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spk08: Thank you for standing by. My name is Enrique, and I will be your conference operator today. At this time, I would like to welcome everyone to the Primoris Service Corporation second quarter 2023 conference call. All participants have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I would like to turn the call over to Blake Holcomb, VP of Investor Relations. Please, go ahead.
spk10: Good morning, and welcome to the Vermoores Second Quarter 2023 Earnings Conference Call. Joining me today with prepared comments are Tom McCormick, President and Chief Executive Officer, and Ken Dodgen, Chief Financial Officer. Before we begin, I would like to make everyone aware of certain language contained in our Safe Harbor Statement. The company cautions that certain statements made during this call are forward-looking and subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC. Our forward-looking statements represent our outlook as of today only, August 8, 2023. We disclaim any obligation to update these statements except as may be required by law. In addition, during this conference call, we will make reference to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures are available on the Investors section of our website and in our second quarter 2023 earnings press release, which we issued yesterday. I would now like to turn the call over to Tom McCormick. Tom?
spk02: Thank you, Blake. Good morning and thank you for joining us today to discuss our second quarter 2023 financial results and operational performance update. Remorse continues to build positive momentum in 2023, delivering another well-executed quarter with improved top-line revenue and margins. In fact, our revenue and gross profit in Q2 were the highest recorded in the company's history, and we believe we have the potential to continue to set new records as we grow market share in certain businesses and benefit from increased customer spending. I want to thank our employees out in the field and in our offices that make this success possible. They are working hard in often harsh weather conditions to repair lines after a storm, build sun-powered generation to provide electricity to homes, and construct facilities that allow us to fill our cars at the pump. Most importantly, they perform their duties safely, efficiently, and to the satisfaction of our customers. Our safety performance this year has been particularly strong, and we have the ability to meet or exceed our best safety year on record. We also ended the quarter with record backlog of just under $6.6 billion, including booking a record $2.5 billion during the quarter. To put that in perspective, five years ago, our total backlog was only $2.8 billion. This represents an increase of 133% or $3.8 billion over that period. This growth can be attributed to our hardworking business development and operations personnel and our strategic decision to increase our focus on renewables, communications, and power delivery opportunities, while also being selective in winning lower risk, strong margin industrial, heavy civil, and pipeline work. Now let's turn to our operational performance more closely by segment. Starting with the utilities segment, we saw year-over-year improvement in revenue, gross profit, and gross margin during the quarter. The acquisitions of PLH and BCOM helped drive revenues higher in power delivery and communications. We also saw strong growth of more than 10% in gas operations with improved margins. Gas operations has been better than expected in 2023 as we have been able to pick up market share in certain regions. We have also been able to increase margins by selectively exiting unfavorable contracts and reducing costs in some underperforming markets over the past 12 months. Power delivery also saw revenue and gross margin improvement from the last year. You'll recall the significant inflationary challenges that we faced in the second quarter of 2022. We experienced rapid escalation of wages in our non-union operating areas that we were not able to make up for during the period. We also saw steep increases in fuel prices due to uncertainty of supply following the start of the conflict in Ukraine. Today, we're in a much better position with our contracts due to our ability to negotiate adjustments to many of our MSAs. While non-union labor rates remain elevated compared to 2021 levels, we have been able to claw back much of the margin pressure through increased revenue and improved contracts. We are continuing to make progress updating the PLH contracts particularly in the southern region. We expect this effort to be completed by year-end and to be accretive to margins. Last quarter, we discussed our intention to increase our mix of major projects in power delivery. Our goal is not to grow projects at the expense of MSAs, but to complement them. MSAs often serve as the gateway to project work with customers, and we are in a good position to continue growing our share of work with our MSA customers by adding projects. We have also acquired some exceptional talent to assist us in winning and managing more of these projects. To put the scope of this market opportunity in perspective, we are currently evaluating or bidding over $2 billion of major projects, most of them with existing MSA