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spk08: My name is Kate, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Investor Relations Third Quarter 2023 conference call. This call is being recorded. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question and answer period. To ask a question, please press star, then one. Please note, we will take one question and one follow-up question from each participant today. It is now my pleasure to turn the floor over to your host, Granite Construction Incorporated Vice President of Investor Relations, Mike Barker.
spk06: Good morning, and thank you for joining us. I'm pleased to be here today with President and Chief Executive Officer Kyle Larkin and Executive Vice President and Chief Financial Officer Lisa Curtis. Please note that today's earnings presentation will be available on the events and presentations page of our Investor Relations website. We begin today with a brief discussion regarding forward-looking statements and non-GAAP measures. Some of the discussion today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding future events, occurrences, opportunities, targets, growth, demand, strategic plans, circumstances, activities, performance, shareholder value, outcomes, outlook, guidance, objectives, committed and awarded projects or CAP, and results. Actual results could differ materially from statements made today. Please refer to Granite's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward-looking statements. The company assumes no obligation to update forward-looking statements except as required by law. Certain non-GAAP measures may be discussed during today's call and from time to time by the company's executives. These include, but are not limited to, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted earnings per share. The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and in company presentations, which are available on our website, graniteconstruction.com, under investor relations. Now, I'd like to turn the call over to Kyle Larkin.
spk01: Kyle Larkin Good morning, and welcome to our third quarter conference call. We had a strong third quarter. Q3 marked our second consecutive quarter of top-line growth, and we continue to grow our record cap at projects that should produce margins in line with our expectations. Just over two years ago, we stated that our goal was to transform Granite from what had become a volatile business into a business that earns predictable, strong financial results, while also producing consistent, sustainable growth. We also shared our plan to earn adjusted EBITDA margins that Granite had not seen since the housing boom. To support this effort, we took significant actions on both the construction and material size of the business. For construction, the first step we took was to de-risk our committed and awarded project portfolio, or CAP. We moved away from complex design-build projects and shifted our focus to best value and bid-build projects. In best value projects, such as CMDC or construction manager general contractor, we are better positioned to succeed as we work collaboratively with the client to mitigate risk for the project. Although some best value projects have high total contract values, They are often separated into smaller work packages, which are then reviewed through multiple project workshops. We have constructed more than 60 best value projects, and they are generally completed quicker and with fewer claims. Our record high-quality cap and macroeconomic construction market, fueled by the Federal Infrastructure Bill, or IIJA, puts Granite in the strongest position for growth and profitability in over a decade. On the materials side of the business, we said we intended to invest in our materials business, and in the home markets that have been our strength since our founding. For the past three years, we've invested in greenfield reserves, a liquid asphalt terminal, new automated aggregate plants, and bolt-on materials investments. These actions have strengthened our positions in our profitable, vertically integrated markets. We see further opportunities to strengthen our current home markets and to expand into new geographies. While much of the focus of the past couple years has been on internal transformations, We are now growing and plan to pursue opportunities to drive growth and expand our footprint in both our materials and construction segments. Our 2024 strategic plan is designed to grow our margins. The actions our teams have accomplished over the past three years gives me confidence that we are on track to achieve our 2024 financial targets. Now let's review the performance in our segments for the quarter, starting with the construction segment. Total cap grew in Q3. Continuing the trend over the last year, cap increased 147 million from the second quarter and is up 1.5 billion or 37% year-over-year to 5.6 billion. This represents a second consecutive record cap for Granite. In what is typically our largest revenue quarter of the year, growing cap is a significant accomplishment for our teams. The robust market has produced a number of public and private opportunities that should allow us to continue to build high-quality cap in the fourth quarter and as we move into 2024. Further, I believe the IIJA funding will continue to expand bid opportunities in 2024 across all of our key markets, and we are well positioned to capitalize on those opportunities. Diving into our operating groups and starting with the California group, cap was flat in the second quarter and increased 792 million, or 51%, from Q3 2022. This is a really