Q2 2025 MYR Group Inc Earnings Call

Jennifer Harper: Good morning, everyone, and welcome to the MYR GROUP Second Quarter 2025 Earnings Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one-one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one-one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jennifer Harper, MYR GROUP's Vice President of Investor Relations and Treasurer. Please go ahead, Jennifer.

Good morning, everyone.

And welcome to the MYR Group second quarter 2025 earnings results Conference call.

At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one one or your telephone you would be inherent at immediate message advising your hand is raised.

To withdraw your question. Please press star one again, please be advised that today's conference is being recorded.

I would now like to hand, the conference over to Jennifer Harper MYR group's Vice President of Investor Relations and Treasurer. Please go ahead Jennifer.

Kelly Huntington: Thank you, and good morning, everyone. I would like to welcome you to the MYR GROUP Conference Call to discuss the company's second quarter results for 2025, which were reported yesterday. Joining us on today's call are Rick Swartz, President and Chief Executive Officer; Kelly Huntington, Senior Vice President and Chief Financial Officer; Brian Stern, Senior Vice President and Chief Operating Officer of MYR GROUP's Transmission and Distribution segment; and Don Egan, Senior Vice President and Chief Operating Officer of MYR GROUP's Commercial and Industrial segment. A copy of yesterday's press release is available on the MYR GROUP website at myrgroup.com under the Investors tab. A webcast replay of today's call will be available on the website for seven days following the call. Before we begin, I want to remind you that this discussion may contain forward-looking statements.

Thank you and good morning, everyone.

We welcome you to the MYR Group Conference call.

Second quarter results for 2020.

We reported yesterday.

Joining us on today's call are export President and Chief Executive Officer.

Huntington Senior Vice President and Chief Financial Officer.

Brian <unk> Senior Vice President and Chief operating officer of MYR groups' transmission and distribution segment.

Ian <unk> Senior Vice President and Chief operating officer of MYR group's commercial and industrial segments.

A copy of yesterday's press release is available on the MYR group website at MYR group Dot com under the investors tab.

A webcast replay of today's call will be available on the website for seven days.

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

Kelly Huntington: Any such statements are based upon information available to MYR GROUP's management as of this date, and MYR GROUP assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31st, 2024, the company's quarterly report on Form 10-Q for the second quarter of 2025, and in yesterday's press release. We also present certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release. With that, let me turn the call over to Rick Swartz.

Any such statements are based upon information available to MYR group management as of this date.

Barro group assumes no obligation to update any such forward looking statements.

These forward looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward looking statements.

Accordingly. These statements are no guarantee of future performance.

These risks and uncertainties are discussed in the company's annual report on Form 10-K.

For the year ended December 31 2024.

The company's quarterly report on Form 10-Q for the second quarter of 2025 and in yesterday's press release.

We also present certain non-GAAP financial measures.

A reconciliation of these non-GAAP measures to the most comparable GAAP measure is set forth in yesterday's press release.

With that let me turn the call over to export.

Rick Swartz: Thanks, Jennifer. Good morning, everyone. Welcome to our second quarter of 2025 conference call to discuss financial and operational results. I will begin by providing a summary of the second quarter results, and then we'll turn the call over to Kelly Huntington, our Chief Financial Officer, for a detailed financial review. Following Kelly's overview, Brian Stern and Don Egan, Chief Operating Officers for our T&D and C&I segments, will provide a summary of our segment's performance and discuss some of MYR GROUP's opportunities going forward. I will then conclude today's call with some closing remarks and open the call up for your questions. A steady second quarter performance resulted from the strength of our long-term customer relationships, operational consistency, and strong market presence. We were awarded several master service agreements, further expanding existing relationships with key customers while safely performing ongoing work around the US and Canada.

Thanks, Jennifer Good morning, everyone welcome to our second quarter 2025 conference call to discuss financial and operational results.

I will begin by providing a summary of the second quarter results and then we'll turn the call over to Kelly Huntington, Our Chief Financial Officer for a detailed financial review.

Boeing Kelly's overview, Brian started Don Egan, Chief operating officers for our T&D and C&I segments will provide a summary of our segment performance and discuss some of the more our group's opportunities going forward.

Ill, then conclude todays call with some closing remarks and open the call up for your questions.

Ah study second quarter performance resulted from the strength of our long term customer relationships operational consistency and strong market presence.

We were awarded several master service agreements further expanding existing relationships with key customers will safely performing ongoing work around the U S and Canada.

Rick Swartz: We also captured additional projects in our chosen core markets, further solidifying our market position and continue to strategically pursue new opportunities. Across both business segments, bidding activity remains healthy, driven by the demand for electricity and reliable, resilient infrastructure, as well as the increasing prominence of modern technologies such as artificial intelligence. Emphasis on grid modernization and hardening continue to be strong market drivers and could present opportunities for consistent success across our business. As always, our focus remains on collaborating closely with our customers in an open and trusting partnership while delivering safe, quality, and consistent on-time results in this dynamic energy landscape. Overall, the increased electrification and investments being made in the electrical infrastructure are encouraging and highlight why we believe our chosen markets are poised for ongoing success for years to come. Now, Kelly will provide details on our second quarter of 2025 financial results.