customers. We are also projecting that over the next 12 to 18 months, we will perform approximately $60 million of high-voltage interconnect work from our renewables business in support of their customers' projects. These and other scopes of project work are a growing industry need and currently an underserved market by Comoros. We are optimistic that we will win our fair share of major project work while maintaining our disciplined approach in managing project execution risk and margin profile. Wrapping up the segment with communications, we are pleased with our ability to grow revenue while being disciplined on margins. We remain selective in the regions in which we work and in the customers we work for in order to maximize the efficiency of our teams and maintain margins. To this end, we are seeing significant expansion in the Central Texas market and gain share with the new customer in the Arizona market. We are also being pulled into the Colorado market by a key customer relationship, which will allow us entry into another high growth area of the country. We remain on track to achieve our growth targets in communications in 2023, even as our second half is expected to slow down since some of this work was pulled forward in the first half of the year. Moving over to the energy segment, we saw multiple business lines increase revenue and improve their margins from the prior year, including our renewables, industrial, and pipeline services businesses. Pipeline has seen somewhat of a turnaround from the prior year when we experienced negative gross margin due to low project volumes and cost overruns on a project. In Q2 2023, Pipeline has been able to execute well from a stronger backlog position and pick up some additional work at favorable margins. In fact, margins in the second quarter improved closer to the mid-cycle level in the low double digits. Challenges remain in this business and the market remains competitive, but we are seeing more opportunities to bid projects that require specific experience, equipment, and skills that we possess. There are also several additional carbon capture scopes that we are targeting to build on the success of our first announced project earlier this year. Another big story for the Corridor in Energy was the over $1.8 billion in bookings, representing a 2.3 times book to build for the segment. Included in these bookings were $650 million in industrial and heavy civil awards that span across several states and provide a diverse range of sizes and scopes. These wins represent not only the benefits coming from federal stimulus, but also a favorable change in customer behavior. Customer demand for quality specialty contractors is rising, and as a result, we are seeing improved productivity for services that are in high demand. We believe that if this trend continues and we finalize some projects that have been a drag on margins, we will continue to see margin expansion in the next couple of years in these businesses. Renewables continues to see solid demand, announcing several large contract awards in the quarter as well, with a combined value of approximately $770 million. These solar energy facilities will add another 1.4 gigawatts of renewable energy to the grid. Two of these projects will not begin construction until late 2024, which signifies the strength of our relationships and the confidence our customers have in our people to contract early and make supply chain commitments. We believe we are uniquely positioned to be the contractor of choice for these and other customers going forward. On top of a great quarter of bookings, we also saw revenue and margin growth within renewables compared to the second quarter of 2022. We believe we are on track to achieve our 30% to 40% revenue growth target, as well as continuing to achieve solid margins in 2023 by maintaining our high-performance standards. We are very pleased overall with our execution and performance in renewables. The market for renewables remains strong, and we aren't anticipating a slowdown within the next few years. Solar module delays are appearing to be less of a concern for delivery in 2024. To support this, we are seeing billions of dollars of investments in domestic solar module manufacturing to help the industry capture the benefits of the Inflation Reduction Act. This supply chain investment reflects a long-term bullish view on this market that we share with these manufacturers. We are also seeing our customers comply with IRA labor requirements sooner than we expected, following further clarity on the IRA incentives that were made known in May of this year. This means that our apprenticeship and prevailing wage programs are now in place, and we have plans to execute on our first project using this program beginning in Q3. Also, in anticipation of the industry's continued strong growth trajectory, we are working towards expanding the number of our utility-scale solar project teams by the end of the year. We have built a very solid reputation in the industry, which enables us to attract and promote top talent. We believe our approach to solar EPC is best in class, and we plan to keep recruiting and retaining top talent to ensure we perform our work safely and to maximize our efficiency and profitability. I'll now turn it over to Ken for more on our financial results.
