Q1 2025 Granite Construction Inc Earnings Call
Good morning.
Devon: My name is Devon, and I would be your conference facilitator today.
Devon: At this time I would like to welcome everyone to the granite 2025 first quarter quantum conference call.
Devon: This call is being recorded.
Devon: All lines have been placed on mute to prevent any background noise and.
Devon: After speakers remarks, there will be a question and answer period.
Devon: To ask a question please press star one.
Devon: Please note we will take one question and one follow up question from each participant today.
Devon: It is now my pleasure to turn the fill or what do you host.
Devon: Granite Vice President of Investor Relations, Mike Buckle.
Speaker Change: Good morning, and thank you for joining us I'm pleased to be here today, with President and Chief Executive Officer, <unk>, and executive Vice President and Chief Financial Officer Stacy Woozy.
Speaker Change: Please note that today's earnings presentation will be available on the events and presentations page of our Investor Relations website.
Speaker Change: We begin today with a brief discussion regarding forward looking statements and non-GAAP measures.
Speaker Change: Some of the discussion today may include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker Change: 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.
Speaker Change: Activities performance shareholder value outcomes outlook guidance objectives committed and awarded projects where cap and results.
Speaker Change: Actual results could differ materially from statements made today. Please.
Speaker Change: 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.
Speaker Change: Certain non-GAAP measures may be discussed during today's call and from time to time by the company's executives. These.
Speaker Change: These include but are not limited to adjusted EBITDA adjusted EBITDA margin adjusted net income adjusted earnings per share and cash gross profit.
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.
Carlos: Now I would like to turn the call over to Carlos.
Carlos: Good morning, and thank you for joining us today I'm excited to talk about our first quarter performance I would also like to take an opportunity to share our expectations for the year.
Carlos: Four months ended the year, our markets and performance are in line with our expectations for another record year.
Carlos: As a result, we are confirming our 2025 guidance and our 2027 financial targets, although there's a lot of uncertainty in today's macroeconomic environment granites markets have largely performed as we were expecting coming.
Carlos: Coming into 2025, we expected a strong bidding environment with federal and state funding fueling opportunities across the public sector.
Carlos: We also expect it to be in position to pursue a number of strong opportunities in the private sector. At this point the market has met our expectations and we have won more work and in the first four months of 2020 for.
Carlos: This is a continuation of the trend that we've seen over the last several years.
Carlos: While we are in the second half of the federal infrastructure Bill the opportunity is funded by the Bill continued to increase because of the timing delay between allocation of the state's funding for specific projects.
Carlos: The benefit from the bills to extend well beyond his termination September of 2026. In addition, despite reports of project disruptions on certain federally funded work the change in administration, we have not experienced any delays.
Carlos: Concerns over tariffs has been a major source of uncertainty granted like all companies is not immune to the direct and indirect impacts of tariffs. However to date, we have not significantly impacted our results or our strategy.
Carlos: We will of course continue to closely monitor tariffs and work to mitigate negative impacts to the company where possible.
Carlos: Since 2020, we have talked a lot about our efforts to Derisk ran its project portfolio.
Carlos: Among other things we turned our focus away from long term design build mega projects, where contractors are not only responsible for all the virus, but also the risk of vendor our subcontractor price increases over the contract life, which can often extend well over five years.
Carlos: Time of a certain price increases those types of contracts amplify the risk borne by the contractor.
Carlos: In the current environment with our project portfolio. Our teams are focused on locking in on pricing at the time to mitigate the risks of inflation or other price increases.
Carlos: While it is impossible to eliminate all inflation risks in our contracts, we believe our portfolio and cash to significantly reduce risk compared to our portfolio from only a few years ago.
Carlos: We also work to limit the risk on tariff related inflation with commodities using our work like natural gas diesel and liquid asphalt.
Carlos: We monitor these markets in the normal course of business throughout the year and apply measures to mitigate the risk of price fluctuations.
Carlos: In summary, we are winning high quality projects that should support our growth and margin expectations. We are continuing to strategically invest in our materials business. There are tremendous opportunities to strengthen our footprint in order to drive volumes and higher margins in our materials business. We are acting on those opportunities and finally, we continue to pursue accretive M&A.
Carlos: It will strengthen our home markets or expand our geographic footprint.
