Brent Thielman

Brent Thielman asked about the board's criteria for new leadership, potential changes in Apogee's strategic direction, particularly regarding scaling the Performance Services business, and the primary drivers behind the updated financial outlook, specifically the impact of aluminum inflation on the Metals segment and the appropriateness of long-term EBITDA margin targets.

Answer

Don Nolan, Apogee's Chief Executive Officer, confirmed no change in strategy, emphasizing focus on becoming an economic leader, managing the portfolio through accretive M&A, and strengthening the core. He noted the search for a new CEO focuses on candidates with deep growth, operational excellence, and M&A integration experience. Mark Augdahl, Interim Chief Financial Officer, attributed the updated outlook primarily to rising aluminum prices impacting Metals margins and slight declines in Glass volume and price, while affirming that long-term EBITDA margin targets remain appropriate despite near-term pressures.

Brent Thielman asked about the board's criteria for new leadership, the strategic direction of the company, particularly regarding scaling the Performance Services business, the impact of aluminum inflation on the Metals segment's updated outlook, and the continued appropriateness of long-term EBITDA margin targets despite near-term pressures.

Answer

CEO Don Nolan stated that there is no change in strategy, focusing on becoming an economic leader, managing the portfolio, and strengthening the core. He added that the board is seeking a CEO with deep growth, operational excellence, and M&A integration experience. Interim CFO Mark Augdahl explained that aluminum prices continue to rise, impacting Metals margins, and Glass is seeing slight volume and price declines, but long-term EBITDA targets remain appropriate.

Brent Thielman asked about the organic growth drivers within the Performance Services segment, specifically inquiring about the impact of internal distribution initiatives versus broader market growth. He also sought clarification on the factors contributing to the strong performance of the flooring side of the UW Solutions business and the reasons behind the significant increase in the Architectural Services backlog.

Answer

Ty Silberhorn, President and CEO, explained that Performance Services' organic growth was primarily driven by UW Solutions (formerly Large-Scale Optical) regaining retail shelf space, adding new products, and leveraging cross-selling opportunities. He noted that the flooring side of UW Solutions is outperforming due to demand for automation in distribution centers and a pull into Europe by a large global e-commerce retailer. Regarding the Architectural Services backlog, Silberhorn attributed the growth to a combination of factors, including a pickup in bid activity in the Northeast and successful expansion efforts in the Western United States, allowing the team to gain market share in a soft environment.

Brent Thielman inquired about the organic growth drivers within the Performance Services segment, specifically distinguishing between internal initiatives like distribution improvements and broader market growth. He also asked for details on the services backlog increase, questioning if it reflects new market outreach or general market conditions.

Answer

President and CEO Ty Silberhorn explained that strong organic growth in UW Solutions (formerly Large-Scale Optical) was driven by regained retail distribution, new product additions, and cross-selling opportunities. He highlighted the flooring side of the UW portfolio outperforming due to demand for automation in distribution centers and expansion into Europe. Regarding the services backlog, Mr. Silberhorn noted it was a combination of both, with significant growth from projects in the Northeast and continued expansion in the Western United States, attributing the success to the team's ability to gain market share in a soft environment.

Brent Thielman from D.A. Davidson & Co. inquired about the improving revenue pipeline in the Glass segment, the drivers for its expected second-half pickup, and whether other business segments could operate within their long-term margin targets for the fiscal year. He also sought details on distribution gains in Performance Surfaces.

Answer

CEO Ty Silberhorn explained that the Glass segment's pipeline is strengthening due to increased rigor, a strategic pivot to smaller jobs to fill market gaps, and ongoing productivity improvements, with revenue growth anticipated in Q3 and Q4. For other segments, Silberhorn noted that Metals and Services face tariff headwinds, making it a struggle to reach the bottom of their target margin ranges, while Performance Surfaces is expected to operate within its range. He clarified that the Performance Surfaces gains involve regaining and expanding shelf space in retail and custom framing shops. CFO Matt Osberg added that the focus is on growing absolute EBITDA dollars and that the Services segment's margin would have improved year-over-year without the tariff impact.

Brent Thielman asked if trends in the Services business, such as bookings and quotes, were aligning with third-party market forecasts. He also questioned management's confidence in the Glass segment's ability to remain within its target margin range amid volume declines and followed up on capital allocation, asking about the M&A pipeline's activity and target profile.

Answer

CEO Ty Silberhorn confirmed that Services trends align with forecasts showing market softness, but noted the business is seeing a 'flight to quality'. CFO Matt Osberg expressed confidence that the Glass segment will operate within its 10-15% margin range in fiscal 2026 due to structural productivity and efficiency improvements. Ty Silberhorn added that the M&A pipeline is 'very active' and the company is focused on acquiring differentiated, higher-margin products that open up new growth areas.

Brent Thielman inquired about the cross-selling opportunities with the newly acquired UW Solutions, the market share of its businesses, and the sustainability of the Architectural Glass segment's high profitability.

Answer

CEO Ty Silberhorn explained that UW Solutions and Apogee have minimal customer overlap, which he views as a positive for creating new opportunities, particularly in HD Printable Materials. He noted UW focuses on premium market segments. CFO Matt Osberg addressed the Architectural Glass segment, stating that while margins have been exceptionally strong due to favorable pricing and mix, the company's pipeline visibility suggests a moderation toward the upper end of the 10-15% target range in the second half of the year.

Brent Thielman asked about the margin progression and sustainability for Power Solutions, its cash conversion cycle, and how the acquisition accelerates Dycom's 'inside the fence' strategy through customer relationships and revenue synergies.

Answer

President and CEO Dan Peyovich confirmed Power Solutions' consistent strong margins in the mid to high teens, which he believes are sustainable. He noted that Power Solutions' DSOs typically in the 60-day range would positively impact Dycom's cash conversion. He affirmed that the acquisition is a cornerstone for accelerating the 'inside the fence' strategy, strengthening hyperscaler relationships, and creating significant revenue synergies by collectively providing more value to end users, especially given the massive infrastructure needs for AI.

Brent Thielman asked about the margin progression of Power Solutions, its sustainability, and the cash conversion cycle related to the acquisition, particularly its role in deleveraging efforts. He also inquired if the acquisition accelerates Dycom's 'inside the fence' strategy by leveraging Power Solutions' customer relationships.

Answer

President and CEO Daniel Peyovich stated that Power Solutions has consistently delivered strong margins, with mid-to-high teens being a sustainable range, benefiting from operating leverage. He noted Power Solutions' DSOs are typically in the 60-plus day range, which will positively impact Dycom's cash conversion cycle and support deleveraging. He confirmed the acquisition absolutely accelerates the 'inside the fence' strategy by strengthening hyperscaler relationships and enabling collective value provision, broadening and deepening opportunities.

Brent Thielman of D.A. Davidson & Co. requested a progress update on middle-mile projects and asked whether new initiatives like 'inside defense' and long-haul builds would be accretive or dilutive to margins.

Answer

CEO Daniel Peyovich highlighted the $20 billion addressable market for data center connectivity, noting these complex projects are in early stages and will contribute more significantly starting next year. He clarified that these new opportunities are competed for in a similar margin range as the core business and should not be modeled differently.

Brent Thielman asked about the effective share capture strategies within the Rooftop business, specifically referencing national accounts growth and how that strategy is working. He also inquired if Basics is starting to see more standardized product orders and the diversification of customers reflected in recent orders. Finally, Brent Thielman questioned AAON's comfort level with continuing to capture more orders for the Memphis facility, even as it has not fully ramped up.

Answer

CEO Matt Tobolski explained that Rooftop growth drivers include the Alpha-class air source heat pump, offering best-in-class solutions for various climates, and the national account strategy, which aligns with decarbonization goals. For Basics, he clarified that the productization strategy focuses on highly configurable, semi-custom solutions, not standardized products, with current backlog growth reflecting historic custom solutions. He noted a mix of large and smaller customers contributing to backlog diversity. Regarding Memphis, Matt Tobolski stated there is good backlog for a measured ramp-up, but also headroom for more orders, especially in the second half of next year, as the facility has capacity for more production lines.

Brent Thielman asked about the successful share capture strategy within the Rooftop business, specifically how national accounts growth informs this strategy. He also inquired about the BASX segment's orders and immediate pipeline, seeking clarification on the progress towards more 'standardized' products and the diversification of customers. Finally, he asked if the company is comfortable continuing to capture more orders for the Memphis facility, even as it is still ramping up.

Answer

CEO Matt Tobolski attributed Rooftop's outperformance in bookings to the Alpha-class air source heat pump's product differentiation and the national account strategy, which aligns with customers' decarbonization goals across diverse climates. He clarified that BASX's 'productization strategy' focuses on software-driven, semi-custom, highly configurable solutions, not standardized products, and that current backlog growth reflects historic custom solutions. While there are a couple of large orders, customer diversity exists. For Memphis, Matt Tobolski confirmed there is good backlog for a measured ramp-up, but also headroom, especially in the second half of next year, to continue taking orders as the facility has capacity for more production lines.

