Operator: Your next question comes from the line of Adam Thalhimer with Thompson Davis. Your line is open.
Adam Thalhimer: Hey, good morning, guys. Great quarter. Hey, within solar, do you feel like you’re seeing a benefit from the IRA yet? Or is that still on the come?
Tom McCormick: Like we’re seeing a benefit of the anticipation of what’s going to come with the IRA it gets more — it gets defined. Our clients are very excited about the opportunities it creates for them and some of them were actually moving forward on those in anticipation of it.
Adam Thalhimer: Okay. Has it slowed some of the down at all just out of curiosity?
Tom McCormick: No. It is definitely not — that’s for sure. It’s almost like renewables on steroids. I think some of our guys have likened it to. There’s a lot of opportunity out there.
Adam Thalhimer: Why do you think you guys have been a little bit more successful than the competition in building that business profitably, too, the margins have been great.
Tom McCormick: Yes. I mean I don’t know what our competitions do, so I won’t speak to that, but I’ll tell you what we do. We’re very disciplined about how we execute our work before we deploy a team on to a project, we actually — they shadow a project team on a current project that goes through a lot of training. We set expectations. We have metrics that we measure almost daily, so we can track performance. We’re very careful about how we hire and who we hire and what positions they take, and we’re very careful about what clients we do work with and the terms of those contracts. And then I think about solar, certainly for us is we get involved early in the estimating and scoping and estimating stage. So by the time we actually land on a price with our clients, we’ve already — we’ve done an employee survey or craft survey in the area, you know where we’re going.
We know what the labor market is like. We’ve estimated the job three or four, five times, we know this go in and out, and so it’s — we wrap our arms around that scope.
Operator: Your next question is from the line of Brent Thielman with D.A. Davidson. Your line is open.
Brent Thielman: Hey thanks. Good morning, guys. Hey Ken, a nice strong comeback in Utilities margins here in the second half. I guess, just wondering if this is purely sort of indicative of the work you’ve done to renegotiate terms on contracts. Is it moving to the customers the value that you bring? And then I guess, any context for the sort of percentage of business or contracts out there you’re still operating under that — you think are opportunities to address kind of better terms over the course of 2023?
Ken Dodgen: Yes. Good question, Brent. I mean, the short answer is, it’s a mixture of both, right? We had — we did see the benefit in the fourth quarter. The contract negotiations. We clearly had a good mix of work in the quarter as well that drove the margins a little bit higher. But I’ll tell you with respect to that, our work is not done. I think we talked a little bit about this last quarter, but we have a little bit more work to do on our legacy contracts, and then we inherited some work with PLH because they have not — they were a little bit behind us in terms of renegotiating those contracts. I couldn’t give you the percentage breakout. But yes, we’re hopeful that as we work through that over the course of 2023, not only with the rest of our contracts, but with the ones we inherited with PLH that we’ll be able to see some more benefit.
Now that said, Q1 is going to be a typical Q1 for us of much lower margins just because of the timing of work and the seasonality.