Carlos: The timing of M&A is difficult to predict but the deal environment is active with numerous pursuits ongoing we continue to target materials focused Peruvian integrated companies the smaller bolt ons to strengthen our home markets our target of completing two to three deals in 2025 is unchanged.
Carlos: Now, let's turn to our first quarter results, starting with the materials segment.
Carlos: In our press release this quarter, we included product level disclosures for aggregates and asphalt for the first time.
Carlos: This is another important step in the evolution of our materials business.
Carlos: After years of Underinvestment, we are committed to strengthening and growing the materials segment that is core to our vertically integrated strategy for.
Carlos: In 2022 through 2024, we've invested organically and through M&A and the materials business. This has increased our reserves by 56% to $1 6 billion tons. We also added 11, new aggregate crushing plants and 10, new asphalt plants. During this three year span.
Carlos: In addition, we completed numerous capital improvement projects to drive efficiency and reduce production costs, such as aggregate plant automation projects one year ago, we completed the realignment of our operational leadership wasting materials experts over our materials business and centralizing management functions, such as sales and quality control.
Carlos: The team has made impressive progress over the last year and margin improvement in both aggregates and asphalt I expect the team to continue to raise the bar drive profitability and increase shareholder value in 2025 and over the next several years.
Carlos: And in the materials business remains strong and our expectations are for volumes in 2025 to be consistent year over year with price increases on aggregates in the high single digits and low single digit increases on asphalt.
Carlos: Now, let's move to the construction segment.
Carlos: We're off to a strong start to 2025, despite a wet march in many of our western markets as.
Carlos: As I mentioned earlier, our markets are strong and this strength is reflected in our cap in the first quarter cap has increased 444 million to $5 7 billion, which is a new granite record as we discussed in our last call.
Carlos: There were a number of projects circle are awaiting formal award which are now included in cap.
Carlos: Building off the fourth quarter of 2020 for the first quarter has been another busy period in the bedroom across the company. Our teams have delivered again, they're winning more work in the prior year.
Carlos: Markets across the company are strong, California, Texas, and the Federal Division have it highlights the number of opportunities and wins during the quarter.
Carlos: As I look at the bid list over the next several months I am encouraged by the number of excellent quality project opportunities ahead of us.
Carlos: Have a great opportunity to continue to build cap in 2025, we built what we believe is the highest quality project portfolio and grants history by focusing on our home markets and best value projects.
Carlos: Better position us for success.
Carlos: But the work do we have in cap the project opportunities ahead of us and the continued emphasis on operational excellence I expect to meet our growth and margin expectations in 2025 now.
Carlos: Now I'll turn it over to Stacy to review, our financial performance for the quarter.
Stacy: Thanks, Kyle we are off to a great start to 2025 in the first quarter revenue increased 28 million or 4% gross profit increased 30 million or 54%. Adjusted net income increased 9 million adjusted EBITDA of $14 million and we achieved positive operating cash flow.
Carlos: 4 million in what is typically one of our most weather impacted acquires.
Carlos: And the construction segment revenue increased $19 million or 3% year over year to $615 million driven by John cap across the company and favorable weather early in the quarter.
Carlos: In March wet weather across many locations in the west.
Carlos: The progression of the project and recognition of revenue.
Carlos: Despite some bad weather in mind, our outlook for 2025 is unchanged with a busy construction season ahead of us.
Carlos: Construction segment gross profit improved 29 million to $85 million with a gross profit margin of 14%.
Carlos: This increase is largely due to improved execution and performance across our higher quality project portfolio.
Carlos: As we expected cap increased in the quarter and the market has continued to strengthen in 2025.
Carlos: With the heart of the construction season ahead of US I expect that our year over year revenue growth will increase in the second and third quarters.
Carlos: Based on our cap and current market conditions. We believe we are on track to meet our margin improvement target of over 1% when compared to 2024.
Carlos: I'm pleased to have started 2025 and the construction segment.
Carlos: In the materials segment, we expanded our disclosures in the earnings press release to include product level information for aggregates and asphalt.
Carlos: The new disclosures include revenues sales volumes average selling prices gross profit and cash gross profit by product line.
