Greetings, and welcome to Primoris announces its 2017 Third Quarter Financial Results. At this time all participants are in a listen only mode, a question and answer session will follow the formal presentation [Operator Instructions]. I would now like to turn the conference over to your host, Kate Tholking. Thank you, you may begin.

Thank you, Sherry. Good morning, hello everyone and thank you for joining us today. Our speakers for today will be David King, President and Chief Executive Officer; and Pete Moerbeek, our Executive Vice President and Chief Financial Officer. Before we begin, 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 estimates, believe, expects, projects, may and future or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risk and uncertainties including, without limitation, those discussed in yesterday's press release, those detailed in the Risk Factors section and other portions in our annual report on Form 10-K for the period ending December 31, 2016, our quarterly report on Form 10-Q which was filed yesterday 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, thank you for joining us today. Primoris delivered a strong third quarter and our trailing 12 month revenue is now at 2.4 billion the highest in the company's history. The comparison to 2016's third quarter gets a bit muddy had some large one-time items last year including the impact of settling a receivable collection action and the impact of a significant write down on the Belton I-35 highway jobs, but comparing apples to apples and excluding the one-time items we saw a positive revenue growth in all of our segments. Weather challenges to be as everyone is aware of the hurricanes that pounded Texas, Florida and the entire Gulf Coast. We had some employees homes that were completely destroyed but were fortunate that everyone came through safely. Many Primoris employees as well as the company overall contributed to multiple clean ups and I'm very proud of the way in which so many pitched in when others needed help. I'm also proud of the response made by all the construction companies along the Gulf Coast, we all made efforts to demonstrate the best of the American values. At Primoris some of our jobs were shut down for about two weeks during the worst of the storms and we experienced some loss productivity when we returned to the job sites. We're having conversations with our customers about getting additional days added to the schedule for those jobs that were most impacted and our customers have been very understanding of our position. The strong revenue burn in the third quarter caused a slight decline in our backlog but not as much as anticipated. I credit our business development team for keeping our backlog strong this quarter helping Primoris find a steady stream of smaller awards in each segment. It's always exciting…

Thank you, David, and good morning everyone. Our third quarter numbers are now public with both the earnings release and Form 10-Q filed last evening. The following are some of the highlight. Revenue for the 2017 third quarter was $608 million a 20% improvement over the 2016 third quarter. Our largest customers during the third quarter were two utility customers who accounted for a combined 205 of our overall revenue. And third largest customer was textile. At just over $1.8 billion for year-to-date revenue, it’s safe to say that we will break out of the $1.9 billion to $2.1 billion revenue level that we’ve been out for the past three years. As David mentioned last year’s third quarter included both the positive effect of the collection of a disputed receivable that's provided $27.5 million of revenues and $26.7 million of gross profit to the pipeline and the negative effect of write down of $37.3 million and an impairment charge of $2.7 million in our Civil segment. On an ongoing basis that is without the inclusion of the receivable collection, the revenue increase for this year's third quarter improved to 27% compared to last year’s third quarter. Similarly, on an ongoing basis, gross profit in the 2017 third quarter improved by almost $10 million to $70 million, a 16% increase over the 2016 third quarter. The largest contributor to the improved profitability in the 2017 third quarter was the Power segment where gross profit was up $7.9 million compared to last year’s third quarter. The main contributors were our joint venture power plants in California, OnQuest LNG project and the industrial business unit’s large South Louisiana project. For the Pipeline segment, both the Rockford and Primoris business units contributed to an increase of $6.4 million gross profit compared to Q3 2016,…

Thank you [Operator Instructions]. Our first question is from Lee Jagoda with CJS Securities. Please state your question.

Sstarting with the -- your guidance and some of the gross margin assumptions in your guidance, could you speak to you know especially as you forecast larger projects I know you mentioned the revenue from APC you're kind of assuming it will be a linear ramp. Can you talk to how you typically would accrue for some of the margins and the profits in those projects, and you know why they may or may not be conservative at the beginning of a project.

