Comfort Systems USA, Inc. (FIX) Q1 2018 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Q1, 2018 Comfort Systems USA Earnings Conference Call. My name is Loren, and I'll be your operator for today. [Operator Instructions] I'd now like to turn the call over to Ms. Julie Shaeff, Chief Accounting Officer. Please proceed.

Thanks, Loren. Good morning. Welcome to Comfort Systems USA's first quarter earnings call. Our comments this morning as well as our press releases contain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. What we will say today is based on the current plans and expectations of Comfort Systems USA. Those plans and expectations include risks and uncertainties that might cause actual future activities and results of our operations to be materially different from those set forth in our comments. You can read a more detailed listing and commentaries concerning our specific risk factors in our most recent Form 10-K and Form 10-Q as well as in our press releases covering these earnings. A slide presentation will accompany our remarks. The slides are posted on the Investor Relations section of the Company's website comfortsystemsusa.com. Joining me on the call today are Brian Lane, President and Chief Executive Officer; and Bill George, Chief Financial Officer. Brian will open our remarks.

All right. Thank you, Julie, and good morning, everyone. And welcome to our first quarter earnings call. Let me start by thanking all the Comfort Systems USA employees for their continued hard work and fantastic performance. I'll start with the highlights of the quarter and Bill will come with the financial results in more detail. We are pleased to report very strong first quarter revenue and profits and a terrific start to 2018. Building on solid execution over the last several quarters. We had our strongest ever first quarter performance. Revenues are 22% higher than the first quarter of 2017. We have another quarter of solid execution by our operating companies. As a result, earnings improved substantially, with earnings per share of $0.44 this quarter, compared to $0.20 per share a year-ago. Our backlog continues to build with strong new construction activity in many of our markets. Backlog is 14% higher sequentially, and for the first time in our history, backlog has exceeded $1 billion. Our booking trends continue to indicate a strengthening of our construction prospects. Our service results also improved this quarter, compared to last year. We were also happy to be able to reward our shareholders for the dividend increase. Overall, I am optimistic about our prospects this year. I will discuss our backlog and outlook in more detail in a few minutes, but before I get into that, let me turn this call over to Bill, to review the details of our financial performance. Bill?

Thanks, Brian. Since most of you probably access this call through our Internet link, slides two through four maybe helpful as I provide some explanation and details of our financial results. First quarter revenue was $465 million, there was an increase of $84 million or 22%, compared to the first quarter of 2017. Same-store revenue increased by 15%, or $59 million, compared to last year with remaining increase coming from the BCH acquisition in April 2017. Our same-store growth is primarily due to project activity as construction activity increased for our businesses this quarter. As you will recall, we have particularly light revenue in the first quarter of 2017. However, as 2018 begins, it has become clear that recent project bookings are now moving into the execution stage. Net income for the quarter was $16.7 million, or $0.44 per share, compared to $7.5 million or $0.20 per share for the first quarter of 2017. Of the $0.44 of earnings per share that we're reporting, $0.07 results from the tax accounting method change, and without that we would have earned $0.37 this quarter. That incremental $0.07 is a discrete one-time benefit. Separate and distinct from that discrete item, we of course also benefited from tax reform this quarter, as the new lower rates offset by the loss of some deductions method, our after-tax income was somewhat higher. We estimate that if we had reported the first quarter under prior year tax law, the $0.37 earnings would have been $0.04 or $0.05 lower, but still historically very, very strong. Gross profit was $89.1 million for the first quarter of 2018, an increase of $13 million or 17.2% compared to the first quarter of 2017. Gross profit as a percentage of revenue was 19.2% for the first quarter of 2018, compared to 20% in the first quarter of 2017. SG&A expense was $70 million for the first quarter of 2017, compared to $63.2 million for the first quarter of 2017. Most of the dollar increases is due to the BCH acquisition. SG&A as a percentage of revenue was 15.1% in the current quarter, and that compares to 16.6% in the first quarter of 2017. Pre-tax income was 18.7% for the first quarter of 2018, an increase of $7.4 million or 65% compared to the first quarter of 2017. Income tax expense was $2.1 million with an effective tax rate of 11.1% as compared to income tax expense of $3.9 million with an effective tax rate of 34.2% for the same period in 2017. The low effective tax rate for 2018 was primarily due to the discrete event I mentioned above which was a decrease in unrecognized tax benefits from federal income tax accounting method change. Excluding just this discrete benefit, our tax rate would have been approximately 26% and we believe our go-forward tax rate will be in the really in the 25% to 30% there are a lot of moving pieces right now. Free cash flow was negative $1.4 million compared to positive free cash flow of $5.3 million for the first quarter of 2017. We almost always have negative cash flow early in the year and our results this year reflect very good cash performance especially considering the working capital that we've allocated to support our growth. We feel good about our cash prospects for the remainder of this year. We returned capital to our shareholders this quarter by repurchasing 150,000 shares and as Brian noted, we increased our dividend earlier in the year than usual and we'll consider incremental increases to our dividends of conditions more. Overall, very pleased with our results for the quarter and optimistic that improved activity levels will continue in 2018 and that's all I have in financial spread.

