Greetings and welcome to the Primoris Services Corporation Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kate Tholking, Director of Investor Relations. Thank you. You may begin, Miss Tholking.

Thank you, Jerry. Good morning, everyone. Thank you for joining us today. Our speakers today will be David King, President and Chief Executive Officer; and Pete Moerbeek, Executive Vice President and our Chief Financial Officer. Before we start, I'd like to remind everyone that statements made during today's call may contain certain forward-looking statements, including with regards to the company's future performance. Words such as estimated, believes, expects, projects, may and future or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risks and uncertainties, including without limitation those discussed in this morning's press release and those detailed in the Risk Factors section and other portions in our Annual Report on Form 10-K for the period ending December 31, 2014, our Quarterly Report on Form 10-Q which was filed this morning, and other filings with the Securities and Exchange Commission. Primoris does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. I'd now like to turn the call over to our CEO, David King.

Thanks, Kate. Good morning, and thanks for join us today. I want to start off by saying I'm please with the results our team have delivered this quarter generating the second highest revenues in our company's history. We finished our third quarter strong with little of the outside effects by Mother Nature. We don't often talk about safety on these calls, but it's worth mentioning that Primoris is in the top quartile of industry leaders in safety performance. We have achieved our year-to-date safety goals and received numerous client safety awards throughout this year and continue to strive for excellence as the safety of our employees is always our first priority. During this third quarter, we finally had an opportunity to ramp up our resources in several of our key areas, put our equipment back to work and made several good progress on several of our large projects. We have the capacity and have identified opportunities to grow our revenue in 2016 and we are seeing improved margins on the new jobs in several of our end markets. We announced over $226 million of new projects during the third quarter and we've announced another $96 million so far in the fourth quarter. While our third quarter showed a slight decrease in total backlog, this is due to the timing on two major projects where we have been selected or currently finalizing agreements. These two projects along with our strong MSA work give us confidence that we'll grow our backlog by year's end. During these and with all of our negotiations our goal is the right project for the right terms. Now, taking a look at our operating results, I'll start with the West segment. ARB Industrial revenue was down as expected, but Tim Healy and his group are seeing strong…

Thank you, David and good morning, everyone. As Kate mentioned, we filed our third quarter Form 10-Q this morning, which is a good thing and that means I will speak much less and we can move to your questions earlier. Our third quarter revenues were $556 million, compared to $613 million in the third quarter last year, a reduction of $57 million. This year's third quarter revenues were the second highest in our history. Third quarter earnings were $19 million, or $0.37 per fully diluted share, compared to $27.4 million, or $0.53 per share last year. Of course last year's earnings numbers included approximately $6.05 per fully diluted share from the gain on the sale of our interest in the WesPac venture. For the quarter we achieved a gross profit margin of 12.9% compared to 12.3% last year. However, those numbers are a little bit misleading. Last year's quarter included $39 million of revenue and cost for two projects for which we recognized no margin. After excluding the revenue and cost for those two projects, our gross profit margin declined by about 26 basis points compared to 2014, with most of that decline occurring in our West segment as a result of slightly lower revenues. Our SG&A expenses increased by $2.4 million compared to the previous year's third quarter. About half of that increase was from SG&A cost from two acquisitions with the remainder primarily the result of increased personnel expenses. We also continue to incur legal cost associated with the dispute resolution to enforce collection for two 2014 projects, for which we have take no profit in spite of our belief that we have a very strong basis for our position. We do not expect either dispute to be resolved this year. Our balance sheet at September 30, 2015…

Thank you. At this time we'll be conducting a question-and-answer session. The first question is from Mr. Dan Mannes, Avondale Partners. Please go ahead sir.

Thanks. Good morning everyone.

Good morning, Dan.

So first question on kind of your rolling 12-month guidance. We appreciate you continuing to give this to us by the way. I guess one question here is relative to last quarter, given the fact that you're now going to be including the third quarter of 2016 where you should see a pickup in large pipe work. I guess we thought there was some chance you might be looking to increase that. Do we take the lack of changes to maybe some conservatism at the time of starts or maybe just a little bit of conservatism about the underutilization in first half of 2016 or any other factors maybe I'm not taking into account?