Lee, the traditional things the traditional way we have looked at this is we will establish contingencies at the start of the job and as we progress the job we will then address those contingencies which hopefully to the degree they don't have and could produce additional profitability, I think, traditionally if you look at a job like ACP, you're going to start it at a lower gross margin percentage then hopefully you will see at the end and you certainly saw that sort of response from on the two Florida jobs. So I think for the larger projects that it’s pretty much the same whether it’s a pipeline project or a large power plant, we will tend to start with somewhat lower margins and hopefully the margin profile will improve as we get closer to the end of the job.

So then just to be clear the revenue ramp might be linear in your assumption for the gross margin ramp did not?

Remember that for the forecast that we’re looking at the guidance we’re looking at, we have only two quarters and we anticipate that ACP will be much longer than that. So yes we’re looking at relatively constant gross margins for those first two quarters and would anticipate that they would get better towards the end of the project.

One more and I’ll halt back in. If I take a step back and look at the overall bidding environment and the project letting environment, I know you spoke to some uncertainty for larger infrastructure project. Can you talk about just the overall bidding environment whether you're seeing more competition, less competition? And how do you guys would view frightening over the next two, three years on the mid larger awards?

Yes. And Lee, I kind of have to break that down by segment. And obviously the Civil segment, there are ample opportunities after, I think I mentioned that in my comments. And we’re still seeing the same competitive nature there that we really all wouldn’t same. There are some, now when we get to the airport top work and the port facility, we don't, we see a much smaller list of competitors, but several lives really not much change in that bidding environment after that we're seeing. When you look at the pipeline and underground side we are seeing some upward mobility in the margins on some of those from a bidding perspective. We're still seeing ample bidders out there, we are seeing some bidders that don’t have enough work. So they're obviously willing to take it maybe at a smaller margin than we would, but still seeing good opportunity is out there in the small diameter side. We're seeing more opportunities now than we did last year at this point in time. And it's not just in the smaller diameter or pipeline type related but some of it's in fractionation water, facility pipelines and things like that. Our Utilities & Distribution, we see the similar compound of the bidders that we've always seen and we still see the same pressures of being whether it’s a very, very mature market, the pressures out in California to stay competitive and reduce rates versus maybe as not of a mature market in the Midwest or Southeast area that we've just opened up. On the industrial and power side, there it’s, I think, I mentioned what we're seeing there the bidding opportunities are there pretty much across the board. We're still seeing petrochemical opportunities, but we're now beginning to see some refinery related opportunities and some more back on the LNG export type opportunities. What we're seeing there are specific projects that the probability of those going forward is going up from where they were last year. It’s just the timing right now is feel a little uncertain on some of those projects as to whether some of those thought they would have possibly been booked in the fourth quarter now, they may be a first quarter or second quarter type of booking. But again, pretty much across the we're seeing refining pet chem work on the power side, refineries optimization projects coming in not only in the Gulf Coast but in the West Coast. Still some methanol related projects. So we see that cover all the segments. I believe I covered all the segments for you there. If I didn’t, I will answer any questions you got Lee.

Our next question is from Brent Thielman with DA Davidson. Please state your question.

The power segment margins really strong this quarter. I was kind of thinking NRG was sort of high single-digit margin type project. Is the difference there acceleration of engineering work or something else?

Well it was really on the power side. We really had three contributors in there. You’re listing only one of the threes. We’re got our project open shaft power project that was also contributing and then Tim’s group finished all from his joint venture cogen unit out in California. And I can tell you because I’ve had meetings with the customer on that project. Not only that the project finished on time and the safety and quality and everything else and start up I think was very smooth. So there we really have some good synergy and opportunities to bring down a little bit more margin than may be what the project originally contemplated.

Okay. And then on civil I mean I guess absent the Harvey and Irma impacts, the margins would have been even better. I mean would that bring you closer to that kind of 4% to 7% range if that not happened?

Well I will let Pete comment. I will make a high global comment. I don’t think they would have reached the 4% to 7% because we have to remember we feel that sort of that revenue that’s burning off with zero margin to it, okay? Some of those built in that already five quarter project. But I will tell you without the hurricane effects and roughly couple of weeks that we were down, I think we lost an opportunity of about $10 million of more revenue with profitability associated therein just off of some of those storm effects. But Pete may be you want to add to that.

