Q3 2024 Everus Construction Group Inc Earnings Call

November 7, 2024

Saxon group third quarter 'twenty 'twenty four result conference call.

Operator: Everyone to the Everus Construction Group Q3 2024 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again. Thank you. I would now like to turn the call over to Paul Bartolai. Please go ahead.

Operator: Everyone, to the Everus Construction Group Q3 2024 Result Conference call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Paul Bartolai. Please go ahead.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and session.

You would like to ask a question Judy displays.

Please press star followed by the number one on your telephone keypad.

If you would like to withdraw your question Press Star one again, thank you I will.

Now I'd like to turn the call over to Bob.

Please go ahead.

Thank you welcome to Irish construction groups third quarter 2024 conference call.

Paul Bartolai: Thank you. Welcome to Everus Construction Group's Q3 2024 Results Conference Call. Leading the call today, our CEO, Jeff Thiede, and CFO, Max Marcy. We issued a news release yesterday detailing our Q3 2024 operational and financial results. This release, together with the accompanying presentation materials, are publicly available on our website at investors.everus.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest filings with the SEC.

Paul Bartolai: Thank you. Welcome to Everus Construction Group's Q3, Q4 results conference call. Leading the call today are CEO Jeff Thiede and CFO Max Marcy. We issued a news release yesterday detailing our Q3, Q4 operational and financial results. This release, together with the accompanying presentation materials, is publicly available on our website at investors.everus.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factors section of our latest filings with the SEC.

Leading the call today are CEO.

The CFO Max Mercy.

We issued a news release yesterday detailing our third quarter 2020 for operational and financial results.

Release together with the accompanying presentation materials are publicly available on our website.

At investors <unk> com.

I would like to remind you that management's commentary and responses to questions. On today's conference call May include forward looking statements, which by their nature are uncertain and outside of the company's control.

Although these forward looking statements are based on management's current expectations and beliefs.

Results could differ materially.

For a discussion of some of the factors that could cause actual results to differ please.

Please refer to the risk factors section of our latest filings with the SEC.

Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in our news release issued yesterday and in the appendix of today's presentation.

Paul Bartolai: Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the news release issued yesterday and in the appendix of today's presentation. Today's call will begin with prepared remarks from Jeff, who will provide a review of our recent business performance, including an overview of our forever value creation strategy, followed by a financial update from Max. At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Jeff.

Paul Bartolai: Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the news release issued yesterday and in the appendix of today's presentation. Today's call will begin with prepared remarks from Jeff, who'll provide a review of our recent business performance, including an overview of our 4EVER value creation strategy, followed by a financial update from Max. At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Jeff.

Today's call will begin with prepared remarks from Jeff will provide a review of our recent business performance, including an overview of our forever value creation strategy.

Owed by a financial update for Max.

At the conclusion of these prepared remarks, we will open the line for your questions with that I'll turn the call over to Josh.

Thank you Paul and good morning to everyone joining us on our call today.

Jeff Thiede: Thank you, Paul, and good morning to everyone joining us on the call today. We are very excited to be here with you all today as we report our first quarterly results as a standalone public company following our spin-off from MDU Resources, which completed just last week. Over the 27 years, we have built a scaled national platform of market-leading local brands, positioning us as a leading specialty construction solutions provider. We have developed the scale needed to enter the market as an independent public company and are now ideally situated to execute on our 4EVER strategy and drive value creation for our new shareholders. We are a people-first business with more than 8,500 highly skilled team members currently working across the United States, and we certainly would not be here today without the hard work and dedication of our entire team.

Jeffrey Thiede: Thank you, Paul, and good morning to everyone joining us on the call today. We are very excited to be here with you all today as we report our first quarterly results as a standalone public company following our spinoff from MDU Resources, which we completed just last week. Over the 27 years, we have built a scaled national platform of market-leading local brands, positioning us as a leading specialty construction solutions provider. We have developed the scale needed to enter the market as an independent public company and are now ideally situated to execute on our forever strategy and drive value creation for our new shareholders. We are a people-first business with more than 8,500 highly skilled team members currently working across the United States, and we certainly would not be here today without the hard work and dedication of our entire team.

We are very excited to be here with you all today as we can.

We report our first quarterly results as a Standalone public company following our spin off from MDU resources, which was completed just last week.

Over the 27 years, we have built a scaled national platform of market, leading local brands positioning us as a leading specialty construction solutions provider.

We have developed the scale needed to enter the market as an independent public company and are now ideally situated to execute on our forever strategy and.

And drive value creation for our new shareholders.

We are a people business with more than 8500 highly skilled team members currently working across the United States.

And we certainly would.

Not be here today without hard work and dedication of our entire team.

Our operating brand leadership through our field employees.

Jeff Thiede: From our operating brand leadership through our field employees, we have industry-leading skilled talent. I'm eternally grateful for everything they do and feel honored and privileged to lead this tremendous team. Now turning to our Q3 performance, which we highlight on slide 4. We generated strong Q3 results with continued execution across our portfolio of projects, financial discipline leading to solid free cash flow conversion and record backlog, positioning us for continued success. Our Q3 revenue increased 6%, driven by balanced growth across our diversified end markets, particularly continued momentum in our data center work. Our electrical and mechanical revenues increased 4%, while our transmission and distribution revenues grew 12%. Our Q3 EBITDA increased 12%, driven by our balanced revenue growth, strict financial discipline, and project efficiencies, demonstrating our strong execution.

Jeffrey Thiede: From our operating brand leadership through our field employees, we have industry-leading skilled talent. I'm eternally grateful for everything they do and feel honored and privileged to lead this tremendous team. Now, turning to our Q3 performance, which we highlight on slide four, we generated strong Q3 results with continued execution across our portfolio of projects, financial discipline leading to solid free cash flow conversion, and record backlog, positioning us for continued success. Our Q3 revenue increased 6%, driven by balanced growth across our diversified end markets, particularly continued momentum in our data center work. Our electrical and mechanical revenues increased 4%, while our transmission and distribution revenues grew 12%. Our Q3 EBITDA increased 12%, driven by our balanced revenue growth, strict financial discipline, and project efficiencies, demonstrating our strong execution.

We have industry, leading skilled talent.

I'm truly grateful for everything they do and feel honored and privileged to lead this tremendous team.

Now turning to our third quarter performance, which we highlight on slide four.

We generated strong third quarter results with continued execution across our portfolio of projects financial discipline, leading to solid free cash flow conversion.

And record backlog positioning us for continued success.

Our third quarter revenue increased 6% driven by balanced growth across our diversified end markets, particularly continued momentum in our data center work.

Our electrical mechanical revenues increased 4%.

Our transmission and distribution revenues grew 12%.

Our third quarter, EBITDA increased 12% driven by our balanced revenue growth strict financial discipline and project efficiencies demonstrating our strong execution.

As a result, our third quarter EBITDA margin improved 40 basis points to eight 5% versus eight 1% in the third quarter last year.

Jeff Thiede: As a result, our Q3 EBITDA margin improved 40 basis points to 8.5% versus 8.1% in Q3 last year. Our total backlog at the end of Q3 was nearly $2.9 billion, an all-time record with an increase of 56% from the end of Q3 last year. Our backlog growth emphasizes the strength of our national platform of market-leading local brands, our deep customer relationships, and our strong strategic positioning in markets that are benefiting from favorable secular tailwinds. Our record backlog provides good visibility into our near-term growth outlook and strong operating momentum. We are pleased with our solid Q3 performance and based on our strong backlog growth and continued momentum in our key end markets, we are reaffirming our 2024 financial outlook and are very excited about the opportunities ahead.

