Q1 2025 Sterling Infrastructure Inc Earnings Call
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Speaker Change: Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure First Quarter webcast and conference call. At this time, our linestone will listen only mode. Following the presentation, we will conduct a question and answer session.
Speaker Change: If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 6, 2025. I would now let's turn the conference over to Noelle Dilts. Please go ahead.
Noelle Dilts: Good morning to everyone joining us and welcome to Sterling Infrastructure's 2025 First quarter earnings conference call and webcast.
Speaker Change: I'm pleased to be here today to discuss our results with Joe Cutillo, Sterling's Chief Executive Officer and Ron Ballschmiede, Sterling's Chief Financial Officer Dr. Thalhimer, Noelle Dilts,
Speaker Change: Joe will open the call with an overview of the company and its performance in the quarter. Ron will then discuss our financial results and guidance, after which Joe will provide a market and full-year outlook. We will then open the call up for questions.
Speaker Change: As a reminder, there are accompanying slides on the Investor Relations section of our website. These slides include details on our full-year 2025 financial guidance.
Speaker Change: Before turning the call over to Joe, I will read the Safe Harbor statement.
Speaker Change: The discussion today may include forward-looking statements, actual results could differ materially from the statements made today. Please refer to Sterling's most recent 10K and 10K filings for a more complete description of risk factors that could affect these projections and assumptions.
Speaker Change: The company assumes no obligations to update forward-looking statements as a result of new information, future events or otherwise .
Speaker Change: Please note that management may reference EBITDA, adjusted EBITDA, adjusted that income or adjusted earnings per share on this call, which are all financial measures not recognized under US gap.
Speaker Change: As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our earnings release issued yesterday
Speaker Change: Our discussion of results today will refer to pro-formal figures that adjust prior period results to conform to the current accounting of our RHVJB.
Speaker Change: As a reminder, at year in 2024, there was a change in the accounting treatments for this J.B. such that we no longer consolidate revenue and backlog, but it does not change our share of Iida Dah that we recognize from the J.B.
Speaker Change: Additionally, we may refer to adjusted operating income, EBITDA, and EPS figures that adjust for certain non-cash and non-reparing items. Please see our press release for description and reconciliation of these adjustments. All comparisons are to the prior year quarter, unless otherwise noted. I'll now turn the call over to our CEO , Joe Cutillo.
Good morning, everyone, and thank you for joining today's call.
Sterling is off to a great start for the U.
Speaker Change: In the first quarter, we grew adjusted earnings per share by 29% to $1.63 Reset.
and delivered adjusted EBITDA of $80 million.
A 31% increase
Speaker Change: Our gross profit margins expanded more than 400 basis points from the prior year to reach 22%
Speaker Change: We remain focused on pursuing the most attractive and highest return opportunities.
Speaker Change: Additionally, operating cash flow generation in the quarter was strong at $85 million.
Speaker Change: We are pleased to announce that during the quarter, we closed on the acquisition of Drake Concrete.
Speaker Change: A provider of residential concrete slabs in the Dallas, Fort Worth area for $25 million.
This acquisition strengthens our geographic footprint within DFW.
and expands our customer debt.
as Drake has limited customer overlap with Thielstown.
We anticipate Drake will contribute $55 million of revenue.
and six and a half million dollars of evita in 2025.
Speaker Change: Looking to the future, we remain extremely positive on our outlook.
Well, we are certainly cognizant [inaudible]
Speaker Change: of the high levels of uncertainty surrounding trade policies and the economy.
Speaker Change: We believe we are in markets and geographies that have strong, sustainable growth.
Additionally, we have limited exposure to foreign-source materials.
Speaker Change: We will continue to build upon the strong base we have established. Drive margins and pursue opportunities that enhance our long-term value.
Speaker Change: We will stay focused on the things that we can control and adapt and react to changing conditions as necessary.
Speaker Change: Our backlog position and visibility anchor our confidence in the future.
Speaker Change: That Club, at the end of the quarter, total $2.1 billion.
A 17% year-over-year increase on a pro-forma basis.
and our book to burn ratio was above two times.
Speaker Change: The infrastructure solutions backlog of $1.2 billion was up 27% in the first quarter.
Our customers are not showing any signs of slowing down
Speaker Change: Our multi-year visibility is further supported by continued growth in our pipeline of future phase opportunities by to our current projects.
Speaker Change: At the end of last year, we raised our expectations for future phase work at the end of the first quarter.