impressive result as the group continued to win a significant amount of work while achieving record third quarter revenue. Public spending in the state has been strong and is expected to continue. Earlier in the year, there were concerns about the state budget deficit, but these concerns were resolved without impact to transportation spending. During Q3, Caltrans, the State Department of Transportation, again awarded their highest dollar value contracts in at least five years. Historically, high bid opportunities are expected to continue in 2024. Moving to the mountain group, our most seasonal group, cap decreased $65 million from the second quarter as the group posted year-over-year revenue growth of 12% in the third quarter. Despite the decrease in cap during the quarter, the group ended with cap of $1.4 billion, remained significantly higher by $431 million, or 43% year-over-year. Our Utah, Alaska, and Nevada regions continue to lead the group with strong caps. With budgeted spending in each state and the group expected to increase in 2024, the Mountain Group is poised for continued growth in the fourth quarter and 2024. Finally, in the Central Group, cap increased in the quarter by $212 million sequentially, up $284 million year-over-year to $1.8 billion. The increase in cap was led by the Tunnel Division, which landed a $205 million tunnel project in Ohio and continued growth in the Texas region home markets in Houston and Dallas. While the central group revenue was flat year-over-year in the quarter, I expect the group to return to revenue growth in 2024. The transformation of the central group's cap has been tremendous and a key component to our expected margin expansion in 2024. Overall, the construction segment had an outstanding quarter. We continue to build high-quality cap, grow revenue, and increase profitability in line with expectations. I believe we will continue to grow cap and revenue in the fourth quarter and enter 2024 very well positioned to achieve our financial targets. Moving to the materials segment, we built on the momentum of the second quarter with another strong performance in the third quarter. As I mentioned last call, cost inflation significantly impacted profitability last year, normalized in 2023. Destabilized costs combined with aggregate and asphalt price increases resulted in margin gains in the second and third quarters of 2023. Materials volumes and orders remain strong throughout the third quarter and going into the fourth quarter. In this market environment, I expect to realize further price increases in 2024. As we have previously reported, we've been investing in our materials business in numerous ways over the last two years. In the fourth quarter, we're expecting the completion of major investments in two automation projects, including a new fully automated aggregate plant. These investments in our materials segment should drive cost efficiencies and further margin expansion in 2024 in line with our gross margin expectations of 15% to 17%. Now I'll turn it over to Lisa to review our financial performance for the quarter.
spk07: Thank you, Kyle. In the third quarter, revenue increased $108 million, or 11% year-over-year, to $1.1 billion, while gross profit increased $52 million, to $167 million or gross profit margin of 15%. These results reflect a strong performance in both the construction and material segments during the quarter. In the construction segment, revenue increased $98 million or 12% year-over-year to $946 million, an outstanding result for the segment. The revenue increase was led by the California and mountain groups, which were up an impressive 21% and 12%, respectively, year-over-year. Entering the quarter with record cap, the California group's significant year-over-year revenue increase was in line with our expectations as the group overcame a historically wet and slow start to the year. Heading into Q4, I expect continued top-line growth in the fourth quarter year-over-year and in 2024. The Mountain Group's 12% year-over-year growth was led by construction revenue increases in the Alaska and Nevada regions, with our larger regions, such as Utah and Washington, also contributing meaningfully to revenue. Finally, in the central group, revenue in the quarter was flat year over year, with revenue in the growing Texas, Arizona, and Illinois regions offsetting declines in the Florida region as legacy projects wrap up. Construction segment gross profit increased 44 million year-over-year to 137 million, with a gross margin impact of 14.5% up from 11% in the third quarter of the prior year. The gross profit margin includes a write-down on the I-64 high-rise bridge project of 8 million during the quarter, with an impact to Granite after non-controlling interest of 4 million. The project continues to move towards completion, which is expected by the end of 2023. Despite the impact of I-64 in the quarter, construction segment gross profit margin improved year over year, as expected, led by our higher quality cap compared to the prior year. Over the past year, we have won work at higher margins, and we are seeing the benefits in our gross profit margin. In the material segment, revenue increased 10 million year-over-year to 171 million, with gross profit increasing 7 million to 29 million, or a gross profit margin of 17%. The improvement in gross profit margin was primarily due to sales price increases in both asphalt and aggregates and stable oil and energy costs. The year-over-year increases in revenue and gross profit resulted in third quarter adjusted diluted earnings per share of $1.69 and adjusted EBITDA margin of 11%. Our