I don’t think we are quite in 4% to 7% and I think we’re probably headed toward that into 2018 timeframe. I think over the next few quarters it will get better. But I don’t think even with the -- without the impact of the hurricane, we have been quite that high.

And then may be one more David I guess on the gas power side, it seems like some of the commentary and guidance out there from others is a bit mix lately. Just curious in terms of what types of jobs you are seeing out there whether it’s California or somewhere else and kind of what gets you excited about that market?

Well, I’ve said early on even when we started in some of this gas power stuff that I want to make sure that -- I was worried there might be some dead lighting, I think we’re manjack, I think some projects I wish I hadn’t taken. So my comment all of our team we’re going to be very careful and very disciplined on what we went after and what we took and things. And I want to compliment Gary Martin and Tim Healy who runs those two groups, open shaft and the union side for doing exactly that, being very careful on what they went after. I will tell you that we are seeing more of the opportunities in the West Coast, now currently seeing in that Southeast market, if that does answer your question.

Our next question is from Bobby Burleson with Canaccord. Please state your question.

We're starting to have a little technical difficulties there can you hear me? So I just wanted to ask a couple of questions, your open shop, small diameter opportunities now that the Permian's picking up can we get kind of an update on kind of the outlook there?

Yes, we've seen you know we began I think I'll have to back and look at my notes but I want to say we commented going back at least two or three quarters ago that we were beginning to see more opportunities pop up the bid. Unless you see the opportunity you know you can’t win anything and I can tell you we're seeing more opportunities again this last quarter and this current quarter that we're in than we did the previous two quarters. The competition as I mentioned is still pretty stiff out there. There're still a lot of people you know competing for that work but I actually do see that as a I'm less concerned about our open shop pipeline area having opportunities to bid on that was six months ago.

What's your usual kind of win rate I know it's very competitive but what percentage of what you've been on do you guys typically see appropriate margins and you accept the work?

Yes, and that is a very -- we track those and I can tell I'll give you the answer here in a moment but I want to put qualifier on a -- before I give you the I give you the answer. You know if you look at 10 opportunities we may not chase all 10 of those opportunities and so we're very selective about which ones we try to go after, because we tend to look at the bidders and decide whether or not somebody is going to try to low ball that project or something. So realize that when I gave you this number if we weren't selective it might be a little bit lower than this okay, but typically when we're in there we're in that somewhere 30 to 35% range on the ones that we bid and win on the open shop.

And then in terms of labor shortages that's been an issue, clearly the heavy civil market is getting better Texas is getting better do we expect labor shortages to get worse, do you guys have any particular edge there, you know just help to understand what the labor dynamic is on that work going forward.

First of all on the pipeline side let me talk union pipeline then I'll talk open shop then I'll come back and talk to civil segments and industrial segments. You know we've always had a good follower of workers on our unionized side of the pipeline so we really don't see any shortages there you know I think when some of these we keep till it gets running and ACP and some of these others you know we may see some labor shortages in some of those, what I call the really non-sophisticated you know trade section of that, but in general we're not anticipating a shortage therein for us. Same thing holds true on the open shop pipeline side I think there's you know even though with all these hurricanes and things went through and yeah you have a lot of clean-up crews and you have a lot of carpenter needs and things like that that's not the welders and the fitters and the pipe layers and things like that, and same thing with our industrial sector. We've always a lot of the contractors us included have always been concerned that when some of these major projects do kick off in the Gulf Coast, if they were all to kick off at similar times and indeed we would have a shortage, but that here too that this particular time has not occurred, they've been staged, even Exxon Mobil, when they announced their project dealers not too many other major projects going on. So as long as some are being staged we're not seeing a shortage out there, and we watch it very carefully. We've got a good contrary of superintendence with us and we got a good list of people that’s worked with us for many years, so not anticipating anything there. On the pure Civil side, other than maybe some shortages on what I would call the labors when the hurricane hit. That was pretty much yet. And that's a short, Lee, of duration. And utility and distribution always pretty good. We have a good time contrary people there. So no issues from a labor perspective there.

And then one last quick one in terms of pricing power pipeline, you guys have pricing power you guys are exerting now or as you get to for capacity, how do you will get pricing on future jobs?