Brent Thielman asked about the strategic significance of the Applied Digital partnership for the Basics brand, the key assumptions underpinning the strong Q4 growth outlook, and the drivers behind the robust bookings for AAON branded products.

Answer

CEO Matt Tobolski described the Applied Digital partnership as a key entry into the pure-play AI data center market, positioning AAON as a long-term thermal management supplier. He stated the Q4 outlook is supported by strong backlog visibility, the realization of price increases, and the new Memphis facility coming online. He attributed the strong AAON brand bookings, which are outperforming the market, to the success of the national accounts strategy and the popular Alpha Class heat pump technology.

Brent Thielman asked for an update on the rooftop business supply chain issues, the company's positioning against new tariffs, and the progress on customer diversification within the BasX branded products.

Answer

President and COO Matthew Tobolski expressed confidence that the refrigerant-related supply chain issues are abating and will be resolved in the second half of the year, noting they did not affect the BasX segment. He stated that AAON is well-positioned against tariffs due to high vertical integration and a strong U.S. supply base. On customer mix, Tobolski acknowledged the concentration from a large order but emphasized that diversifying the customer base is a key focus, with significant new order activity and engagement with a spread of new customers.

Brent Thielman questioned if current and planned capacity is sufficient for the $1 billion data center revenue goal, asked for the timeline on the Memphis facility becoming operational, and inquired when the BASX Oregon facility's margins might normalize. He also sought an update on rooftop order visibility.

Answer

President and COO Matthew Tobolski confirmed that existing and planned facilities (Redmond, Longview, and Memphis) will provide total capacity of around $1.5 billion, sufficient to meet the goal. He noted the Memphis facility is ramping up aggressively and should have a meaningful financial impact by Q4 2025. Tobolski expects sequential margin improvement at the BASX Oregon facility throughout 2025, approaching normalized rates in 2026. Both Tobolski and CEO Gary Fields confirmed that rooftop order visibility is improving and normalizing, with bookings up mid-teens for the three months ending in January.

Brent Thielman sought clarification on the revenue sequencing for new orders, particularly why Q1 might be down sequentially despite a large backlog. He also asked about the revenue ramp-up for the core BASX business and whether the current lull in the rooftop business is primarily due to the refrigerant change or broader market factors.

Answer

President and COO Matthew Tobolski explained that the Q1 sequential softness is due to historical seasonality in the Oklahoma segment, which will be offset by accelerating data center revenue in Q2, leading to substantially stronger performance. He noted that BASX as a brand will leverage the entire manufacturing fleet, so its growth isn't limited to the Redmond facility. CEO Gary Fields attributed the rooftop business lull to all three factors he's previously cited: the refrigerant transition, interest rates impacting construction starts, and past election uncertainty, but noted these headwinds have limited duration.

Brent Thielman asked about Everus's organic growth expectations for the upcoming year, considering the company's significant organic growth in the current year and the somewhat lumpy or flattish year-to-date bookings and backlog levels.

Answer

CEO Jeff Thiede affirmed continued strong demand for Everus's services. He acknowledged the lumpy nature of backlog in their business but emphasized the company's ability to secure backlog to support growth, achieved through diversified end markets, anticipatory communication, and disciplined project selection.

Brent Thielman from D.A. Davidson asked about Everus Construction Group's organic growth prospects for the upcoming year, given the company's strong organic growth in the current year and the somewhat flat, yet elevated, backlog year-to-date.

Answer

CEO Jeff Thiede affirmed strong demand for Everus's services and confidence in securing backlog to support continued business growth. He highlighted the company's strategy of navigating cyclicality through diversified end markets, anticipatory communication with operating companies, and disciplined project selection.

Brent Thielman of D.A. Davidson inquired about Everest's ability to sustain its high backlog conversion rate and fill potential gaps with book-and-burn work. He also asked for an update on the M&A pipeline since becoming a public company and questioned if the ramp-up of large projects would negatively impact second-half cash flow.

Answer

CEO Jeffrey Thiede explained that strong project execution and shorter preconstruction phases led to record revenue, and noted the M&A pipeline is expanding with a focus on culturally aligned companies. CFO Maximillian Marcy added that while they are seeking the right M&A opportunity, organic growth is a priority. Regarding cash flow, Marcy expressed confidence in their ability to convert cash in the second half, stating that working capital usage is consistent with historical patterns for ramping up new projects.

Brent Thielman of D.A. Davidson & Co. inquired about Everest's capacity to sustain its backlog conversion rate given recent hiring and project pull-forwards. He also asked about the M&A pipeline's development since going public and the outlook for cash flow conversion in the second half of the year.

Answer

President, CEO & Director Jeffrey Thiede attributed strong backlog conversion to project timing and successful resource planning, noting record employment levels support future growth. Regarding M&A, Thiede highlighted an expanding pipeline and a selective approach to acquisitions. CFO Maximillian Marcy added that while leverage is declining, the focus remains on finding the right M&A fit alongside strong organic growth. Marcy also confirmed confidence in second-half cash flow conversion, explaining that the recent working capital increase is temporary as new projects ramp up.

Brent Thielman of D.A. Davidson & Co. inquired about Everest's ability to maintain its high backlog conversion rate, the progress of its M&A pipeline since becoming a public company, and the outlook for cash flow in the second half of the year given the ramp-up of large projects.

Answer

CEO Jeffrey Thiede explained that project timing and preconstruction phases led to the Q2 pull-forwards and record revenue, and the company is actively hiring to support growth. He also noted the M&A pipeline is expanding with a new corporate development VP. CFO Maximillian Marcy added that while they seek the right M&A fit, organic growth is strong, and he expressed confidence in the company's ability to convert cash in the second half as new projects ramp up and begin billing.

Brent Thielman of D.A. Davidson inquired about Everest's capacity to maintain its high backlog conversion rate and fill potential gaps with book-and-burn work, given recent hiring success and project pull-forwards.

Answer

CEO Jeffrey Thiede explained that project timing can be variable, with shorter preconstruction phases sometimes accelerating work, as seen in Q2. He affirmed that the company is proactively planning resources and adding headcount to support continued growth, viewing their early project involvement and partnership approach as a key strategic strength.

Brent Thielman of D.A. Davidson & Co. inquired about the revenue timing for large, longer-lead-time projects and their potential impact on the year's financial cadence. He also asked for an outlook on the Transmission & Distribution (T&D) segment's workload and the current status of the high-tech manufacturing market.

Answer

Executive Jeff Thiede explained that the complexity of large projects necessitates early involvement in design and constructability, which can extend front-end timelines. He affirmed a positive outlook for the T&D segment, highlighting growth in undergrounding work and strong, long-term customer relationships. Regarding high-tech manufacturing, Thiede noted that despite some cyclicality in client capital spending, Everus maintains a robust, 30-plus year relationship with a major semiconductor client and remains well-positioned due to its proven track record.

Brent Thielman of D.A. Davidson & Co. inquired about the impact of large, long-lead time projects on 2025 revenue timing, the outlook for the Transmission & Distribution (T&D) segment, and the current status of the high-tech manufacturing market.

Answer

Executive Jeff Thiede explained that the complexity of large projects involves extended front-end design and constructability reviews, which can create 'bumpy' but valuable backlog conversion. He affirmed a positive outlook for the T&D segment, driven by undergrounding opportunities and strong customer relationships. Regarding high-tech manufacturing, Thiede noted that despite some cyclicality, Everus's long-term relationships and expertise in sophisticated projects ensure their continued role with key semiconductor clients.

Brent Thielman asked for more detail on the 2025 revenue guidance, specifically how the increasing size and duration of projects are affecting backlog conversion rates, and if the revenue cadence throughout the year will differ from historical seasonality.

Answer

Executive Jeff Thiede explained that as Everus takes on larger, more complex projects, particularly in the data center and industrial markets, the time to complete them naturally extends. Executive Maximillian Marcy added that this could change the backlog burn percentage by up to 10 points compared to the past. Regarding seasonality, Jeff Thiede noted that the business is not significantly impacted by weather, and he expressed optimism for achieving a book-to-bill ratio of at least 1x for 2025.

Brent Thielman of D.A. Davidson & Co. asked about the sources of strong E&M bookings versus the weaker T&D backlog, the performance of slower commercial markets, the margin profile of new contracts, and the company's M&A pipeline strategy.

Answer

Executive Jeff Thiede attributed strong E&M bookings to high demand in data centers and hospitality, while noting the T&D backlog weakness was a matter of project timing. He explained that Everus effectively pivots resources from completed projects to growth areas. Thiede also stated that disciplined project selection and execution through their 'repeatable playbook' are enhancing margins. On M&A, he emphasized the focus is on finding culturally aligned companies that offer strategic synergies, rather than targeting a specific transaction size.