I think Dan, you answered the question better than I could. No, we're looking at some apprehension depending on, is the weather going to be as bad as it was last year? How strong are we going to be able to finish out fourth quarter? I think we as most of our competitors see a very strong second half of the year and obviously would expect that our guidance will increase the next time that we give it. But at this point I think, you know if you look at where we're coming from, almost doubling it is probably a pretty aggressive step.

And I'll add on a little bit Dan to Pete's. Pete explained it exactly correct. When we look at some of these projects that we've got already in backlog, we know roughly when they're going to start but until they start, I'm always a little conservative from beginning to say it's going to be in there until we physically get started on some of that backlog work. Some of the other work, and that's in the pipeline side. In some of our other industrial work, as I mentioned in my comments earlier, some of it is the timing of some of those projects. They look very strong, they look very good projects, but some of them are suspect timing. So I just want to make sure that we don't jump out ahead of ourselves.

No, that makes a lot of sense. The second question is you did mention, you're obviously negotiating some fairly sizeable work. I realize you're not going to confirm the exact identities, but can you maybe point to where they would fall in from a segment basis, the big stuff you're currently close to locking down?

Most of them would fall in the West segment and the Energy segment.

Perfect. And then lastly, just in the California distribution pipeline business, ARB Underground, can you talk maybe a little bit about what you're seeing from your largest customer there? It seems like they've been maybe a little bit slower due to regulatory issues, and what gives you confidence that gets better into 2016?

Basically what gives us confidence is some of the work that they postponed in the earlier half of this year, that's what I mentioned in some of the comments earlier, are now beginning to go into the later half. As you know, they had a very large capital project services, EPC project that's been out for tender and they've been looking at it. They have always said that they would kick that work off in the first part of next year. We have confidence that that work's going to be split amongst two major entities, with us being one of those entities. So when we look at it and we add that segment of the new work, the capital project services work, Dan, on to our existing work, that's why we have a pretty good confidence that we're going to see some robustness in that revenue growth next year for the Underground group.

Sounds great.

You are correct, Dan, they really are down; so far this year for the first three quarters, we're at $70 million compared to $107 million last year.

Got it. That's really helpful. Thanks again.

All right. Thanks, Dan. Thanks for your questions.

The next question is from Mr. Lee Jagoda, CJS Securities. Please go ahead.

Hey good morning.

Morning, Lee.

So, Pete, could you just comment on the Energy segment margins. They obviously improved dramatically. How do we think about the sustainability given the current mix of work in backlog?

I think that you will see, they reflect obviously a large project that we're working on in Louisiana. And I think that as long as we get the opportunity to work on that – part of that improvement too though, Lee, is that you've got to take out the revenue that we did at no margin last year. And of that $39 million, I think $37 million came out of Energy. So, it's probably not quite as good as it looks, just purely on the numbers, but we do believe that we will continue strong as we continue the work on the large project. It's cost reimbursable but still pretty good margin project in Louisiana.

Sure.

Lee, I might also add, to give you a little color on that. In the Energy sector, that particular project we're doing with our industrial group and they are just now really beginning to ramp up on that project. We'd hoped they would be ramped up sooner than that, but some of the engineering deliverables and things that are outside of our control were a little bit later in arriving and so therefore we didn't get a chance to ramp up our industrial group. Obviously, our I&M group, that's in the East sector, that I mentioned Jonas has been working on that project and really ramped up. But I believe you'll see some industrial ramp up coming in these next few quarters.

Okay. And then, Dave, in your press release you sort of cited some instances of delays of capital projects due to the price of oil. Is there anything particular that you've been kind of delayed on that you're already doing work on, or is it more a general widespread thing?

