Greetings and welcome to the Primoris Services Corporation Reports 2016 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode and there will be a question-and-answer session that will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Kate Tholking, Director of Investor Relations for Primoris Services Corporation. Thank you, Ms. Tholking. You may begin.

Thank you, Chris. Good morning, everyone, thank you for joining us today. Our speakers today are going to be David King, the President and Chief Executive Officer of Primoris Services Corporation; and Pete Moerbeek, our Executive Vice President and Chief Financial Officer. Before we begin, I would 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, those detailed in the Risk Factors section and other portions in our Annual Report on Form 10-K for the period ended December 31, 2015, our Quarterly Report on Form 10-Q which we plan on filing in the next day or two and other filings with the Securities and Exchange Commission. Primoris does not undertake any obligation to publicly update or revise 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. David L. King - President, Chief Executive Officer & Director: Thanks Kate. Good morning, everyone. I know it's a busy day for many of you and we really appreciate your time. We had a solid first quarter with improved revenue and net income over same period in 2015 Q1. Our backlog has increased to almost $2.2 billion. Our earnings in the first quarter as many of you know are usually lumpy since many of our West segment group start slowly due to weather and other factors. Our first quarter was a positive start to the year even with…

Thank you, David. We expect to file our Form 10-Q either early Monday or perhaps, late tomorrow. So, I'll give you some additional color to the financial statements that were attached to this morning's earnings release. The good news is that, my color choice is black ink. Our total revenue for the first quarter 2016 grew by $38 million to $430 million from last year's first quarter. The revenue gain came at the East and Energy segments, which benefited from an increase in revenue of $44 million, at the large petrochemical projects in South Louisiana and a $20 million increase from Texas heavy civil work. Unfortunately, Rockford had a very difficult comparison to the first quarter of 2015, when they were working on a Houston area pipeline project and as a result, overall West segment revenue declined by $20 million. Our expectation remains that this summer Rockford will begin construction on two large pipeline projects. Our revenues from MSAs continued to grow with the first quarter MSA revenue growing 16% to $105 million. Our largest customer for the quarter was TxDOT, representing 13.5% of our total revenues and the large Southern Louisiana petrochemical project was the second largest customer. As normal in the first quarter of the year, on a sequential basis, our revenues decreased. This year the decrease was $67 million from the fourth quarter of 2015 with most of that decline occurring in the West segment and about two-thirds of the overall decline coming from the usual reductions at our three largest utility customers. Our overall gross margin for the quarter declined to 9.1% compared to 9.7% in the first quarter of 2015 mainly due to a decline in the West segment gross margin from 11.5% to 8.3%. Several factors contributed to the West margin decline: the reduction…

Thank you very much, sir. Ladies and gentlemen, we will now be conducting a question-and-answer session. We ask that you please limit yourself to one question and one brief follow-up question per caller so that others may have a chance to participate. Our first question is from of Lee Jagoda from CJS Securities. Please go ahead.

Hi, good morning.

Good morning, Lee. David L. King - President, Chief Executive Officer & Director: Good morning, Lee.

So just to start on the SG&A, do you have the litigation expenses incurred in Q1?

We don't break those out separately, but they are somewhat less. Total professional fees are less between our accounting fees expected for the year and the litigation. So that's part of the decrease. But part of the decrease is also due to we literally reduced the SG&A expenses.

....one, and my next question was, if I look at the sequential declines we've had Q3 and Q4 compared to Q1, what are the major items or buckets that the declines are made up of?

Obviously, a company our size, part of it is people costs. We're trying to manage that a lot more carefully. I think you'll start to see us hopefully get to the point as we complete some of our installation of our IT systems that those costs will stay fairly constant going through. So it's been a mixed bag. Obviously part of it is litigation too. David L. King - President, Chief Executive Officer & Director: Yes, Lee, I'll add a comment on for your question on the litigation side, obviously the BridgeTex lawsuit and the ATM (22:03) lawsuit, we've spent quite a bit of legal costs getting prepared for those going through depositions and things, and of course, with both of those, all of our upfront legal cost has been spent. At least, on BridgeTex there's been a court ordered – which we expected that – a court-ordered mediation request that will be coming up in June. I don't think it will be resolved at mediation. I think, they're getting the reality of the situation. But, I think, it will probably end up going to the jury trail, which is still set September. So we won't be having quite as much cost in the second quarter we don't think on some of those legal side. And same way with ATM (22:47). As we said, now from the bankruptcy issue, now we're going after the sureties that provided the bonds. And so although we'll still see legal cost, I don't think we'll see quite as much legal cost from that perspective. On some of the other things that Pete was talking to, I'll add a little bit of flavor for you. Some of the tools that Pete mentioned that we're beginning to combine, we're seeing some savings there and across the business units, and then obviously in some of the combined services things that we're doing, we're seeing some. We still got a ways to go on SG&A. Pete and I are not satisfied yet. We think we've got some more that we can cut out and will cut out, but that will give you a little bit of flavor on the situation.