Brent Thielman inquired about the momentum and award activity for CEC since its acquisition, particularly concerning large data center projects and their conversion timeline. He also asked about specific drivers for margin expansion opportunities within CEC and how the size of Mission Critical projects in the legacy e-infrastructure business has evolved over the past year.

Answer

CEO Joe Cutillo highlighted strong bookings and wins for CEC, primarily in data centers, and positive customer reception to the combined entity, with early discussions for 2026 joint projects. He noted that margin expansion is driven by larger project sizes in site development and leveraging productivity gains from combining electrical and site development services. VP of Investor Relations and Corporate Strategy Noelle Dilts added that over 80% of backlog is now Mission Critical, with projects becoming larger and more complex, including underground infrastructure.

Brent Thielman from D.A. Davidson inquired about the substantial growth in CEC's signed and unsigned work since the June deal announcement, seeking insights into the momentum behind award activity, particularly for large data center projects, and their conversion timeline. He also asked about specific drivers for anticipated margin expansion within CEC and the e-infrastructure business, and how the size of mission-critical projects, especially data centers, has evolved over the past 12+ months, redefining the segment's backlog.

Answer

Joe Cutillo, CEO of Sterling Infrastructure, highlighted strong bookings and wins for CEC, primarily in data centers and other large projects, expressing excitement about customer reception to the combined site development and electrical services. He noted early discussions for 2026 joint projects and aggressive growth plans for site development in Texas. Cutillo explained that margin expansion is driven by increasing project size in site development, leveraging productivity gains from combining electrical and site development (similar to the dry utility tuck-in), and CEC's deeper penetration into higher-margin data center work. Noelle Dilts, VP of Investor Relations and Corporate Strategy, added that over 80% of backlog is now mission-critical, with projects becoming larger and more complex, including underground infrastructure.

Brent Thielman of D.A. Davidson asked about the sustainability of the high E-Infrastructure margins, the re-emergence of e-commerce warehouse projects and their expected contribution timeline, and the outlook for the Building Solutions segment amid market softness.

Answer

CEO & Director Joseph Cutillo expressed high confidence in continued margin expansion for E-Infrastructure, driven by larger, more complex projects with multiple phases. He noted that e-commerce projects are re-emerging stronger than anticipated, with larger scopes, and will begin contributing in late 2025. For Building Solutions, he acknowledged near-term headwinds but expects the segment to maintain double-digit operating margins for the year, believing the market is near its bottom.

Brent Thielman inquired about the composition of the 35% of E-Infrastructure backlog that is not data center-related and asked about the company's exposure to potential tariffs.

Answer

CEO Joseph Cutillo explained that the non-data center backlog is robust, driven by steady manufacturing, resurgent e-commerce, and strengthening small industrial warehouse activity. Regarding tariffs, he stated exposure is minimal across all segments due to factors like 'Made in America' requirements in Transportation, price-locking for materials, indexing clauses for items like fuel, and the phased nature of E-Infrastructure projects that allows for building current costs into pricing.

Brent Thielman of D.A. Davidson & Co. questioned the margin trends for new E-Infrastructure work, the outlook for the Building Solutions segment including PPG's performance, and the dependency of the long-term forecast on large semiconductor projects versus other onshoring trends.

Answer

CEO Joseph Cutillo stated that E-Infrastructure margins are benefiting from stable pricing and significant productivity gains on large, multi-phase projects. For Building Solutions, he anticipates a stronger second half of 2025 and highlighted growth initiatives like expanding with PPG in Fort Worth and adding plumbing services in Phoenix. He expressed confidence in the long-term outlook, noting that strong data center demand provides a solid foundation, while other manufacturing onshoring can fill any gaps if semiconductor projects are delayed.

Brent Thielman inquired about the sustainability of E-Infrastructure's high profitability, the strategy for organic growth versus acquisitions, and the market dynamics within the Building Solutions segment, particularly in Dallas, Houston, and Phoenix.

Answer

CEO Joe Cutillo expressed high confidence that E-Infrastructure margins would continue to improve into 2025, driven by large, mission-critical data center projects that offset lower-margin work. He noted that while organic expansion has been successful, acquisitions are being evaluated to fill geographic gaps. For Building Solutions, Cutillo described softness in Dallas due to affordability issues but noted a recent positive uptick in plumbing starts. He confirmed continued growth in Houston and Phoenix, despite some volatility, and mentioned that homebuilders are very bullish for a 2025 rebound.

Brent Thielman inquired about EMCOR's margin profile, specifically the attractiveness of margins on new work and how the company addresses concerns regarding quarterly fluctuations, in addition to asking about data center RPOs and other surprisingly strong market sectors.

Answer

Chairman, President, and CEO Tony Guzzi, along with Senior VP and CFO Jason Nalbandian, clarified that current operating margins are among the strongest, even with amortization headwinds and investments in new markets, aligning with their 9.1%-9.4% guidance. Mr. Guzzi also highlighted broad-based demand beyond data centers, including strong performance in mechanical services, water and wastewater, healthcare, and traditional manufacturing, noting that high-tech manufacturing can be lumpy.

Brent Thielman inquired about EMCOR's margin profile, specifically new work margins, and sought insights into other strong market sectors beyond data centers.

Answer

Chairman, President and CEO Tony Guzzi highlighted strong overall operating margins, noting that the electrical segment's margins would be 14%+ without amortization headwinds and new market investments. Senior VP and CFO Jason Nalbandian confirmed the consolidated 9.4% operating margin was within their expected range. Tony Guzzi also pointed to robust demand in mechanical services, water and wastewater, healthcare (bolstered by Miller Electric), traditional manufacturing (food processing), and retrofit commercial projects, while acknowledging the episodic nature of high-tech manufacturing awards.

Brent Thielman from D.A. Davidson & Co. asked about the M&A environment for large electrical and mechanical contractors, the sustainability of high mechanical margins, and the outlook for the Building Services segment.

Answer

CEO Tony Guzzi described the M&A environment as active, noting that EMCOR's criteria for cultural fit and fair value remain constant even as deal sizes increase. Regarding margins, Guzzi credited the impressive mechanical segment performance to productivity gains from VDC, BIM, and prefabrication rather than just pricing. He also confirmed that the Building Services segment is at an inflection point and is expected to return to growth.

Brent Thielman from D.A. Davidson & Co. inquired about the M&A environment, seller expectations, the sustainability of high mechanical construction margins, and the outlook for the Building Services segment.

Answer

Chairman, President & CEO Tony Guzzi explained that EMCOR's M&A criteria remain focused on cultural fit and fair value, noting that larger deals are driven by owners seeking growth capital and risk mitigation. On margins, Guzzi attributed the strength to productivity gains from VDC, BIM, and prefabrication rather than just pricing, a point echoed by CFO Jason Nalbandian who suggested looking at 12-24 month rolling averages for sustainability. Guzzi also confirmed that the Building Services segment is at an inflection point and expected to return to growth.

Brent Thielman of D.A. Davidson & Co. questioned why EMCOR did not raise the top end of its guidance despite a strong start, asking if it was due to tariff risks or potential growth headwinds. He also inquired about the outlook for the high-tech manufacturing sector, particularly in pharma, and asked if the Miller Electric acquisition was dilutive to Electrical segment margins.

Answer

CEO Tony Guzzi explained the guidance reflects general macroeconomic uncertainty, not specific growth headwinds, and that the potential impact of tariffs is already factored into the range. He expressed strong optimism for the high-tech manufacturing sector, driven by reshoring and new drug development. CFO Jason Nalbandian clarified that the Miller acquisition was dilutive to the Electrical segment's reported margin due to intangible amortization, but CEO Tony Guzzi added that on an adjusted basis, its margins are neutral with the segment.

Brent Thielman of D.A. Davidson & Co. asked about revenue synergies from the Miller Electric acquisition, the influence of AI on data center bookings, and the sustainability of high margins in the U.S. Electrical Construction segment.

Answer

Tony Guzzi, Chairman, President and CEO, explained that Miller Electric offers additive capabilities with minimal market overlap and will serve as a platform for further Southeast expansion. He noted that while EMCOR is in the 'early innings' of the AI data center buildout, the mix is shifting towards higher-power AI projects. Guzzi was cautious about building on record electrical margins but expressed confidence in their stability, attributing them to operational excellence, prefabrication, and strong labor management rather than pricing power. CFO Jason Nalbandian added that trailing 12-24 month performance is a good indicator of the segment's margin range.

Brent Thielman of D.A. Davidson & Co. inquired about the drivers of data center growth, the sustainability of high margins in the Electrical Construction segment, and the factors contributing to strength in manufacturing and industrial RPOs.

Answer

Chairman, President and CEO Tony Guzzi explained that data center growth is over 90% new build, driven by customer requests for EMCOR to expand into new geographic markets. CFO Jason Nalbandian and Tony Guzzi clarified that while current electrical margins are strong due to mix and execution, a single quarter is not an indicator, and a longer-term rolling average is a better way to view performance. They attributed the strength in traditional manufacturing to reshoring, automation, and energy efficiency projects.