Lee, it's more of a general thing. As you know – and it's really more – I don't know that I'd call it – well, okay, the oil price has not helped, obviously. I think I'd call it more some of these projects that we're seeing, they're non-oil related but they're all gas, LNG related, some of the larger LNG facilities. We, obviously, as you know are a subcontractor on that work, do a lot of construction services. So we see some of that materializing, some of it taking a little bit longer to materialize just from the nature of those projects and some of the funding and timing on them.

Okay, great. That's very helpful. Thank you.

The next question is from Jason Wangler, Wunderlich. Please go ahead Mr. Wangler.

Good morning. You mentioned in your prepared remarks a bit about I think seeing some soft pricing and I think it maybe was around kind of the gathering and smaller oil and gas work. Just curious if I heard that right, one. And two, just how you're seeing that play out just given I assume that a lot of folks are out there bidding for that work and as you start seeing some of the bigger pipelines come on or – are you worried about the same type of situation as you are into 2016?

No, Jason you're right. You read that exact or heard that exactly correct and it was more in our open shop pipeline and maintenance area – in Robert Grimes' area. We were pretty regional based in that group, so a lot – when the oil price did come down, what we saw and I think all of our competitors saw the same thing. We saw a tremendous pressure on the pricing for that work and so obviously we were very selective not wanting to go after work just for the purpose of booking work with no margin. The reason I'm saying a little bit more optimistic, we've regrouped in that area and actually starting to look at work outside that Gulf Coast region, because for me that Gulf Coast region with the price of oil still works as pretty competitive in that open shop pipeline market. And as you also know with our Surber group, our Roustabout group out in West Texas they're still somewhat depressed in getting their top line going also with that price of oil down. But I do expect as we branch out of that Gulf Coast region with our open shop pipeline capabilities, I do look for some of that top line revenue to grow.

Thanks. And then just Pete just curious on the accounts receivable, just kind of seeing it creep up again. Is there any commentary around that? Obviously the cash balance is still in pretty good shape, but just kind of how we should look at that going forward?

Yes, wonderful. I meant that we're going to have a lot of activity in the third quarter compared to second. And that really is what it is. We still if you take out of our receivables the – over – the things that are in dispute we are under 2% in over 60 days on our receivables. So we're very comfortable with – we're collecting as fast as we can. So really it is a positive, because we do have – did have much more activity.

That's helpful. I'll turn it back. Thank you.

The next question is from Tahira Afzal, KeyBanc. Please go ahead ma'am.

Thank you. And David and Pete, congrats on a really good quarter.

Thanks, Tahira. We appreciate that.

You know I guess, I'm trying to understand, it seems like you're hitting, the earnings power you had in third quarter was really good. I understand that Rockford will probably have some underutilization as you build backlog, but given that some of the (26:56) work or undisclosed client work is ramping up, how should I think about it? How should I think about earnings power because is Rockford utilization in the near-term really softening versus the third quarter?

Yes, Tahira, you're reading that correctly. As I mentioned, we want to finish our project in Texas that had all the weather delays and so we held back committing our resources to some projects that maybe we could have won that would have burned off in the fourth quarter and then first quarter. But we're getting some work, but our Rockford group will be underutilized at that time. Then we're still going to be facing in the fourth quarter and the first quarter what we always typically face in those winter months, we'll have some of our groups beginning to gear down, meaning the Q3C group will gear down in the fourth quarter and first quarter. But I think you're reading it correctly.

Got it. Okay. That's helpful, David. And then second question is, we've started to see some of your peers really start seeing some of these large pipeline bookings come through. You've probably started – you'll be noticing that probably as well in their earnings releases. Is there a reason why we're seeing a bit of a lag between their performances and awards and yours, number one? And number two, would love to get any kind of update you can provide around other petrochem subcontracting opportunities. I believe there is a second wave probably likely in 2016.