spk11: Good morning, everyone. Revenue for the second quarter was a little over $1.4 billion, an increase of $390 million from the prior year, driven by growth in both of our segments. The energy segment was up over $226 million, or 41% from the prior year. This was driven by growth in our pipeline, renewables, and industrial business lines, as well as some work being pulled forward from Q3 and Q4, especially in our pipeline business. The utility segment also saw strong growth of $164 million, up almost 35% from the prior year, driven by double-digit gains across all business lines compared to 2022. Gross profit for the second quarter was approximately $157 million, an increase of over $65 million from the prior year due to both higher revenue and improved gross margins. Gross margins were 11.1% for the quarter, which was up more than 200 basis points compared to 9% in the prior year. Now let's look at our segment results. In the utility segment, gross profit was 66.5 million, an increase of 26.2 million, or almost 65% compared to the prior year, due to higher revenue, which was partially driven by the acquisitions of PLH and BCOM. Gross margins improved to 10.4% compared to 8.5% in the prior year when we felt the impacts of labor and fuel inflation in certain markets. We've renegotiated many of those contracts and are seeing the results of better rates. We still expect utility segment margins will be 9% to 11% for the full year, with Q3 margins slightly better than Q2 and Q4 margins seasonally down from Q3 like normal. In the energy segment, gross profit was almost $91 million for the quarter, an increase of $39 million or 75% over the prior year due to both higher revenue and improved margins across multiple business lines. Gross margins came in at 11.7%, which is an improvement from 9.5% in the second quarter of last year. Much of the increase in gross margins can be attributed to recovery in pipeline projects, which delivered low double-digit gross margins this quarter compared to negative margins in the prior year. Gross margins also remain strong in our renewables and industrial businesses. Renewables continues to lead the segment in revenue and gross profit and remains on track to achieving 30 to 40 percent revenue growth this year. Industrial margins also improved after moving past a legacy LNG project that weighed on margins in the prior year. We expect the energy segment to remain strong for the balance of the year and gross margins to remain comfortably in the 10 to 12 percent range. Taking a look at our SG&A, expenses in the second quarter were $85.6 million, an increase of almost $26 million over the prior year. The increase in SG&A is primarily due to the impact of acquisitions and incremental costs to support growth in our key lines of business. As a result, SG&A as a percentage of revenue increased slightly to 6.1%, but in line with our expectations. We maintain our full-year SG&A guidance in the low 6% range. Net interest expense in the second quarter was $16.9 million compared to $4.7 million in the prior year. The increase was due to higher average debt balances and higher average interest rates. We continue to anticipate our full-year interest expense to range between $73 and $77 million. Our effective tax rate increased slightly to 29% for the quarter, and we expect it would be in that range for the full year. The increase from 28% in the first quarter was primarily due to a shift in revenues to higher tax jurisdictions, non-deductible per diems, and some small discrete tax items during the quarter. Net income of $39 million or 72 cents per diluted share was down approximately $11 million from the prior year, primarily due to a $40 million gain on sale and leaseback transaction which occurred in Q2 of last year. However, adjusted EPS was $0.80 per diluted share, an increase of $0.32 per share from the prior year, and adjusted EBITDA was $102.4 million for the quarter, an increase of $46.2 million, or 82% compared to the prior year. Both increases in adjusted EPS and adjusted EBITDA were primarily driven by the higher revenues and gross profit noted earlier. Turning to cash flow, we generated $34.5 million of cash from operations in Q2. The primary drivers were an increase in adjusted net income along with strong customer deposits in the quarter. We are still in the early stages of the working capital initiatives we announced last quarter, but we are encouraged by the progress we made this quarter and will look forward to continued progress over the coming quarters. We ended the quarter with $122.7 million of cash and net debt of approximately $1 billion. Borrowing capacity under our revolver was 153.4 million, providing total available liquidity of 276.1 million at quarter end. Reducing our leverage continues to be a priority for the company. Our 12-month net debt to EBITDA ratio was around 2.8 times at the end of Q2, and we believe we were on track to reach our goal to be around two times by the end of 2024. Our plan is to accomplish this through earnings growth and debt reduction over the next several quarters. Total backlog at the end of the quarter was a little under $6.6 billion compared to just under $4.6 billion in the prior year, an increase of 44%, resulting in another record backlog. Fixed backlog increased to $4.5 billion, up over $1.7 billion, or about 62%, primarily due to the strength in our energy sector. MSA backlog was up 16% or $281 million to a little over $2 billion driven by communications growth in Central Texas and power delivery growth. We expect 100% of our utilities backlog and 59% of our energy backlog to convert into revenue over the next four quarters. And finally, turning to our full-year earnings guidance, given our strong start to the year and constructive outlook for the second half of 2023, we are raising our earnings guidance. We expect EPS of $2.15 to $2.35 per share and adjusted EPS of $2.60 to $2.80 per share. Adjusted EBITDA guidance is also being raised to 360 million to 380 million for the full year 2023. Given the timing of certain projects and the revenue that was pulled forward to the first half of the year, We anticipate Q3 will be flat to slightly up sequentially from Q2. We also expect the fourth quarter to revert closer to Q2 levels, as we typically see a slowdown in certain markets during the fourth quarter. Overall, we are pleased with our results and believe we are on track for a record 2023, which we are optimistic will set the foundation for further growth in 2024. With that, I'll turn it back over to Tom.