Sure. And then shifting gears to the West margins in the quarter. Assuming that the power project write-down was the one of the bigger factors, can you give us some more details about what caused the write-down specifically and where you are in terms of your current position on that job today? David L. King - President, Chief Executive Officer & Director: Sure. That job is nearing completion. There were two aspects of it: one, one of the suppliers on our power distribution center, big motor control center, if I can put it in those terms, Lee, they were late, substantially late in delivering that equipment. That caused us to have to do some work around cost, and then obviously once it did get shipped, it caused us to have to accelerate for installation purposes. That's why there will be some back charges going back, as I mentioned in my opening notes, on that particular supplier. The second part of it, our engineering contractor that we're working with on that project busted some of their quantities as far as piping was concerned and some of their engineering cost relative to startup cost with the facility. Again, same situation there. We will be going back with them on some of the added costs. But those were the two major issues, but that project is basically nearing completion. We're at the 90 percentile range on the completion. We've taken all the write-down that's going to be necessary. And I am optimistic, we'll get a little bit of it back, but as you know with our accounting, we write it down. We take our beating one time.

Got it. Okay, I'll hop back in the queue. Thank you very much, guys.

Thank you very much. Our next question is from Dan Mannes from Avondale. Please go ahead.

Thanks. Good morning, everyone. David L. King - President, Chief Executive Officer & Director: Good morning, Dan.

Good morning.

I want to follow up actually about the West segment margins again. Sorry to beat the dead horse. Can you maybe break out the margin delta in terms of the severity of the impact, whether it's from underutilization at Rockford, the hit from the power job, the mix at ARB Underground. Can you just help us out because again it's a pretty different margin structure than I think we've even seen in the segment.

I think it's a combination. You're probably not going to be that far wrong, if you take the total dollar change and split it into three ways. So order of magnitude, you're going to be pretty close. The challenge that we had at ARB Underground was that we did not do a lot of work on the integrity program for either of the two California utilities, and that tends to be higher margin work than the work we traditionally have. So we're also seeing in the West some decline in work for a lot of the traditional gas company work that we do for non-utility works. It's a combination. It's really a combination of all, the underutilization, the fact the mix changed, the fact we had the write-down on the one job and the fact that Rockford is down for the quarter. So, as I said, you're not going to be very far wrong if you take the delta and divide it by three.

Any weather impact in California? I know that was the one place in the country that actually unfortunately had a lot of water?

Yes, but that did not have a significant impact for us. First quarter, working for the utilities tends to be low to begin with, and they didn't surprise us this year by asking for more. It's a pretty significant delta from Q4 to Q1.

Okay. And my second question, as it relates to guidance, I want to touch on the point that you made. Obviously, you've kind of kept the same guidance number for a while. I know you entered into it reluctantly. But just given what's kind of gone on the last three quarters to four quarters, we want to make sure what the grounding is of that guidance number? And how much of maybe you're reticent to move it up is really just rooted in the timeline of when these projects start, whether it's Carlsbad or the big pipeline work?

The answer is yes to all of those. I think that our challenge is the big impact we had – we gave guidance and then ended up with a horrible second quarter last year. So I think it's a combination of all of it, Dan. We're trying to be very careful. Certainly as we model what this year is going to look like and what the next four quarters look like, we think at this point that it looks like it could be really a good year, but we're also not there yet. So that was my comment that if we see things happening the way that we are expecting over the next three months, then we might be able to change it. I don't want to do that yet until we get a little bit further along. David L. King - President, Chief Executive Officer & Director: Yes, Dan, I tried to give a little bit in that opening comment. As Pete said, with that power project up in California, we've been working on those limited notices to proceed and they keep increasing it a little bit, and then we're slow-walking it along. So until I really see us out there with dozers and equipment and things like that, I get nervous to go ahead and say the forecast should include that or not include it, because it's continuing to slide a little bit. I've never been worried, as you know, about our two major pipeline projects, but at the same point in time – and again for the particular reason that we've mentioned, the economics on them are good, the customers are good, all the above, but there were so many other pipeline projects that were getting canceled and delayed in midstream, and I said look, guys, until we're really out there putting things in the ground, let's be a little careful. So, anyway, I think that's why you see us a little bit reluctant to ease (29:29) that accordingly.

Fair enough. Thanks for the color.

Thank you very much. Our next question is from Jason Wangler from Wunderlich. Please go ahead.

Hey, good morning, guys. David L. King - President, Chief Executive Officer & Director: Hi, Jason.

Was curious living down here in Huston and being under water for the last few weeks, if you guys have seen much impact just as we look at the second quarter and kind of the time the seasonality starts to get on our side, if you're seeing any impact from everything that's gone on in Texas and even I think Louisiana in the last few weeks? David L. King - President, Chief Executive Officer & Director: Yes, we really haven't, Jason. Obviously, we saw the effect of the water where we would have a job shut down for a day or so. But that rain was not anywhere near like what we were seeing in first quarter and second quarter of last year. And if you remember, last year we had a large pipeline project that was underway. The pipeline projects that we have currently underway were really not down in that Houston area that got impacted so badly. So we really didn't see much there. We saw a little bit on the Highway Department work in Texas. But if you live in Texas, you've got to expect that some. And so we're beginning to get more accustomed to the one-day, two-day storms type things. So, really, I guess, in general to answer your question, we didn't see much of an effect on it.