We also captured additional projects in our chosen core markets further solidifying our market position and continue to strategically pursue new opportunities.

Across both business segments bidding activity remains healthy driven by the demand for electricity and reliable resilient infrastructure as well as the increasing prominence of modern technologies such as artificial intelligence.

Emphasis on grid modernization and hardening continued to be strong market drivers and could present opportunities for consistent success across our business.

As always our focus remains on collaborating closely with our customers in an open and trusting partnership while deliveries delivering safe quality and consistent on time results in this dynamic energy landscape.

Overall, the increased electrification and investments being made in the electrical infrastructure are encouraging and highlight why we believe our chosen markets are poised for ongoing success for years to come.

Kelly will provide details on our second quarter 2025 financial results.

Kelly Huntington: Thank you, Rick, and good morning, everyone. Our second quarter 2025 revenues were $900 million, which represents an increase of $71 million, or 8.6% compared to the same period last year. Our second quarter T&D revenues were $506 million, an increase of 10% compared to the same period last year. The breakdown of T&D revenues was $305 million for transmission and $201 million for distribution. Distribution revenues increased by $25 million, and transmission revenues increased by $23 million. Work performed under master service agreements continued to represent approximately 60% of our T&D revenues. C&I revenues were $394 million, an increase of 6% compared to the same period last year, primarily due to an increase in revenue on fixed-price contracts. Our gross margin was 11.5% for the second quarter of 2025 compared to 4.9% for the same period last year.

Thank you Rick and good morning, everyone.

Our second quarter 2025 revenues were $900 million.

Which represents an increase of $71 million or eight 6% compared to the same period last year.

Our second quarter T&D revenues were $506 million, an increase of 10% compared to the same period last year.

The breakdown of T&D revenues was $305 million for transmission and $201 million for distribution.

Distribution revenues increased by $25 million.

Transmission revenues increased by $23 million.

Work performed under Master service agreement continued to represent approximately 60% of our T&D revenues.

C&I revenues were $394 million, an increase of 6% compared to the same period last year, primarily due to an increase in revenue on fixed price contracts.

Our gross margin was 11, 5% for the second quarter of 2025 compared to four 9% for the same period last year the.

Kelly Huntington: The increase in gross margin was primarily due to the second quarter of 2024 being negatively impacted by certain T&D clean energy projects and a C&I project. In the second quarter of 2025, gross margin was also positively impacted by better-than-anticipated productivity and a favorable job closeout. These margin increases were partially offset by an increase in costs associated with labor and project inefficiencies and unfavorable change orders. T&D operating income margin was 8% for the second quarter of 2025 compared to an operating loss margin of 1.8% for the same period last year. The increase was primarily due to the second quarter of 2024 being negatively impacted by certain clean energy projects, as well as better-than-anticipated productivity on certain projects during the second quarter of 2025. These increases were partially offset by higher costs related to labor and project inefficiencies.

The increase in gross margin was primarily due to the second quarter of 2024 being negatively impacted by certain T&D clean energy projects.

And a C&I project in the second quarter of 2025 gross margin was also positively impacted by better than anticipated productivity and a favorable job closeouts.

These margin increases were partially offset by an increase in cost associated with labor and project inefficiencies and unfavorable change orders.

<unk> operating income margin was 8% for the second quarter of 2025 compared to an operating loss margin of one 8% for the same period last year.

The increase was primarily due to the second quarter of 2024 being negatively impacted by certain clean energy projects as well as better than anticipated productivity on certain project during the second quarter of 2025.

These increases were partially offset by higher costs related to labor and project inefficiencies.

Kelly Huntington: C&I operating income margin was 5.6% for the second quarter of 2025 compared to 0.4% for the same period last year. The increase was primarily due to the second quarter of 2024 being negatively impacted by a single project, as well as contingent compensation expense related to a prior acquisition that did not recur in the second quarter of 2025. In addition, higher gross margin in the second quarter of 2025 was due to a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion, as well as better-than-anticipated productivity and a favorable job closeout. These positive drivers were partially offset by higher costs related to labor and project inefficiencies and unfavorable change orders. Second quarter 2025 SG&A expenses were $63 million, an increase of approximately $2 million compared to the same period last year.

C&I operating income margin was five 6% for the second quarter of 2025 compared to 0.4% for the same period last year.

The increase was primarily due to the second quarter of 2024 being negatively impacted by a single project as well as contingent compensation expense related to a prior acquisition that did not recur in the second quarter of 2025.

In addition, higher gross margin in the second quarter of 2025 was due to a larger portion of our project progressing at higher contractual margin some of which are nearing completion as well as better than anticipated productivity and a favorable job closeouts.

These positive drivers were partially offset by higher costs related to labor and project inefficiencies and unfavorable change orders.

Second quarter 2025, SG&A expenses were $63 million, an increase of approximately $2 million compared to the same period last year.