Well, recently we've been asked to look at some of the other projects Rockford has that some of the spreads that were not awarded on some of the other major projects, and we price them accordingly. Some of them really batch spreads, so it's not pretty understandable why the other contractors didn't take them, but so, yes, we're using some of that. I'll use the word cherry picks and spreads that may be seal out there. We're not yet on our open shop really exerting much of the pricing power there. I think I told you there's still ample of bidders out there for that work. So we're staying pretty -- keeping that pretty close to the chest right now. I'm sure you tracked pipeline trackers like we do and things like that but when we look at last year at the end of last year just on the number of projects and the mileage there Ian, and I look at the last report that came out from pipeline tracker, I think it went from like 4,000 miles 4,500 miles. So there's still definitely a lot of pipeline projects going out there.

Our next question is from Adam Thalhimer with Thompson Davis & Co. Please proceed with your question.

As far as your Civil segment margins, I know we had improvement, but it's kind of like a long term goal for that. What kind of pace would you expect?

With the long term goal we've said it’s always been high single digits realistically probably in the 7% to 9% that somewhat depends on how much of the Civil work is doing is being done by the instructor maintenance business unit, which tends to work for private companies and tends to have somewhat better margins and then just the pure Heavy Civil rip and reed work. So our intent has always been to keep the margins above 5% and push them toward the higher numbers. I think that when you look at the pace we've been averaging probably a little over $200 million a year in revenues for Heavy Civil and then I&M just depending on where they are on projects. And I would certainly see that the Heavy Civil will continue, I&M may be challenged as David said in his discussion that we are looking at some jobs for them. But I think if you look at it from a -- over next year so we’re going to see somewhat better margins and we’re not planning on a large increase in revenue.

Let me add, Kevin I will add one more piece, I think also asked timing. I think I said it and I think Pete reiterated it. Of the three jobs, three of 35 quarter jobs that are burning off, two of them which have no profitability and revenue will burn off in the first -- I think first quarter or second quarter of next year Pete. Yes, and so we’ll be down -- so let’s just say by mid-year we’ll be down to where we basically only had one of those 35 quarter jobs left to execute. So timing wise, that made a little bit of color for you.

Yes, appreciate the color on that. Also as far as may be a sense on what M&A opportunities. I know the performance on the recent deals have been very well fitted?

Yes we definitely are still looking at acquisitions both small and large. No doubt about it. We are still very interested in the U&D sector and most of those are by the shear nature I think Kevin are going to be relatively small because U&D is a very fragmented market across the nation and things like that. We continue to still look at some solar projects. We think there is some opportunities there. In fact, I think we will have some good news not only in investment but actually building some larger solar facilities with our Primoris Renewable. Brian past year -- the Chairman of the Board but past year laughed at me when I made this comment but I will make it anyway. We are doing a lot of strategic looking at what I call that a fifth dimension of the company which brings up the Age of Aquarius or something like that in some song but I want a fifth segment that and there’s some out there that we are looking at that infrastructure based relates and things of that nature so, leave it that way.

And as far as -- my final one I’ve got, with the rising commodity prices, over the past few months, do you think any area that you’ve been -- that it continues?

That’s a good question. I would tend to say most of the pricing of the commodities and things we estimate build into the projects as we go along, or the reimbursement of nature. So I don’t know that the rising of it would benefit us a great deal. Obviously the more revenue you push the more in that pockets you make off the revenues, so you might get a little uptick from there. But I don’t see that as a big thing for us Kevin.

[Operator Instructions] Our next question is from Tahira Afzal with KeyBanc Capital Markets. Please state your question.

So I guess as I look at the tricky 12 months rolling guidance you guys provide and I back out the fourth quarter that you’re going to see, could you kind of give us some directional sense of -- I mean can you still grow earnings into next year organically? And to the extent you can, what are the moving parts we should look for?