Brent Thielman asked if the mid-single-digit pricing improvement for 2026 is consistent with planned annual price increases, and about the volume contribution from underpriced acquisitions that Vulcan is working to optimize.

Answer

Ronnie Pruitt, COO, confirmed the mid-single-digit pricing is a combination of backlog, bidding work, and fixed plant letters, with positive early conversations. He noted about 10 million tons of acquired volume from last year (Wake and Superior) are being optimized, expecting the pricing gap to close over the next 12 months.

Brent Thielman questioned Comfort Systems USA's ability to sustain growth outside of modular given industry labor constraints, asking about the criticality of internal recruiting versus larger job values and any slowdown in hiring. He also asked if the 3 million sq ft modular space for early 2026 is effectively sold out and about the segment allocation of the $15.5 million write-up.

Answer

President and CEO Brian Lane highlighted their attractive work environment, continuous recruiting, and access to a large contract labor pool, noting improvements in productivity and project selection. COO Trent McKenna confirmed the modular capacity is effectively sold out. CFO Bill George clarified that the $15.5 million write-up was in the electrical segment, part of favorable late-stage project developments that augmented an already strong quarter.

Brent Thielman of D.A. Davidson & Co. asked about the manufacturing pipeline versus data center focus, the proportion of modular in the backlog, the potential for new hyperscaler clients, visibility into 2026-2027, the semiconductor and pharma pipeline, and the reason for existing building construction outgrowing new construction.

Answer

EVP & COO Trent McKenna stated the manufacturing pipeline is strong, but technology projects currently offer the best opportunities. EVP & CFO William George noted that while new hyperscaler opportunities exist, they prioritize strong partnerships and that modular's share of backlog should remain stable as the overall business grows. CEO Brian Lane confirmed they are booking work for 2026-2027. Trent McKenna added that pharma and chip fab pipelines are strong but lumpy. William George explained that much industrial work, including tech expansions, is classified as 'existing building,' driving its growth.

Brent Thielman of D.A. Davidson & Co. asked about the manufacturing project pipeline, the proportion of modular in the backlog, the potential to add new hyperscale customers, visibility into 2026-2027, and opportunities in the semiconductor and pharma markets.

Answer

EVP & COO Trent McKenna stated the manufacturing pipeline remains strong, but the company is prioritizing higher-opportunity technology projects. EVP & CFO William George noted they are selective with customers, favoring collaborative partners, and expects modular to remain a similar percentage of the growing business. CEO Brian Lane confirmed visibility and bookings extend into 2026 and 2027. McKenna added that pharma and chip fab pipelines are also strong.

Brent Thielman of D.A. Davidson & Co. questioned if the manufacturing pipeline was declining or if the focus on tech was a strategic choice. He also asked about modular's share of the backlog and the potential to add new hyperscaler clients.

Answer

EVP & COO Trent McKenna clarified that the manufacturing pipeline remains strong, but the company is prioritizing the best opportunities, which are currently in technology. CEO Brian Lane praised the operating companies' project selection. EVP & CFO William George explained that while opportunities with new customers exist, they prioritize working with collaborative partners and estimated modular would remain a similar percentage of the overall growing business.

Brent Thielman of D.A. Davidson & Company asked if the manufacturing pipeline was subsiding in favor of technology projects, the proportion of modular in the backlog, and visibility into 2026-2027. He also followed up on opportunities in semi-fab and pharma and why existing building construction is outgrowing new construction.

Answer

EVP & COO Trent McKenna clarified the manufacturing pipeline is strong, but the company is prioritizing the best opportunities, which are currently in tech. EVP & CFO William George noted that while new hyperscaler clients are possible, the focus is on strong existing partners. CEO Brian Lane confirmed visibility into 2026-2027. On the follow-up, McKenna noted strong pipelines in pharma and fab, while George explained that the industrial focus, which often involves additions to existing sites, drives growth in the 'existing building' category.

Brent Thielman of D.A. Davidson & Company questioned if the manufacturing project pipeline has subsided or if the focus on data centers is a strategic choice. He also asked for the proportion of modular in the backlog and whether capacity additions are for new hyperscale customers. Lastly, he inquired about visibility into 2026 and 2027.

Answer

EVP & COO Trent McKenna clarified that the manufacturing pipeline remains strong, but the company is prioritizing technology projects due to better opportunities. EVP & CFO William George stated that while opportunities with new hyperscalers exist, the company is focused on serving existing customers who are strong partners. He estimated modular would remain near its current percentage of the business. CEO Brian Lane confirmed that customer conversations are actively looking out to 2026 and 2027, with the company being 'full' for 2025.

Brent Thielman of D.A. Davidson & Co. asked for the reason behind the decline in manufacturing sector revenue during Q1. He also questioned if the HVAC refrigerant transition has had any impact on the business and inquired about the company's target minimum cash balance.

Answer

CFO William George clarified that the dip in manufacturing revenue was not due to weak demand but a strategic allocation of resources to more profitable tech-sector projects. CEO Brian Lane added that large manufacturing projects are inherently lumpy. Regarding the refrigerant transition, Lane stated it has had no impact and is expected to remain neutral. On the balance sheet, CFO William George asserted there is no minimum cash target, expressing a preference for deploying capital, including opportunistic share repurchases as seen in Q1.

Brent Thielman of D.A. Davidson & Co. inquired about the company's confidence in sustaining elevated margin levels into 2025, the growth outlook for the modular business, and the drivers behind the fourth-quarter increase in capital expenditures.

Answer

CEO Brian Lane attributed the strong margins to disciplined project selection, excellent execution by their field workforce, and working with good customers. COO Trent McKenna was not on the call. CFO William George explained that modular growth will be gradual and focused on productivity and automation, supporting overall margins. He also noted that higher CapEx reflects reinvestment in the business, including opportunistically purchasing operational facilities.

Brent Thielman asked about the recent step-back in the manufacturing vertical, the company's visibility into future projects, whether favorable cash flow terms are broad-based, and if M&A valuation multiples have changed significantly.

Answer

CFO William George explained the dip in manufacturing revenue was a strategic choice to pursue more attractive data center work, while the pipeline in food and pharma remains strong. CEO Brian Lane confirmed that early involvement in large, multi-phase projects provides strong visibility and confidence. George noted that favorable payment terms are being negotiated broadly due to strong bargaining power. On M&A, he argued that the focus is on the quality of future earnings, not just the multiple, and that they continue to find deals at what they consider reasonable prices.

Brent Thielman asked about the agriculture business backlog, specifically if current industry fundamentals were impacting the project business pipeline and if the lower backlog should be a concern. He also questioned if there were signs of stabilization or continued softness expected in the Lighting and Transportation (L&T) segment.

Answer

President and CEO Avner Applbaum stated that the market environment for the agriculture project business remains strong, with a robust and diverse pipeline supporting 2026 goals, despite project timing causing fluctuations. For Lighting and Transportation, he acknowledged continued softness in Asia-Pacific lighting and North American construction, along with operational issues, but highlighted meaningful progress in reshaping the business with new leadership and improved focus.

Brent Thielman asked if the lower agriculture business backlog reflects broader industry fundamental impacts on the project pipeline or is primarily due to episodic project timing.

Answer

Avner Applbaum, President and CEO, clarified that the market environment for agriculture projects remains strong, driven by food security needs, with a robust and diverse pipeline supporting 2026 goals. He noted that year-to-date sales are up double digits despite typical project timing shifts.

Brent Thielman of D.A. Davidson questioned the performance of international markets within the Infrastructure segment and asked for an update on the apparent recovery in the Brazilian agriculture market, inquiring if it represents a true rebound.

Answer

CEO Avner Applbaum identified a slow start in Asia-Pacific, particularly in Australia's lighting market, but noted that order rates are now improving and factored into guidance. Regarding Brazil, he stated the market appears to have bottomed out, with stabilizing order activity and volume growth in Q1. While margins remain pressured, he expressed long-term optimism, adding that a robust project pipeline in the Middle East is helping to offset other regional weaknesses.

Brent Thielman of D.A. Davidson inquired about the M&A strategy, specifically the potential size of acquisitions and interest in a transformational deal. He also asked about the current pricing environment in the Agriculture segment amid volume pressures.

Answer

President and CEO Avner Applbaum confirmed Valmont is not seeking transformational M&A, but rather bolt-on acquisitions that are tied to the core business and can make a meaningful contribution. On Agriculture pricing, he stated that despite market challenges, the company is not seeing pricing pressure due to its leadership position and the strong value proposition of its technology offerings like Agsense 365, which resonates with dealers and growers.