Carlos: In 2020 for our investments and focus on aggregates drove year over year improvements in gross profit margin and cash gross profit margin of 260 550 basis points respectively.
Carlos: We believe it is important to disclose cash gross profit margin because of the investments we have made in the materials business through capital expenditures and M&A have added significant depreciation depletion and amortization costs in the segment.
Carlos: As such we believe that cash gross profit margin is more reflective of the performance of the business.
Carlos: The significant strides we have made in a short amount of time are highlighted by the increase in the average selling price of our aggregates and completion of projects to improve efficiency and reduce aggregate cost per ton.
Carlos: Consolidated materials segment revenue increased 8 million year over year to 85 million with gross loss decreasing by 1 million to a loss of 2 million.
Carlos: Volume in aggregate sales price increases resulted in gross profit and cash gross profit improvement in the quarter.
Carlos: With these strong first quarter results. We believe we are on track to realize revenue gross profit and cash gross profit increases in 2025.
Carlos: Based on the performance of both.
Carlos: First we are maintaining our guidance for 2025, including revenue of 4.2 to $4 4 billion and adjusted EBITDA margin of 11% to 12%.
Carlos: Turning to cash flow and the balance sheet, we generated $4 million of operating cash flow in the first quarter.
Carlos: Typically the first quarter and first half of the year and the slow period for cash flow with projects and operations in our colder climates in the startup phase.
Carlos: Then as we get deeper into the construction season and cash flow increases.
Carlos: Seasonal impacts were offset this quarter by the collection of a long outstanding contract retention balance as well as the receipt of funds from a legal dispute that was settled in the fourth quarter.
Carlos: As a result, our cash flow in the first quarter is slightly better than expected.
Carlos: We remain on track for our operating cash flow target of 9% of revenue for the year.
Carlos: I live at the end of Q1 cash and marketable securities were 513 million availability under our credit agreement was $330 million and that was largely unchanged from year end at $740 million.
Carlos: With our strong balance sheet and cash flow expectations for 2025, we are in a position to act on M&A opportunities that fit our strategic initiatives.
Carlos: As we said on our call last quarter, we have added experienced leadership and resources to our corporate development team and are pursuing deals across our footprint ranging from small bolt ons to larger geographic expansion opportunities.
Carlos: We continue to be selective, but we expect M&A should add to our cash flow generation and lead to increased shareholder value.
Kyle: Now I'll turn it back over to Kyle.
Kyle: Thanks, Stacy I'll close with the following points.
Stacy: Our start to 2025 is in line with our expectations. We will continue to closely follow the macroeconomic environment. At this time, however has not been significantly impacted by tariffs.
Kyle: Our cap is benefiting strong public market environment supported by the <unk>.
Stacy: Well as healthy state budgets across our geographies.
Stacy: There are a number of strong opportunities in the private market as well the cap increase in the first quarter as we expected and we believe there are excellent opportunities ahead of us to continue to grow cash.
Stacy: With our performance in the first quarter. We believe we are on track to meet our 2025 guidance.
Stacy: And what has historically been a seasonally slow quarter, we generated positive operating cash flow and I believe we should reach our target of operating cash flow of 9% of revenue for 2025, and finally, we were very busy analyzing a number of M&A opportunities timing is difficult to predict but our target of completing two to three deals in 2025.
Stacy: It is unchanged.
Stacy: Operator, I'll now turn it back to you for questions.
Stacy: To ask a question please press star one.
Stacy: Please limit yourself to one question and one follow up question.
Stacy: And feel free to jump back in the queue. If you have additional questions.
Speaker Change: Our first question is from Brent Thielman with D. A Davidson. Please go ahead.
Brent Thielman: Hey, Thanks, Congrats on a great start here to the year.
Speaker Change: No Kyle I guess, Mike My first question from what I take the opening commentary it sounds like active bidding environment overall within a lot of the markets you serve maybe if you could just maybe talk around a little more about what youre seeing in.
Speaker Change: How we might think about the trajectory of cap, which is obviously in a strong position here to start the year, where that where that might go given all you are seeing out there.
Mike Buckle: Yeah. Thanks, Brad I. Appreciate the question you know the market is very strong perhaps stronger than the public market the private market.
Speaker Change: I think our cash balance and increased to a record level in Q1 reflects this.
