Alex Dwyer : Got it. And then I just wanted to ask transportation margins. Obviously, you guys don’t have Myers & Sons in the segment anymore. How much more room is there for margins to run in the segment? I think last quarter, you guys were talking about getting another point or so over the 18 to 24 months. So I’m just wondering if this is still the case.
Joe Cutillo: Yeah. I think it’s actually a little higher than that. I think we’ll get over the next 18 months, make 2 to 2.5 points. And if we continue to see the shift and work it could be better. But I feel great with 2 to 2.5 points over the next 18 months.
Ron Ballschmiede: Some of that will be a backlog. We can’t rock it up that fast, but we should see a steady increase in gross margin in backlog.
Joe Cutillo: Our gross margin is up about 200 basis points right now. So that will flow through over the next 18 months.
Ron Ballschmiede: And that year-over-year, I would say 50-50 disposition versus selling at higher margins, that increase.
Alex Dwyer : Yeah. And my last question, I don’t think I see a cash flow guidance anywhere for 2023. I know you guys have historically talked about operating income as a good proxy for your operating cash flow. Is this a fair assumption to make in 2023?
Ron Ballschmiede: I think it is. I think if you recall, we didn’t start out strong in the first half of this year, so I probably backed off of getting to the operating income number. But the back half was just incredible. So I’m staying with — it’s hard to predict, but I think the continuing view would be — start with operating income. We think we can continue to get in that ballpark given the structure we have today.
Alex Dwyer : Thank you.
Ron Ballschmiede: Thank you.
Operator: Our next question is from Brian Russo with Sidoti. Please proceed.
Brian Russo : Hi, good morning.
Joe Cutillo: Hey, Brian.
Brian Russo : Just a follow-up on the transport. Do you have the capacity or the appetite to try to enhance the top line so you could have accelerating top-line growth along with 200 basis points of margin improvement? And it seems like the IIJA and given where you are in the Rockies and I believe Idaho. Those are pretty strong markets for infrastructure. Just wondering what maybe your post 2023 strategy might be?
Joe Cutillo: Yeah, we certainly have the capacity. Our strategy has been to be very selective, continue to get this margin up to the point where — but we’re — if we get the margins up to 13%-14%, then we’ll look at growing it at a more aggressive rate. The thing that’s a little bit deceiving to people is that we are actually growing at a much faster rate in the Rocky Mountains than the total numbers look at. We’re continuing to shrink that low bid revenue in several of the other areas. So Texas continues to shrink along with some of the other markets. So it offsets that. So the net is at 3% to 5%, but our growth rate in the Rocky Mountains is historically better than that. We’ll continue to do that as long as that work remains.
Brian Russo : And how soon do you think you can burn the remaining heavy-type highway work that you’re currently shedding?
Joe Cutillo: Yeah. When we look at our backlog, it probably averages two years in the heavy highway states and there’s a blend there’s jobs that will burn in three months, and there’s jobs that are years long. But the bigger jobs that are in there, the design builds, the alternative delivery, they’re usually 18 to 24 months durations on those. So we look — we don’t have an exact number, but 18 to 24 months is a pretty good number, generally just use two years.