Brent Thielman of D.A. Davidson & Co. questioned how the recent improvement in order rates in Brazil should inform the short-term outlook for 2025, given the current revenue headwinds. He also asked for clarity on the Lighting & Transportation (L&T) business, specifically when the company will lap the comparisons from exiting low-margin products and what portion of the decline is due to true demand versus strategic exits.

Answer

President and CEO Avner Applbaum advised a cautious view on Brazil for 2025, despite encouraging order rates. He noted that low soybean prices continue to pressure farmer profitability and sentiment, but affirmed the long-term growth outlook remains strong due to the value proposition of pivot irrigation. For L&T, Applbaum attributed the tough quarter to weakness in residential lighting, timing of DOT projects, and plant flexibility issues, which are not expected to repeat at the same magnitude. He expressed a positive outlook for 2025, citing strong DOT order rates, the expected rebound in residential lighting (which lags housing starts by 12 months), and progress in improving plant flexibility.

Brent Thielman of D.A. Davidson & Co. asked about the status of any remaining material COVID-era legacy project disputes, the expected cost savings from recent restructuring actions, early evidence of these actions improving work acquisition, and Matrix Service Company's strategic role and opportunities within the growing data center market.

Answer

President and CEO John Hewitt confirmed that the company is largely beyond material COVID-era legacy disputes, with the recently charged crude terminal project being the final significant one. He highlighted that recent organizational realignments have created energy, streamlined decision-making, and improved market focus, expecting positive impacts on both winning and executing work, particularly for EPC projects. Regarding the data center market, John Hewitt explained that Matrix Service Company will focus on indirect opportunities such as power generation, backup power, fuel supply, electrical interconnects, substation work, and complex cooling process installations, leveraging existing skill sets in gas-fired turbine construction and LNG facilities. VP and CFO Kevin Cavanah detailed that restructuring actions cut approximately $12 million, split evenly between construction overhead and SG&A, reducing quarterly SG&A to around $16.5 million and lowering the break-even revenue point to $210 million-$215 million per quarter.

Brent Thielman of D.A. Davidson asked if there were other material COVID-era legacy jobs in dispute, the expected cost savings from restructuring actions and early evidence of these changes contributing to winning more work, and Matrix Service Company's role in the growing data center market, both directly and indirectly. He also followed up on the impact of restructuring on the company's break-even point.

Answer

CEO John Hewitt confirmed that the company is largely beyond material legacy pandemic issues, with the recently charged crude terminal project being the final significant one. Hewitt highlighted increased organizational energy, streamlined decision-making, and improved alignment as early positives from restructuring. CFO Kevin Cavanah detailed $12 million in annual cost savings, split 50/50 between construction overhead and SG&A, expecting SG&A to drop to $16.5 million per quarter in fiscal 2026. Hewitt clarified that Matrix will not build data centers but will play a role in the demand for additional and backup power generation, fuel supply, electrical interconnects, and complex cooling process installations. Cavanah added that restructuring decreased the break-even point from approximately $225 million per quarter to $210-$215 million per quarter.

Brent Thielman of D.A. Davidson inquired about the status of other potential COVID-era legacy project disputes, the expected cost savings from restructuring actions, early evidence of these actions leading to more work, and Matrix Service Company's role in the growing data center market.

Answer

President and CEO John Hewitt confirmed that the company is largely beyond material legacy pandemic issues, with the recent $6 million charge being the final significant one. He also highlighted improved organizational alignment and decision-making as early benefits of restructuring. VP and CFO Kevin Cavanah detailed $12 million in annual cost savings, split evenly between construction overhead and SG&A, and noted a reduced quarterly break-even point from $225 million to $210-$215 million. John Hewitt explained Matrix's role in the data center theme through demand for power generation, backup power, fuel supply, electrical interconnects, and complex cooling systems, rather than direct data center construction.

Brent Thielman of D.A. Davidson asked for a big-picture perspective on how the current geopolitical and macroeconomic environment might influence customer spending in the medium term. He also sought confirmation on the expected revenue ramp in the fourth quarter, particularly within the Storage and Terminal Solutions segment.

Answer

President and CEO John Hewitt expressed a bullish long-term outlook, stating that rising global energy demand, particularly for U.S. NGLs and LNG, will override short-term uncertainties and drive significant infrastructure investment. He believes Matrix is well-positioned to capture this demand. CFO Kevin Cavanah confirmed expectations for a 'really strong growth cycle' in the Storage and Terminal Solutions segment in Q4, which will be the primary driver for a significant increase in total company revenue and improved gross margins through better overhead absorption.

Brent Thielman of D.A. Davidson asked for a big-picture perspective on how the current geopolitical and macroeconomic environment might influence customer spending in the medium term. He also sought confirmation on the expected Q4 revenue ramp, particularly in the Storage and Terminal Solutions segment.

Answer

CEO John Hewitt expressed confidence that rising global energy demand will override short-term uncertainties, driving significant infrastructure investment in NGLs and LNG where Matrix is well-positioned. CFO Kevin Cavanah confirmed expectations for a 'really strong growth cycle' in the Storage and Terminal Solutions segment in Q4, following muted sequential growth in Q3 due to procurement timing. He stated this ramp, combined with growth in other segments, should drive strong overall revenue and improve gross margins.

Brent Thielman of D.A. Davidson & Co. asked for a big-picture perspective on how the current geopolitical and macroeconomic environment might influence customer spending in the medium term. He also sought confirmation on the expected fourth-quarter revenue ramp, particularly whether key jobs in the Storage and Terminal Solutions segment are moving forward to support the outlook.

Answer

CEO John Hewitt expressed confidence that despite short-term uncertainty, the fundamental global demand for energy, especially for U.S. LNG and NGLs, will drive significant infrastructure spending, benefiting Matrix's market position. CFO Kevin Cavanah confirmed that a 'really strong growth cycle' is expected in the Storage and Terminal Solutions segment in Q4, following procurement timing delays in Q3. He stated this, combined with growth in other segments, should lead to a strong overall revenue increase and improved gross margins for the fourth quarter.

Brent Thielman asked for a big-picture perspective on how the current geopolitical and macroeconomic environment might influence customer spending in the medium term. He also sought confirmation on the expected Q4 revenue ramp in the Storage and Terminal Solutions segment.

Answer

President and CEO John Hewitt expressed confidence that despite near-term uncertainty, the fundamental global demand for energy, particularly U.S. NGLs and LNG, will drive significant infrastructure spending, benefiting Matrix's core markets. CFO Kevin Cavanah confirmed that a 'really strong growth cycle' is expected for the Storage and Terminal Solutions segment in Q4, driven by the timing of project activities, which will support the overall revenue outlook and improve overhead absorption and gross margins.

Brent Thielman of D.A. Davidson & Co. asked about the book-to-bill ratio, wondering why it wasn't stronger given the lower revenue levels and questioning if the election was causing project delays. He also sought more confidence in the significant revenue ramp projected for the full fiscal year and asked for specifics on the potential size of the LNG terminal opportunity should the current federal moratorium be lifted.

Answer

CEO John Hewitt explained that the sub-1.0 book-to-bill ratio was a matter of timing, with a large project award anticipated in the second quarter. He noted that client reactions to the election are mixed. Regarding the revenue ramp, Hewitt expressed increased confidence, stating that significant permitting issues that had previously delayed major projects were resolved during the quarter, clearing the path for work to accelerate. He estimated the near-term opportunity from lifting the LNG moratorium is approximately a couple of hundred million dollars, with more significant long-term potential.

Brent Thielman of D.A. Davidson & Co. asked about the weaker-than-expected book-to-bill ratio, questioning if election uncertainty was causing project delays. He also sought more confidence in the significant revenue ramp implied by the full-year guidance and asked for an estimate of the work tied to the LNG terminal moratorium.

Answer

CEO John Hewitt attributed the 0.9 book-to-bill ratio to the timing of a large project award, which he now expects to land in the second quarter. He noted that client sentiment on the election is mixed. Hewitt expressed confidence in the revenue ramp, stating that significant client-side permitting issues that had delayed project starts were resolved during the quarter, providing clearer visibility for ramping up work on major backlog projects. He estimated the near-term opportunity related to lifting the LNG export moratorium is around a couple of hundred million dollars, with more significant long-term potential.

Brent Thielman from D.A. Davidson asked for clarification on the fiscal 2025 revenue sequence, particularly for Q1, and questioned the ongoing challenges in the electrical delivery business despite strong market tailwinds. He also inquired if the project pipeline was beginning to reflect demand from data centers.

Answer

CFO Kevin Cavanah projected that Q1 revenue would likely be slightly lower sequentially due to seasonality and a large project completion, despite growth in the Storage segment. CEO John Hewitt explained that the electrical business challenges are localized to their Northeast footprint due to specific client spending patterns. He outlined a strategy to expand their client base and geographic reach to improve performance. Hewitt confirmed they are seeing data center-related opportunities in their pipeline, both for grid connection and for on-site backup power systems like LNG or hydrogen, which fits their core competencies.