Jeffrey Thiede: As a result, our Q3 EBITDA margin improved 40 basis points to 8.5% versus 8.1% in Q3 last year. Our total backlog at the end of Q3 was nearly $2.9 billion, an all-time record, with an increase of 56% from the end of Q3 last year. Our backlog growth emphasizes the strength of our national platform of market-leading local brands, our deep customer relationships, and our strong strategic positioning in markets that are benefiting from favorable secular tailwinds. Our record backlog provides good visibility into our near-term growth outlook, and strong operating momentum. We are pleased with our solid Q3 performance, and based on our strong backlog growth and continued momentum in our key end markets, we are reaffirming our 2024 financial outlook, and are very excited about the opportunities ahead.

Total backlog at the end of the third quarter was nearly $2 9 billion, an all time record.

Increase of 56% from the end of the third quarter last year.

Our backlog growth emphasizes the strength of our national platform of market, leading local brands, our deep customer relationships.

Our strong strategic positioning in markets that are benefiting from favorable secular tailwind.

Our record backlog provides good visibility into our near term growth outlook and strong operating momentum.

We are pleased with our solid third quarter performance based on our strong backlog growth and continued momentum in our key end markets. We are reaffirming our 2024 financial outlook and are very excited about the opportunities ahead.

Let me shift gears, a bit and provide an overview of our fore river strategy, which forms the foundation for our value creation framework and as detailed on slide five of today's presentation.

Jeffrey Thiede: Let me shift gears a bit and provide an overview of our forever strategy, which forms the foundation for our value creation framework and is detailed on slide five of today's presentation. Our forever strategy is the basis for everything we do and is designed to deliver value creation through sustained profitable growth, operational excellence, and disciplined capital allocation. Our forever strategy starts with E for our employees. We are a people-first business, and our highly skilled, industry-leading workforce is critical to ensuring successful outcomes for our customers. Our culture starts with safety. We are an industry-leading safety standard, and our extensive training program ensures that we constantly maintain, grow, and share our skills across our national platform. Our strong union relationships, which cover 82% of our workforce, ensure that we have access to a highly skilled, scalable workforce as we grow.

Jeff Thiede: Let me shift gears a bit and provide an overview of our 4EVER strategy, which forms the foundation for our value creation framework and is detailed on slide 5 of today's presentation. Our 4EVER strategy is the basis for everything we do and is designed to sustain profitable growth, operational excellence, and disciplined capital allocation. Our 4EVER strategy starts with E for our employees. We are a people-first business, and our highly skilled, industry-leading workforce is critical to ensuring successful outcomes for our customers. Our culture starts with safety. We have industry-leading safety standards, and our extensive training program ensures that we constantly maintain, grow, and share our skills across our national platform. Our strong union relationships, which cover 82% of our workforce, ensure that we have access to a highly skilled and scalable workforce as we grow.

Our four of our strategy is the basis for everything we do and is designed to deliver from creation through sustained profitable growth operational.

<unk> excellence and disciplined capital allocation.

Our core of our strategy starts with E Ferrara employees.

We are a people first business and our highly skilled industry, leading workforce is critical to ensuring successful outcomes for our customers.

Our culture starts with safety.

We are an industry.

Safety standards and our extensive training program ensures that we constantly maintain grow and share our skills across our national platform.

Our strong union relationships, which covers 82% of our workforce ensures that we have access to a highly skilled and scalable workforce as we grow.

And our strategy is for value.

Jeffrey Thiede: The V in our forever strategy is for value: value for our customers, and ultimately value for our shareholders. Driving value for our customers ensures long-term relationships that drive repeat business and a platform for growth. The second E in forever is execution. Our proven, repeatable project playbook is at the heart of our execution strategy. Our discipline, focused on our playbook, enables our consistent, high-quality execution across the project lifecycle. This helps us reduce risk, generate a resilient margin profile, and provide high-quality outcomes for clients. Our playbook runs from pre-construction through construction and into the post-construction phase. It covers everything from thoughtful project selection to bidding discipline and systematic project execution, with a relentless focus on safety to post-construction services. We also review lessons learned, and prioritize customer satisfaction and customer retention. Finally, the R in forever is for relationships.

Jeff Thiede: The V in our 4EVER strategy is for value for our customers and ultimately value for our shareholders. Driving value for our customers ensures long-term relationships that drive repeat business and a platform for growth. The second E in 4EVER is execution. Our proven repeatable project playbook is at the heart of our execution strategy. Our disciplined focus on our playbook enables our consistent high-quality execution across the project life cycle. This helps us reduce risk, generate a resilient margin profile, and to provide high-quality outcomes for clients. Our playbook runs from pre-construction through construction and into the post-construction phase. It covers everything from thoughtful project selection to bidding discipline and systematic project execution with a relentless focus on safety to post-construction services. We also review lessons learned and prioritize customer satisfaction and customer retention. Finally, the R in 4EVER is for relationships.

Value for our customers and ultimately value for our shareholders.

Driving value for our customers.

Long term relationships.

Peak business and a platform for growth.

The second Ian Forever is execution.

Our proven.

Project Playbook is at the heart of our execution strategy.

Our focus.

Focus on our playbook enables our consistent high quality execution across the project lifecycle.

This helps us reduce risks.

Do you have a resilient margin profile and provide high quality outcomes for clients.

Our playbook runs from new construction through construction and into the post construction phase.

Everything from co project selected to bidding discipline and systematic project execution with a relentless focus on safety to post construction services we.

Also review lessons learned and prioritize customer satisfaction and customer retention.

Finally, the R and forever as four relationships.

High quality execution on complex projects.

Jeff Thiede: Our high-quality execution on complex projects for our key customers ensures strong customer relationships and repeat business. We are very committed to building and maintaining these long-term relationships, which is clearly demonstrated by the tenure of our top customers who have been trusted partners for an average of more than 30 years, with some of the customer relationships predating Everus' acquisition of the local operating brand. These long-term relationships prove that our highly capable team provides long-term added value through safe, high-quality project execution. We are committed to driving sustained value creation through a dedicated focus on our 4EVER strategy while targeting growing submarkets, focusing on operational excellence, and prioritizing disciplined capital allocation. Our plan is highlighted on slide 6 in today's presentation. Our 4EVER strategy is designed to help us deliver sustained growth, and we have multiple levers for growth.

Jeffrey Thiede: Our high-quality execution on complex projects for our key customers ensures strong customer relationships and repeat business. We are very committed to building and maintaining these long-term relationships, which is clearly demonstrated by the tenure of our top customers, who have been trusted partners for an average of more than 30 years, with some of the customer relationships predating Everus' acquisition of the local operating brand. These long-term relationships prove that our highly capable team provides long-term added value through safe, high-quality project execution. We are committed to driving sustained value creation through a dedicated focus on our forever strategy, while targeting growing sub-markets, focusing on operational excellence, and prioritizing disciplined capital allocation. Our plan is highlighted on slide six in today's presentation. Our forever strategy is designed to help us deliver sustained growth, and we have multiple levers for growth.

Key customers ensures strong customer relationships and repeat business we.

We are very committed to building and maintaining these long term relationships, which is clearly demonstrated by the tenure of our top customers who have been trusted partners for an average of more than 30 years with some of the customer relationships Predating <unk> acquisition of the local operating brands.

These long term relationships prove that our highly capable team provides long term added value through safe high quality project execution.

We are committed to driving sustained value creation through a dedicated focus on our four of our strategy.

Growing sub markets, focusing on operational excellence and prioritized and disciplined capital allocation.

Our plan is highlighted on slide six in todays presentation.

Our core of our strategy is designed to help us to deliver sustained growth and we have multiple levers for growth.

First our strong customer relationships provide opportunities for us to grow in existing end markets.