All right. Thank you, Bill. I am going to spend a few minutes discussing our backlog and activity in various sectors and markets. These are covered on slides five through seven. I will then comment on our prospects for the rest of this year. Our improving backlog trends continued this quarter as the underlying demand for our services presence. Backlog at the end of the first quarter of 2018 exceeded $1 billion, an increase of a $130 million or 14% compared to the fourth quarter of 2017. Our year-over-year backlog comparison is even stronger. Compared to a year ago on a same-store basis, our backlog has increased by $164 million, which is a 19% increase. The increase is distributed over most of our companies. We have a good balance in our various end-user sectors. Institutional markets, which include government, healthcare and education made up 41% of our revenue for 2018. The commercial sector was 37% of our revenue and industrial and distribution represented the remaining 22%. Please turn to slide seven for our current revenue mix. For 2018, construction is 72% of our total revenue with 39% from construction projects, the new buildings and 33% from construction projects and existing buildings. Our construction business is benefiting from good fundamentals and trends in the non-residential construction market. We continue to book good projects with some companies booking into next year already. We have made and continued to make investments in our service business. Service is 28% of our revenue with service projects providing 9% of revenue and pure service including hourly work, providing 19% of revenue. Our service business is doing well and exceeded the first quarter of 2017 both in volume and profits. It is a good investment that we've made, and we will continue to make. Finally, our outlook, our backlog in pricing environment is strong and our ongoing prospects are good. We believe that our prospects for revenue growth have improved and we currently expect mid to upper single-digit full company revenue growth for the full year. We feel well-positioned to execute on these opportunities and we intend to continue to invest and return capital to our shareholders. For several years we have been investing in our service business and expanding our construction capabilities and execution, those investments have begun to realize their potential. With our backlog and in all-time high, with strength and most of our markets and with good opportunities to invest, we are optimist about our future. Thank you once again to our 8,900 employees for their hard work and dedication. I'll now turn it back over to Lauren for questions. Thank you.

[Operator Instructions]. Our first question comes from the line of Tahira. Please proceed.

Hi, Brian and Bell, this is Sean on for Tahira. Congratulations to your team on a great start to the year.

Thanks, Sean.

Firstly, from us, the bookings for this quarter were quite a bit stronger than we had expected and it sounds like you are locking in some work for 2019, perhaps a bit earlier than would be normal. So, I'm wondering what's driving that and how you are thinking about pricing and inflation as you decide to commit those resources for the out year?

Okay, Sean, great question and I think what's driving, people booking working to 2019 is the labor section we've talk about the year's as well documented at this point, I think you've seen good customers and end users or general contractors seen work that they went now and next year want to make sure they walk us up via the resources and the capability to do that. So, you've seen good customers commit to working only and have us doing that. In terms of pricing, we think for a pricing is pretty stable, it's improved and somewhat recession over the last few years. So, we feel quite good about the work that we're looking at, we're taking today, it's work we now, it's work a comfortable work, it's in our wheel house. So, I think the rest of this year and the work so far and next year is good work, Bill do you have anything to add to that.

No, that's exactly right.

That's great. And then on the service side, it sounds like they really had a great quarter. I'm just wondering if you can speak to the growth profile you are seeing there generally. I know this has been sort of a share gain story on the service side and I'm wondering as that business has gained more and more critical mass, if it's become difficult to maintain the growth rate there and how you are working around that?