Brent Thielman asked about the persistence and stabilization of pricing pressure in Concrete Pumping Holdings' U.S. business, and whether the lower U.S. pumping margins were solely due to asset underutilization or if other cost factors like inflation were at play.

Answer

CEO Bruce Young confirmed ongoing pricing pressure, attributing it to light commercial market softness driving competitors into more complex projects and residential market weakness. He anticipates this pressure will continue for approximately six more months. CFO Iain Humphries explained that margin pressure primarily stems from volume decline and asset underutilization, with cost control initiatives partially mitigating the impact, and expects strong margin recovery with improved volumes and utilization due to the variable cost base.

Brent Thielman of D.A. Davidson & Co. asked if the Eco-Pan segment was also impacted by weather, where excess equipment capacity is affecting market pricing, and whether a ramp-up in capital expenditures should be expected.

Answer

Executive Iain Humphries confirmed the Eco-Pan segment faced similar weather challenges. Executive Bruce Young stated that surplus equipment primarily affects the residential and light commercial markets with smaller units, not the company's core infrastructure or large commercial sectors. Both executives explained that no significant CapEx increase is planned, as the company has sufficient fleet capacity and views potential M&A as a source for additional assets.

Brent Thielman of D.A. Davidson questioned the market-specific areas of equipment oversaturation and the company's strategy for protecting margins against competitive pricing. He also asked about the sustainability of growth in the Eco-Pan segment.

Answer

Executive Bruce Young attributed equipment oversaturation to industry-wide over-ordering based on prior forecasts, leading to pricing pressure. He confirmed the company is holding its pricing and market share. Young also expressed confidence in the Eco-Pan segment's growth, stating it's driven by converting customers from less efficient, traditional waste methods, a trend that persists even in a soft construction market.

Brent Thielman of D.A. Davidson & Co. inquired about the bifurcated market trends in the Precast segment, the outlook for the Water Transmission Systems (WTS) segment into 2026, and details on organic investment initiatives.

Answer

President & CEO Scott Montross explained that the non-residential side of the Precast business is seeing its order rate recover and expects margins to improve in the second half of the year. For WTS, he anticipates the 2026 market will be at least equal to 2024 and 2025, with potential upside from IIJA-funded projects. Montross also detailed the "product spread" organic growth strategy, which involves expanding precast product manufacturing into existing WTS plant locations.

Brent Thielman of D.A. Davidson & Co. asked for specifics on the tariff-related issues, the rationale for the flattish second-half revenue outlook for the Precast segment, and the reasons behind the higher-than-expected SG&A expenses in the quarter.

Answer

CEO Scott Montross explained that new trade policies from the new administration created temporary cost issues and shipment delays in March, particularly for the SPP segment's Mexico facility. He stated the issue is largely resolved due to a new $60 million order that is not subject to these policies, which will improve absorption. Montross also noted the second-half Precast outlook is conservative, with potential upside. CFO Aaron Wilkins clarified that the Q1 SG&A increase was due to seasonal bonus accruals from strong 2024 performance and reaffirmed the full-year guidance of $47 million to $50 million.

Brent Thielman of D.A. Davidson & Co. inquired about the drivers behind the Steel Pressure Pipe (SPP) backlog decline, the potential revenue headwind from lower steel prices in the upcoming year, and the sustainability of the strong revenue growth observed in the Precast segment.

Answer

President and CEO Scott Montross explained that the SPP backlog decline was primarily due to the timing of job awards, not a lack of demand, and he expects the backlog to increase by year-end. He noted that while steel costs are down 22% year-over-year, selling prices are only down 9%, indicating strong pricing power. Montross also affirmed the sustainability of Precast revenue growth, citing continued strength in the residential market and an expected recovery in the nonresidential sector as interest rates fall.

Brent Thielman of D.A. Davidson & Co. asked about the revenue visibility for the wind business heading into 2026 and the specific market changes that prompted the decision to convert a wind tower facility to produce utility structures.

Answer

President and CEO Antonio Carrillo expressed confidence in the 2026 outlook for wind, noting that while two plants need orders for 2026, they are actively working with customers and expect to fill that capacity. He explained the plant conversion was driven by accelerating demand for utility structures, faster permitting, and a trend toward larger poles, which fits Arcosa's manufacturing strengths. CFO Gail Peck added that it is a capital-efficient conversion of an idle plant into a high-growth, high-return business.

Brent Thielman inquired about the sustainability of the 18%+ EBITDA margins in Engineered Structures, the financial impact of selling tax credits, the seasonal ramp-up of the Stavola acquisition, and the outlook for barge orders given steel price volatility.

Answer

CFO Gail Peck estimated the potential loss on tax credit sales at approximately $2 million per quarter. CEO Antonio Carrillo stated the margin target for utility structures is around 15%, with accretive results from Amaron and wind. He confirmed the Stavola ramp-up is on track with strong bidding activity. Regarding barges, Carrillo noted that while steel prices are high, demand is not strong enough to support them, and he sees significant underlying replacement demand for both tank and dry barges.

Brent Thielman asked about the Q4 and 2025 outlook for Engineered Structures, particularly wind delivery growth, and inquired about the remaining barge production capacity for 2025.

Answer

Executive Gail Peck stated that with the Berlin facility fully ramped, Arcosa expects solid revenue growth from wind in 2025 and for wind to become a slightly larger, margin-accretive share of the segment. Executive Antonio Carrillo addressed the barge business, stating that tank barge capacity is fully booked for 2025, with hopper barge capacity booked into Q3 2025. He noted this backlog provides flexibility to focus on margins ahead of an expected strong multiyear replacement cycle.

Brent Thielman of D.A. Davidson & Co. inquired about the pace of construction revenue growth in the first half, given the record-high CAP, and asked about the sustainability of the notable profit margin expansion in the materials segment.

Answer

President and CEO Kyle Larkin clarified that construction revenue timing is linked to project start and finish dates and anticipates an acceleration in the second half of the year, supported by the $6.1 billion CAP. For the materials segment, Larkin attributed the strong margin performance to significant volume increases in asphalt and aggregates, driven by public markets, and noted the company is tracking well ahead of its full-year margin improvement goals for both materials and construction.

Brent Thielman of D.A. Davidson inquired about the pace of construction segment growth in the first half of the year, given the rising CAP, and asked about the sustainability of the significant profit margin expansion in the materials segment.

Answer

President and CEO Kyle Larkin explained that the revenue pace is related to project start and finish timing, and he anticipates an acceleration in the second half due to a record CAP of $6.1 billion. He noted that materials margin expansion is tracking well ahead of the 3% minimum target for the year, driven by strong public market demand and volume increases in asphalt and aggregates. Larkin also confirmed the construction segment is exceeding its margin expansion goal of 1% or greater.

Brent Thielman of D.A. Davidson inquired about the pace of revenue growth in the Construction segment during the first half, questioning if it was slower than expected given the rising CAP, and asked about the sustainability of the notable profit margin expansion in the Materials segment.

Answer

President and CEO Kyle Larkin explained that first-half revenue timing is related to project starts and finishes, and he anticipates an acceleration in the second half, supported by a record $6.1 billion in CAP. For the Materials segment, he confirmed that strong volume increases in asphalt and aggregates are driving margin expansion, which is tracking well ahead of their full-year improvement targets.

Brent Thielman of D.A. Davidson & Co. inquired about the pace of construction segment revenue growth in the first half and the sustainability of the notable materials profit margin expansion seen in the quarter.

Answer

President and CEO Kyle Larkin explained that first-half construction revenue reflects project start and finish timing, and he anticipates an acceleration in the second half due to a record $6.1 billion in Committed and Awarded Projects (CAP). Regarding materials margins, Larkin highlighted strong volume growth in aggregates and asphalt, driven by public markets, and noted the company is tracking well ahead of its full-year margin improvement targets for both the Materials and Construction segments.

Brent Thielman of D.A. Davidson & Co. inquired about the construction segment's growth pace in the first half of the year and the sustainability of the significant profit margin expansion observed in the materials business.

Answer

President and CEO Kyle Larkin explained that construction revenue timing is influenced by project starts and finishes, with an acceleration expected in the second half due to a record Committed and Awarded Projects (CAP) balance. Regarding materials, he attributed the strong margin performance to sustainable factors like increased volumes in both asphalt and aggregates, driven by a healthy public market, and successful execution of the company's strategic plan. Larkin noted both segments are tracking well ahead of their full-year margin expansion targets.

Brent Thielman of D.A. Davidson inquired about the pace of growth in the construction segment during the first half of the year and the factors influencing the notable profit margin expansion in the materials business, questioning its sustainability.

Answer

President and CEO Kyle Larkin explained that the construction revenue pace was due to project start and finish timing, but he anticipates acceleration in the second half, supported by a record $6.1 billion in Committed and Awarded Projects (CAP). Regarding materials margins, Larkin highlighted strong volume growth (over 10%) driven by public markets and confirmed the company is tracking well ahead of its full-year margin improvement targets for both the materials and construction segments.