Yes. Let me start, Tahira and I'll answer the first question on the pipeline. One of the things that we've had a noticed of an award on our major pipeline project for probably at least the last couple of months. We've been working through the T's and C's and I'm very – as Brian was my predecessor, very particular on making sure that we've got the right contract with the right terms and things. And that client is a very good client and so that's been just more of us not wanting to announce something until we get all the final dots and T's crossed and I's dotted. Otherwise we would have probably had a major project announced in Q3. And as far as Rockford group on other bidding projects. We're still out there chasing obviously a lot of those projects and we've got good indications as well as some of our other competitors of which portions they will be doing and which portions we feel we will be doing. And most of them – you're aware of from the Atlantic Coast and Atlantic Sunrise and some of the other projects. So I'm really not too concerned on our pipeline side – the big pipeline work. On the petrochemical work or industrial work, we're still seeing obviously some LNG activity. We're seeing methanol plan activity. We're beginning to see and it's an area that we've excelled with but we're beginning to see a lot of the industrial gas companies come to us for our services, for their air separation projects, nitrogen projects and those are all projects that will have to be built that supplement and feeds some of these other methanol and ethylene and ethane cracker projects and things of that nature. So we're seeing quite a bit of activity on our radar screen in those areas.

Got it, David. That was very helpful and congrats on the quarter again.

Thank you very much, Tahira.

We have a question from Mr. Bill Nubi (30:45), D.A. Davidson. Please go ahead sir.

Good morning, guys. This is Bill Nubi (30:50) in for John Rogers.

Good morning. And I see he is making you do early morning calls.

Yes. So, just wondering if we could get a little bit more color on the underground revenue growth that you guys are seeing in California. Is that – how much of that is being driven by actual new construction and how much of it is by maintenance on existing distribution networks?

Well, there is really a third piece that maybe the driver in a longer term or at least near-term basis is the integrity work. So we're seeing a little bit of uptick on the new construction. We continue to do the maintenance. I think where we see, there are some very good opportunities both in northern and southern California are on the integrity work. That integrity work has started in the southern part of the state, it still a ways way in the northern part of the state but that's where we see some very significant opportunities. Now having said that, our traditional largest customer there as I said is down some $36 million, $37 million through the first nine months, so some of that's tied into when they get regulatory approval, but – we look at that business opportunity, that's still really, really strong for the next few years.

Yeah, Bill (32:14) to add a little more color on that for you, that particular client, it's public knowledge out there, what they announced relative to that program that I mentioned earlier that we feel will be split amongst two major contractors with us being one of them. But now I don't think they'll spend as much as what they've announced but they're talking about about an $800 million spend on an annualized basis. They won't do that. It will be down from that, but even if it's down in the $300 million, $400 million, $500 million range and that's split, you're still talking about another $100 million or $200 million of potential revenue growth that wasn't there before.

Okay. Thanks. That helps. And just I guess a follow-up, how do you guys – I mean, how should – I understand you guys don't really want to give specific numbers, but how can we think about it in terms of earnings power with those three types of work and how that is going to effect the bottom line?

I think when it comes online, it will give us an opportunity to get some – that's all pretty good margin work for us. I think obviously the work we do for the utilities out there kind of depends on the mix of the work and the location of the work. But as we start to see that increase – and we see the opportunities there, we've been over $200 million a couple of years ago, three years ago for that large client – that has a very positive impact to the bottom line. So we look at it and say they're very, very significant opportunities for us. This is work that has not gone to anybody else, it's work that's there for us, it's our for the taking and it's a matter of them exercising the terms of our MSA. So yeah, we're very positive and that can really drive the overall results of the company.

All right, thanks. And congrats on the quarter.

Thank you.

Thanks Bill (34:13).

We have a question from Adam Thalhimer, BB&T Capital Markets. Please go ahead. Adam Robert Thalhimer - BB&T Capital Markets: Hey, good morning guys. Nice quarter.

Good morning. Thanks, Adam.

Appreciate it, Adam. Adam Robert Thalhimer - BB&T Capital Markets: Hey, David, maybe this is just your personal opinion but LNG, the E&C seem to be a little bit split on – some saying that new projects are going to be really challenged to go forward and others saying no, we're still going to get a couple new projects moving forward every year. What's your personal opinion on that work moving forward?