Jeff Thiede: First, our strong customer relationships provide opportunities for us to grow in existing end markets. We have a strong track record of growing with our customers, and we are well positioned to continue doing so in the future while gaining additional market share. Second, we are well positioned with proven capabilities and experience to capitalize on multiple mega trends in the submarkets that we serve. Some of our key near-term opportunities include the strong growth in data center construction and the focus on grid modernization, high-tech reshoring, and the energy transition. Third, our existing long-term relationships with customers give us opportunities to grow into new geographies with our customers through satellite projects. When we've successfully completed a complex project in one location, a customer may ask us to perform the same or similar work in another location.

Jeffrey Thiede: First, our strong customer relationships provide opportunities for us to grow in existing end markets. We have a strong track record of growing with our customers, and we are well-positioned to continue doing so in the future, while gaining additional market share. Second, we are well-positioned with proven capabilities and experience to capitalize on multiple megatrends in the sub-markets that we serve. Some of our key near-term opportunities include the strong growth in data center construction, and the focus on grid modernization, high-tech reshoring, and the energy transition. Third, our existing long-term relationships with customers give us opportunities to grow into new geographies with our customers through satellite projects. When we've successfully completed a complex project in one location, a customer may ask us to perform the same or similar work in another location.

We have a strong track record of growing with our customers and we are well positioned to continue doing so in the future while gaining additional market share.

Second we are well positioned with proven capabilities and experience to capitalize on multiple mega trends in the sub markets that we serve.

Some of our key near term opportunities include the strong growth in data center construction and the focus on grid modernization high Tech re shoring and the energy transition.

Third.

Our existing long term relationships with customers to give us opportunities to grow into new geographies with our customers through satellite projects with.

When we successfully completed a complex project in one location.

Customer asked us to perform the same or similar work in another location.

Our national platform with market, leading local operating companies enable us to regularly transfer our capabilities to another area and utilize our proven repeatable playbook to successfully execute the project and expand our geographic footprint.

Jeff Thiede: Our national platform with market-leading local operating companies enables us to readily transfer our capabilities to another area and utilize our proven repeatable playbook to successfully execute the project and expand our geographic footprint. Finally, the last lever of our growth strategy is the ability to supplement our organic initiatives through strategic M&A. We operate in fragmented industries, and we have a proven track record of successfully identifying and integrating acquisitions that have generated compelling financial results. We benefit from a capital-light business model that produces strong free cash flow. Now, as a standalone company with total control over our capital decisions, we have the financial flexibility to execute on our M&A strategy. Also, a focus of our value creation framework is operational excellence with a priority on consistent and resilient margins.

Jeffrey Thiede: Our national platform with market-leading local operating companies enables us to readily transfer our capabilities to another area and utilize our proven, repeatable playbook to successfully execute the project and expand our geographic footprint. Finally, the last lever of our growth strategy is the ability to supplement our organic initiatives through strategic M&A. We operate in fragmented industries, and we have a proven track record of successfully identifying and integrating acquisitions that have generated compelling financial results. We benefit from a capital-light business model that produces strong free cash flow. Now, as a standalone company with total control over our capital decisions, we have the financial flexibility to execute on our M&A strategy. Also, a focus of our value creation framework is operational excellence, with a priority on consistent and resilient margins.

And finally, the last lever of our growth strategy is the ability to supplement our organic initiatives through strategic M&A.

We operate in fragmented industry, and we have a proven track record of successfully identifying and integrating acquisitions that have generated compelling financial results.

We benefit from our capital light business model that produces strong free cash flow.

Now as a Standalone company with total control over our capital decisions.

We have the financial flexibility to execute on our M&A strategy.

Also a focus of our value creation framework is operational excellence with a priority on consistent and resilient margins.

Our operating excellence is driven by our bidding discipline, a focus on higher margin submarkets with respective end markets and our operating leverage.

Jeffrey Thiede: Our operating excellence is driven by our bidding discipline, a focus on higher margin sub-markets within respective end markets, and our operating leverage. Based on the discipline focus on these initiatives, coupled with the execution of our growth strategy, we expect a resilient margin profile with an opportunity for modest margin expansion over time. Finally, the last part of our value creation framework is built on our discipline capital allocation strategy. Our first priority will be to continue to invest in our business. Going forward, we will increase our capital expenditures slightly between 2% and 2.5% of revenues, up from our historical average of roughly 1.5%, with the incremental amount focused on organic growth opportunities. Second, we will look for value-enhancing opportunities through M&A that either expand our geographic reach or strengthen our market position, particularly in high-growth sub-markets.

Jeff Thiede: Our operating excellence is driven by our bidding discipline, a focus on higher margin submarkets within respective end markets, and our operating leverage. Based on the disciplined focus on these initiatives, coupled with the execution of our growth strategy, we expect a resilient margin profile with an opportunity for modest margin expansion over time. Finally, the last part of our value creation framework is built on our disciplined capital allocation strategy. Our first priority will be to continue to invest in our business. Going forward, we will increase our capital expenditures slightly between 2 and 2.5% of revenues, up from our historical average of roughly 1.5%, with the incremental amount focused on organic growth opportunities. Second, we will look for value-enhancing opportunities through M&A that either expand our geographic reach or strengthen our market position, particularly in high-growth submarkets.

Based on the disciplined focus on these initiatives coupled with the execution of our growth strategy, we expect a resilient margin profile with an opportunity for modest margin expansion over time.

And finally, the last part of our value creation framework is built on our disciplined capital allocation strategy.

Our first priority will be to continue to invest in our business.

Going forward, we will increase our capital expenditures slightly between two and two 5% of revenues up from our historical average of roughly one 5%.

So the incremental amount of focus.

Ganic growth opportunities.

Second we will look for value enhancing opportunities through M&A that expand our geographic reach or spring.

Market position, particularly in high growth sub markets.

It is important to note that we will only complete a transaction at the right time with the right metrics.

Jeffrey Thiede: It is important to note that we will only complete a transaction at the right time, with the right metrics, at the right value. We will look for deals that are financially accretive, and maintain optimal leverage. Third, if we do not see the right organic or inorganic investments, we will take down debt and delever our balance sheet to provide ample dry powder for when the timing of investment is right. Lastly, we do not have a dividend policy or share repurchase authorization in place. However, we will work with our board to decide when those returns are prudent in the future. Right now, as a new standalone company with meaningful growth opportunities, we feel it is best to invest in ourselves to drive maximum shareholder value. Max will provide more details during his comments.

Jeff Thiede: It is important to note that we will only complete a transaction at the right time, with the right metrics, and at the right value. We will look for deals that are financially accretive and maintain optimal leverage. Third, if we don't see the right organic or inorganic investments, we will pay down debt and de-lever our balance sheet to provide ample dry powder for when the timing of investment is right. Lastly, we do not have a dividend policy or share repurchase authorization in place. However, we will work with our board to decide when those returns are prudent in the future. Right now, as a new standalone company with meaningful growth opportunities, we feel it's best to invest in ourselves to drive maximum shareholder value. Max will provide more details during his comments.

And at the right value.

We will look for deals.

That are financially accretive and maintain optimal leverage.

Third.

If we don't see the right organic or.

Investments.

Debt and de lever our balance sheet to.

To provide ample dry powder for when the timing of investment is right.

Lastly, we do not have a dividend policy or share repurchase authorization in place. However, we will work with our board to decide when those returns are prudent in the future right now.

<unk> Standalone company with meaningful growth opportunities, we feel it's best to invest in ourselves to drive maximum shareholder value.

Max will provide more details during his comments.

But as we highlight on a long term value basis on slide seven of today's presentation.