First of all, we think the service business is a great business. We helped that way a long time. The thing is here about service, it's a longer when it cost steady state growth, the business is stickier. It takes a lot more of a sales force. So, in terms of the growth rates that we've had - we're still seeing some strong growth rates. I think we've improved that sales capability tremendously or higher in tax, this is a good place to work. So, we are able to attract technicians. And we're going to continue focus on that both in training and on bringing on - continue to bring on new customers. So, Sean, I don't think you'll ever see a huge spike in growth and service, I think you'll see a nice in steady state which is what our goal is and what we would like to see. So, we are huge fans of the service business and fully committed to it.

All right, great. And then lastly for me, this one might be a little more for Bill. We had a big service quarter, but then we also had some early stage construction work ramping up. So, kind of a lot of moving parts on the margin mix and so I'm just wondering how we should be thinking about the progression as we move through the year? How we should be building those gross margins and maybe how bigger than impact some close outs, some back end and some of this constructional work could be toward the latter part of the year and next year?

So, we feel 19.2% is higher than we generally experience in the first quarter. Last year, we had 20% but it was a very light revenue quarter. So, we're very happy to see 19.2% when we have a bunch of work starting. We think that bodes well, we think there is no reason to think we wouldn't exceed 20% for the year which historically is stratospheric for us. Although we're getting used to it now, As far as the way that they'll progress through the year, it will be choppy, I mean, when we start were, - we're in the first 25% of building something, we're not pulling a lot of profit out, So, I think you will not see big leaps, beyond the 20% mark. And as far as close outs late in the year, that's a really perceptive question. I think, this year is too early for there to be a whole lot of that, I hope I'm wrong, but at the end of the day, an awful lot of these work just won't be finishing by the fourth quarter. So, I think we'll get, - we always get help in the fourth quarter, but as far as this new surge in bookings, I think the close outs will more be next year, on those.

A really helpful response. Thanks very much gents.

Thanks.

Our next question comes from the line of Adam, please proceed.

Hey, good morning, guys. Congrats on a great quarter.

Thanks Adam.

Hey Brian, is there a little conservatism, you talked about the top-line up mid-to-high single-digits for the full year, in light of the 15% organic growth in Q1, just curious, how much conservatism there might be in that outlook?

What do you think, Bill?

So, mid seems to be pretty easy, right? If you do the math, yeah. So, here's one thing, we're little slow to raise that to double-digit, just because we're comparing to light revenue first quarter last year, but obviously a 15% first quarter comparable is, we'll have start towards the high single-digits part of that mid-to-high single-digits. We thought about giving more guidance around that and just given the comparable and giving, it's really still is the first quarter.

I think Adam, if you use high single-digits from you model that's probably, I think, there's probably some conservatism but via model, I think that's a good number.

Okay, understood. And then, two more, firstly just, you guys didn't do an acquisition as I went through usually you do, can you talk a little bit about the M&A environment?

Yeah, so, we did last year do our biggest acquisition ever, we have a pipeline that's as good as it's ever been. We probably, we don't generally do close deals in the summer, but we feel great, I mean right now I would say, our pipeline is - people we've talked to for a long time is very good. So, I think I'd say generally optimistic as ever, but that doesn't mean we're about to make an announcement.

And Adam, I'd just like to jump on the recent one in Tampa. We couldn't be happy with those folks joining Comfort Systems. They have been a terrific performer from a net financial standpoint, but also just be good citizens and great to have within our company, it's great to have with us.

Okay. And then lastly Brian maybe you can just walk us around the country little bit, what you are seeing in terms of bidding environment>

Okay, so if you look at the [indiscernible] pretty broad, all the way to Madison, and I just had an unbelievably solid terrific first quarter and the bidding activity is still very good. We've just got a note from our folks in upper middle New York, last night that bunch of opportunities came our way, so very strong, but it's going to be good this year and next year. South East, the Mid-Atlantic, right, where you live right now Adam, the activity in that areas is outstanding, and we've seen that with our friends in Greensborough and around the Mid-Atlantic, lot of good opportunities, very strong bid activity. South East in general is very good, if you're talking about Florida, Tampa maybe specifically as more opportunities than probably main [ph] can do over the next few years. So, we've just seen very strong bid activity. Eastern Mississippi very good and Texas is good, very solid. West maybe a little bit up and down, Denver, terrific performance from our company there and the bid activity is still very solid. Arizona has picked up considerably coming out of recession and I was there couple of weeks ago. And we're just seeing a lot of very markets there. Arizona, New Mexico. California up and down a little bit, but I think we're seeing good opportunities and service in small project business for us, Seattle markets pretty good. So, I think if you look at that across the country item, we're very happy with the activity and the type of work with select and I think that's the key discipline right now is what work had taken, make sure where you can do and it's at a good price that we want to execute that. So, I am probably feeling good about the opportunities out there like since I have been here.