non-GAAP adjustments during the quarter included a litigation charge of $8 million and other costs related to the settlement of the Salesforce Tower matter. At the end of the third quarter, our cash and marketable securities totaled $329 million, up from $251 million in the second quarter. During the quarter, we also paid off our outstanding revolver draw in the amount of $55 million, resulting in a net debt reduction of $133 million. Third quarter profit and favorable movement in key working capital accounts produced strong operating cash flow in the quarter of 153 million. We reduced net contract assets by 55 million from the second quarter as billings, cash collection, and overall activity from projects ramping up in the second quarter progressed through the heart of the construction season. I am pleased with our progress in the quarter and expect the trend of strong cash generation to continue in the fourth quarter as seasonally high receivable balances are collected. I believe as we settle older outstanding claims in conjunction with our de-risked business model, our cash flow will continue to significantly improve. Our third quarter performance was directly in line with our 2023 guidance expectations, and we are not changing our guidance. I believe we could achieve the higher end of our revenue and adjusted EBITDA margin ranges if we continue to have favorable weather conditions in the fourth quarter and we continue to execute across our portfolio. We are also maintaining our 2024 financial targets of 3.6 to 3.9 billion in revenue and adjusted EBITDA margin of 9 to 11%. We believe we have the market opportunities and the cap to reach our 2024 targets that will then lead to even further gains beyond 2024. Now, I'll turn it back over to Kyle.
spk01: Thanks, Lisa. I'll close with the following points. Although we grew our top and bottom lines in the quarter in alignment with our guidance for 2023 and 2024 financial targets, our results were impacted again by I-64. While less impactful than prior quarters, we can't finish this job soon enough. Fortunately, we expect to complete the project this year. Revenue growth during the quarter was consistent with the strong cap position our teams had when heading into the quarter. I'm impressed that even though the third quarter was our busiest quarter, we were still able to continue to build cap as we have done in each quarter over the last year. We end the third quarter with another record cap and a great position for the fourth quarter and 2024. I believe we will continue to build cap over the next year as we are still in the early stages of projects going out for bid funded by the IIJA. We are being selective in the projects that we bid but are winning work at better margins year over year. That is a really good sign for Granite and the industry. Lastly, the materials segment is performing very well. We continue to invest in the materials segment, and I believe we will see top-line growth and bottom-line expansion as those investments come online. Operator, I will now turn it back to you for questions.
spk08: To ask a question, please press star, then 1. Please limit yourself to one question and one follow-up question, and feel free to jump back in the queue if you have additional questions. Our first question is from Stephen Ramsey with Thompson Research Group. Please go ahead.
spk04: Hey, good morning. This is actually Brian Barrison for Stephen. Thank you for taking my questions. First of all, the cap growth in the central region is very strong. Can you guys just talk more to the project set that you filled the cap with there? I think you mentioned a few projects. In the prepared remarks, are there any other specific types of projects you're targeting? And just how does the margin profile on those compare to the other Mountain and California regions?
spk01: Yeah, so good question. Our business down in Texas and our Texas region, that was one of our initiatives a couple years ago to really shift back to that home market strategy, specifically within our Texas region. And they've been focused on two primary markets today, Dallas-Fort Worth, which we've been in that market for a long time, and also in the Houston market. And so we're seeing that home market strategy pay off for that team. Historically, we've been pursuing large projects, megaprojects out of that office across the country. So this home market strategy for them is really focusing on smaller DOT jobs, projects that are fully designed, the build-type projects that they can execute on and perform at a high level, And that's really what their portion of the cap is. The average job size now for them is probably pretty close to $50 million, maybe $75 million, which is a lot different than historically the type of work that they would have on the book. So that's just a great example of how we've shifted away from really risky projects and asked our teams to focus on a home market strategy, and they've done a really nice job executing on that. From a margin profile perspective, it's right in line with the rest of the company and where we expect to be directionally as an organization moving in 2024.
spk04: Got it. Thank you. And follow-up, maybe just the construction gross margins overall looks like it might have been above 15% if you exclude the I-64. Is that the right way to think about the gross margins there? And if you just put kind of the year-to-date gross margins of that segment X, the oldest projects in the prospectives, Kind of seems like you're maybe already within the targeted zone for next year, so just thinking about how to reach the high end of that in 2024.