Speaker Change: from half a billion dollars to three quarters of a billion dollars.
and we hit the high end of that goal.
Speaker Change: We are extremely excited about the future and believe we will continue to drive strong earnings growth over the next few years.
Speaker Change: The Sterling Way, which is our commitment to take care of our people, our environment, our investors, and our communities, while we work to build America's infrastructure, remains our guiding principle as we execute our strategy.
Speaker Change: Now, I'd like to discuss our segment results in a little more detail.
Speaker Change: The data center market was again the primary growth driver in the quarter.
increasing approximately 60% over the prior year period.
Adjusted Segment Operating Income, Groose 61%
Speaker Change: and adjusted operating margins reach 23%. If 618 basis point increase.
This was driven by a shift towards large mission critical projects.
Speaker Change: including data centers where our superior project management and ability to finish jobs on or ahead of schedule are extremely valuable to our customers.
Speaker Change: Mission Critical Work continues to represent the vast majority of our e-infastructure backlog.
Moving to Transportation Solutions
First quarter revenue grew 9% on a pro form of bases.
Speaker Change: and adjusted operating profit grew 60 percent, given by strong market demand and the benefits of Nick Schrift toward higher margin services.
Speaker Change: We ended the quarter with Transportation Solutions' backlog of $861 million.
An 11% year-over-year increase on a pro-former basis.
Speaker Change: Gifting to building solutions, and the first quarter, Segment Revenue declined 14% and adjusted operating income to collide 18%
Speaker Change: Overall, the man for homes has been impacted as potential home buyers struggle with affordability challenges.
Speaker Change: Revenue from our legacy residential business declined 19%, given by softness in the over a housing market.
Speaker Change: Unusually severe weather and a challenging comparison to the first quarter of 2024.
Speaker Change: With that, I like to turn it over to Ron to give you more details on some of our financial metrics and for your guns. Ron?
Ron: Thanks, Joe, and good morning. I am pleased to discuss our very strong and record first quarter performance.
Ron: Let's start with some financial highlights starting with our Consolidate Backmog metrics.
Ron: Our first quarter backlog totaled $2,128 million, a 26% increase from the year end 2024.
Ron: an increase of both the amount of e-infrastructure backlog and its margin drove this improvement.
We close the quarter with combined backlog of $2.23 billion.
which was up 21% from the year-end 2024.
Ron: First quarter, 2025, booked the burn ratios were 2.23 times for backlog and 2.13 times for a combined backlog.
Ron: Turning to our first quarter-income statement, revenue was $430.9 million, a 7% increase, excluding our H.B. from the prior period.
Consistent with our past seasonal characteristics.
Ron: Our first quarter is expected to be our lowest revenue quarter for the year.
Ron: Current Quarter Consolidate Gross Profit was $94.8 million or 22% of revenues, a 400 basis points increase.
over the 2024 first quarter.
Ron: General and Administrative Expense increased in the quarter by $7.3 million.
Ron: Approximately 1.6 million of this increase related to one-time separation expenses.
Ron: Additional drivers of the increase include performance-based compensation, investments in personnel and systems to support our growth.
Ron: We expect our full year GNA expense to be approximately 6.3% of revenues, which compares to 6.1% excluding RHB from 2024.
Ron: Our Effective Income Tax Rate for the first quarter was 26.1%. We expect our full-year Effective Income Tax Rate to be approximately 26%.
Ron: The net of all these items resulted in a record first quarter with adjusted net income of $50.2 million or $1.63 per deluded share.
Ron: It improvement of 29% compared to the first quarter of 2024.
Ron: On a gap basis, the looted earnings per share were $1.28 as compared to $1 even in the first quarter of 2024.
Ron: Shifting to our cash flow metrics, cash flow from operating activities for the first quarter of 2025 was a strong $84.9 million compared to $49.6 million in the first quarter of 2024.
Ron: Cashwell used in investing activities for 2025 included $16.4 million of net capex and $37.9 million for acquisitions including Drake Concrete.
Remaining availability under the existing repurchase authorization is $85.6 million.
We ended the quarter with a very strong liquidity position.
Ron: consisting of $638.6 million of cash and debt of $310 million for a cash net of debt balance of $328.6 million.
Ron: In addition, our $75 million revolving credit facility remains unused during the period.
Now, I'd like to discuss our guidance.
Ron: As we look ahead to 2025, the ongoing strength of our business positions us for another record year at Sterling.