spk02: Thank you, Ken. Before we take questions, I'd like to summarize some key takeaways from the quarter. I am proud of our safety performance, as well as of our operational and financial results in the first half of 2023. We have successes to celebrate across all of our businesses and remain committed to executing on behalf of our customers with a focus on safety, quality, and productivity. We are establishing new records and raising our expectations for what we can achieve as a company, and I believe the best is yet to come. We have made great strides growing in our strategic markets of renewables, power delivery, and communications. We are also delivering improved profitability and cash flow in many of our other businesses through strong leadership and disciplined execution. This only increases our conviction that we are focused on bidding the right projects with the right customers in the right markets. Additionally, we are in a great position to further grow market share in the renewable space, particularly in solar and energy storage. We are growing teams, bringing value to our customers, and expanding our customer relationships and service offerings, all of which will help us solidify our position as the top provider of renewable EPC services. As renewable energy sources continue to grow and benefit from a favorable environment, Comoros is in a great position to work with the right customers to execute on our strategy. We have the best people and a unique opportunity to assist with the energy transition while also building the U.S. infrastructure necessary to keep the economies in North America running smoothly. Finally, as we look toward the back half of 2023, we are not complacent and we know that there is more work to do to finish the year strong. We are focused on the safe execution of our customers' projects and on improving our profitability through increased productivity and effective project management. Success in these areas will allow us to improve our cash flow generation reduce our debt balance, and provide us with maximum flexibility to invest in our business to the benefit of our employees, the communities in which we work, and our shareholders.
spk05: We will now open up the call for questions.
spk08: At this time, I would like to remind everyone in order to ask questions, press star, then the number one in your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from from Thompson Davis. Adam, please go ahead.
spk06: Hey, good morning, guys. Great quarter. Hey, there was a fair amount of discussion about a pull forward of work from the back half into the second quarter. Can you just kind of review all that?
spk11: Yeah, I mean, it's spread across a lot of different business units, a little bit of pipelines, definitely on the utility side as well. I don't have the exact numbers in front of me, but the top line is probably about $150 million that was pulled forward.
spk06: Okay. And then I guess along those same lines, was that a revenue comment about revenues slightly up Q3 versus Q2 and then Q4 is more in line with Q2?
spk09: Yes.
spk06: That's a revenue. Okay. And then how does that kind of break down between the segments?
spk11: The utility segment is going to be, I'm just double checking, the utility segment actually, you know, whereas we normally kind of have our peak in Q3, we had it in Q2 because of the revenue pull forward. So revenue is going to be down sequentially in utilities in Q3 and Q4. Energy is going to be the opposite. Energy will be up sequentially from Q2 into Q3 and Q4.
spk06: Okay. Perfect.
spk05: I'll turn it over and hop back in the queue. Thanks.
spk08: Your next question comes from the line of Sean Eastman at KBank Capital Markets. Sean, please go ahead.
spk03: Hi, team. This is Alex on for Sean this morning. Thanks for taking our questions and congrats on the quarter. So I guess my first question, are we still on pace for that 100 million to 150 million operating cash flow range this year? And then, like, how do we think about a normal like cash flow conversion as we think about 2024 and beyond with these working capital initiatives?
spk11: Yeah, for this year, yes. We're still looking at the same range. We picked up a little bit in Q2, as you noticed. In Q3, it's going to be a push. It's going to be dependent on the timing of certain projects kicking off in Q3. So the bulk of it's going to be back in loaded into Q4 like normal. And as for next year, you know, to be honest with you, we're just about to kick off our planning process for next year. And with so many initiatives going, I don't know that I can tell you much more about next year just yet. I think it's going to be another quarter or so before we have that better visibility into that.