Speaker Change: And our teams are just doing a great job I think across really all of our business units and casualty work as we mentioned we're bidding more work so.
Speaker Change: So far this year, capturing more of that work and the workhouse higher margins than the previous years and I think that's just been a reoccurring trend that we've seen now for several years.
Speaker Change: I think that's really exciting for the business. So we do expect really over the year for our cash balance to continue and continue to increase.
Speaker Change: I would say that the <unk>.
Speaker Change: <unk> continues to provide really strong spending really across all of our geographies and as a reminder, only about I.
Speaker Change: I would say 30% of that spend has happened to date and we believe there is still several years of spending under the <unk> and we also believe that there is bipartisan support.
Speaker Change: Lot of momentum around another bill that it'll be it'll come on following the Iga, a that'll have spending levels equal to or greater than what we see around highways bridges and roads. So we'll see.
Speaker Change: If we can get that passed but certainly that would be good news for our industry and good news for granted.
Speaker Change: Got it.
Speaker Change: Maybe just my follow up more just on the quarter itself and in thinking about the strong margins in the construction segment. I mean, you did mentioned some adversity related to weather.
Speaker Change: You didn't have a lot of growth in the construction segment this quarter, but margins really popped.
I guess, what what are you seeing it.
Speaker Change: Project level, that's driving these higher levels of profitability in an otherwise yes.
Speaker Change: Otherwise slower quarter for you and how we think about that going forward.
Speaker Change: Yes.
Speaker Change: Q1, as you know is always it's not our biggest quarter certainly has its most seasonal as well and so any year you compare core.
Speaker Change: But over a quarter it can depend on whether or not the prior year had some weather or not certainly we had a little bit more weather in March.
Speaker Change: But despite that we are just really strong top line and even some growth in our construction segment and.
Speaker Change: I think it's all down to execution, our new we had we had mentioned that we expected our construction gross profit margin in 2025 to be at least 1% greater.
Speaker Change: And what we saw in 2024 and that was a combination of improved execution and our team is focused around execution and then just the improvement in our cap. So we did expect that increase starting in Q1, and we expect to see a continued improvement in gross profit margin throughout 2020 524 in our construction segments.
Speaker Change: Okay, great. Thank you.
Brian: Thanks, Brian our next.
Okay.
Speaker Change: Our next question is from Steven Ramsey with Thompson Research Group. Please go ahead.
Speaker Change: Hey, good morning, another question on Cat M and the quality of it the strong bidding environment and the rising quality in it.
Speaker Change: For Q1, it looks like bid build projects grew 21% year over year, whereas best value was down around 10% year over year in the second quarter of decline can you maybe put into context, how these diverging movements.
Speaker Change: The different types of projects play into the quality of cap and do you expect.
Speaker Change: Cap to lean towards did build through the rest of 2025.
Speaker Change: Yeah, I don't know that it's difficult to predict and many ways. Some of the best value projects are a little bit larger than the more larger complex projects that we can execute on without really a derisked contracted method. So the timing of those those coming into our cap.
Speaker Change: And skew those numbers a little bit so I wouldn't read too much into the percentages I think over the long haul we're going to see that breakdown would be pretty consistent with what we've seen historically.
Speaker Change: And I think that is good news too in the sense that.
Speaker Change: It gives us a good balance so the bid build typically burns a little bit faster than your average job size of the company is.
Speaker Change: 56 million most of those contracts firm within within a 12 month cycle.
Speaker Change: Whereas those best value projects have a longer burn and we think that's healthy there was a two year preconstruction period, typically and then another three years for actual construction. So we liked having that mix. We think that's just a nice healthy mix of our business.
Speaker Change: Okay. That's good context, and then it was looking at over the FY 'twenty two through 'twenty four period materials revenue.
Speaker Change: Was in the 17% to 18% range of construction revenue looking at Q1 'twenty five it was 14% of revenue up 100 bps or so year over year, just thinking about those two data points and your focus on vertical integration.
Speaker Change: Do you expect material revenue to run in that that range of 17% to 18% of construction sales for.
Speaker Change: For 2025 and thinking about these two data points.
Speaker Change: What is that that tells you and how do you think about where those go over the next couple of years.