Kelly Huntington: The increase was primarily due to increases in employee incentive compensation costs and employee-related expenses to support future growth. These increases were partially offset by $5 million of contingent compensation expense related to a prior acquisition recognized during the second quarter of 2024 that did not recur in 2025. Second quarter 2025 net income was $27 million compared to a net loss of $15 million for the same period last year. Net income per diluted share was $1.70 compared to negative $0.91 for the same period last year. Second quarter 2025 EBITDA was $56 million compared to negative $5 million for the same period last year. Total backlog as of June 30, 2025 was $2.64 billion, 4% higher than a year ago. Total backlog as of June 30, 2025 consisted of $927 million for our T&D segment and $1.72 billion for our C&I segment.

The increase was primarily due to increases in employee incentive compensation costs and employee related expenses to support future growth.

These increases were partially offset by $5 million of contingent compensation expense related to a prior acquisition recognized during the second quarter of 2024.

That did not recur in 2025.

Second quarter 2025, net income was $27 million.

Compared to a net loss of $15 million for the same period last year net.

Net income per diluted share was $1 70 compared to negative <unk> 91 for the same period last year.

<unk> quarter, 2025, EBITDA was $56 million compared to negative $5 million for the same period last year.

Total backlog as of June 32025, with 264 billion, 4% higher than a year ago total backlog as of June 32025 consisted of $927 million for our T&D segment and $1 $72 billion for our C&I segment.

Kelly Huntington: Second quarter 2025 operating cash flow was $33 million compared to $23 million for the same period last year. The increase in cash provided by operating activities was primarily due to higher net income. Second quarter 2025 free cash flow was $12 million compared to $3 million for the same period last year, reflecting the increase in operating cash flow partially offset by higher capital expenditures. Moving to liquidity in our balance sheet, we had approximately $251 million of working capital, $86 million of funded debt, and $383 million in borrowing availability under our credit facility as of June 30, 2025. We have continued to maintain a strong funded debt to EBITDA leverage ratio of 0.46 times as of June 30, 2025.

Second quarter 2025, operating cash flow was $33 million compared to $23 million for the same period last year and.

The increase in cash provided by operating activities was primarily due to higher net income.

Second quarter 2025, free cash flow was $12 million compared to $3 million for the same period last year, reflecting the increase in operating cash flow, partially offset by higher capital expenditures.

Moving to liquidity and our balance sheet, we had approximately $251 million of working capital $86 million of funded debt and $383 million in borrowing availability under our credit facility as of June 32025.

We have continued to maintain a strong funded debt to EBITDA leverage ratio of 0.46 times as of June 32025, we believe that our credit facility strong balance sheet and future cash flow from operations will enable us to meet our working capital needs support the organic growth of our business pursue.

Kelly Huntington: We believe that our credit facility, strong balance sheet, and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions, and opportunistically repurchase shares. Our board of directors authorized a new $75 million share repurchase program, which replaces our prior repurchase program. The new program will expire on February 4th, 2026, or when the authorized funds are exhausted, whichever is earlier. I'll now turn the call over to Brian Stern, who will provide an overview of our transmission and distribution segment.

<unk> and Opportunistically repurchase shares.

Our board of directors authorized a new $75 million share repurchase program, which replaces our prior repurchase program. The new program will expire on February four 2020 or when the authorized funds are exhausted whichever is earlier.

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

Brian Stern: Thanks, Kelly, and good morning, everyone. Our T&D segment achieved steady results in the second quarter as our focus remained on strengthening and expanding existing relationships with key customers by executing our work at a high level and creating value. Healthy bidding activity continued in the second quarter as we monitored and selectively pursued projects of various sizes with our project portfolio consisting of master service agreements and a healthy mix of smaller to mid-sized jobs. This quarter, an MYR GROUP subsidiary executed a five-year design-build electric distribution master service agreement with Excel Energy, with anticipated revenues to be in excess of $500 million over the five-year period. The MSA is effective through 2029, with construction projects estimated to begin in the first part of 2026. In addition, we are awarded two other MSAs with major utilities in the Northeast and Midwest.

Thanks, Kelly and good morning, everyone.

Our T&D segment achieved steady results in the second quarter as our focus remained on strengthening and expanding existing relationships with key customers by executing our work at a high level and creating value.

Bidding activity continued in the second quarter as we monitored and selectively pursued projects of various sizes with our project portfolio, consisting of Master service agreements and a healthy mix of smaller to mid sized jobs.

This quarter and MYR group subsidiary executed a five year design build electric distribution Master service agreement with external energy with anticipated revenues to be in excess of $500 million.

Over the five year period.

The MSA is effective through 2029 with construction projects estimated to begin in the first part of 2026.

In addition, we were awarded to other Msas with major utilities in the northeast and Midwest.

Brian Stern: Beyond MSAs, we also want a variety of transmission and substation work across the country, including 230 kV and 345 kV transmission line rebuilds in South Carolina and Missouri, respectively. The growing demand for electricity continues to create exciting growth opportunities in the industry. A recent Deloitte Research Center for Energy and Industrials report released in February forecasts $1.4 trillion of capital investments in the US power sector from 2025 to 2030 and predicts similar expenditures to last until 2050. The report also projects that by 2030, power demand will increase 10% to 17% from 2024 levels. MYR GROUP will continue serving as a dependable and agile partner for our utility customers as they strive to meet this increasing electrification demand, helping build an improved infrastructure for the future.