spk01: Yeah, we're pretty close. I think if you adjust out I-64, we're just below the kind of range that we put out there at 14% to 16% for 2024. We have a few other things going for us. Certainly, we've been focusing on execution as a company for a while. We put in place our construction playbook across the company, and that's been moving forward. And the team's been adopting the playbook and implementing it across the organization. And so we expect to see further margin expansion in construction through our efforts on that front. And then the other thing to think about is our cap. So our cap has gotten stronger. As we've talked in the last few quarters now, we're picking up more work with higher margins. And so we've seen that trend continue through Q3. And so as projects get burned through in construction. We bring new cap into construction. We expect a margin expansion on that end. So that gives us, we have the confidence that we're going to be well within that range of 14 to 16% as we get into 2024. Thank you. Thank you.
spk08: Thank you. The next question is from Brent Thielman of DA Davidson. Please go ahead.
spk03: Hey, great. Thanks. Good morning. Hey. Kyle, you mentioned several times through the commentary just better bid margins within the book of business that you have today, and obviously you've been more selective as well over the last couple of years in terms of what you're pursuing. Any more sort of granularity on how those bid margins within the cap look today relative to a year ago or two years ago as we think about you executing in that book over the next 12-plus months?
spk01: Yeah, I mean, I think if you go back a couple of years, certainly we saw the market tighten a little bit in early 21. We talked about that. And as we've seen the market adjust and grow, and certainly with the IJA funds coming in, I think over that two-year period, we've seen our margins improve probably pretty close to a percent and a half, maybe up to 2% on the day, I think might be a good proxy for what we've seen. So we'll start to see that really transition in. I mean, some of that already has, so I don't want to, over promise and suggest there's another 2% in margin expansion just in our cap. But we've seen some of that cap already get burned through, and some of the newer cap coming in certainly better margins than we had a couple years ago.
spk03: Okay. And then, you know, obviously some of the concerns in the market right now these days seem to be around the private sector. You're obviously much more focused within the infrastructure side. Maybe Can you talk about any slack in your markets that you may be seeing across your geographic region, things you might be concerned about? You know, do you feel like you're capturing that in these growth expectations for the business in the 2024?
spk01: Yeah, I think I look at the public side as really strong. I think as we look at what's coming for our teams really across our entire footprint is growth in 2024, certainly from a public spending perspective. I mentioned the last call, the American Road and Transportation Builders Association website had a lot of good information around the opportunities that are out in front of us, specifically in our markets, and they all show really strong public funding for us in 2024. I know our teams see a lot of opportunities for growth in 2024 and beyond as a result of that. On the private side, you know, our focus has really been around mining, rail, industrials, and solar has been a little bit soft this year, I think, as The solar developers kind of worked through some of the funding that came their way, and we expect that to pick back up. And I think the only softness we've seen is probably around residential. And I would look at that more on the material side. But as we've talked before, we don't really correlate high with residential. We correlate higher with transportation for a couple reasons. One is our asphalt is about two-thirds of our materials business versus aggregates. But most of it's been kind of isolated up in the Northern California and Northwest Washington. But that's been in place for a few quarters now, so we think that that softening is kind of already into our numbers of what we've seen today.
spk03: Okay, really helpful. Thank you. Thank you.
spk08: The next question is from Brian Russo of Sedoti. Please go ahead.
spk00: Hi, good morning. Good morning. I'm just curious. When we look to 2024 and the targets you've given, 9% to 11% EBITDA margins in the top line and gross margins by construction material segment, are those kind of considered normalized, or can you improve upon that as well, maybe as you referenced, you know, better bidding, or maybe it's incremental vertical integration, or even – a different public versus private mix, which I think is approximately 60-40. Just wanted to get your kind of strategic thoughts on that.