Jeffrey Thiede: As we highlight on a long-term value basis on slide seven of today's presentation, we expect our forever strategy to drive us toward a financial framework of organic revenue growth in a range of 5% to 7% annually, which, combined with our discipline-focused operational excellence, will enable annual EBITDA growth of 7% to 9%. Our framework is based on capital spending of 2% to 2.5% of revenue, which is slightly higher than historical levels, as we will invest more in our growth opportunities. We will deliver these financial results while maintaining a targeted net leverage of 1.5 to 2 times. Importantly, this is our expectation for organic growth. As I've discussed, we expect that M&A will play an important role in our growth framework and will supplement our organic growth strategy.

Jeff Thiede: As we highlight on a long-term value basis on slide 7 of today's presentation, we expect our 4EVER Strategy to drive us toward a financial framework of organic revenue growth in a range of 5% to 7% annually, which combined with our disciplined focus on operational excellence, will enable annual EBITDA growth of 7% to 9%. Our framework is based on capital spending of 2% to 2.5% of revenue, which is slightly higher than historical levels, as we will invest more in our growth opportunities. We will deliver these financial results while maintaining a targeted net leverage of 1.5 to 2 times. Importantly, this is our expectation for organic growth. As I've discussed, we expect that M&A will play an important role in our growth framework and will supplement our organic growth strategy.

We expect our four ever strategy to drive us toward our financial framework of organic revenue growth in a range of 5% to 7% annually.

Which combined with our disciplined focus on operational excellence will enable annual EBITDA growth of seven 9%.

Our framework is based on capital spending of two to two 5% of revenue, which is slightly higher than historical levels.

We'll invest more in our growth opportunities.

We will deliver these financial results, while maintaining a targeted net leverage of one five to two times.

Importantly, this is our expectation for organic growth and as I've discussed we expect that M&A will play an important role in our growth framework and we will supplement our organic growth strategy.

Bottom line we.

Could not be more excited by our strategic position and the opportunities that lie ahead for Everest.

Jeff Thiede: Bottom line, we could not be more excited by our strategic position and the opportunities that lie ahead for Everus. We are strongly positioned to benefit from multiple mega trends in the submarkets and end markets we serve. We have a seasoned leadership team that has been instrumental in developing and executing on our 4EVER Strategy. We have a scaled national platform with market-leading local brands and long-tenured customer relationships. Our people first culture helps us attract and retain top industry talent and maintain industry-leading safety results. Our diversified revenue base, capital-light investment model, and disciplined capital allocation approach position us for sustained growth and business resilience. With that, I'll turn it over to Max.

Jeffrey Thiede: Bottom line, we could not be more excited by our strategic position and the opportunities that lie ahead for Everus. We are strongly positioned to benefit from multiple megatrends in the sub-markets and end markets we serve. We have a seasoned leadership team that has been instrumental in developing and executing on our forever strategy. We have a scaled national platform with market-leading local brands, and long-tenured customer relationships. Our people-first culture helps us attract and retain top industry talent, and maintain industry-leading safety results. Our diversified revenue base, capital-light investment model, and disciplined capital allocation approach position us for sustained growth and business resilience. With that, I'll turn it over to Max. Thank you, Jeff, and good morning, everyone. I will provide additional details on the quarter, give an update on our liquidity and balance sheet, and wrap up with our guidance.

We are strongly positioned to benefit from multiple mega trends in the markets and end markets we serve.

We have a seasoned leadership team.

Instrumental in developing and executing on our four ever strategy.

We have a scaled national platform with market, leading local brands and long tenured customer relationships.

Our people first culture helps us attract and retain top industry talent.

And maintain industry, leading safety results.

And our diversified revenue base capital light investment model.

And disciplined capital allocation approach position us for sustained growth and business resilience.

With that I'll turn it over to Max.

Thank you, Jeff and good morning, everyone.

Max Marcy: Thank you, Jeff, and good morning, everyone. I will provide additional details on the quarter, give an update on our liquidity and balance sheet, and wrap up with our guidance. Beginning on slide 9 in today's presentation, net revenue for Q3 2024 was $761 million, an increase of 6.1% compared to the same period last year. The increase in revenue during the quarter was driven by E&M revenues increasing 4% and T&D revenues increasing 12%. The growth was highlighted by our E&M commercial end market, led by the data center submarket, and momentum in our T&D utility end market, led by the transmission and underground submarkets. Total EBITDA was $65 million during Q3, an increase of nearly 12% from the same period last year.

I will provide additional details on the quarter.

Date on our liquidity and balance sheet and wrap up with our guidance.

Beginning on slide nine in today's presentation.

Jeffrey Thiede: Beginning on slide nine in today's presentation, net revenue for the third quarter of 2024 was $761 million, an increase of 6.1% compared to the same period last year. The increase in revenue during the quarter was driven by E&M revenues increasing 4% and T&D revenues increasing 12%. The growth was highlighted by our E&M commercial end market, led by the data center sub-market, and momentum in our T&D utility end market, led by the transmission and underground sub-markets. Total EBITDA was $65 million during the third quarter, an increase of nearly 12% from the same period last year. The growth in EBITDA was driven by solid revenue growth, income from joint ventures, and strong project execution, partially offset by higher selling, general, and administrative expenses. E&M benefited from positive project efficiencies, highlighting our ability to safely complete projects on time and within budget.

Net revenue for the third quarter of 2024 was $761 million an increase of six 1%.

For the same period last year.

The increase in revenue for the quarter was driven by <unk> revenues, increasing 4% and <unk> revenues increasing 12%.

The growth was highlighted by our A&M commercial end market led by the data center Submarket and momentum in our T&D utility end market led by the transmission in underground Submarkets.

Total EBITDA was $65 million during the third quarter.

Increase of 12% from the same period last year.

The growth in EBITDA was driven by solid revenue growth.

Max Marcy: The growth in EBITDA was driven by solid revenue growth, income from joint ventures, and strong project execution, partially offset by higher selling, general, and administrative expenses. E&M benefited from positive project efficiencies, highlighting our ability to safely complete projects on time and within budget. This resulted in Q3 EBITDA margin of 8.5%, an improvement of 40 basis points from last year. At 30 September, total backlog was an all-time record of $2.9 billion, up 56% from backlog of $1.9 billion at the end of Q3 last year. Our backlog growth reflects strong momentum in our E&M business, combined with the impact of project timing, as we have seen some E&M projects get pushed out a bit.

Income from joint ventures, and strong project execution, partially offset by higher selling general and administrative expenses.

<unk> benefited from positive project efficiencies, highlighting our ability to safely complete projects on time and within budget.

This resulted in third quarter EBIT margin of eight 5% an improvement of 40 basis points from last year.

Jeffrey Thiede: This resulted in third-quarter EBITDA margin of 8.5%, an improvement of 40 basis points from last year. At 30 September, total backlog was an all-time record $2.9 billion, up 56% from backlog of $1.9 billion at the end of the third quarter last year. Our backlog growth reflects strong momentum in our E&M business, combined with the impact of project timing, as we have seen some E&M projects get pushed out a bit. As a reminder, our backlog burn rate can move around quarter to quarter based on the type and size of projects. Additionally, a portion of our revenues, including our MSA work, do not go through backlog. Given the current mix of our backlog, which includes some larger multi-year projects, our backlog conversion may be extended relative to our historical pattern in the coming quarters.

Okay.

At September 30.

Backlog was an all time record $2 9 billion.

Up 56% and backlog of $1 $9 billion at the end of the third quarter last year.

Our backlog growth reflects strong momentum in our E&S business combined with the impact of project timing.

As we have seen some A&M projects getting pushed out a bit.

As a reminder, our backlog burn rate can move around quarter to quarter based on the type and size of projects.