Speaker Change: Yeah, well I think thats, probably a safe assumption from a percentage perspective in 2025 really we've been reinvesting in our materials business now for a few years it was <unk>.
Speaker Change: <unk> invested previously.
Speaker Change: We've made up a lot of ground.
Speaker Change: Certainly as you look at it our emphasis around materials, a realignment of the organization last year round construction materials, we've already seen really strong benefits from that effort and really a short amount of time that we're excited about where we can go even further and then if you look at where we've been from an M&A perspective.
Speaker Change: The deals we've done have been materials focus so I think over the long haul we expect our materials business to become a larger part of our overall company.
Speaker Change: Okay. That's great. Thank you.
Speaker Change: Thank you.
Speaker Change: The next question comes from Michael Dudas Vertical research. Please go ahead.
Michael Dudas: Good morning, Stacy Mike.
Speaker Change: Good morning.
Speaker Change: A couple of things first your federal business, you highlighted as a strength.
Speaker Change: Cross currents of issues with regard to Washington policy and it seems like Guam is still going to be active given the port for the.
Speaker Change: Projection of where.
Speaker Change: Military wants to be here in the next several years is that something that's also.
Speaker Change: Looking pretty solid for you guys and my follow up would be.
Speaker Change: With regard to your Mississippi, Your Tennessee, the South East region, how those businesses track relative to what you had thought the acquisition would be team almost three years ago was 18 months ago.
Speaker Change: And.
Speaker Change: Is there a mix on like private is there a lot more industrial manufacturing activity youre seeing that in that world. So just typically the similar type of public versus private work in that in that area. Thank you.
Speaker Change: Okay.
Speaker Change: Thanks, Mike for the federal business that we did highlight that certainly we have picked up quite a bit of work in our federal business and our federal business partners with a lot of our local home market teams and we just capitalize on the federal market in itself and we do think that the current administration. There are a lot of opportunities for us in the federal space.
Speaker Change: And Guam has been a highlight so you've likely seen a lot of press releases that we put out around some of the projects. We have in Guam, we've been in Guam now for over a decade.
Speaker Change: So it is not as a home market for us in that regard. We've also been successful in other states and I'd highlight Texas, we have a few projects in Texas now.
Speaker Change: Federal projects you've.
Speaker Change: We've seen a lot of success there as well.
Speaker Change: So I think going to the question around the acquisitions in the southeast we're really pleased with the performance of our business down in the southeast from a from a deal perspective.
Speaker Change: And I think I think the real highlight for US was moving into M&A strategy around vertically integrated businesses.
Speaker Change: And I think the real success for US is just the integration.
Speaker Change: Deep integration has gone really well it gives us a lot of confidence to continue to build on that southeast platform.
Speaker Change: It has to do other deals and other arrangements I think that we were looking for really good businesses healthy and growing markets with strong leadership and we found that.
Speaker Change: Im going to most of all his exceptional leadership in those businesses. It gives us a lot of confidence to build out that southeast platform. So all in all.
Speaker Change: Going well.
Speaker Change: I'll talk a little bit more about M&A as well as our three focus areas today.
Speaker Change: It's always important strengthening our business out in the West These home markets that we've had in place is continuing to build out that southeast platform.
Speaker Change: We're looking for other platforms that we can draw upon those are still to be determined but yeah. I think we're in good shape and I think that the acquisitions that we completed a really just gives us a lot more confidence to keep you down that path.
Tom: Thank you Tom.
Speaker Change: Yes. Thank you.
Speaker Change: We have a final question from Jerry Revich with Goldman Sachs. Please go ahead.
Jerry Revich: Yes, hi, good morning, everyone.
Speaker Change: Good morning.
Jerry Revich: Hi, Eric.
Speaker Change: Can I ask you folks in terms of the additional disclosures are really appreciate.
Speaker Change: The information in a good progress in aggregates unit profitability for the team in 'twenty four.
Speaker Change: As we look at cash gross profit per ton for your business with before it's about $4.
Speaker Change: <unk> footprint is obviously different but there.
Speaker Change: $11 plus can you just talk about.
Speaker Change: The difference is beyond the geographic locations I believe you folks or higher.
Speaker Change: Yes.
Speaker Change: Should be lower and crushed stone sand and gravel how much of a factor is that can you just talk about where could cash unit profitability move over time.