Great to hear. Thanks, guys.

All right. Thanks.

Our next question comes from the line of Joe. Please proceed.

Good morning, guys.

Hey, Joe.

So, my first question I wanted to ask you to put the slide in every presentation regarding sort of the breakout of new inspection retrofit. And it looks like the new construction as a percentage of revenue really hasn't changed the whole lot. Some and one of the concerns has been new construction becoming sort of a bigger piece and that's why the gross margins are falling year-over-year. But I am just wondering why is new construction not becoming a bigger piece of revenue if the reason why gross margins are born?

I'd say give a time. It went 38 to 39, but that was a fully year, it was comparing to and obviously we're in the first quarter, not our heaviest construction quarter. Right, a lot of it didn't pick up until March. I'll just say give time, but construction was 2% on the whole number. 1% of that rounds out the existing project work, but just give it time. And the percent's a lot, a percent of $2 billion is not inconsequent.

Like we say Joe is, Bill has said a couple of times with this start some of this work plus still work in existing buildings, I know it sounds like it small, you can have a significant project in existing building and some - it's bigger than sometimes think so. I think in the early days of that.

One of the things I would say is Comfort, people like you and lot of people on this call have been around us for a long time. One of the things that's changed since the last time we were in very robust market is that the acquisitions that we've done have skewed us more into industrial and heavier work as a proportion of our revenue, a higher proportion of that work at all times is in existing plans, right. They tend to add to their plans, they tend to build. It's only new construction when you're building it straight out of the ground, but a lot of those guys, they plan for multiple additions, when they - some of that work looks kind of like new construction. But I don't think we're headed back towards the levels of new construction you saw in the past because our business has changed.

Okay. And in your queues, you breakout your projects based on the amount of revenue per project? It looks it hasn't changed a whole lot in terms of the break, but it does look like the one - your most projects are less than $1 million, the next category $1 million to $5 million that looks like has - is the one sort of category that sort of pick up, so could you talk about that and the margin breakout of those kind of - what kind of projects there, margin pricing. If that's anything.

But Joe if you look at the projects over five main for us it has increased probably 10% by number and $0.20 by revenue, so we're up a little bit. The other thing and as I mentioned a few minutes ago we try to remain disciplined on what work we take for example we've talked a lot about a drop up on East Coast that had 67 [indiscernible] the mechanical job we don't have to do so. On larger work we're being very disciplined about the type of work it is, who is the customer, where it is and what's our capability. So that number could be bigger, but we are not falling for that, we are really trying to hold to our principles and what we believe in that we can execute so Bill do you want to add?

Yeah, and as far as margins go we get great margins on work between $1 million and $5 million so it doesn't hurt our feelings if that's a lot of what we're doing.

We'll do that all-day long.

Okay. I guess I'll ask another question. could you talk about if there is in the backlog any orders that you received in the first quarter even going back to the fourth quarter, are you seeing any higher margin type projects whether it's hospitals or whatever the work that you might see just wondering outside of the breakout between new construction and retrofit which I know that sort of dynamic in terms of type of projects are you seeing any fluctuation in different kinds of margin to projects or is it been sort of consistent?

Hey Joe while you were talking I took a look at our project numbers and so, part of the reason you're not seeing an upturn in the big end in the projects is a lot close out over the winter. So, they replaced. So, in the new bookings we have a few bigger projects than we've had in a while, so one project can be pretty big. As far as whether we're seeing higher margin stuff I mean - Brian said we're getting pricing, we have the opportunity over higher margin now we got to go execute. But we've done pretty well at that, so we feel.

It's one thing with margins it's what the [indiscernible].

Right. Also, the weather in the Northeast and even up until week or two ago in sort of the Northwest, it was pretty bad - historically band did that do you think that affected any work or anything in the first quarter?