I think – pretty much with what you just said, Adam. I mean we keep our ear to the ground pretty close on that and meetings and things. And there are some that I think will go forward. There is obviously some that I don't feel very high will go forward. It all relates around, and we look very close at this, as to what kind of offtake agreements they've already got. What kind of agreements they've got in place for the gas, what kind of agreements they have as far as their marketing is concerned. I'm probably honing in on one that I think potentially has better viability than some of the others, but we continue to chase those others. So it's hard to answer, Adam. It's a very difficult question. I think that's why you see a little bit of our hesitatency to really say okay, we're going to burn some more in that first half of next year because it's based on some of the viability of those projects. But I feel comfortable that some of them will come forth. Adam Robert Thalhimer - BB&T Capital Markets: Okay. And then just ballpark I guess, but – let's say you're brought in as a sub on one of those very large new build jobs. I mean is it similar to the Sasol opportunity or a little larger?

Well, let me mention, on the Sasol opportunity that you mentioned – since you've called it by name, so that project for us started out, if you remember we released about $290 million of work. I think we've always said that that would be substantially more work than that and it will be. It may approach the $450 million – $500 million-ish type of range. So, yes to your question on some of this work that we're looking performing on some of these other projects, part of it is where we specialize and some of the marine type work, meaning the shoreline and dirt work and civil work. But I do and I would expect that some of those, if they materialize, we could be looking at starting out about half as much as we did on the petrochem job and maybe climbing to as much as the petrochem job. Adam Robert Thalhimer - BB&T Capital Markets: Okay. Thanks for giving that color. And then – hey road work in Texas, sorry if I missed this, but with Proposition 1 in place and Proposition 7 getting passed, have you seen bidding opportunities pick up there?

Yes, we don't think they'll really pick up, Adam, until probably in the 2017 timeframe, because that Prop 7 is a funding based on getting a certain what's over and above some budgeted line items. But we do see and again we've been developing as I mentioned, we're third largest contractor in the State of Texas for TxDOT. We've been working with them quite closely on a lot of projects, and they're very optimistic that starting early in 2017, we'll start seeing some of that bid package work come out. And if you follow TxDOT very much at all, and again, this is predicated upon some estimates of the amount of money additional to spend, but you might be seeing as much as 50% more spending or double spending opportunities for the State of Texas in some of this highway funding. But we think most of it, Adam, won't really come about till 2017 and onward. Adam Robert Thalhimer - BB&T Capital Markets: Okay. And lastly, out of California, you had a really nice refinery award recently. Where are you in terms for the industrial segment in terms of utilization now and can you give us a little insight into what you're looking at additionally for 2016?

Yes, we're somewhat underutilized in our industrial group out there. When we came down off the big solar project, of course, we were already in the throes of we're finishing the Pasadena project and so we're still burning quite well there. You're right the refining project has helped in that regard. The NRG job that I mentioned and the gearing up on it in the first quarter, second quarter of next year. What we're really looking at out there and again, we're trying to make sure that that it's the right project terms with the right customer. So I'm very conscious about making sure that we don't in the zealousness to get work take on a bad contract that you'll be hearing me talk about two years from now saying gosh, I wish we didn't have this project or something. And Tim Heal has been extremely good about making sure that we're disciplined in our approach to those projects. But we do see some more refining work out there. We do see some more co-gen-type work out there and obviously there is some more power project work out there that we're continuing to look at. Adam Robert Thalhimer - BB&T Capital Markets: Great, thanks guys.

Yes, sir.

Ladies and gentlemen, we've reached the end of the question-and-answer session. And I would like to turn the conference call back over to Mr. David King, CEO and President for closing remarks. Please go ahead Mr. King.

Thank you very much for participating on our call today. As you can see from our third quarter results, it was very positive for our diverse company with what I'd consider very strong execution fundamentals. We continue to see high quality projects and opportunities for our services with our customers. We appreciate your interest in our customer and just in closing, I just want to recognize those veterans within our organization and all the veterans throughout this country for the service they've given our country, as we celebrate Veterans Day next week. Again, thank you very much for your interest in our company. Thanks and have a good day.