I'm not sure if I fully understood your question but the answer is we have some projects that will go over into next year, obviously, Carlsbad will. We're starting to get down to the end of the large Louisiana project, but we expect that there will be some revenue and profitability for that. One of the great things about our business model is that we have that solid utility base that under score is underlines the work bid is up, significant amount of our revenues are from that. And then, obviously, the swinger in the one that it’s going to have the big impact next year is when ACP starts. If ACP starts, and as I said in my comments, we’re somewhat linear right now just in getting to the forecast, the guidance that we have is tricky as it may be, but the real intend is that we should do better than that once we find when ACP starts. And as David said if we really do what you suggested which is we do five spreads next year, that totally changes the numbers as you get toward the end of the year. It’s just at this point almost every week we get a call from a rocker guys and then something new has changed through the processes ensure that start time has changed. So when we put together the guidance, we recognize that there were way too many things that could make it better and a few that could make it worse. And we didn’t want to come to today give you a set of numbers and then come back and back off of those, when we have the next call at the end of February, early March, so that and we discussed this with our board and we also just the furnish thing to do or the best thing to do is just kind of leave that where it is, but we fully expect that if ACP goes as well as we believe it will and if it starts around the time it will that you will see us changing our guidance pretty dramatically for 2018 going into 2019.

Yes, let me add a little more own piece things for costs. I didn’t want -- we don’t want to over promise and under deliver. I think that was one of the things in my comments when we had our board discussion. And putting aside the standard things to get on the U&D and Civil side, let me tell you some of the moving parts that Pete now we're looking at, obviously P&D lease group is out of the ground and going like game busters. So we're going to see a lot of revenue burn out, the power side, over these next twelve months. Some of these EPC related projects, the engineering is basically done. And so they're waiting for the final investment decision. And when those move, they will burn pretty quick. It's not like you're having to wait for the engineering to be done.

Got it.

All of these renewables that we're doing on solar side, these are fast burn projects. I mean putting up these solar panels and things, these are not year-long projects. These are 6-months long, nine months long projects. So some of those here, they’re going to move very quickly. And then when we throw in what Pete was saying on the pipeline side, when you look at the union side of the pipeline, Rockford specifically, it could go from two spreads to five spreads. And the open shop is gaining momentum, but again there it's still a competitive environment. So when I thought all those together, I can paint a picture. I'm painting a picture on the high side and I’m painting a picture on the low side. So I've rather fleet don’t over promise and under deliver.

Probably the right thing David, and that actually pretty helps far. I guess the next question from me, David, is really around prospects, and you’ve talked about the some of the large ones out there. But I know the ones that could help you would be pretty big ones like maybe --. And if I look the customer commentary, it seems to be incrementally profited, while we haven’t seen anything FID. Do you feel little more comfortable from the work that will be hitting your backlog over let's say the next six to nine months?

I do Tahira. And you mentioned the projects that we’re obviously tracking very close and then I'll mention a few others for you here in a moment. But, yes, that's why my commentary earlier about the probability of those is going up. It’s timing. And to be honest with you, I thought at least one of them, we would have probably put into backlog by now if not in the fourth quarter, but I'm nervous it may be a first quarter or second quarter. So but you know just in addition to those as you mentioned, there's a lot of -- there's still some other ethane crackers, and there still some other pipeline work and there's still some other levy packages and some port facility work in there. I'm not talking about ours. I'm really talking about -- and infrastructure related projects. So, yes, I think the way you summarized it earlier is correct.

And last question for me. As you consider other verticals they did, would water infrastructure be any one of them?

Did you say water? You know Tahira, right now, let me -- I need to make sure with them what I’m talking about. If you’re talking about water purification or water cleanup water treatment and things probably, no that market is not shown to be a very profitable business line, I think, to anyone. If you're talking about…

Pipelines and…

Yes. If you’re talking about pipelines for fresh water or if you're talking about water retention ponding and things of that nature, the answer is yes.

Ladies and gentlemen, we have meet the end of our question and answer session. I’d like to turn the call back over to management for closing remarks.

Well, before we sign off, our thoughts are with the people of Southerland springs, Texas after the tragedy this past weekend. Our prayers are with the families and our nation at that day. When these things happen that's really autumn and say relative to that is just prayers are with the families. I want to thank everyone for participating today’s call. We appreciate the questions and the ongoing interest in Primoris. And we say thanks again for your time and have a good day.

Thank you. This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.