Beyond Msas. We also won a variety of transmission and substation work across the country, including 230 kv and $3 45 kv transmission line rebuild in South Carolina, and Missouri, respectively.

The growing demand for electricity continues to create exciting growth opportunities in the industry.

A recent Deloitte Research center for energy and Industrials report released in February forecast, one four trillion.

Capital investments in the U S power sector from 2025 to 2030 and predict similar expenditures to last until 2050.

Port also projects that by 2030 power demand will increase 10% to 17% from 2024 levels.

And why our group will continue serving as a dependable and agile partner for our utility customers as they strive to meet this increasing electrification demand helping.

Helping build an improved infrastructure for the future.

Brian Stern: In summary, our strong focus and commitment to safety and project execution has enabled us to grow our customer base with new contract wins and expand our current partnerships. We continually strive to leverage the full capabilities of our companies and teams to contribute to our customer success. I will now turn the call over to Don Egan, who will provide an overview of our commercial and industrial segment.

In summary, our strong focus and commitment to safety and project execution has enabled us to grow our customer base with new contract wins and expand our current partnerships.

We continually strive to leverage the full capabilities of our companies and teams to contribute to our customers' success.

I will now turn the call over to Don Egan, who will provide an overview of our commercial and industrial segment.

Don Egan: Thanks, Brian, and good morning, everyone. The second quarter saw steady results in the C&I segment as we continued to strengthen and leverage strong relationships with our valued customers while professionally executing projects of various sizes and strategically bidding new opportunities. Bidding activity remains healthy in our chosen core markets, even as wider economic questions linger moving forward. The major construction indices continue reporting increases in growth potential compared to the previous year. According to the most recent Q1 2025 market conditions report based on information from the US Census Bureau, total non-residential construction spending in the US increased 3.9% from February 2024 to February 2025. This includes a 6.7% increase for educational construction spending and a 4.8% increase in manufacturing construction spending.

Thanks, Brian and good morning, everyone.

The second quarter saw steady results in the C&I segment, as we continued to strengthen and leverage strong relationships with our valued customers, while professionally executing projects of various sizes and strategically bidding new opportunities.

Bidding activity remains healthy and our chosen core markets, even as wider economic questions linger moving forward. The major construction indices continue reporting increases in growth potential compared to the previous year.

According to the most recent Q1 2025 market conditions report based on information from the U S Census Bureau.

Nonresidential construction spending in the U S increased three 9% from February 2024 to February 2025. This includes six 7% increase for educational construction spending and a four 8% increase in manufacturing construction spending. This improvement is also reflected in the latest.

Don Egan: This improvement is also reflected in the latest Dodge Momentum Index report released in June, which saw an overall 3.7% growth in May compared to the previous month, including a 10.5% increase in institutional building. The report also found the DMI was up 24% when compared to May of 2024, with data centers still significantly contributing to the overall healthy growth. Last quarter, we mentioned the verbal award of phase one of a large-scale data center project in Colorado for Sturgeon Electric, valued at over $90 million, which has now been contractually awarded and added to our backlog. We also want additional work throughout our core markets across the country in the quarter, including aerospace, healthcare, and higher education. We also received awards in battery storage, transportation, and manufacturing.

Momentum Index report released in June, which saw an overall three 7% growth compared.

Compared to the previous months.

Including a 10, 5% increase in institutional building.

<unk> also found the BMI was up 24% when compared to May of 2024, with Datacenters still significantly contributing to the overall healthy growth.

Last quarter, we mentioned the verbal award of Phase one of our large scale data Center project in Colorado for Sturgeon Electric.

Argued at over $90 million.

Which has now been contractually awarded and added to our backlog. We also won additional work throughout our core markets across the country in the quarter, including aerospace healthcare and higher education.

We also received awards in battery storage transportation and manufacturing.

Don Egan: In summary, we are proud of our employees for their creative thinking, dedication, and commitment to collaborating closely with our valued customers. Their proactive and customer-focused approach enables us to maintain a healthy pipeline of work and enhance our potential for continued growth. Thanks, everyone, for your time today. I will now turn the call back to Rick, who will provide us with some closing comments.

In summary, we are proud of our employees for their creative thinking and dedication and commitment to collaborating closely with our valued customers.

Our proactive and customer focused approach enables us to maintain a healthy pipeline of work and enhance our potential for continued growth.

Thanks, everyone for your time today I will now turn the call back to Rick who will provide us with some closing comments.

Rick Swartz: Thank you for those updates, Kelly, Brian, and Don. Our performance in the second quarter reflects the strength of our operational team, our ability to maintain and expand diverse customer relationships, and the stability of our core markets. We continue to be proactive and disciplined in this dynamic energy landscape and remain committed to the strong operating principles and sound business strategies that have enabled us to become an industry leader. We recognize the importance of adapting to market conditions and being an agile partner for our customers as we respond to industry changes. This is supported by our continued investment and development of our teams, who drive value for our customers and communities by the work they perform each day. Thank you to every employee for your dedication and invaluable contributions to this organization. It does not go unnoticed.