No, thanks for asking it because we don't like to talk about the weather. But having said that, we will, if you look at the North East in particular, [indiscernible] where you are located our service business really benefited from that extreme cold, particularly over the holidays in January. We saw a lot of equipment breakage, particularly more equipment. So, we really were very, we're very busy and usually construction gets hampered significantly by bad weather particularly snow. But we had a lot of our construction work up there that was already, the [indiscernible] was, that in we're inside the building, so we're able to work through it. So, I think it helped a little bit, it slows you down of course, you lose some time with whether that was that bad but, our service business was very good, and construction hung in there, Joe. More so [indiscernible] considering the weather that we had.

Great. And just last question for me, Bill, the usually when you make an acquisition, you pulling on a good amount of amortization related to the backlog, but then it usually falls off within 12 to 18 months, so I'm just wondering with this recurred, BCH acquisition and with the fact that you really have been made any acquisition this past winter, what is the amortization expense going to look like over the next few quarters? Are we expecting that's full of it all?

The actual amortization in 2017 was $17.4 million, you can pull that out our financials. We once a year, in the 10K we're required to publish sort of a future look forward to amortization based on what we know, and if you look at that, we were projecting $13.8 million of amortization for this year, it's right on the 10K, so, that is obviously a couple a million bucks of improvement, if we hadn't do something out. I will say, we also do some tuck ins, so, there's some number of hundreds of thousand, when you see, even if we don't do announce deal, we still by companies that are immaterial for financial segment, so, they're not announced. So, if we didn't do anything out - should see probably amortization this year coming in the mid 14s, or the high 14s, is my guess. So, hopefully, that helps you.

Okay. So, we were actually at a run-rate of 3.8 in the first quarter, which gets you to over 15, if you annualized that, so, essentially, if you're at 14 to 14.5 or so, you may see that expense come down a little bit throughout the year, - making in.

Yeah, come down - or materially flat, it won't go, unless we do a big deal it won't go up, because it is the sinking pool, every quarter the amount you amortize is lower than the quarter before, except for some reason for the second quarter with the couple other categories, they have to do a crazy math. So, -just slowly comes down, it's a nice built-in improvement, of course you pay for that upfront because you do these acquisitions and you don't get much from them first. By the way BCH was accretive for us this quarter, it's just like a penny, because there's still, they still have these amortizations between them and the final net income line.

Okay, thank you.

Thanks.

Our next question comes from the line of Brent, please proceed.

Hey guys, great quarter again.

Hey Brent, thanks.

Bill, I want to get your thoughts around the backlog obviously tremendous, book a business right now, I guess it would be operations and the people you've in place today, do you have the ability or capacity to take it up to on a 1.2 or 1.3 billion, or even higher, for that having to make a big investments in people and equipment?

So, that's a good question, right now, we're in good shape. And lot of is not so much the actual number than it is, it's one as comment, all right. So, right now we have a pretty good percentage in 2019, we could take on depending where we are, little bit more works this year. We probably could go up to the numbers, you talk about, if it was a spread out, it could have some in - that and so I - do it over summer time that would not be doable today. But back half of the year leading into next year, we could hit the numbers that you mentioned.

And let me take advantage to your question, just point something out. So, we frequently subject to the trends in the market in a steady state, we're going to book more over the winter, most of the time, and net book more over the winter most of the time, it's our lower revenue quarter, so, we're burning less. And then, even a flat backlog number in the two summer quarters is bullish right, because you are burning so much and busy time that if you are replacing that that's bullish. So, just want to remind people of our cyclicality on that. And also, I want to say this was a big backlog, increase $130 million in a quarter, after a big jump in the fourth quarter of last year. I mean as, our backlog is lumpy, and those are two gigantic increases. And we thought we might go about the billion, in this quarter, we didn't think we'd be $80 million above the billion. So, this is - the good news is there is a matter what you get it, when you get at this - that's you get it, so we got it and then that's you full of bunch of cash from and you don't waste the cash and that's what we've plan to do.

Okay. I mean it sounds like, both the business I mean give reporting, it sounds like the market strong enough to potentially support that level of backlog, I mean is that, am I hear in that right?

Yes. I'll say that's yes, but to some guys on the field they are going, you come and do it Brian. But absolutely yes, I know it came good.

Brian, still has the tool belt.

Yes, and it helped us?

I'm sure you do just fine. And I think as follow-up and you talk about some of the work going out the 2019, but I want to get your thoughts in terms of cost inflation and still and not just staying, it's not assuming labor out there. Are you - I mean give to yourself just going to make an after to that and some of these larger projects?

