Sterling Infrastructure, Inc. (NASDAQ:STRL) Q4 2022 Earnings Call Transcript

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Ron Ballschmiede: And we’re pretty close to being where we want to be on hard bid work. Hard-bid highway work, there is strategic hard-bid opportunities that we will continue to go after. But the MATOC work is only $10 million down, that’s not because we slowed down because we have less of that type of work that we want to reduce. So $10 million for the year that’s pretty much declaring victory at this point in time, if you ever can do that. So that will be kind of a continuing flow. We had a little bit — we had some jobs we will replace that will ultimately bring in better backlog. But the safer side might be as we have today for hard bid, just at better margins.

Brian Russo : Okay. Great. And then just a follow-up on e-infrastructure, low double-digit organic growth is pretty strong. And I’m just curious, you kind of have a unique service offering, right, and site development. We’ve heard from several E&C companies over the last couple of weeks directly point to data centers and/or electric vehicle manufacturing or just reshoring in general as a fairly robust market going forward. And I’m just curious, is low double-digit top line growth, is that sustainable when we get out past 12 months?

Joe Cutillo: Yeah. When we look out, we say the average over a three-year period if the market say that it’s going to be kind of high single digits. So far, we’ve outpaced that significantly every single year. Our goal would be to try to keep it in that high single to low double-digit growth. We certainly see the opportunities there. If you look at the cycle, data centers are extremely strong and continue to have a long future. We don’t see that slowing down anytime soon. In the e-commerce world, even though Amazon slowed down, the rest of the world is trying to cut Amazon is building very quickly and recently talking to some of the folks at Amazon, their plans are pretty strong when you get out past 24 and building more. So we see that continuing to be strong.

But the manufacturing piece is really — is not only a nice new entree for us, but the most important thing about that is the size and the scope of these projects. In the bigger the more dirt you have to move, the more complicated in a short period of time is a forte. We’ve got the most horsepower of anybody out there. And the recent announcement of the SK job, and that job has got 14 million yards of dirt on it. And I know that the surface doesn’t mean a lot to people, but that’s equivalent to 1.4 million dump trucks of dirt or if you stack those dump trucks up, you would go from New York to California, back to New York and then back to about St. Louis is how they would stack to kind of put it in perspective of how much dirt is being moved on that job in approximately a year.

So these are really good. We — there’s more and more talk on chip manufacturing. I’ll be honest, we haven’t seen that’s a little further behind. We haven’t seen those projects progress or be at the point that the EVs and the battery plants are. But there’s more electric vehicle builds and more battery plants down through the Southeast and up to the Northeast. And we’re very pleased with those. And it’s a great shot of adrenalin for us and a little extra boost over the next several years.

Brian Russo : Okay, great. Thank you very much.

Operator: We reached the end of our question-and-answer session. I would like to turn the conference back over to Joe Cutillo for closing comments.

Joe Cutillo: Thanks, Sherry. I’d like to thank everyone again for joining today’s call. If you have any follow-up questions or wish to schedule a call with us, please refer to the information provided in the press release associated with our Investor Relations Group here at Sterling or our partners at The Equity Group. I hope everybody has a great day, and thanks again. Thank you.

Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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