Dickerson Wright: Well, I’ll give a general thing, and then I’ll really leave it to Alex to perhaps answer, but we are really focused on the utility business, and we’ve hired additional people and we’re entering into new markets. So we are very positive. And I wouldn’t — for our piece, I wouldn’t say it’s so much of an increase in the overall general utility business, but it’s the specific client bases that we’re going after. So we’re really focused on the utility business from areas that we want to identify and we want to focus on. So I think we’re just giving more emphasis towards it and so we feel very optimistic in 2024 about the utility business. But Alex, you may have a comment on that.
Alexander Hockman: No, I would agree with what you said, Dickerson. The only thing that I would add is that we’re seeing tremendous opportunities with our strategic underground, both transmission and distribution as well as in general, increase in CapEx on distribution lines.
Timothy Mulrooney: Got it. And I also wanted to ask on your infrastructure business, and apologies if you already addressed this, but I just wanted to get your 10,000-foot view on where we are in fiscal stimulus with a particular focus on IIJA. I ask because we’ve been hearing some more dollars that finally flowing into actual projects and new contract vehicles being announced. So I was just curious how you’d expect this particular piece of stimulus to unfold over the next several years? And when you really think it might really start to impact your numbers, if at all? .
Dickerson Wright: I’ll just speak from our provincial look at things. We’ve always wanted to be in a mandated business. So anything in infrastructure is not so much based on the economy as it is based on need. People need to drink clean water, people need to use the facilities, people need to go over bridges. And those things have to be done whether the economy — whether the economy is good or bad. And so we think that we wanted to have something that is much more stable than something that is just some business that are based on the economy. So in infrastructure, we are starting to see some new projects that have been had some support from federal funding. And so the overall general view is we do — we are seeing some tailwinds. And so we think the federal mandated projects, they are giving some assistance to that, and we seem to be benefiting from that.
Timothy Mulrooney: And if I might sneak one more, just modeling question. For Ed. At apologies, but I’m still new to the story. So I was just curious, within COGS, it looks like that other direct cost line jumped up about $6 million sequentially here in the third quarter. I’m just curious what drove that increase. And if $21 million to $22 million is a good run rate for how to think about that particular line item in our models moving forward.
Edward Codispoti: Right? So that particular line of COGS has a few things flowing through the way. One is your traditional pass-throughs for expenses of employees that are working on their projects. But the items that move the needle more, which are the ones that you’re alluding to are in the case of the LNG business, when they assemble and manufacture the equipment, the equipment itself passes through that line. And so sometimes it’s a little bit noisy, right? because a lot of it has to do with the timing of the project cycles. And that’s what’s driving that particular spike that you’re referring to.
Timothy Mulrooney: Okay. So maybe not something we should be using as a run rate moving forward, it sounds like? .
Edward Codispoti: You got to look at them at a larger, longer window, right, and look at averages, but it’s hard to say it’s going to stay static at that current run rate of $21 million.
Operator: Our next question is Jeff Martin with ROTH MKM.
Jeffrey Martin: I was wondering if you could give us a frame of reference on the LNG projects. I mean, I don’t recall a whole lot of discussion on previous calls regarding LNG. So maybe give us a high-level view and maybe now it down on specific projects. How — collectively, how large is LNG this year versus last year? Are there large projects that are tailing off? I think would be helpful for us to know and have a point of reference as we model out the balance of this year and into next year.
Dickerson Wright: I’ll start to comment and you’re right, from me, it is going to be very high level. So I think this is one of the — one of our business units that is really focused on percent of completion. So we anticipate having a very much stronger, very strong year, quarter in the fourth quarter LNG where they will be recognizing a revenue better. I don’t think there isn’t anything that they’re doing now that would indicate that there would be a slowdown in the fourth quarter. A lot of the work they’re doing now is transferred over to unit price basis rather than they’re very risk-averse. So they’re not so much based on outcome as they are on billing for the progress that they’re making. And they tend to be a little bit conservative in recognizing revenue. But that — the LNG group reports an Infrastructure Group to Alex, and he’s here today, and Ed may have some comments on how they see the LNG business.
Alexander Hockman: So the one thing that’s unique about the LNG business, Jeff, is that it’s an EPC model. So they’re providing engineering procurement as well as overseeing the construction. So as you look at the types of projects you could consider it in these 3 phases. So while the engineering phase is actually very steady in terms of its revenue the issue that you have with the cost of goods or relative to the procurement of various pieces of equipment, that’s where we start to get the lumpiness. But overall, we’re seeing still very, very high demand for these peak shaping facilities, and we’re very bullish on the future of our LNG business.
Edward Codispoti: And then just from a number standpoint, to give you a sense, it’s around an $80 million business right now on the top line.
Jeffrey Martin: $80 million this year? And what was it last year? And what do you think it could be next year? .
Edward Codispoti: Last year was also in the $80 million range roughly.
Jeffrey Martin: And then do you foresee any project completions that would create growth headwind?
Alexander Hockman: So it’s not about growth headwinds. But as the project completes, the engineering phase is still very strong. But in terms of the pass-through revenue, that is very dependent upon where you are in the construction cycle.
Jeffrey Martin: And then in terms of project delays, I believe you mentioned at the start of the call, there were some construction-related project delays. I was wondering if you could elaborate on that?
Alexander Hockman: Some of the delays that we’re seeing relative to construction is with interest rates increasing, some of the private development have just put projects on hold. They’ve already acquired land but the actual initiation of breaking ground and going through with the projects are the types of projects where we’re typically seeing some headwinds.
Jeffrey Martin: And then as we head into next year, I would assume with the strong bookings and strong backlog in Geospatial, you would expect some organic growth acceleration for the business next year in Geospatial?