Our full-year 2025 guidance ranges are as follows.
Revenue of $2.05 billion to $2.15 billion [inaudible]
Net income of $222 million to $239 million.
Diluted EPS of $7.15 to $7.65.
Adjusted, Diluted EPS of $8.40 to $8.90 [inaudible]
Ron: EBITDA of $381 million to $4.3 million and finally adjusted EBITDA of $4.10 million to $4.32 million.
Considering the diversity and strength of our portfolio businesses
Ron: Our strong liquidity position and our comfortable EBITDA leverage, we are well-positioned to take advantage of additional opportunities to generate significant shareholder value in 2025 and beyond.
Now, I'll turn the call back to Joe.
Thanks, Ron.
Joe Cutillo: As we look to the future, we remain very bullish on the multi-year opportunity in each of our markets.
Joe Cutillo: Our strong backlog, future phase opportunities, and discussions with our customers can contribute to our confidence.
Joe Cutillo: Any infrastructure solutions, we anticipate that the current strength and data center demand will continue for the foreseeable future.
Our customers are discussing multi-year capital deployment plans [inaudible]
Joe Cutillo: and are focused on how to align with the great partners to support these points.
Joe Cutillo: on the manufacturing front. We believe that in 2025, we'll see a fairly steady pace of mid-to-large-sized on-turing project activity.
Remains a big pool of mega projects on the horizon.
This would include Plan Semiconductor Facilities.
Joe Cutillo: Given the complexity involved with their develops, we believe it will take some time before awards start to flow.
Joe Cutillo: The e-commerce market has strengthened in 2025 and we anticipate that we will see additional awards throughout the year.
Joe Cutillo: The Small Warehouse and Commercial Market, which began to soften back in 2023.
is showing signs of straightening. [inaudible]
Joe Cutillo: Together, these dynamic supports strong growth opportunities over a multi-year period.
Joe Cutillo: For 2025, we expect to deliver strong e-investructure revenue growth in the bid to high teens.
and adjusted operating profit margins in the mid-20% range.
Inter-expertation Solutions .
Joe Cutillo: We are now on the second half of the federal funding cycle. We have built over two years of backlog and continue to see good levels of good activity.
Joe Cutillo: For 2025, we anticipate continued growth in our core Rocky Mountain in Arizona market.
Joe Cutillo: The downsizing of our low bid heavy highway business in Texas is progressing according to plan.
Joe Cutillo: which is resulting in some moderation of transportation solutions top line and backlog in 2025.
We should drive meaningful margin improvements as we move through.
The Rest of the Year
Joe Cutillo: We anticipate operating profit growth in the mid teens on an adjusted basis.
Joe Cutillo: In building solutions, we continue to believe the business is well positioned for growth over a multi-year period.
Joe Cutillo: Arche geographies of Dallas-Bort Work, Houston and Phoenix are all expected to see continued population and growth, driving the man for new homes.
Joe Cutillo: Additionally, there's a significant opportunity for share gains in Houston and Phoenix.
Joe Cutillo: The Drake acquisition positions us well for when the market does begin to recover.
Joe Cutillo: For 2025, we continue to anticipate slight revenue growth overall in building solutions driven by acquisition contributions.
Joe Cutillo: We are forecasting an organic decline in the legacy residential business.
Joe Cutillo: In addition, we anticipate our commercial work will continue to decline at previously mentioned rates.
Joe Cutillo: We're working hard to find the right acquisition to grow the company and enhance our service offerings.
The key infrastructure market remains our top priority for M&A.
Additionally, we are seeing some interesting opportunities in building solutions.
Joe Cutillo: We will remain patient and disciplined in our inner-granic growth strategy.
Joe Cutillo: The midpoint of our 2025 guidance would represent 12% revenue growth as adjusted for RHP.
22% Adjusted EPS Growth
and 23% adjusted Eva to growth.
Would that, I like it, turn it over for questions.
Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised.
Joe Cutillo: She wishes to climb from the polling process, please press star followed by the two, and if you are using a speakerphone, please lift the handset before pressing any keys.
Speaker Change: The first question comes from Brent Thielman at Davidson. Please go ahead.
Speaker Change: Hey, thank you. Good morning. Great to order. Thank you. Joe, maybe just on the E infrastructure business group, could you talk around the 35% of the backlog that's
Speaker Change: Not data center. It sounds like you still have pretty good visibility and many factoring and that continues and maybe warehouse activities.