Max Marcy: As a reminder, our backlog burn rate can move around quarter to quarter based on the type and size of projects. Additionally, a portion of our revenues, including our MSA work, do not go through backlog. Given the current mix of our backlog, which includes some larger multi-year projects, our backlog conversion may be extended relative to our historical pattern in the coming quarters. Now, turning to our segment results. Let's first look at E&M, where our Q3 revenue increased nearly 4% to $537 million. The increase was driven by higher workloads in our commercial and institutional end markets, particularly in the data center sub-market, partially offset by decreased workloads in the industrial, service, and renewable end markets.

Additionally, a portion of our revenues, including our MSA work both through backlog.

Given our current mix of our backlog, which include some larger multiyear projects.

Backlog conversion may be extended relative to our historical pattern in the coming quarters.

Now turning to our segment results.

Jeffrey Thiede: Now, turning to our segment results, let's first look at E&M, where our third-quarter revenue increased nearly 4% to $537 million. The increase was driven by higher workloads in our commercial and institutional end markets, particularly in the data center sub-market, partially offset by decreased workloads in the industrial, service, and renewables end markets. Our E&M EBITDA was $41 million in the third quarter, up from $34 million in the third quarter last year, which is an increase of 21%. This was the result of strong revenue growth, solid project execution, and efficiencies. As a result, our E&M EBITDA margin improved 110 basis points to 7.6%. Our third-quarter T&D revenue was $229 million, up from $205 million last year, or an increase of 12%, and growth in our transmission and underground sub-markets within the utility end market, partially offset by the timing of work in our distribution business.

Okay, Dnm, where our third quarter revenue increased nearly 4% to $537 million.

The increase was driven by workloads in our commercial and institutional end markets.

Particularly in the data center Submarket, partially offset by decreased workloads in the rail service and renewables and markets.

Our E&S EBITDA was $41 million in the third quarter.

Max Marcy: Our E&M EBITDA was $41 million in Q3, up from $34 million in Q3 last year, which is an increase of 21%. This was a result of strong revenue growth, solid project execution, and efficiencies. As a result, our E&M EBITDA margin improved 110 basis points to 7.6%. Our Q3 T&D revenue was $229 million, up from $205 million last year, or an increase of 12% from growth in our transmission and underground submarkets within the utility end market, partially offset by the timing of work in our distribution business. We also benefited from strong growth in our transportation end market due to higher workloads in our traffic signalization and street lighting services.

$34 million in the third quarter last year, which is an increase of 21%.

This was the result of strong revenue growth.

Solid project execution and efficiencies.

As a result, our A&M EBIT margin improved 110 basis.

Seven 6%.

Our third quarter T&D revenue was $229 million.

Up from $205 million last year or an increase of 12%.

Growth in our transmission and underground submarkets within the utility end market, partially offset by the timing of work in our distribution business.

We also benefited from the strong growth in our transportation end market due to the higher workloads in our traffic signals.

Jeffrey Thiede: We also benefited from strong growth in our transportation end market due to higher workloads in our traffic signalization and street lighting services. T&D EBITDA was $30 million in the third quarter of 2024, up from $28 million last year. Our T&D EBITDA margin was 13.3% during the third quarter, down 50 basis points from 13.8% last year, primarily due to project mix. Turning to our balance sheet, liquidity, and free cash flow. In October 2024, we entered into a senior secured credit agreement with our bank group, consisting of a $300 million term loan and a $225 million revolving credit facility. We drew down $40 million under the revolving credit facility as of 31 October to fund projected working capital needs. As we disclosed at our investor day on 17 October, our estimated net leverage would be approximately 1.3x at the separation date.

Street lighting services.

T&D EBITDA was $30 million in the third quarter of 2020.

Max Marcy: T&D EBITDA was $30 million in Q3 2024, up from $28 million last year. Our T&D EBITDA margin was 13.3% during Q3, down 50 basis points from 13.8% last year, primarily due to project mix. Turning to our balance sheet liquidity and free cash flow. In October 2024, we entered into a senior secured credit agreement with our bank group, consisting of a $300 million term loan A and a $225 million revolving credit facility. We drew down $40 million under the revolving credit facility as of 31 October to fund projected working capital needs. As disclosed at our Investor Day on 17 October, our estimated net leverage would be approximately 1.3x at the separation date.

Up from $28 million last year.

Our T&D EBIT margin was 13, 3% during the third quarter.

Down 50 basis points from 13, 8% last year.

Primarily due to project mix.

Turning to our balance sheet liquidity and free cash flow.

In October 2024, we entered into a senior secured credit agreement with our bank group, consisting of $300 million term loan a and a $275 million revolving credit facility.

We drew down $40 million under the revolving credit facility as of October 31 to fund working capital needs.

As disclosed in our Investor day on October 17th our estimated net leverage will be approximately one three times at the separation date.

We generated free cash flow of $58 million through the first three quarters of 2024 up from $46 million in the same period last year.

Jeffrey Thiede: We generated free cash flow of $58 million through the first three quarters of 2024, up from $46 million in the same period last year. Our year-to-date CapEx was $35 million, or approximately 1.7% of revenue, versus CapEx of $28 million last year, which was approximately 1.3% of revenue. The primary drivers of improved free cash flow were higher net income and improved working capital. Wrapping up with guidance, as Jeff said, we are reiterating our 2024 guidance that calls for revenues in the range of $2.65 to 2.85 billion and EBITDA in the range of $220 million to 240 million, keeping the midpoint unchanged, with EBITDA margins higher than in 2023.

Max Marcy: We generated free cash flow of $58 million through Q1 through Q3 of 2024, up from $46 million in the same period last year. Our year-to-date CapEx was $35 million, or approximately 1.7% of revenue, versus CapEx of $28 million last year, which was approximately 1.3% of revenue. The primary drivers of improved free cash flow were higher net income and improved working capital. Wrapping up with guidance. As Jeff said, we are reiterating our 2024 guidance that calls for revenues in the range of $2.65 to 2.85 billion and EBITDA in the range of $220 million to $240 million, keeping the midpoints unchanged with EBITDA margins higher than in 2023.

Our year to date, Capex was $35 million or approximately one 7% of revenue.

Capex of $28 million last year, which was approximately one 3% of revenue.

The primary drivers of improved free cash flow were higher net income and improved working capital.

Wrapping up with guidance.

That said, we are reiterating our 2024 guidance that calls for revenues in the range of $2 65 to $2 $85 billion.

And EBITDA in the range of $220 million to $240 million, keeping the midpoint unchanged with EBITDA margins higher than in 2023.

It is important to note that our guidance is consistent with our construction services segment guidance that MDU resources provided in the second quarter. This year and it does not include additional standup costs or dis synergies that.

Jeffrey Thiede: It's important to note that our guidance is consistent with the construction services segment guidance that MDU Resources provided in the second quarter this year, and it does not include additional stand-up costs or disinergies that we have discussed. We will reconcile our fourth quarter and full-year results, which will include disinergies, to our anticipated range at the end of this year. We currently expect public company stand-up costs of approximately $5 million in the fourth quarter. Now, shifting from our near-term outlook to our long-term expectations, I would just like to wrap up with a few comments on our long-term framework. As Jeff said, based on our attractive market position, strong execution, and disciplined capital allocation, we are committed to delivering long-term organic revenue growth of 5% to 7% annually.

Max Marcy: It's important to note that our guidance is consistent with the construction services segment guidance that MDU Resources provided in Q2 this year, and it does not include additional stand-up costs or dissynergies that we have discussed. We will reconcile our Q4 and full-year results, which will include dissynergies, to our anticipated range at the end of this year. We currently expect public company stand-up costs of approximately $5 million in Q4. Now, shifting from our near-term outlook to our long-term expectations, I would just like to wrap up with a few comments on our long-term framework. As Jeff said, based on our attractive market position, strong execution and disciplined capital allocation, we are committed to delivering long-term organic revenue growth of 5% to 7% annually.