Thank you for those updates Kelly Bryan in.

Our performance in the second quarter reflects the strength of our operational teams, our ability to maintain and expand diverse customer relationships and the stability of our core markets.

We continue to be proactive and disciplined in this dynamic energy landscape and remaining committed to the strong operating principles and sound business strategies that have enabled us to become an industry leader.

We recognize the importance of adapting to market conditions and being an agile partner for our customers as we respond to industry changes.

This is supported by our continued investment and development of our teams who drive value for our customers and communities by the work they perform each day. Thank.

Thank you to every employee for your dedication and invaluable contributions to this organization. It does not go unnoticed and finally I want to thank each of you for your continued support of MYR group, we look forward to progressing our business strategies will emphasizing our customer relationships and creating shareholder value operator.

Rick Swartz: And finally, I want to thank each of you for your continued support of MYR GROUP. We look forward to progressing our business strategies while emphasizing our customer relationships and creating shareholder value. Operator, we are now ready to open the call up for comments and questions.

Now ready to open the call up for comments and questions.

Jennifer Harper: Thank you. As a reminder for those of you on the phone, to ask a question, please press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one-one again. Please stand by while I compile the Q&A roster. Our first question comes from Sanjita Jing from KeyBank. Please go ahead.

Thank you.

As a reminder for those of you on the phone to ask a question. Please press star one one of your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Please stand by while a compile the Q&A roster.

Our first question comes from <unk> Jain from Keybanc. Please go ahead.

Sangita Jain: Good morning. Thank you for taking my questions. First, if I can ask Rick and Kelly on the MSA that you press released earlier, I think it was this month. If it was, I'm presuming it's a new MSA and not a renewal, and whether you displaced an incumbent or if it's like brand new scope that you won with Excel.

Good morning. Thank you for taking my questions first if I can ask Rick and Kelly on the MSA that you press release earlier I think it was this month.

If it was I'm presuming, it's a new MSA, another renewal and whether you displaced an incumbent or if it's like brand new scope that you won with excel.

If new scope so it's additional to what we already have under our Msas.

Rick Swartz: It's new scope, so it's additional to what we already have under our MSAs.

Sangita Jain: And did you displace? And so there was no displacement. This was just new work, you're saying?

And did you displace.

There was no displacement. This was just new work Youre, saying.

Rick Swartz: This is additional work, yes.

This is additional work yes.

Sangita Jain: Okay. And then if that's helpful, thank you. And then if I can ask a follow-up on your C&I backlog. Good to see the data center $90 million award getting booked into Q, but I'm just trying to wonder why the backlog was down sequentially and if there's anything big that you that got finished in the second quarter or how should we think about that?

Okay, and then if thats helpful. Thank you and then if I can ask a follow up on your C&I backlog good to see the data center and $90 million award getting booked into Q.

Just trying to wonder why the backlog was down sequentially and if there's anything big that you.

They've got finished in the second quarter or how should we think about that.

Rick Swartz: I would say it was the normal progression of work. Our backlog's always going to be lumpy. I've said that for for years. I mean, it takes us a long time to negotiate out these contracts. Lots of good activity on that side. But again, it's going to be lumpy. These projects are longer-term projects in a lot of cases when you're getting into some of the data centers and other types of work. Some of the transportation work and those projects, again, take months to negotiate out.

I would say it was the normal progression of work our backlogs are always going to be lumpy I've said that for years I mean, it takes us a long time to negotiate these contracts lots of good activity on that side.

But again, it's going to be lumpy. These projects are longer term projects and a lot of cases, when youre getting into some of the data centers and other types of work.

Some of the transportation work and those projects again can take months to negotiate out.

Yeah.

Sangita Jain: Got it. Helpful. Thank you, Rick.

Got it helpful. Thank you.

Rick Swartz: Thanks.

Okay.

Jennifer Harper: Thank you. One moment for our next question. Our next question comes from Ati Modak from Goldman Sachs. Please go ahead.

Thank you.

A moment for our next question.

Our next question comes from <unk> <unk>.

Goldman Sachs. Please go ahead.

Atidrip Modak: Hi. Good morning, guys. Rick, that color on the MSA was very helpful, but I guess maybe in terms of the business footprint expansion, assuming that is mostly the MSA, anything you can talk to in terms of the philosophy on how additional expansion would occur and should we expect new MSA announcements or something that you're actively pursuing?

Hi, Good morning, guys, Rick that color on the MSA was very helpful, but I guess maybe.

In terms of the business footprint expansion, assuming that is mostly the MSA anything you can talk to go onto the philosophy on how additional expansion with Alcoa and should we expect new MSA announcement is something that you're actively pursuing.

Rick Swartz: Yeah, we're always, I mean, we like the MSA work. As Kelly said, it was approximately 60% of our T&D revenue for this last quarter. But again, we like the bid work too. So it's really just timing how it comes in. Not all customers want to do MSA work. So we'll continue to expand that where we can. And but, you know, very good opportunity when we're looking kind of at the mid to large-sized, longer-term projects out there too. So we'll push it on, I guess, all fronts on that side. But this last quarter, we did have some pretty good MSA activity.

