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

Dave Goodin: Ryan, I’m going to ask Jason Vollmer to lead off there. Jason really led from an internal perspective, our Knife River spin and all the activities associated with that. And coincidentally, I’ve asked him to lead this effort. So I’ll ask Jason because he can talk with detail there, but I think you’re looking kind of for the high-level work streams here.

Jason Vollmer: Yes, absolutely. I can dive into a few of those. So you’re right, there are some major items that we see, whether it’s potential for a private letter ruling, looking at the Form-10 process, getting through the SEC comment process, we look to stand this up carving out financial statements and making sure we have everything audited and separated at the right level and developing that investor story and forecasting here. Those are all things that I think — the nice thing is we’ve got a lot of experience with this. We just came out of a Knife River transaction, where we were able to get this done. And what we thought was a pretty timely manner and certainly work through that and set up a successful stand-alone company there.

We’ve used a lot of lessons learned, I think, throughout that process to look at the CSG process here and say what we think is a aggressive but achievable time goal to be able to get this where we need to be. So we’ve got a high level of confidence in the team’s ability to be able to move through this and get this done in a timely manner. And we really feel like that time frame gives us a great opportunity to be able to do the diligence we need on this project and get this set up as a very successful public company.

Ryan Levine: And I guess recognizing that some of the final capital structure is to be determined, but maybe moving to the fundamental business for CSG on a go-forward basis. Can you speak to where you think the backlog mix will be within the next year in terms of different customer types or industries that you’re targeting?

Dave Goodin: Yes, Ryan, I’ll ask Jeff Thiede to comment on kind of a future look at backlog and certainly split between T&D and E&M as we think about the major segments to that business. Jeff?

Jeff Thiede: And thanks, Ryan, for your question. Our backlog has always been broad-based. You’re currently building some of the most innovative and largest projects in multiple geographic regions and in the markets that we serve. And these projects include but really aren’t limited to mission-critical data center work, semiconductor manufacturing, health care, renewables and of course, hospitality gaming projects in the entertainment sector. And there are more of these type of projects on a radar in the future. In our T&D sector, Transmission and Distribution work, including wildfire mitigation, traffic signal work are on our top 10 backlog list. And we are currently underway on 2 significant transportation projects in the Kansas City area in addition to our MSA and substation work for our utility customers.

Again, this illustrates our diversification as a company and how we have the ability to capitalize on the current market and then, of course, pivot to expanding markets for continued success I see more of the same type of work. But as markets adjust, we will allocate those resources and that will include, of course, capturing some more of the Infrastructure Investment and Jobs Act and Inflation Reduction Act work. We have the experience in these areas, and we’ll continue to positioned for those to be — adding those projects and those opportunities in our backlog and executing successfully.

Ryan Levine: And then one follow-up. In terms of that mix, particularly on the on the renewable and utility work. Are you seeing any slippage in time line or delay in projects as you’re looking out over the next 12 months?

Jeff Thiede: We’re not seeing any project delays over the next 12 months. So that’s all positive. We are in preconstruction on more than several projects that are going to add to our backlog going forward. So looking forward to continuing that momentum and building upon our Q3 record performance.

Operator: [Operator Instructions]. Your next question comes from the line of Brian Russo with Sidoti. Please go ahead.