That we have discussed.

We will reconcile our fourth quarter and full year results, which will include the synergies to our anticipated range at the end of this year.

We currently expect public company standup costs of approximately $5 million in the fourth quarter.

Now shifting from our near term outlook to our long term expectations I would just like to wrap up with a few comments on our long term framework as Jeff said.

Based on our attractive market position strong execution and disciplined capital allocation. We are committed to delivering long term organic revenue growth of 5% to 7% annually, we expect to deliver stable EBITDA margin performance with modest EBITDA margin expansion from ongoing project execution and all.

Jeffrey Thiede: We expect to deliver stable EBITDA margin performance, with modest EBITDA margin expansion from ongoing project execution and operating leverage, resulting in expected annual EBITDA growth of 7% to 9%. Our framework is based on capital spending of 2% to 2.5% of revenue, which is slightly higher than historical levels, as we will invest more in our growth opportunities. We will deliver these financial results while maintaining a targeted net leverage of 1.5 to 2 times. That completes our prepared remarks. Operator, we are now ready for the question-and-answer portion of our call. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.

Max Marcy: We expect to deliver stable EBITDA margin performance with modest EBITDA margin expansion from ongoing project execution and operating leverage, resulting in expected annual EBITDA growth of 7% to 9%. Our framework is based on capital spending of 2% to 2.5% of revenue, which is slightly higher than historical levels, as we will invest more in our growth opportunities. We will deliver these financial results while maintaining a targeted net leverage of 1.5 to 2 times. That completes our prepared remarks. Operator, we are now ready for the question and answer portion of our call.

Operating leverage resulting in expected annual EBITDA growth of 7% to 9%.

Our framework is based on capital spending of two to two 5% of revenue, which is slightly higher than historical levels as we will invest more in our growth opportunities.

We will deliver these financial results maintaining a targeted net leverage of one five to two times.

That completes our prepared remarks, operator, we're now ready for the question and answer portion of our call.

Thank you.

Thank you for the question and answers.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from the line of Brent Thielman with D.A. Davidson. Please go ahead.

If you have dialed in and we can ask.

Your question please.

Please go ahead.

Thank you Mr.

Mr would like to withdraw your question press Kyle.

Okay.

Cause I missed.

Quick question.

Jeffrey Thiede: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from the line of Brent Thielman with B.A. Davidson. Please go ahead. Hey, thanks. Good morning. Nice start there as a public company. Congrats. Good morning. I guess first question I heard, Jeff. Just was curious, Jeff, anything more you can share in terms of the sources of booking strength in E&M? I mean, really strong this quarter. Also, just on your T&D backlog, it was a bit weaker. What should we make of that, especially in context of what seems to be a pretty dynamic environment for utility spending on the grid over the next few years? Yeah, thanks for the question, Brent.

Okay.

I'm sure that your phone is snap on mute.

Next question.

Your first question comes.

Right.

Red cameras.

Please go ahead.

Good morning.

Darren.

Brent Thielman: Thanks. Good morning. Nice start, there as a public company. Congrats.

Company Congrats.

Good morning, I guess first question.

Jeff just was curious.

Max Marcy: Morning.

Jeff Thiede: Morning.

Brent Thielman: Hey, Jeff. Just was curious, Jeff, anything more you can share in terms of the sources of booking strength in E&M? I mean, really strong this quarter. Then also just on your T&D backlog, it was a bit weaker. You know, what should we make of that, especially in context of what seems to be a pretty sort of dynamic environment for utility spending on the grid over the next few years?

Jeff anything more you can share in terms of.

The sources of booking strength in EMEA.

I mean really strong this quarter and then also just on your key in deep backlog. It wasn't weaker what should we make any bad, especially in context, and what seems to be a pretty.

The dynamic environment to utility spending on that Greg.

Yes.

Yes, thanks for the question Brad.

We're still seeing a high demand for our work in the E&S space and with our diversified business.

Jeff Thiede: Yeah, thanks for the question, Brent Thielman. We're still seeing a high demand for our work in the E&M space. With our diversified business, we are seeing our customers in the data center space, institutional, even hospitality, in the Vegas area where they're seeking our services to partner and to be able to get us on board in pre-construction so we have the ability to pre-fab and be able to get jobs done timely, within budget, and safely. As far as the T&D space, I think it's just project timing, and we continue to emphasize and support our T&D companies with capital on the work that they do, the transmission, the distribution, above ground, below ground. I think it's more of a timing factor with the T&D space.

Jeffrey Thiede: We're still seeing a high demand for our work in the E&M space. With our diversified business, we are seeing our customers in the data center space, institutional, even hospitality in the Las Vegas area, where they're seeking our services to partner and to be able to get us on board in pre-construction so we have the ability to prefab and be able to get jobs done timely, within budget, and safely. As far as the T&D space, I think it's just project timing. We continue to emphasize and support our T&D companies with capital on the work that they do, the transmission, the distribution, above ground, below ground. I think it's more of a timing factor with the T&D space. With the diversification we have, we're real excited about what we've done in Q3 and off to a good start, as you said. Yeah. Okay.

Are seeing our customers in the data center.

Base institutional hospitality.

And the Vegas area, where there are seeking our services to partner and to be able to get us onboard and pre construction.

So we have the ability to pre fab.

I'm going to get the jobs done timely within budget safely as far as the T&D space.

Project timing and.

We continue to emphasize.

And support our P&C companies with capital.

The work they do the transmission and distribution above ground below ground. So I think it's more of a timing.

Factor with that.

These days so.

With the diversification we have we're real excited about.

Jeff Thiede: With the diversification we have, we're real excited about what we've done in Q3 and off to a good start, as you said.

What we've done in Q3.

And off to a good start as you said.

Okay I appreciate that Jeff and then you've got a lot of interesting market here that are clearly working well for you and I think maybe you might have missed.

Brent Thielman: Yeah. Okay. I appreciate that, Jeff. Yeah, you've got a lot of interesting markets here that are clearly working well for you. I think maybe you might admit some that are a bit slower, presumably, maybe more on the true kinda commercial side, Jeff. Could you just talk about some of those areas? I heard you mention hospitality is actually okay. You know, how challenging are those really for you? I guess, does it matter just given your ability to ship resources to the areas that are working for you?

Jeffrey Thiede: I appreciate that, Jeff. You've got a lot of interesting markets here that are clearly working well for you. I think maybe you might admit some that are a bit slower, presumably maybe more on the true kind of commercial side, Jeff. Could you just talk about some of those areas? I heard you mentioned hospitality is actually okay, but how challenging are those really for you? I guess does it matter just given your ability to shift resources to the areas that are working for you? Yeah, that's the key for us, to be able to anticipate and pivot and to be able to allocate resources to upcoming opportunities and see projects complete. The hospitality area has been great for us.

Mid slower, presumably maybe more on the true kind of commercial side, Jeff could you just talk about some of those areas that hurt you mentioned hospitality is actually okay.

But yes.

How challenging or there's really four years I guess.

Given your ability to ship resources to.

That are working for you.

Yes, that's the key.

Just to be able to anticipate.

Jeff Thiede: Yeah, that's the key for us, is to be able to anticipate and pivot and to be able to allocate resources to upcoming opportunities as we see projects complete. The hospitality area has been great for us. We've got exceptional companies in the Las Vegas area, and we've been able to complete some very complex projects on time and within budget and safely. Seeing some of those projects complete and cross-training our talented management and field staff, we've been able to pivot and to be able to move some of those resources into data center world and other geographic markets.

And to be allocate resources.