Speaker Change: Starting to pick up and contribute to you more but maybe just how firm you feel like that backlog is and whether or not you can continue to build on that that side of the business.
Yeah, we too.
Speaker Change: Feel good about it. There's really kind of three parts of that. We got manufacturing is going to stay pretty steady through the year. We've seen the e-commerce coming back and picking up actually even faster and a little more than we anticipated. So that's exciting for us.
Speaker Change: We are starting to see more activity around what we call the small industrial and warehousing stuff. We think that trend is going to continue through the back half of the year, so we feel very good about that 35%.
Speaker Change: and I think we still have some potential upside opportunities on projects that look like they're going to bid in the second half of the year, kind of across all pieces of the infrastructure.
Noelle Dilts: Great, great. Joe, when you think about just tariffs from a high level maybe just where you're most exposed and least exposed from a direct sort of cost perspective and what's better than the outlook for it relative to that.
Yeah, I think that the good news is...
Noelle Dilts: and the impact on the business was minimal at the end of the day.
Noelle Dilts: So when we look at the tariffs, I'll just kind of go through each segment just so people understand them.
Noelle Dilts: in our transportation segment. We'll start there. First, the major items of steel.
Noelle Dilts: and those components all have to be made in America for the most parts on our contracts and we lock those in at the beginning of the contract. So our upfront pricing may appear higher than what market pricing is but it's guaranteed for that. In addition on some of the other items.
Noelle Dilts: If we see increases above a certain percent, there's actually some indexing that takes place and throughout COVID we saw virtually no impact.
Noelle Dilts: through transportation solutions. So we think we'll see minimal there. Obviously, there in both building solutions, there's risk of concrete powder blowing up and concrete prices, but again, there's some indexing that offsets and protects that.
in the infrastructure.
Noelle Dilts: We really have a couple major components, all the piping and underground components that go into the contracts or into the builds and fuel. Those are two big items.
Noelle Dilts: We have learned from COVID and in our major contracts, we have indexing in our fuel pricing. If it exceeds, I believe it's 5%.
Noelle Dilts: We then pass that on. But similarly, if it goes down more than a certain amount, we give money back to the customer. So we're not trying to make money off a fuel. We just don't want to lose money on.
Noelle Dilts: because our projects are phased. This is what we love about them.
Noelle Dilts: We only price one phase at a time, so we're generally buying the material for that phase.
Noelle Dilts: while we're pricing it so we can build that in. So, I won't say there's zero exposure, but worst case scenario would be kind of two to three months of exposure on a project if we got locked into something and didn't have the material pre bought.
Noelle Dilts: I will tell you our guys are probably pre-vying material more than they have in the past just to ensure that doesn't happen.
and then in building solutions, countries are our biggest material.
Noelle Dilts: As of two weeks ago, I didn't check on it last week. Prices were still coming down on concrete across the board for us.
So we've seen the opposite take place there.
Noelle Dilts: So that would be our biggest risk. But again, those are very quick turn projects.
Very good. I'll pass it on. Thank you.
Speaker Change: Thank you. The next question comes from Julio Romero, Xodori. Please go ahead.
Thanks, high good morning, Joe, Ronald and Noelle.
Julio Romero: Good morning. Good morning. Really nice margin performance here in transportation solutions in the quarter. Can you maybe talk a little bit about the drivers of that margin? How much of that margin strength is from the shift away from low bid versus other kind of drivers there, and how should the cadence of margins and transportation?
Flo for the remainder of the year
Julio Romero: Yeah, I would say we're seeing very little from the shift away from Logan. We're still finishing up projects and that sort of stuff. The vast majority of that margin improvement is around.
is we continue to shift our mix towards Iron Margin.
Julio Romero: and products, whether that's alternative delivery in the highway space, more and more aviation.
in the Bix of Rail.
Julio Romero: those all have much higher margins so we continue to push our efforts to blend that next more towards that portfolio and as we do that we'll continue to see
Margin increases.
Julio Romero: We should start seeing more of an impact from the load bit as we get towards the end of this year in the early next year.
Speaker Change: Great, really helpful there. And then, you know, great color you gave on, you know, going around the portfolio and talking about kind of your tariff exposure across all three segments.
Speaker Change: Maybe if you can talk about your level of comfort in bidding for new projects going forward and you know accepting new work and just kind of execution this broader operating environment.