spk03: Got it. Cool. And then on pipeline, that business sounds like it's performing a lot better this year. Can you just talk about the pipeline of future opportunities over the next 12 months? Are you seeing more large diameter pipelines out to bid? And is there an update on this carbon pipeline you booked last quarter? Did that begin construction?
spk02: So the carbon project that we announced last year will go into the field next year, so in 2024. We're not seeing a lot of large diameter. If we are, they're shorter runs or more intrastate than they are across state lines. But we're seeing more projects, and again, they're smaller projects, and I'd be remiss to give you a range, but they're smaller than what you typically see or we've seen historically, but there are a lot more of them. So there's a lot of cutouts and replaced sections and just smaller sections that are supporting some of these LNG plants and these other industrial facilities that are being built.
spk05: Thank you.
spk08: Your next question comes from the line of Julio Romero with CIDADI and Co. Julio, please go ahead. Hi.
spk04: Good morning, Tom, Ken, and Blake. This is Alex Hantman on for Julio. First question around utilities. Can you talk about your efforts to win more project work in the power delivery business and talk to when we can expect to see that reflected in the backlog?
spk02: Well, we're starting to see some of it reflected in the backlog. You'll see it in the back half of this year. We've been doing some cross-selling with our renewables groups, and we are executing some high-voltage work for them. I noted in my comments earlier, we'll see probably about $60 million of revenue added for just those projects alone. I think as we get into 2024, you're going to see that ramp up, our revenue in that work ramp up. We really went through a consorted effort in bringing in a management team that has the expertise and the experience to chase that type of work. And as I noted earlier, we're not going to sacrifice our MSA work for it. It's really to complement the MSA work, and actually it will drive a little bit higher margins for us.
spk04: Got it. Thank you. In terms of pipelines, is there a way to quantify the benefit of the mid-Atlantic pipeline project, either from a margin or profit dollar perspective, you know, on the overall second quarter energy segment performance?
spk05: The mid-Atlantic project, are you talking about from last year?
spk02: Yes. Really just that's some maintenance work to clean up the right-of-way so that they can walk away from that work. They have certain obligations that the client has to meet to the respective departments of energy in which that pipeline was built and was being built. And so we're just cleaning up that work and cleaning up the right-of-way and finishing up some work for them. We'll finish that work this quarter.
spk04: Got it. Thank you.
spk08: At this time, I'd like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from Jerry Ravitch from Goldman Sachs.
spk01: Hi, good morning. This is Adam on for Jerry today. Thanks for taking my question. Can you just update us on where the crew count stands in utility scale and small scale solar today and how you expect that crew count to evolve over the course of the year and entering 2024?
spk02: I can tell you we're somewhere between 12 and 15 crews on utility scale solar. We're working towards the end of trying to achieve, you know, build three new teams or actually get to 15 by the end of this year, and we're right in the middle of that. So it's somewhere between 12 and 15. DG, smaller scale, I think we're at five teams there. I may be off a team or two, and we're seeing – Quite a bit of that work, but I'm not sure what our goal is as far as building those teams with their smaller teams. I think the biggest concentration right now is building the larger scale teams.
spk01: Got it. That's helpful. And then really strong margin performance in the energy business. In 3Q, we normally see a seasonal step down in that business, I think of around 100 basis points. Given some of the moving pieces there and growing solar revenues, can you just help calibrate us on puts and takes on the sequential margin cadence in energy in the back half of the year versus normal seasonality?
spk11: Yeah, it's a good question. We will see a small step down in Q3, but not to the cadence that you mentioned. But it'll probably be closer to about 50 bps in Q3 and then probably stay flat sequentially into Q4.
spk05: Great. Thanks so much.
spk08: Your next question comes from the line of Oliver Kronos with DA Davidson. Oliver, please go ahead.
spk00: Hi there, guys. I'm sitting in for Brent. Thanks for taking my question. I just wanted to kind of get back to the MSA versus project work balance that you were speaking with earlier. Can you talk about the progress made towards finding the balance between MSAs and project work? And do you feel that you're making progress towards finding more project work versus MSAs?