So we're always I mean, we like the MSA work as Kelly said is it was approximately 60% of our <unk> revenue for this last quarter, but again, we like the bid work too. So it's really just timing of how it comes in not all customers want to do MSA work. So we will continue to expand that where we can but.

Very good opportunities when we're looking at kind of mid to large sized longer term projects out there too.

So we're pushing on my guess all fronts on that side.

But this last quarter, we did have some pretty good MSA activity.

Atidrip Modak: That's great. And then as you think of this new sort of incremental slice of revenue, how are you thinking about labor requirements, any need to acquire or sort of expand part of work that is not self-sourced, and how should we think about the margin impact of these new MSAs?

That's great and then as you think of this new sort of incremental.

Of revenue how are you thinking about labor requirements any.

Need to acquire or sort of expand.

Part of work that is not self sourced how should we think about the margin impact of these new.

New Msas.

Tom.

Rick Swartz: You know, I think for the most part, we've always self-performed 100% of our electrical work. We do ancillary services. We'll subcontract that out. But good opportunities in the labor market. I think we do a lot on the training, the development side, the recruitment side. Over the years, we've shown we can grow our company that way. And then again, we're always looking for that, right? You know, tuck in acquisition on top of it where it would, it makes sense and it would be additive to our company. So I think we're really pushing it on all fronts, but trying to make sure we're patient and make the right decision.

I think for the most part we've always yourself performed 100% of our electrical.

Work that we do ancillary services will subcontract that out.

Good opportunities in the labor market I think we do a lot on the training and the development side the recruitment side over the years, we've shown that we can grow our company that way and then again, we're always looking for that right tuck in acquisition on top of it.

It makes sense and it would be additive to our company. So I think we're really pushing on all fronts, but trying to make sure we're patient and make the right decision.

Atidrip Modak: Thank you, Rick.

Thank you Greg.

Jennifer Harper: Thank you.

Thank you. Thank you one moment for our next question.

Atidrip Modak: Thank you.

Jennifer Harper: One moment for our next question. Our next question comes from Justin Hawk from Baird. Please go ahead.

Our next question comes from Justin Hauke.

From Baird. Please go ahead.

Okay.

Justin Hauke: Great. I guess I wanted to get an update just because you guys have kind of intentional, I mean, you've been in the solar market forever, renewables generation forever, but it's kind of been something that you've moved away from some of your work there from maybe where it was at a peak. I think you've given us some stats for the T&D business in terms of kind of the trailing 12-month revenue contribution from solar work. And I guess I was just hoping to get an update on that. And I guess the reason why is specifically, maybe you can comment on is just, you know, any change in customer discussions in terms of their planning with the One Big Beautiful Bill because that's something that's obviously topical and, you know, we're getting a lot of questions on that.

Great.

I guess I wanted to get an update just because you guys.

Hum.

Kind of intention or have you been in the solar market forever renewables generation forever, but it's kind of been something that you've moved away from some of your.

Your work there from maybe where it was at a peak I think you've given us some stats for the T&D business in terms of kind of the trailing 12 month revenue contribution from from solar work and I guess I was just hoping to get an update on that and I guess the reason why is specifically maybe you can comment on is just any change in customer.

<unk> in terms of their planning with the.

One big beautiful Bill because that's something that's obviously topical and we're getting a lot of questions on that.

Rick Swartz: Yeah. I would say on the T&D side, we continue to be selective on those projects. We haven't seen big changes in the markets that we've talked about that we've competed on historically on the solar side of our T&D business. So being selective, we haven't announced any new work come into that. But again, our core T&D business is growing well. On our C&I side, where we do active solar work, seeing good activity in the markets we're in there, seeing long-term activity and good conversations with our clients. So we're having, you know, conversations with our clients across the country. But I would say in the T&D areas, not as strong of conversations as far as what's going to be built out for pending projects for us right now. But we continue to watch that and monitor it.

I would say on the T&D side, we continue to be selective on those projects, we haven't seen big.

Big changes in the markets that we've talked about that we've competed on historically in the on.

On the solar side of our T&D business, so being selective we haven't announced any any new work come into that.

But again, our core T&D business is growing well on our C&I side, where we do active solar we're seeing good activity in the markets. We're in there.

<unk> long term.

Activity.

Good conversations with our clients so.

Having conversations with our clients across the country, but I would say in the T&D areas.

Not as strong the conversations as far as what's going to be built out.

For pending projects for US right now, but we continue to watch that and monitor it.

Rick Swartz: And, you know, at the right contractual terms and the right pricing, we like that market. But we're patient again.

And at the right contractual terms and the right pricing, we like that market.

But we're patient again.

Justin Hauke: Okay. So would it be fair to say that that's a low single-digit percentage contribution of your revenue? It's probably just renewable stuff at this point.

Okay.

I mean would it be fair to say that Thats low single.

<unk> digit percentage contribution of your revenue guide is renewable stuff at this point.

