MDU Resources Group, Inc. (NYSE:MDU) Q3 2023 Earnings Call Transcript

Dave Goodin: Dariusz, if I could maybe just add a little bit. I think your point about one segment having a certain type of quarter, certainly offset by other segments in that business as we think kind of top line in that business at CSG, again, the record quarter, the record EBITDA and the year-to-date results, we feel very confident in that as we think about the rest of the year. Any other questions or follow-up, Dariusz?

Dariusz Lozny: No, not at this time. I’ll let others in the queue ask. I’ll just say congratulations to Dave and also to Nicole on the appointment. Thank you very much.

Dave Goodin: Thank you, Dariusz.

Operator: Your next question comes from the line of Chris Ellinghaus with Siebert Williams Shank.

Chris Ellinghaus: Congratulations to Nicole and to Dave, and thanks so much for all the good conversations over the years, Dave. I appreciate it. Can you talk about — you had an Analyst Day scheduled, what’s changed in terms of your thought process that made you want to change when you give your update.

Dave Goodin: Chris, appreciate the commentary earlier. I appreciate working with you over the years here as well. So we just felt given today’s announcement and the timing of this clarity, if you will, on how we’re looking to separate the Construction Services business and the timing of that slated for late 2024 that we just felt probably first quarter ’24 would just be a more appropriate timing to give a more fulsome update into the marketplace, more kind of what the RemainCo story looks like and how that can kind of build on itself along with greater clarity on Construction Services. And there’s a number of end markets there to be describing. And I think in our opinion, there’d be enhanced investor interest as knowing the separation being a separate publicly traded company, which is our target. We just thought there was probably a more appropriate timing.

Chris Ellinghaus: When you get to that late first quarter meeting, do you anticipate having greater clarity on the form that the transaction might take?

Dave Goodin: That’s certainly part of this as we work through this, and we would expect to have participants — all the principles of those business units, certainly Nicole leading the group, but the electric and gas business, the pipeline business is the RemainCo story. And then obviously, Jeff, as part of the — and his team as part of the CSG SpinCo story.

Chris Ellinghaus: And one last question for Jeff. Jeff, has the sort of improvement in your outlook for margins this year, throughout the year, giving you any insights into what your outlook for next year might look like?

Jeff Thiede: I’m really confident in our ability to continue to perform at a high level — on a record level with our company. Part of our margin improvement has been due to getting our MSAs and also our jobs that we are in preconstruction in, getting pricing updates to be able to update the labor increases, fuel increases, equipment costs that we’ve had. In addition to that, the ability to execute in the field, that’s crucial to our business. And we’ve gotten better through our prefabrication initiatives. We’ve got better through our planning. And of course, our field personnel and the management staff that supports them have all stepped up. And that’s put us in a good platform and a good position to be able to spin go forward and continue to provide exceptional shareholder value.

Operator: Your next question comes from the line of Ryan Levine with Citi. Please go ahead.

Ryan Levine: I guess to start off, in terms of the time line, so you highlighted that the intention to do the spin by the end of next year. What are the key milestones that really need to be achieved to hit that deadline. And in the disclosed material, there was reference to private letter rulings and other contingent items. What’s the challenge there? What’s the confidence level that you’re going to be able to achieve the targeted time line?