Opportunities as we see projects complete hospitality areas.

For Us we've got exceptional company.

Jeffrey Thiede: We've got exceptional companies in the Las Vegas area, and we've been able to complete some very complex projects on time, within budget, and safely. Seeing some of those projects complete and cross-training our talented management and field staff, we've been able to pivot and move some of those resources into the data center world and other geographic markets. That's what we try to do, to be flexible and nimble, to keep up with the demand for our services and build upon our backlog like we did in the third quarter at $2.9 billion, which is a record for us. Yep. Maybe just a question in terms of the profile contracts you're adding into the backlog in terms of anticipated margins you could earn as you execute.

In the Las Vegas area.

Able to complete some very complex projects.

Time and within budget and safely so seeing some of those products is complete.

<unk>.

Okay.

Our talented management and field staff, we've been able to pivot and to be able to move some of those resources into data Center world.

Other geographic markets. So that's what we try to do to be flexible and nimble to be able to keep.

Jeff Thiede: That's what we try to do to be flexible and nimble, to be able to keep up with the demand for our services and build upon our backlog like we did in Q3 at $2.9 billion, which is a record for us.

Up with the demand.

For our services.

And build up build upon our backlog like we did in the third quarter at $2 9 billion, which was a record for us.

Yes.

Okay.

Maybe just a question in terms of the profile contracts are adding into the backlog.

Brent Thielman: Yeah. Maybe just a question in terms of the profile contracts you're adding into the backlog in terms of anticipated margins you could earn as you execute. Are they more attractive than bookings earlier this year? The same, just you know, given the margin improvement this quarter, just trying to get some context on you know, where those could potentially go with what you've got in hand.

Anticipated margins you could earn us execute.

At a more attractive than vaccines earlier this year the same just given the improvement.

Jeffrey Thiede: Are they more attractive than bookings earlier this year, the same, just given the margin improvement this quarter? Just trying to get some context on where those can potentially go with what you've got in hand. Certainly, our disciplined approach to project qualification and selection is real important to be able to pick the right jobs where our customers want to partner with us, or in other markets where we want to enter to look at the contracts and negotiate favorable terms, and even more favorable terms today, given the constraint on labor. It's all about execution. It's about planning our work safely and productively, and prefabbing where we can, and increasing our prefabrication resource base, in addition to making sure that we're getting paid timely for the work we're providing.

This quarter, just trying to get some context on where those could potentially go with what <unk> got in hand.

Certainly our disciplined approach to project qualification and selection.

Jeff Thiede: Yeah. Certainly, our disciplined approach to project qualification and selection is real important to be able to pick the right jobs where our customers wanna partner with us or in other markets where we wanna enter to look at the contracts and negotiate favorable terms and even more favorable terms today, given the constraint on labor. It's all about execution. It's about planning our work safely and productively, and pre-fabbing where we can and increasing our pre-fabrication resource base in addition to making sure that we're getting paid timely for the work we're providing. I think the acumen of our people in the field and also in management part of our business has improved through our repeatable playbook, and that has helped with our margin enhancement.

It's really important to be able to pick the crops, where our customers want.

With us or in other markets, where we wanted to look at the contracts and.

Negotiate favorable terms.

Even more favorable terms today, given the constraint on labor and then it's all about execution, it's about planning our work safely and productively.

Okay.

In <unk>, where we can increase.

Increasing our pre fabrication and resource space.

Two.

Making sure that we're getting paid for the work we are providing so I think.

The acumen of our people.

Jeffrey Thiede: I think the acumen of our people in the field and also in management, part of our business, has improved through our repeatable playbook and has helped with our margin enhancement. Very good. Last one, if I could, just maybe if you could talk about the acquisition pipeline you're cultivating. Is that both on the E&M and T&D side? Could you potentially talk about the potential size ranges of companies you're speaking to? In that context, Jeff, what's kind of the sweet spot in your view in terms of kind of transaction size, given that's part of the story going forward? Yeah, it is part of our story. We continue to see opportunities across a variety of end markets and company sizes.

The field and also in management part of our business has improved through a repeatable playbook.

With our margin enhancement.

Okay.

If I could just maybe if you could talk about the.

Brent Thielman: Very good. Last one, if I could just maybe if you could talk about the acquisition pipeline you're cultivating, is that both on the E&M and T&D side? You know, could you potentially talk about the potential size ranges of companies you're speaking to? You know, in that context, Jeff Thiede, what's kind of the sweet spot in your view in terms of, you know, kind of transaction size, given that's, you know, part of the story or going forward?

The acquisition pipeline you are cultivating is that both on the <unk> side.

Could you potentially talk about the potential size.

Okay.

In Q2 and in that context, Jeff what's kind of the sweet spot in your view in terms of that.

Okay transaction size, given that part of the story going forward.

Yes. It is part of our story and we continue to see opportunities across a variety of end markets.

Jeff Thiede: Yeah, it is part of our story, and we continue to see opportunities across a variety of end markets and company sizes. The key is gonna be to find the right company with the right culture that can complement our long-standing relationships and effectively execute our project playbook. We look at the multiples, which vary depending upon the type of businesses and the opportunity for our synergies that we would realize as we acquire a company. When we look at companies, we wanna make sure that we fully understand how this potential company that we would acquire, how do they get their work? Are they respected by their clients? Do they have exceptional field people? Do they have a good succession plan?

Any sizes. The key is going to be to find the right company with the right culture that can complement our long standing relationships and effectively execute our project work.

Jeffrey Thiede: The key is going to be to find the right company with the right culture that can complement our long-standing relationships and effectively execute our project playbook. We look at the multiples, which vary depending upon the type of businesses and the opportunity for our synergies that we would realize as we acquire a company. When we look at companies, we want to make sure that we fully understand how a potential company that we would acquire, how do they get their work? Are they respected by their clients? Do they have exceptional field people? Do they have a good succession plan? All these components, in addition to the geographic expansion where we could serve customers in more locations, all very important and all will be part of our story going forward. Okay. Very good. Thanks for taking the questions. Congrats again. Great momentum here. Thank you, Brent.

So.

Yeah.

<unk>, which vary depending upon the type of businesses and the opportunity for our synergies that we.

We realize as we acquire a company.

Yes.

When we look at companies, we want to make sure of that.

Yes.

We fully understand how.

Potential companies that we would acquire how do they get their work.

Further respected by their clients do they have exceptional people do that.

The succession plan all of these components. In addition to the geographic expansion, where we could serve customers in more locations all very important part of our story going forward.

Jeff Thiede: All these components in addition to the geographic expansion where we could serve customers in more locations, all very important and all will be part of our story going forward.

Okay.

Okay very good thanks for taking the questions and congrats again, great great momentum.

Brent Thielman: Okay. Very good. Thanks for taking the questions. Congrats again. Great, great momentum here.

Thank you Brendan.

Okay.

Jeff Thiede: Thank you, Brent.

Again he has.

And would like to ask a question.

Operator: Again, if you have dialed in and would like to ask a question, please press star on your telephone keypad. Your next question comes from Michael Dudas with Vertical Research Partners. Please go ahead.

Jeffrey Thiede: If you have dialed in and would like to ask a question, please press star on your telephone keypad. Your next question comes from Michael Dudas with Vertical Research Partners. Please go ahead. Good morning, gentlemen, and well done last week. Good morning. Jeff, maybe looking at the outlook and some of the positive outlooks in your markets, how does your customers' expectations of quicker time to market, their ability to want to have more diverse vendors, and your union labor access, is that important to allow you to gain share and maybe drive a more sustainable booking and revenue outlook as you move forward? Yeah, I think it's certainly a contributor to our ability to be able to secure and get selected for complex projects. The 82% of our workforce being from the union is a big part of that.