spk01: Yeah, good question, Brian. I mean, first off, we feel good about where we're headed directionally and what we look like for 2024. We have put out there the 9% to 11% EBITDA margin. When you look at where we are today in terms of our midpoint of our guidance around 8%, There's obviously some nice improvement as we have I-64 wrapped up and behind us. That gets us pretty close to the bottom end of that range. As I mentioned in the previous question, our cap is very different. So we believe there is a margin expansion associated with our cap as we get newer projects going through the pipeline, so to speak. So that will help drive up margins as well. into that range. We think our execution, we're still not there. I mean, there's still opportunities for us as a company to improve. We don't want to suggest that we're kind of at the end of the road in terms of operational excellence as a company. That's going to stay a really primary focus of ours next year and beyond. So we think there's continuing opportunities for us on that front. We see opportunities for materials pricing. So we do expect to raise pricing again in 2024, and then we'll kind of see where things go beyond that. And then the automation effort. We talked about a couple of the facilities we're bringing online next year, and those are nice investments for us. And with those facilities, I think that's going to help expand our margins as well. And I think from there, you know, we're always going to expect, certainly from our team in 2025, beyond top and bottom line growth. And so that's something that we can come back to you on in terms of kind of what's the next step. step for the company longer term and how we can get those top line and bottom line growth up.
spk00: Okay, great. And just curious on the I-64 project, obviously your write downs are declining each quarter this year. So what is actually or technically left to complete that project by year end? You know, what's your confidence level? that that can actually happen since I think previously you were targeting mid-October.
spk01: Yeah, that's right. And really the impact in the quarter was just further delays, mostly associated with design conflicts that we encountered as we started to kind of put the final project together. So today we're down to final top-lift paving. So we're actually putting the final surfacing on the roadway itself, putting the final striping in, and putting the vehicles in their final configuration and expecting to turn it over to the owner in December. And so, again, we're working day, we're working nights, two or three paving crews getting that work complete. There's things in our control that we feel good about, so we're confident that we can perform the work. We're meeting our productions, that the project will be complete. I think the only thing that's out there would be weather. If some major storm came through the area, that could be a setback for the team. We expect to have a few rain days here and there. That's certainly normal for that part of the country in this time of year. But we feel good about the opportunity to get that project behind us this year.
spk00: All right, excellent. And then lastly, just you mentioned expanding your footprint into new geographies. Could you just elaborate on that? You know, what might be complementary to, I guess, your existing home markets?
spk01: Sure. Yeah, I mean, I think you go back to Q1 and 22, we laid out a plan that from 22 through 24 and beyond, we were going to focus on support and strengthen of our existing home markets. That was really around small bolt-ons, automation efforts, and purchasing material reserves. in our existing oil markets. And we got a lot done, as we mentioned in prepared remarks, around continual asphalt and oil terminal in Bakersfield, Brunswick Canyon, quarry in Hopland, northern Nevada, Grantsville's quarry expansion in Salt Lake City, and then Coast Mountain Resources, which is a quarry up in Canada that ships material down into our business in the state of Washington. So a lot of really nice support and strength in our existing oil markets over the last couple of years that we're excited about. But we always both to doing something larger around expansion and getting outside our existing footprint, specifically around a vertically integrated business in 2024 and beyond. We felt like the timing would be right for us to do that, that the large megaproject challenges we had as a company would be behind us, and so we do feel like it's time for us to take on a new opportunity outside our existing footprint. I think there's a lot in the pipeline that are out there in the marketplace today. I can tell you what we're looking at is, first off, good businesses to be a platform. We're still looking for a market that's healthy and growing. And, of course, we're looking for strong leadership. And those opportunities are out there. We have a couple things in the pipeline, and I hope that we'll be able to share some success in the coming months.
spk00: Okay, great. Thank you very much.
spk08: The next question is from Michael Dudas of Vertical Research Partners. Please go ahead.
spk05: Good morning, gentlemen. Lisa. Good morning. Kyle, just quickly, I'm following up on the material side. How do you say costs have been normalized? Any insight on maybe cost pressures fourth quarter into 2024? And what kind of range of type of pricing are you anticipating? And is there volume growth associated with that business relative to not only the core businesses, and you mentioned about residentially a little bit slower, but some of the new acquisitions, some of the new opportunities you've got from your bolt-ons.