Brent Thielman of D.A. Davidson & Co. inquired about the strength of the current bidding environment, the potential trajectory for Committed and Awarded Projects (CAP), and the key drivers behind the strong Construction segment margins despite weather challenges.

Answer

President and CEO Kyle Larkin confirmed that the public market is particularly strong, fueled by the IIJA, and he expects the record-high CAP balance to continue increasing throughout the year. Larkin attributed the robust Construction margins to improved project execution and a higher-quality project portfolio, stating the company is on track to improve the segment's gross profit margin by at least 1% in 2025 over 2024.

Brent Thielman inquired about the specific causes for project delays into 2025, sought clarification on the baseline year for the 2027 organic growth target, and asked about the confidence behind the 2025 materials pricing expectations.

Answer

CEO Kyle Larkin stated that minor, owner-driven project delays are not abnormal and the work remains in CAP, providing momentum for 2025. He clarified the 6-8% organic CAGR target uses 2024 as the baseline. Larkin expressed confidence in achieving high single-digit aggregate price increases in 2025, citing strong public market visibility from IIJA funding, a recovery in private markets, and rising 2025 asphalt order volumes.

Brent Thielman of D.A. Davidson asked which specific markets were performing exceptionally well and whether the company's acquisition strategy would need to evolve to capitalize on future private market growth, such as from manufacturing reshoring.

Answer

CEO Jule Smith highlighted strong growth across numerous Sunbelt markets, including Florida, Texas, and the Carolinas, driven by migration and robust state funding. He noted that the reshoring of American manufacturing is a significant future tailwind. He affirmed that the current acquisition strategy remains perfectly aligned, as the pipeline consists of traditional targets like good construction and service companies that fit their vertically integrated model and are located in these high-growth areas.

Brent Thielman from D.A. Davidson asked for the updated CapEx guidance, the current sentiment among potential M&A sellers, the company's approach to balance sheet management, and which state markets appear most promising based on budgets.

Answer

CFO Gregory Hoffman reiterated the full-year CapEx guidance of $130-$140 million. Executive F. Smith characterized the M&A pipeline as active, with seller motivations focused on long-term planning. Hoffman outlined the plan to use strong cash flow for debt reduction to meet leverage targets, while maintaining cash at 3-5% of revenue. F. Smith described all state markets as healthy, with Texas and Florida being particularly strong, and noted a 'snowball effect' in contract awards across their footprint.

Brent Thielman asked for clarification on the second-half margin outlook, the timeline for the Bowman Innovation Growth (BIG) Fund, and how evolving data center demands are impacting customer engagements.

Answer

CFO Bruce Labovitz stated that while Q2's margin was a strong indicator, some labor inflation is expected, but the second-half collective margin should still be higher than the first half. He described the BIG Fund's capital deployment as 'opportunistically open-ended,' with pilot programs already underway. CEO Gary Bowman explained that the data center business is evolving from site development to encompassing the entire energy infrastructure, a shift accelerated by the E3i acquisition.

Brent Thielman questioned the reliability of the 70-80% backlog conversion rate, asked if economic uncertainty was slowing M&A deal flow, and inquired about how AI is currently impacting the business and its competitive position.

Answer

CFO Bruce Labovitz confirmed the 70-80% backlog conversion rate within 12 months remains a good rule of thumb, though it may lengthen slightly as project sizes grow. Executive Gary Bowman stated that economic noise has not noticeably affected M&A dialogues, with no signs of distress selling or seller hesitation. Regarding AI, Bowman explained that while the company is beginning to integrate it, the technology has not yet fundamentally changed its operations or market position.

Brent Thielman asked about the specific verticals driving the stronger-than-usual new orders, the reasons for the dip in the building infrastructure backlog, the company's capital allocation priorities between M&A and share buybacks, and the current status of integrating recent acquisitions.

Answer

CFO Bruce Labovitz stated that the strong new orders were broad-based across all markets, not concentrated in one area. He explained that the building infrastructure backlog can fluctuate due to its quicker project-turn characteristic. On capital allocation, Labovitz described it as an 'and' decision, not 'either/or,' balancing M&A, buybacks, and internal tech investments. He confirmed that acquisition integrations are progressing well, with most systems and operations fully integrated.

Brent Thielman of D.A. Davidson & Co. questioned the key levers for achieving the implied margin expansion in the 2025 guidance and asked for an update on the building infrastructure market, particularly regarding residential trends and expectations for reacceleration.

Answer

CFO Bruce Labovitz and Executive Gary Bowman cited several levers for margin expansion: achieving greater economies of scale, better overhead cost control, marginal improvements in contract multipliers, and a renewed focus on operational excellence. They pointed out that the Q3 margin of 16.7% is already within the 16-17% target range for 2025. On building infrastructure, Gary Bowman described the market as stable and stated that based on a notable uptick in proposal activity, they see "new energy" and anticipate an acceleration in 2025.

Brent Thielman of D.A. Davidson & Co. asked about the outlook for the Oregon market, the impact of larger jobs on backlog margins, and the sustainability of the strong aggregates pricing seen in the quarter.

Answer

CEO Brian Gray explained that Oregon's legislative funding issues are unlikely to be resolved in time to benefit 2025. He attributed lower backlog margins to a revenue mix shift away from high-margin Oregon and the nature of larger projects. Gray confirmed the Strata acquisition guidance is on track and credited strong aggregates pricing to disciplined dynamic pricing initiatives, which supported an increase in the full-year pricing outlook.

Brent Thielman asked about the resilience and pressure points in private construction markets across Knife River's territories, and requested an update on the integration of the Strata acquisition.

Answer

President and CEO Brian Gray identified Hawaii, California, and Texas as strong private markets, while noting pressure primarily in Oregon. Gray stated the Strata integration is proceeding very well, is accretive to margins, and is a key driver behind the company's increased full-year guidance, which was timed well with new infrastructure funding in North Dakota.

Brent Thielman of D.A. Davidson & Co. inquired about which regions and product lines are expected to see the most significant margin improvement in 2025 from internal initiatives, excluding the Strata acquisition. He also asked for an expansion on the noted increase in private work opportunities.

Answer

President and CEO Brian Gray responded that while all regions are improving, the aggregates product line offers the most opportunity for margin expansion. Geographically, he highlighted the newly formed West segment (formerly Pacific) as having the most upside. Regarding private work, Gray noted a significant increase in bidding activity for subdivisions, data centers, and energy projects, with the majority of the volume impact anticipated in the second half of 2025.

Brent Thielman from D.A. Davidson sought details on the key drivers behind the strong Q2 bookings in the Utility segment, the status of the fixed-price power delivery project pipeline, and the outlook for the pipeline business.

Answer

EVP & CFO Ken Dodgen attributed strong Utility bookings to broad-based MSA growth, particularly in power delivery, with gas and communications now expected to see mid-single-digit growth. Chairman & Interim CEO David King added that the fixed-price power delivery pipeline is robust, with bookings expected in late Q3 or Q4. Regarding the pipeline business, management will be opportunistic, potentially growing revenue to $500-600 million, but sees it as more of a 2026-2027 opportunity.

Brent Thielman of DA Davidson & Co. questioned what variables could drive Utilities segment margins above the target range and asked to size the potential for natural gas generation project bookings.

Answer

Chairman and Interim CEO David King explained that continued margin progress in Utilities is not dependent on booking more project work, though growth could accelerate with supply chain improvements. He also revealed that Primoris is currently vetting close to $1 billion in natural gas projects tied to data centers.

Brent Thielman questioned the strategy of shifting transmission resources to renewables projects and its potential impact on the standalone power delivery business. He also asked about the catalysts for a pickup in the pipeline market.

Answer

CEO Tom McCormick clarified that they are self-performing substation and interconnect work on renewables projects, which enhances their offering without handicapping the core power delivery business; in fact, it builds competencies. Regarding pipelines, he explained that the growing need for natural gas to fuel new power generation plants and support LNG facilities is driving project discussions and activity.

Brent Thielman asked if the company will have fully lapped the headwinds in the Power delivery business by 2025. He also inquired about the internal strategy to support the continued growth of the solar business, which is now a much larger part of the company.

Answer

CEO Tom McCormick clarified that the improvements in the Power business are part of a multi-year plan and will continue through 2025, with targets likely being met in late 2025 or 2026. For the solar business, he emphasized a strategy of disciplined organic growth, focusing on select clients and contracts, while also expanding complementary offerings like battery storage and O&M services. He added that any acquisitions would be small and targeted to supplement their EPC capabilities.

Brent Thielman of D.A. Davidson asked for an update on MasTec's direct work for data centers, inquiring about the size of the business and whether the company is investing to scale its capabilities in this area.