Kelly Huntington: Yeah. So if you look on the T&D side of our revenues, you know, it was at 10% of our revenues last year. And, you know, as we've mentioned previously, it was down to just 4% of our fourth quarter revenues. And that percentage has continued to decline in the first and second quarters as we've been, you know, undertaking activities to reach final completion on that existing portfolio of projects. And then on the C&I side, you know, it's been a core market for us for a long time and a part of our growth on the C&I side of the business. But, you know, not a single one of our core markets is dominant, including solar or data centers.

Yes.

T&D side of our revenues.

At 10% of our revenues last year and as we've mentioned previously went down to just 4% of our fourth quarter revenues and Thats percentage of continued decline in the first and second quarters as we've been.

And undertaking activities to reach final completion on that existing portfolio of projects.

And then on the C&I side.

Been a core market for us for a long time in that part of our growth on the C&I side of the business but.

Not a single one of our core market dominant including solar or data centers.

Justin Hauke: Yeah. Okay. All right. That's helpful. And I guess my second question, Rick, you talked a little bit about the M&A, but just philosophically thinking about it, you know, your balance sheet's obviously in a really good position. You've got the new $75 million authorization. You were, you know, aggressive on buying the stock in the first quarter. But, you know, just thinking about, I don't know, kind of the various ways that, you know, you could deploy capital, you know, desire for M&A versus buyback or just how you're balancing that, especially since some of your peers have been more aggressive, particularly on the C&I side in terms of bringing on some more capacity, just maybe just to lay the land of capital allocation out.

Okay, Alright, that's helpful.

I guess, Mike My second question.

Rick you talked a little bit about the M&A, but just philosophically thinking about it.

Your balance sheet, obviously in a really good position you've got the new $75 million authorization you were.

Aggressive on buying the stock in the first quarter, but just thinking about.

I don't know kind of the various ways that you could deploy capital.

Desire for M&A versus.

Buyback or just.

How youre balancing that especially since some of your peers have been more aggressive, particularly on the C&I side in terms of.

Bringing on some more capacity just maybe just delay of Atlanta.

On capital allocation.

Okay.

Rick Swartz: Sure. Sure. You know, when you look at that side of it, I think for us, it's finding the right acquisition. So we continue to look. We see good activity out there, but it's just finding the right one. And again, we're going to be disciplined in the price we'll pay for an acquisition. So that plays into it. We've seen multiples come up significantly on the C&I side. But again, for the right company, we will pay a fair multiple for that company. And we want somebody that's going to be with us long term. So continue to look at those opportunities. But with our balance sheet, with the shape it's in, our leverage is low as it is. We've got the opportunities to still do, you know, acquisitions, push our organic growth, and do stock buybacks when it makes sense.

Sure sure.

Yes.

When you look at that side of it I think for US it's finding the right acquisition. So we continue to look we see good activity out there, but it's just finding the right one and again, we're going to be disciplined in the price we will pay for an acquisition.

So that plays into it.

We've seen multiples come up.

Significantly on the C&I side, but again for the right company, we will pay a fair multiple for that company and we want somebody that's going to be with us long term. So.

Continue to look at those opportunities, but with our balance sheet with the shape. It's in.

Our leverage is low as it is.

We've got the opportunities to still do.

Acquisitions.

Bush, our organic growth in <unk>.

Buybacks when it makes sense.

Justin Hauke: Yeah. Okay. Great. Thank you.

Yes.

Okay, great. Thank you.

Jennifer Harper: Thank you. Our next question comes from John Bretz from Kansas City Capital Associates. Please go ahead.

Thank you.

Next question comes from John Breads.

This CD capital Associates. Please go ahead.

Jonathan Braatz: Morning, everyone. Rick, Kelly, maybe my first question is, you know, your environment, your operating environment seems to be getting incrementally better every quarter. You hear a lot of great news about demand for electricity. I guess my question is, Rick, do you have to sort of ramp up your investment spending, your CapEx spending, and maybe your, you know, sort of your corporate expenses to meet this incrementally stronger demand? Any reason you have to begin to accelerate spending?

Hey, everyone.

Correct Kelly maybe.

First question is.

Youre environment, you're operating environment seems to be getting incrementally better every quarter here a lot of great news about demand for electricity I guess my question is Rick do you have to sort of ramp up your.

Investment spending in your Capex spending and maybe your.

Sort of your corporate expenses too.

To meet this.

Incrementally stronger demand.

Any reason you have to.

Begin to accelerate spending.

Rick Swartz: I think we watch that all the time, especially on the, you know, CapEx side. You know, when you look at equipment deliveries, where that side's at, the commitments we need to make for some potentially larger projects out there would continue to look at it. But I wouldn't say it's going to be a needle mover on something that's, you know, going to double or anything like that. But we continue to make the right calls, buy the equipment in advance, make the right capital expenditures as needed, and, you know, invest in our people to capture the right people to manage this work. So I would say it's, you know, a balancing act, but a very strong, you know, long-term market out there that we're really trying to monitor, gauge, and adapt to as we prepare to be ready to take on this work.

We watch that all the time, especially on the Capex side when you look at it.

Equipment deliveries where that side.

The commitments, we can debate for some potentially larger projects out there we'll continue to look at it but I wouldn't say, it's going to be a needle mover on something thats.