That's good to hear. And then Pete talked about the M&A front still being pretty aggressive. I didn't see – I think there was maybe a small one during the quarter. Just curious if there's any color around that?

The small one was... David L. King - President, Chief Executive Officer & Director: Mueller.

...was Mueller. What we were doing there, as you remember, I guess it was about a year ago we purchased a company called Aevenia up in Minnesota area basically to do power and transmission work up in the Bakken and things of that nature, and of course we knew the Bakken was dropping off, but it gave us a good opportunity to make a what we thought was a really pretty unique purchase. And part of what they do is they would subcontract out of lot of their foundation work around some of their T&D work. And so this little company did that type of work for them. And we just saw an opportunity to do a little quick purchase and add to the scope and capabilities to keep it more in-house as opposed to having to subcontract it. We typically like to self-perform all of our work. And so that was just adding another complement to it.

That's great. Thanks for the color. I'll turn it back.

Okay. Thank you.

Thank you. Our next question is from Matt Tucker from KeyBanc. Please go ahead.

Hey, guys. Good morning. David, you provided some great color at the start of the call. It came out to me a little bit fast. So apologies if I ask something you've already addressed. So hoping you could talk a little bit more about the outlook at Rockford for larger projects. How we should think about utilization as the year progresses based on what's already in the backlog and then what bidding opportunities are seen for the rest of the year? David L. King - President, Chief Executive Officer & Director: Sure, Matt. Not a problem. As you know, we've got the announcement on the two larger projects, the Florida connector project and then obviously the Sabal Trail project. We've been obviously pursuing along with some other contractors the ACP project. So that's one that we're obviously still looking at. That was not awarded. We hoped like a lot of other contractors that we will be awarded that project later this year. But there's a lot of other opportunities that we're still looking at, but as I mentioned on the call at the start, we want to make sure it's with the right customer, with the right contract. Williams has been a extremely good customer for us. We're still looking at some work for Williams. A lot of people know which the projects are, but we're also looking at some work with Danbury and BellSouth (33:51). Those are two projects that we continue to look at. We're also looking at our Pacific connector project, which would go in well beyond the 2017 timeframe. So, as we begin to utilize our Rockford group, we're taking those little holes when we know we'll be coming down in certain areas and saying, where can we plug those. And then as I've mentioned, we're going into a very robust pipeline business right now and 2016, 2017 and into 2018 and so we're looking now at what we can do in the 2018 and beyond timeframe. So for us that's an extremely good position to be in. I don't know if that's added enough color, but I don't want to go too far on the color because obviously I don't want my competitors to know what I'm going after.

No, no, that was a great, Dave. Thank you. And as a follow-up to that, and again, apologies if I missed it. But any color you can provide on the timing of construction start on those projects down in Florida that you have in your backlog? David L. King - President, Chief Executive Officer & Director: Both of them right now we're looking at starting this year, starting in the June, July timeframe. We've already started moving machs and equipment and things of that nature over there. So we're already seeing cost in our system to get prepared so that when the clock starts ticking, we've got materials, man and machs there to blow and go, so to speak, because that's how we make our money by moving rather quickly on it. So those we don't see any issue with at all. I think most people out in the marketplace still think ACP is going to be a later this year award and start sometime in 2017 and go over into 2018, and I see nothing that makes us feel any differently about that. The others are smaller projects that kind of are sprinkled through, some later this year might begin, some in 2017 and some into the 2018 timeframe.

Thanks, again. And then shifting gears, a couple of your competitors or peers on the pipeline side have commented this week that they may start pursuing some telecom-type work. Given your underground capabilities, I'm curious if that's an area of interest for you, if you've given that much thought? David L. King - President, Chief Executive Officer & Director: Yes, we've given it some thought. There is some areas that we're looking at in our pipeline network where, again, we subcontract out certain functions, whether it be some tunneling or boring and things like that. And so we're obviously looking at maybe how we can self-perform some of that work through maybe those little smaller acquisition therein. But really as far as your specific question, we're looking at more of what the work we've got and how much more of it we can self-perform and how we could add additional spreads from a capabilities perspective.

Thanks a lot for the color. That's all for me.

Thank you very much. Gentlemen, it appears that we have no further questions. I would like to hand the call back to Mr. David King. David L. King - President, Chief Executive Officer & Director: Oh, sorry, thank you very much. Well, first of all, I want to say thank you for joining us on our call today. We continue to see what I think are higher-quality projects and opportunities for our services with our customers. We really appreciate your interest in our company and again thanks again. Have a good day.

Thank you very much, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.