Yeah, I would show you, you know, part of our...
Speaker Change: Our margins in the quarter of transportation and e-infrastructure, frankly, is our teams continue to execute extremely well, and all the things we're doing to continue to drive, whether it's technology or other things to improve.
Speaker Change: Project Performance continue to pay off and I'm excited about some of the stuff we're working on that we'll start paying off next year in the year after as well.
Speaker Change: So, if you look at the performance side, all good, when we look at the bid activity side,
Speaker Change: You know, we've still got a little over a year left on I.I.J.A.
Speaker Change: There's that spend continues to increase. They approved the budget for 2025. That was up. I forget the number. Noelle, was it up 8% I think is what it was?
for Total Spend Approximately.
and so bid activity remains good in transportation.
in E Infrastructure.
I would tell you, our front end guys.
Speaker Change: We wish it would slow down. These four guys are working seven days a week, 12 hours a day right now with that activity that's coming in. So we're very optimistic on what's going on there. If you take a look at our backlog.
in e-infrastructure, you know.
Speaker Change: We're really looking at how do we finish filling 2026 and filling 2027.
Speaker Change: It's not that we can't take more in 2025, we will take more, but we're really starting to focus much further out, making sure we're solid on a long-term basis.
Speaker Change: The area of weakness for us, the headwinds we're seeing is certainly in the residential side. That market has been...
Speaker Change: Soft, probably a little softer than we even anticipated in the quarter.
But the difference there is there's tremendous pent up demand.
Speaker Change: Somebody is going to figure out this portability piece in some way, shape or form, whether that interest rate is coming down.
Speaker Change: or some pricing coming down on the builder side to get people in. So, we're bullish long-term on that market over a multi-year period. We may go through a little bit of a slow period. We see there's an opportunity to build our capabilities and potentially expand during this time.
Speaker Change: and we'll come out of it even stronger on the back end.
Speaker Change: Makes a lot of sense. Thank you for the color. I'll pass it on. Thank you.
Adam Thelheimer: Thank you. The next question comes from Adam Thielhimer at Tom Thompson Davis. Please go ahead.
Hey, good morning guys, nice quarter
Speaker Change: Thank you. Ron, what did you follow up on? You mentioned that E Infrastructure was your top priority for M&A.
Would that be for geographic expansion?
Speaker Change: Well, I think we look at it in multiple facets. First of all, there's a couple of geographies we really would like to get into and are working hard to find a potential acquisition or come up with an organic growth plan for those.
Speaker Change: You know, one of those, frankly, is Texas. It's we sit in Texas and the amount of activity is going on whether it's data centers or chip plants or anything else is astronomical.
Speaker Change: Doing site development with geographical extensions looking at acquisitions for that I should say is something we are definitely looking at.
Speaker Change: In addition, we believe there's high value and high opportunity in us adding electrical and mechanical and potentially specially piping along with some other skill sets to the portfolio. Thank you very much.
We have experimented with a small little dry utility business.
Speaker Change: We'll triple that business, or maybe even quadruple it in the next 12 months.
Speaker Change: just by bringing it to the customers and contracts we have and getting that built in to those contracts. So we think that there's an opportunity if we can provide an entire electrical and mechanical package.
Speaker Change: that we could bring those solutions to our core customers as well.
Speaker Change: That's not something that would happen overnight but the next round of projects that we do, we would obviously work hard to try to get those built in So the answer is we're doing both we're looking geographic expansion and additional services
and then with that...
Speaker Change: Those additional services, would you start offering those potentially on a standalone basis or would it only be for your...
Speaker Change: Now what we see is we certainly could use them with our customer base. We would use them outside of our customer base and we look at it as potentially an opportunity if the right acquisition came along with the right and customer base.
Speaker Change: May pull us in the different end markets on the S.I. Solutions I got them.
All right, and then just last one for me.
Speaker Change: You just kind of confuse me because you put up a 22% gross margin in Q1, that's also the guidance for the year. I was just curious why you wouldn't see maybe a seasonal uptick in gross margins during that.
in a summer and fall.
Speaker Change: Yeah, we will see an uptick in summer and fall and we see the dip in the fourth quarter.
So it kind of comes out pretty close to it.
God, it's a little higher than for a while.
I understood, I'll turn it over, thank you.
Speaker Change: Thank you. The next question comes from Noelle Levitts at William Blair. Please go ahead.
Noah Levitz: Joe, Ron, and Noelle, good morning, and congrats on strong numbers.