So, most of things we buy and provide to our customers, we have very little risk on that and like the equipment we did a piece for that before we quote somebody. And they - so we really almost take no risk on that. There are few areas where we take just a little bit of risk and that's the commodity items and steel is one of those. I will say that many of our companies that had projects pre-bought, pre-committed to a bunch of steel to look their pricing in the first quarter. I had to approve a few things that was outside of our ordinary parameters where you'd have to go get an approval. I think we're planning well for that, but the reality is steel can hurt us, but it's in the - it's doesn't - it's not material right, if you just look at as a percentage of our cost of goods sold, even if we miss it by 7.5% or 10% or something it's in the hundreds of thousands not millions. So, we feel every penny counts and our guys are all over it and obviously when inputs go up that's not a good thing. But as you know we live or die what we see is skilled labor. And also, by the way many of our contracts have price escalation clauses. We take advantage of this kind of a market to say the people, you need to pay us to pre-buy it, and we need to store it and guess what when the headlines over the [indiscernible] one times you can make money on that conversation and right and we saw the people want to protect themselves and it's not right for them guys because we've to take that risk and they understand we wanted to be either compensated for the risk and we wanted should be protected from the risk. So, this is in our first revenue all right.

Yes, understood. Maybe a follow-up on the M&A question, I know you guys are - for lack of better word, it really requires overtime, but look as the core business looks great, organic growth looks really strong. I mean and you more inclined to walk away from deals right now just given the strength of the core business?

So, we do not buy acquisitions on a quota. We buy a company, when we have conviction that they will be a fantastic partner for our other companies. And we do it when we get a price that we think we'll give a fair return to our shareholders. So, I think we've proven over the years that it doesn't, we don't sweat if we go a year, year and a half without a deal, and we don't buy and doing two deals in a year. And that's exactly what we're going to keep doing. And but I will say we - there are companies that are at a time when it's logical for them to sell, many of them U.S. as a fantastic partner, it really the best destination for their people. And I'm generally optimistic about the prospects that are out there for us, for us to really continue to bring good partners into our business that helps us get better.

Okay. And then maybe one on SG&A, looks like you are flat on absolute basis results 4Q - with the growth here willing to this year the mid to high single-digits. Presumably can you sustain that and tell that $70 million to $75 million range through the year at least on a quarterly basis, or is the breakout?

I think that a dollar amount will go up a little, as the year goes on, we'll be occurring for, hopefully some big bonuses, everybody from Project Managers to Presidents, I think we'll continue to get most of the kind of the leverage you saw in the first quarter, for most of the year. And then us yeah, we do have, we will now have after April 1, we've owned BCH for years, so I have true comparable on SG&A, but we're happening to invest, I mean, you go from --, your revenues got 65-85 million in the quarters. There's some money got to be spent, there're people who got to build for that - truthfully make filings and get permits and do outsource of things, right?

And it's good money to spend.

Okay. If I could sneak one more and just back on, kind of the pipeline and the low - construction to, - you guys kind of later in the projects cycle, that's what you do, how many of these jobs, by the time you book have already broken ground?

So, year or two ago, all of them, by the time, they actually meet our definition of backlog. Maybe a few there having now. Because people really, they reach in point where people realize, summer of 2018, not everybody who want to building gives - but mostly likely December 2019, there will be people who'll say you go to the GC and say, hey, build me a building, I'm ready to go. And the GC will be explaining in a year later, why there is not a building because frankly.

Yeah, I'd say, - most of stuff in the next year hasn't yet but, pretty much it's got to go.

In some form its broken ground by the time it meets our definition of backlog, yes. Keep in mind, they've already given up some notice to proceed, we might have been out there putting an underground, sometimes we just can't get to our definition of backlog, because there plans are finally not for us to have a number, that it can be put into a contract and understood that we have great relationships with our customers and they say hey, go, get started. So, we frequently have significant revenue, before we actually put something in our backlog, and - almost have revenue - in our backlog, on construction projects.

Thank you for your time. I appreciate it.

All right, thank you.

Thanks

At this point, I'd like to turn the call over to Brian Lane, for closing remarks.

Okay, thank you. And thank you all for participating in today's call and your interest in our Company. We're pleased with our start to the year, and we look forward to continuing momentum for the rest of the year. We look forward to seeing everybody in the row shortly, and hope you all have a great weekend, thank you.

Thanks.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.