spk02: Yeah, I think we are. I think we'll see through the course of the year the percentage of our total revenue in that group become more balanced between what we do in project work versus MSAs. At one point in time last year, I think we were at 90% MSA and 10% project. We really want to get that down to 70-30% maybe something a little bit lower, a little more balanced, with not the intention of going 50-50, but 65-35 would not be bad. I think we're seeing, we're doing some work right now, and as we continue to perform that work and do it successfully and demonstrate to our clients that we have that capability, we're seeing more and more opportunity to bid other projects.
spk00: That's great. Thanks so much for that color. And just kind of to get back to the solar a bit, I know you mentioned that you're taking on more crews. With the more substantial workload that you guys are taking on, is there capacity to take on more?
spk02: Well, as we build our crews, there is. We're just trying to be very disciplined about it. Look, we've had tremendous growth rates in that business over the last five years, and we've been successful in executing all of our projects successfully because we've been very disciplined in how we recruit, hire, onboard, train, and develop our crews, and we're going to continue to do that.
spk05: Awesome. Thanks so much, guys.
spk08: Your next question comes from the line of Lee Jagoda with CGS Securities.
spk07: Hi, good morning. It's Pete Lucas for Lee. You talked about utility margins being strong in the quarter and you gave us some good color in terms of the outlook there. Just wondering the impact on those margins of PLH contract repricing. Did some of that get pulled forward more than expected, and how should we think about that contract impacting the back half?
spk11: Yeah, not much of it got pulled forward. We just continued with that process, and it will continue as we've talked about over the course of the balance of the year. So I think what you're going to see, it's going to be a combination of normal seasonality within utilities as well as a little bit of PLH contract negotiation. Should see margins tick up a little bit. in Q3 sequentially and then drop back down in Q4 like normal.
spk07: Great. Very helpful. And then how much of the current energy backlog is attributable to solar projects as of Q2?
spk09: One point I'm looking at. 1.8 billion.
spk07: Great. And then last one from me. You mentioned pipelines starting to show some improving demand. Some projects rolling off there. Just wondering, is there anything meaningful happening on the regulatory front to structurally improve the business?
spk02: Yeah, we keep hearing talk about it, but we haven't seen it. A lot of what we're doing is, you know, doesn't require FERC permits. As a matter of fact, not everything we're doing right now doesn't require FERC permits. So we hear talk about it, and we're waiting on it, but we're not there yet. Very helpful. Thanks.
spk05: I'll jump back in the queue.
spk08: Our next question comes from the line of Adam Talahaina with Thompson Davis. Please go ahead.
spk06: Hey, Tom, you made a comment about customers demanding quality specialty contractors. The demand was rising. And I think you said as a consequence of that, it could be good for margins for a few years. It struck me as a possibly really bullish comment. I just was hoping you could flesh that out a little more.
spk02: Well, we've been in a seller's market for so long, Adam, that you really had very little room. One, there are very few projects to bid, and you had very little room to negotiate. We're seeing clients being much more receptive to granting much more amenable terms. We've seen it in renewables for the past several years where clients have actually been willing to move their schedules and their project schedules. just to be able to have our teams available. We all know there's a tightness in the market with respect to craft labor, but there also is with respect to management talent. And so if clients are seeing more and more where contractors are executing projects successfully for them, if they have other projects following those, they want to secure those resources for their upcoming projects. And we're seeing the benefit of that, as are some of our peers, I'm sure.
spk06: Was that mostly renewables comment or is that in a bunch of markets?
spk02: I think we're seeing it in energy as well. I think we're seeing it in utilities with some of our clients in power delivery where we're getting opportunities because we have successfully executed some projects in the past where we've struggled prior to this leadership team in. In industrial, for sure, we've seen it. And a lot of it is based on when you're successful, success breeds success. Clients see that. They see you have a good client, project team, and they want to retain them if they have other work, for sure.
spk06: Understood. Okay. Thanks, Tom.
spk08: And I'll turn the call back over to Tom McCormick for closing remarks.
spk02: Thank you, Enrique. And thank you for your questions and for participating in the call this morning. I also want to, again, thank all of our employees who make Primoris the great company that it is today and who will be the drivers of our becoming a leader in the industries we serve in the years to come. We had a great Q2 and first half of 2023. Now, I'm optimistic about the balance of the year and setting the groundwork for a promising year in 2024. We look forward to updating you next quarter. Have a good day.
spk08: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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