Thank you. Start off.
Yeah, um...
Noah Levitz: So the IIJ bill, you have two years left in backlog, it's coming to an end following in the next year.
Some other peers have talked about
Noah Levitz: I.I.J.A. Part II, the next bill. Can you talk a little bit if you're seeing anything in Congress and what you would hope to see or expect in the next bill?
Noah Levitz: Yeah, so I think people worry that the bill ends and everything stops. It's just the next bill comes out, right? In the worst-case scenario, if there is a gap, they usually do a transition year or a bridge.
Noah Levitz: Generally, they've taken that the prior year's number, adjusted for inflation and-
Noah Levitz: We continue on until the next bill goes, but here's what I will I will tell you.
Speaker Change: and I was supposed to be in DC this week, but with Ernie Skull and board meeting, it's not working out. There is more activity further in advance on the next infrastructure bill going on right now by partisan activity in DC.
Speaker Change: Head of Transportation was told to make a bigger, more beautiful infrastructure bill than's ever been done before.
Speaker Change: And there are a lot of people in DC running around trying to figure that out right now, including for the first time talking about some longer term.
Speaker Change: ways to pay this with fees, federal fees for registrations of electric vehicles, hybrid vehicles, and even gas vehicles. It's different rates, so...
Speaker Change: So far, so good. Again, they're much further ahead. They seem to be much more rational in their thought process. And I think they've been given an edit to do something bigger and better. So I...
Speaker Change: You know, it's still a year away, a little year and a half probably.
Speaker Change: But I would tell you, it looks better than it has historically. Normally, at this point in time everybody is trying to get Congress to think about it because it's coming up and they say we still have over a year, why would we think about it that? So that all looks positive.
Speaker Change: Great, that makes sense. And then shifting back over to e-infrastructure, you mentioned in your prepared remarks about the semiconductor opportunity and on-shoring. I think over the past few months in particular, it's been a lot of capital investment plans, very sizable ones from pharmaceutical companies.
Speaker Change: bringing back manufacturing to the US, expanding their existing capabilities. And last quarter, you mentioned that you had a project going on in that biopharma space. So I wanted to provide some.
Colour about, you know...
Speaker Change: conversations related to these particular builds, the BioFarm 1s, potential size of these projects.
and whether or not you have capacity constraints.
Speaker Change: That could potentially inhibit your ability on these projects just because of how exposed you are to data centers and how well that's been ramping. Thank you.
Speaker Change: Yeah, I'll start with the end. We'll do everyone that comes our way that we think is a good project. So we, you know, I...
Speaker Change: The great thing is the business is growing well. The margins continue to expand. I would tell you if the right projects came and we had to grow our capacity 25 to 30% right now we could do it. That's I think that's a good thing and as we go into next year we'll have more capacity.
What we haven't seen is a wave of an industry.
Speaker Change: And what I mean by that is we haven't seen 10 farm of plants coming back and all of a sudden there's this big farm of bill We haven't seen 10 auto plants go we're seeing kind of onesy twosies we'll see one here, we'll see one there and and they're all different we're waiting for this wave that says we're going to bring back. [inaudible]
Speaker Change: 25 of our plants, right? And watch them get ready to break ground.
Speaker Change: We think it's coming, but it's still early. It takes a while. I think people underestimate it from the time you say you want to build the factory.
Speaker Change: It would be rid of the political process and the permitting. It is it is taking much longer to get permits through than ever before.
Speaker Change: Every since COVID happened, the agencies have never come back to work. They're working from home which is very complicated to get it would permit that took weeks now takes months.
and permissive took months and I'll take a year.
Speaker Change: If they could clean up that process, we would see plans built at a much faster rate and much greater rate, I think.
Speaker Change: The answer to the question, again, we've seen kind of onesy twosies, we're talking to the big engineering firms that are working on the front end of the stuff. Food is an other one. Food and Farma, we keep hearing about all the designs taking place. We're just waiting for that wave to become the shore.
Great, thank you very much.
Speaker Change: Thank you, there are no further questions, I will turn the call back over to Joe Cutillo for closing comments.
Speaker Change: Thanks, Joanna. I'd like to thank everybody again for joining today's call. If you have any follow-up questions or wish to schedule a call with us, please feel free to contact Noelle. Or contact information can be found in our press release.
Speaker Change: Again, I want to thank everybody and hope you have a great day.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.