Speaker Change: As you look at your peers.
Speaker Change: Yes, that's a great question, Jerry and then it's a challenge because we don't have any perfect peers and certainly have peers that are in the aggregates and asphalt business. So.
Speaker Change: If we look across I think certainly our cash gross profit per ton is very different than the larger the larger peer group out there or.
Jerry Revich: Do you think geography matters I think that is that is an important driver I think you hit on kind of the outlet and a lot of aggregates go into computer ready mix nationally the numbers my understanding around 50% were a lot lower than that 45% were closer to around 30%. So.
Speaker Change: That's another big variance that goes there from a market perspective and geography.
Speaker Change: One product could have even a 10 or 15 dollar sales price difference between different markets based on scarcity of aggregates within that market. So that does play in the things I think what we're looking at is our.
Speaker Change: Our business and we're looking at our materials business we're.
Speaker Change: We're looking at that cash gross profit improvement that we've seen between 'twenty three 'twenty four but just that reorganization of our business within one year. We've really made huge strides that we're really proud of and I'm proud of the team for really focusing on pricing standardizing, how we operate setting higher standards.
Speaker Change: Our expectations for our business units.
Speaker Change: Automation investments are big for us.
Speaker Change: Of course reinvesting in the right reserves and we're seeing the results of that so on the asphalt side were up almost 2% on a cash gross profit perspective, well under.
Speaker Change: Aggregates close to 6% I think just within one year, that's really good improvement and if anything as you look at our peer group.
Speaker Change: And that gives us a lot of opportunity to continue to challenge ourselves.
Speaker Change: And find other ways, we can continue to expand margins and we believe even in 2025, we expect our gross cash gross profit margins in materials segment to go up over 3%.
Speaker Change: So we think we can look at that for this year, we think even beyond 2025, there's room for us to continue to expand our cash gross profit margins in this segment.
Speaker Change: And.
Speaker Change: Kind of just to make sure I understood page with you when you.
Speaker Change: Cash gross profit margin expansion of 300 basis points.
Speaker Change: Not a growth in the cash gross profit per ton. That's a percent margin increase of 300 basis points in just one year that's right, yes, that's correct.
Speaker Change: Well done very good.
Speaker Change: And then can we shift gears in terms of the cadence of demand what we're hearing from.
Speaker Change: Other companies with your end market exposure January February soft March really sharp acceleration in.
Speaker Change: Surprisingly strong demand through April can you comment on whether thats consistent with what you've seen in your business given.
Speaker Change: The macro uncertainty out there what's going on or what happened in April is a big question.
Speaker Change: Yeah, I would say just in general January and February were actually.
Speaker Change: Pretty strong in the March as he mentioned, we have a little bit of weather in March so that was little bit of a slowdown for us in some regards so I think overall.
Speaker Change: Certainly the materials segment, we expect things to be relatively flat.
Speaker Change: Certainly the AG side and asphalt side, maybe a little bit up just depends on what's going to happen on the private market and we're looking for that to pick up in the back half of the year to see how that.
Speaker Change: It shakes out.
Speaker Change: And could you comment on April.
Speaker Change: Yes, I mean April so far.
Speaker Change: There has to be.
Speaker Change: Strong month for us nothing nothing out of the ordinary it's very important today.
Speaker Change: And lastly can I ask in terms of the tariff impact on equipment purchases or leases can you talk about what youre seeing from from your suppliers and any changes in your Capex plan.
Speaker Change: We get ahead of any tariff increases can you flesh that out for us if you don't mind.
Speaker Change: Yes, we do expect there to be some equipment cost increases parts increases some repair cost increases. So those things are going to happen and we've been we've been navigating that environment. Now are you going to be pre tariff impacts for several years. So we do.
Speaker Change: Typically go get Preauthorization for Capex for the following year early so we can get those orders in as soon as possible. So that's kind of normal course of business for us today.
Speaker Change: Thank you.
Thank you.
Speaker Change: This is the end of the Q&A.
Speaker Change: And now I would like to turn the call back go we'll put to Mr. Larkin.
Speaker Change: 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 I look forward to seeing many of you next week during the construction industry safety week. Thank you for joining the call and your interest in granite we look forward to speaking with you all soon.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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