spk01: Yeah, I think the cost has stayed fairly consistent this year. I mean, there's been some fluctuations early and late. We've seen a little bit there. I mean, the energy escalator we put in place, Last April is still out there for us to protect ourselves, and also we have public owners that provide some protection on that end of things. We feel good about kind of the cost components today. I guess we were able to raise pricing on agates and asphalt in 2023, and we do expect that to be consistent with what we can do next year, probably in the range of, say, 5% to 10%. But all in all, we do think that the cost components have normalized, and I think that's good news. For the business, from a volume perspective, we haven't seen a drop. So, despite the fact that there were a couple markets that softened with residential, our volumes were actually up on both asphalt and aggregates for the year. So, I think that's kind of indicative of the market today. Thanks, Kyle. Thank you.
spk08: The next question is from Jerry Revich of Goldman Sachs. Please go ahead.
spk02: Hi, this is Adam on for Jerry today. Thanks for taking my question. Nice to see the positive free cash flow inflection in the quarter. Can you just update us on how you're thinking about the free cash flow and receivables trajectory in Q4 and into 2024? And then as a follow-up, how are payment terms on new projects you're winning, how do they compare to what you were winning in 2022 and 2021?
spk07: Yeah, hey, Adam, this is Lisa. So, good morning. Yeah, really good quarter from a cash flow perspective, you know, coming in at $153 million for the quarter. We've talked before about, you know, from an internal perspective, how we look at operating cash flow and ultimately free cash flow. It's first, you know, we're incentivized internally at a 5% operating cash flow as a percent of revenue. that being at 5%. And so, you know, we manage our CapEx, looking at we spend approximately 1% to 2% for maintenance CapEx. And so you take that from our operating cash flow, so that leaves about 2.5%, 3%. So that's our target of what we're shooting for. So as we work through some of our challenging projects from the past, which some of that is – included in our contract assets, we anticipate cash to be freeing up as we're moving forward. And we've seen that in Q3 in our operating cash flow. Our net contract assets went down around 55 million, as I mentioned, in the third quarter. And overall, that's just key working capital account movements. Receivables are up in the quarter, which we expected. That wasn't unusual. You know, we started the year off slow and then picked up activity levels in Q2. So we were full speed ahead when we entered Q3 with a very busy quarter with coming in with revenues of $1.1 billion. So higher accounts receivable that we expect to turn in Q4, along with just other working capital accounts with higher activity. And so going into 2024, At a minimum, we would anticipate, you know, our operating cash flow targets being similar or even pushing a little bit higher as we build momentum and start to release some of the contract assets that are on our balance sheet, improvements in our contract liabilities, and then receivables just from a collections perspective. You know, we're always working with the teams to focus on cash collections and just generation and just speeding up that process. That area is working well, but just continue to maintain the focus going into 2024.
spk02: Thank you. Very helpful. And I appreciate the color of, you know, cap by procurement type. Can you update us on the contract mix of your cap? So, you know, how much is fixed price versus fixed unit price? Any color there would be helpful.
spk01: I don't know if we have the breakdown between fixed price and fixed unit price on the bid-build side of things. But, you know, our cap, if you look at the best value, has been pretty consistent between last year in Q3 and this year in Q3, right around 42% or so. Our fully designed projects are at 53% of our cap today. And so I think we feel good. We feel like we've de-risked the company. Our design-build, again, went from 5% down to 3%. And so that's, as you see, those I-64 jobs certainly wind down that we expect. We don't expect that to go to zero. There's still owners that will have design-build contracts that we have a compelling reason to pursue, but they're kind of the exception in our business today. So I think we feel good about where we're at from the cap perspective and the contracting message we have. I don't think anything's shifted, by the way, in terms of the payment terms. with the contract work, that hasn't really changed a whole lot. What's changed is this whole market strategy. I think, one, we're working for clients that we know and we understand, which allows us to move away from having contract claims, which is certainly not helpful in terms of generating cash for the business. And also, we're doing work that is best value as opposed to design bills, so there's a lot less claims associated with these types of contracts, too. So I think our entire business model has shifted, which will only help not only de-risk the company but also generate better cash flows in the future.
spk02: Great. Thanks so much. Thank you. Thank you.
spk08: This is the end of Q&A, and now I would like to turn the call back over to Mr. Larkin.
spk01: Okay. Well, thank you for joining the call today. As always, we want to thank all of our employees for the work they do every day. I believe that our company has never been stronger or in a better position to grow and deliver shareholder returns. Let's finish the year strong. Thank you for joining the call and your interest in Granite. We look forward to speaking with you all soon.
spk08: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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