We're going to double or anything like that but we continue to make the right calls.

Buy the equipment in advance to make the right capital.

<unk> is needed and invest in our people.

To capture the right people to manage this work so I would say, it's a balancing act, but a very strong long term market out there.

We're really trying to monitor gauge in.

Two as we prepare to be ready to take on this quarter.

Jonathan Braatz: Okay. Okay. And a question for Don. Obviously, there's a lot of noise out there all the time regarding tariffs and supply chain and so on. Are you seeing any C&I projects or any projects having to go back to for rebid and maybe the timeline to project awards lengthening at all?

Okay, Okay, and a question for Don.

Obviously, theres a lot of noise out there all the time regarding tariffs and supply chain and so on are you seeing any C&I projects.

Any projects, having to go back to for rebid and maybe.

The timeline.

Project Awards lengthening at all.

Don Egan: Haven't necessarily seen many projects extend their schedules. However, we do have clients that are coming to us much sooner, issuing in some cases a limited notice to proceed to get long-lead equipment coming. So we're talking actively with our customers to try to do what we can to prevent any extension to schedules.

I haven't necessarily seen many projects extend their schedules. However, we do have clients that are coming to us much sooner.

In some cases, a limited notice to proceed to get long lead equipment coming so we're talking actively with our customers to try to do what we can to prevent any extension to schedules.

Jonathan Braatz: Okay. All right. Thank you very much.

Okay, Alright, thank you very much.

Rick Swartz: Thank you.

Thank you.

Jennifer Harper: Thank you. Our next question comes from Brian Brophy from Stifel. Please go ahead.

Thank you.

Our next question comes from Brian Brophy from Stifel. Please go ahead.

Brian Brophy: Yeah. Thanks. Good morning, everybody. Appreciate you taking the question. I guess if I remember correctly, you guys have previously talked about high single-digit growth in T&D this year, excluding some of the headwind on the clean energy side. It feels like after this quarter and some of the backlog and order activity, that maybe there's some upside to that. Just curious if you wouldn't mind providing an update there. Thanks.

Yes. Thanks, good morning, everybody I appreciate you taking the question I guess, if I remember correctly.

You guys had previously talked about high single digit growth in T&D this year excluding.

Some of the headwind on the clean energy side.

It feels like after this quarter and some of the backlog and order activity.

Maybe is there some upside to that just curious if you would if you would mind, providing an update there. Thanks.

Rick Swartz: Yeah. I would say, Kelly, go ahead, Kelly.

Yes, I would say Kelly go ahead Kevin.

Kelly Huntington: Okay. Sure. So, you know, we still see that expectation for the full year that high single-digit growth, excluding solar, which, as I mentioned before, was 10% of our revenues last year. You know, I think we're continuing to see a really strong market environment out there. You know, I think the one thing that can continue to be a little bit unpredictable on how quarterly revenues fall out on both sides of the business really is timing and materials expense. And when projects are ramping up, you know, pushes by a few weeks in either direction can cause some variability to quarterly revenues. But continue to see a strong market outlook and, you know, that high single-digit growth for both C&I and for T&D, excluding solar.

Okay sure.

So we still see that expectation for the full year at that high single digit growth, excluding pillar, which as I mentioned before was that 10% of our revenues last year.

I think we're continuing to see a really strong market environment out there.

I think the one thing that and continue to be a little bit unpredictable on how quarterly revenues fall out on both sides of the business really is timing of materials expense.

When projects are ramping up pushed out by a few weeks in either direction can cause some variability to quarterly revenues, but continued to be a strong market outlook and that high single digit growth for both C&I and for T&D excluding.

Fuller.

Don Egan: Thanks. I appreciate it. I'll pass it on.

Thanks, I appreciate it I'll pass it on.

Okay.

Jennifer Harper: All right. I am showing no further questions in the queue. I will now turn the call over to Rick Schwartz for any additional or closing remarks.

I am showing no further questions in the queue I will now turn the call over to Rick Swartz for any additional or closing remarks.

Rick Swartz: To conclude, on behalf of Kelly, Brian, Don, and myself, I sincerely thank you for joining us on the call today. I don't have anything further, and we look forward to working with you in the future and speaking with you again on our next conference call. Until then, stay safe.

To conclude on behalf of Kelly, Bryan, Dan and myself I sincerely. Thank you for joining us on the call today.

Don't have anything further and we look forward to working with you in the future and speaking with you again on our next conference call until then stay safe.

Jennifer Harper: Thank you. This concludes today's conference call. We thank you for participating. You may now.

Thank you. This concludes today's conference call. We thank you for participating you may now disconnect.

[music].

Okay.

Yes.

Yes.

Okay.

Yes.

Okay.

Okay.

Okay.

[music].

Yeah.

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Okay.

Okay.

Yes.

[music].

Sure.

[music].

Yes.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

Okay.

Yes.

Yes.

Yes.

Okay.

Okay.

Okay.

[music].

Okay.

[music].

Sure.

Okay.

[music].

Okay.

Okay.

Sure.

[music].

Okay.

Hum.

[music].

Okay.

[music].

Thank you.

[music].