Okay.

Our next task Glenn.

And your next question.

I can't do that.

Please please.

Please go ahead.

Good morning, gentlemen, and well done last week.

Michael Dudas: Good morning, gentlemen, and well done last week.

Morning.

Jeff Thiede: Good morning.

Maybe.

Michael Dudas: Jeff, maybe, you know, looking at, you know, the outlook and some of the positive outlooks in your several markets, how does the, your customers' expectations of quicker time to market, their ability to want to have more diverse vendors and your union labor access, is that important to allow you to gain share and maybe drive a more sustainable, you know, booking and revenue outlook, as you move forward?

Looking at the outlook and some of the positive developments in this market.

The customers.

Expectations are quicker time to market.

Your ability to want to have more diverse vendors.

A new Union labor access is.

Is that important to light and gain share.

When you drive a more sustainable.

Bookings and revenue.

As we move forward.

Yeah, I think it's certainly a contributor to our ability to be able to secure it get selected.

Jeff Thiede: Yeah, I think it's certainly a contributor to our ability to be able to secure and get selected for complex projects. The 82 percent of our workforce being from the union is a big part of that. Highly skilled tradespeople are majority of the employee count that we have within our business. Our customers understand that. They wanna get their jobs done quicker and safe. They wanna go to market with their product, and they rely upon us to be able to provide those highly skilled people, both in the field and, of course, our management, to be able to accomplish their goals.

For our complex generics.

The 82% of our workforce.

<unk> is a big part of that highly skilled tradespeople are.

Jeffrey Thiede: Highly skilled tradespeople are the majority of the employee count that we have within our business. Our customers understand that. They want to get their jobs done quicker and safe. They want to go to market with their product, and they rely upon us to be able to provide those highly skilled people, both in the field and, of course, our management, to be able to accomplish their goals. I appreciate that, Jeff. Next, when you're looking at the catch-up on capital on some of the growth areas, what kind of opportunities internally do you ever specifically look at or looking at to enhance some of those opportunities? Is prefabrication access or ability something that's important as well? Absolutely. When we get selected for our capabilities, our experience, our safety, our track record, we get on board early.

Majority of the employee count that we have within our business. So.

Customers understand that.

Wanted to get their jobs done quicker and safe and want to go to market with their product.

Lie upon us to be able to provide those highly skilled people both in the field and of course our management.

To be able to accomplish their goals.

I appreciate that.

Looking at cash on capital on some of the brokers.

Michael Dudas: I appreciate that, Jeff. Max, when you're looking at, you know, you just a little touched upon CapEx on some of the growth areas. What kind of opportunities internally does Everus typically look at or looking at to enhance some of those opportunities? Is prefabrication access or ability something that's important as well?

What kind of opportunities internally.

We've looked at are looking at.

Enhanced some of those opportunities as pre fabrication access or facility is something thats important as.

As well.

Absolutely.

<unk> selected for our capabilities our experience our safety year track record.

Jeff Thiede: Absolutely. When we get selected for our capabilities, our experience, our safety, our track record, we get on board early. We have the opportunity to be able to be an extension of the design team, to collaborate, to be able to provide those constructability reviews. That is a platform for us to be able to increase our prefabrication. There are so many benefits on a project, not only for us, but also the other trades and the owner. We have less congestion. We're able to move hours into a controlled environment where we have production and safety enhancements. All these components that we share with our customers to share the value, the value add that we provide, they're understood, and they're evaluated when we get selected for jobs early, even before the jobs are completely designed.

Max Marcy: Absolutely. When we get selected for our capabilities, our experience, our safety, our track record, we get on board early. We have the opportunity to be able to be an extension of the design team, to collaborate, to be able to provide those constructability reviews. That is a platform for us to be able to increase our prefabrication. There are so many benefits on a project, not only for us, but also the other trades and the owner. We have less congestion. We're able to move hours into a controlled environment where we have production and safety enhancements. All these components that we share with our customers to share the value, the value add that we provide, they're understood, and they're evaluated when we get selected for jobs early, even before the jobs are completely designed.

We get on board early we have the opportunity to be able to be an extension.

Jeffrey Thiede: We have the opportunity to be able to be an extension of the design team to collaborate, to be able to provide those constructability reviews. That is a platform for us to be able to increase our prefabrication. There are so many benefits on a project, not only for us, but also the other trades. The only thing is we'll have less congestion. We're able to move hours into a controlled environment where we have production and safety enhancements. All these components that we share with our customers to share the value, the value add that we provide, they're understood and they're evaluated when we get selected for jobs early, even before the jobs are completely designed. That's really our wheelhouse. We're good at it. We're always looking to get better.

Deciding to.

To collaborate to provide those construct ability reviews.

As a platform for us to be able to increase our prefabrication and there are so many benefits on a project not only for us but also the other.

And the only.

We will have less congestion and we were able to move ours too.

Controlled environment, where we have production and safety enhancements. So all of these components.

That we share with our customers.

Sure the value the value add that we provide.

They are understood and Theyre evaluated when we get selected for jobs early even before the jobs are completely design. That's really are our wheelhouse. We're good at it we're always looking to get better.

Jeff Thiede: That's really in our wheelhouse. We're good at it. We're always looking to get better. That is one of the reasons why we've been able to build our business, our diverse business up with our customers.

Max Marcy: That's really in our wheelhouse. We're good at it. We're always looking to get better. That is one of the reasons why we've been able to build our business, our diverse business up with our customers.

That is one of the reasons why we've been able to build our business.

Jeffrey Thiede: That is one of the reasons why we've been able to build our diverse business up with our customers. Excellent. Thank you, gentlemen. Thank you. Again, if you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. That concludes our Q&A session. I will now turn the conference back over to Jeff Thiede for closing remarks. Please go ahead. Thank you all again for joining us today. We are very excited about the opportunities ahead for Everus. We are scaled for success, and we're built for growth. We are confident that we are very well positioned to create long-term value as a standalone publicly traded company. We have enjoyed the opportunity to meet with many of you over the last few weeks.

Our diverse business up with our customers.

Excellent. Thank you gentlemen.

Thank you.

Michael Dudas: Excellent. Thank you, gentlemen.

Okay.

Jeff Thiede: Thank you.

Diana.

To ask a question. Please press star one on your tenants.

Operator: Again, if you have dialed in and would like to ask a question, please press star one on your telephone to add your raise hand and join the queue. That concludes our Q&A session. I will now turn the conference back over to Jeff Thiede for closing remarks. Please go ahead.

Jenny.

Thank you.

Yeah.

And that concludes the Q&A session I will now turn the conference back over to Jeff.

My closing remarks.

Please go ahead.

Thank you all again for joining US today, we are very excited about the opportunities ahead for Everest.

Jeff Thiede: Thank you all again for joining us today. We are very excited about the opportunities ahead for Everus. We are scaled for success, and we're built for growth, and we are confident that we are very well positioned to create long-term value as a standalone, publicly traded company. We have enjoyed the opportunity to meet with many of you over the last few weeks, and we look forward to continuing the conversation in the coming quarters. Thank you for your time and for your interest in Everus. This concludes today's call.

We are scaled for success and we're built for growth and we are confident that we are very well positioned to create long term value as a standalone publicly traded company.

We enjoyed the opportunity to meet with many of you over the last few weeks.

We look forward to continuing the conversation in the coming quarters.

Jeffrey Thiede: We look forward to continuing the conversation in the coming quarters. Thank you for your time and for your interest in Everus. This concludes today's call. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for your time and for your interest in <unk>.

This concludes today's call.

Ladies and gentlemen that studies. This concludes today's call. Thank you all.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Gentlemen, you may now disconnect.

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