Answer

CEO José R. Mas confirmed that MasTec is investing to grow its data center-related work, which has expanded from civil work to include associated power and telecom infrastructure. He stated that the company is more optimistic than ever about the long-term opportunities in this market and expects to provide more specific details on services in the coming quarters.

Brent Thielman from D.A. Davidson asked where the company sees the most potential to outperform its 2025 growth outlook, aside from the pipeline segment. He also inquired about the visibility and confidence in sustained strength for the wireless business beyond 2025.

Answer

CEO Jose Mas pointed to the strong non-pipeline growth (14% revenue, 26% EBITDA) and suggested the outlook may be conservative for renewables, the ramp-up of new communications contracts, and the Greenlink project. For wireless, he expressed long-term bullishness, citing the multi-year AT&T network swap and the eventual return of spending from Verizon and T-Mobile, for which MasTec is well-positioned.

Brent Thielman of D.A. Davidson & Co. inquired about a sustainable long-term cash flow conversion rate and asked if the recent Lumen win indicates a rebalancing of the Communications segment toward wireline.

Answer

CFO Paul Dimarco projected a sustainable long-term cash conversion rate of 60% to 65% of adjusted EBITDA. CEO Jose Mas confirmed that the Communications segment's significant growth over the past three years has been primarily driven by wireline, a trend he expects to continue, though he also anticipates a recovery in wireless spending.

Brent Thielman of D.A. Davidson asked for clarification on the drivers for the expected Q3 sequential margin expansion and questioned the sustainability of the 30% growth rates seen in Flex and climate-controlled solutions.

Answer

EVP & CFO Matthew Jacobsen attributed the expected 50-100 basis points of Q3 margin expansion to ongoing improvements in delivery and installation margins from insourcing initiatives and some SG&A leverage, similar to the drivers seen from Q1 to Q2. President & COO Timothy Boswell addressed the high-growth products, stating that while a 30% rate may not be sustained indefinitely, the order book for Flex remains encouraging, and order rates for climate-controlled storage were up 60% YoY, indicating continued strong trends.

Brent Thielman of D.A. Davidson & Co. sought to understand the drivers behind the modular segment's exit rate for units on rent and utilization, which he found surprising. He also asked what level of rate growth is factored into the 2025 guidance for the storage business.

Answer

President & COO Timothy Boswell explained that the lower starting point for modular units on rent was due to activation levels between Q3 and Q4 2024, but noted that current quarter-to-date activity is in line with their forecast. CFO Matt Jacobsen addressed storage rates, stating that assumptions for core container rate growth are subdued compared to prior years. He indicated the base case assumes a modest increase in core rates, with an additional contribution from VAPS penetration.

Brent Thielman of D.A. Davidson & Co. asked about the Mission and Technology Solutions (MTS) segment, inquiring if a more robust second-half bookings environment is expected and what key developments are needed to support the revised 2027 growth targets for the segment.

Answer

President & CEO Stuart Bradie stated that an increased award cadence is a reasonable expectation for the second half, given the record pipeline and forthcoming budget resolutions. EVP & CFO Mark Sopp added that timing could be affected by staffing changes in government contracting offices. To achieve 2027 targets, Bradie and Sopp highlighted the importance of pipeline conversion, growth from a lower post-EUCOM base, increased international defense spending, and capturing opportunities from the Reconciliation Act, which directs funds to KBR's core RDT&E and O&M areas.

Brent Thielman from D.A. Davidson & Co. asked for a breakdown of the 2025 revenue outlook, specifically the contributions from HomeSafe and LinQuest, and inquired about the success of the Plaquemines LNG project opening up discussions with other potential clients.

Answer

EVP & CFO Mark Sopp detailed the 2025 revenue growth, attributing approximately 5 percentage points each to HomeSafe ($300M-$500M) and the LinQuest acquisition (around $400M). He noted the LinQuest integration is performing well. President & CEO Stuart Bradie added that the success at Plaquemines and strong global demand for LNG are leading to increased early engagement from multiple customers, including new market entrants and those with existing facilities looking to expand.

Brent Thielman questioned the key drivers of the Marine segment's strong Q2 profitability, the project mix for the second half, the potential timing of federal military contract awards, and the company's confidence in building backlog amid private sector hesitation.

Answer

CEO Travis Boone attributed the Marine segment's strong performance to multiple large projects contributing simultaneously, not just the two major ones from last year. He confirmed that while the Hawaii and Grand Bahama projects will wind down later, other projects are ramping up to smooth the transition. Regarding military opportunities, Boone stated that award timings have shifted, with nothing expected in the current fiscal year. Despite some private sector delays, he remains optimistic about building backlog through the end of the year.

Brent Thielman questioned the drivers of the Q1 loss in the Concrete segment and whether the outlook assumes a return to profitability. He also asked if the company expects a back-half weighted year for earnings and if the balance sheet is positioned to support large new projects.

Answer

CFO Scott Thanisch attributed the Concrete segment's Q1 loss to typical seasonality and lower productivity, confirming that the business is expected to return to profitability as the year progresses. He affirmed the expectation for a back-half weighted year and stated the balance sheet is strong, with no draws on the revolver and $40-$60 million of capacity to fund growth.

Brent Thielman asked how the increased 2025 CapEx would be funded, questioning if it would come from operating cash flow. He also inquired about the expected quarterly sequencing of results in 2025, the potential for the Concrete segment to reach its high single-digit margin target this year, and whether federal budget issues were causing bidding delays for Pacific projects.

Answer

CFO Scott Thanisch stated that the increased CapEx is expected to be funded largely by operating cash flow. CEO Travis Boone outlined the 2025 cadence as a buildup from Q1 through Q3, with Q4 potentially being less strong than the prior year as a major project concludes. Regarding Concrete margins, Boone believes they will get close to the target but may not fully reach it in 2025, with Thanisch adding that increased scale is the final step. Thanisch also confirmed they have not seen government spending concerns delay the timing of bids for Pacific projects.

Brent Thielman inquired about the long-term vision for the planned U.S. manufacturing facility, asking if it would be complementary or as large as the current operations. He also asked about commercial order trends since the end of the quarter and whether the incoming order backlog was showing increased geographic diversification.

Answer

Executive Christian Daes described the planned U.S. facility as complementary, starting with producing billets and eventually expanding, with a long-term goal of it representing 30-40% of future growth. CFO Santiago Giraldo added that residential orders were up 17% year-over-year since the quarter's end. Executive Jose Daes confirmed that business is "booming," with strong deal flow both within Florida and in new regions like Washington, New York, Boston, and Texas, leading to continued backlog growth and diversification.

Brent Thielman of D.A. Davidson & Co. asked about the momentum of single-family residential growth into Q1 2025, the business contribution from smaller commercial projects, and whether there is a noticeable geographic shift in new commercial orders beyond the Southeast.

Answer

Executive Jose Daes described early 2025 single-family growth as "extraordinary" compared to the prior year. CFO Santiago Giraldo quantified lighter commercial projects as roughly 20-25% of total commercial revenue, with activity remaining stable. Jose Daes also confirmed strong demand from other states, including New Jersey, New York, Washington, California, and Texas, indicating geographic expansion.

Brent Thielman requested more detail on the constructive outlook for the International Solutions business and how CRH sees the rest of the year playing out for that segment.

Answer

Executive Jim Mintern explained that the positive outlook is driven by several factors. He noted a recovery from trough activity levels in Western Europe, continued strong growth in Central and Eastern Europe underpinned by EU infrastructure funding, and early signs of a residential recovery in some markets. This, combined with commercial excellence and self-help measures, supports the division's performance.

Brent Thielman of D.A. Davidson & Co. asked about the durability of state-level infrastructure funding. He inquired about the risk of states reallocating funds away from transportation projects if their tax revenues were to see a shortfall.

Answer

Chair and CEO Ward Nye expressed strong confidence in state funding, noting that 8 of Martin Marietta's top 10 states have increased their DOT budgets year-over-year. He provided specific examples: Texas's 10-year program is up to $104 billion, Colorado has $3.7 billion available for FY25, and North Carolina has a mechanism to shift sales tax revenue to its highway fund. Nye emphasized that the company's strategy since 2010 has been to focus on states with strong fiscal conditions, which is now proving to be a key advantage.

Brent Thielman asked about the Midlothian cement plant expansion, specifically whether the company expects to sell out the new capacity in 2025 or if a ramp-up period should be anticipated.

Answer

CEO C. Nye confirmed that there will be a ramp-up period for the new capacity. He stressed the importance of the North Texas market and stated that the company will be very methodical and thoughtful in bringing the incremental volume to market over time, rather than all at once next year.

Brent Thielman from D.A. Davidson & Co. asked about the potential impact of tariffs and supply chain disruptions on contracts and whether recent weather patterns had caused unusual seasonal business effects.

Answer

Frank Renda, President & CEO, stated that tariffs are not expected to have a material impact, as most projects already require 'Made in America' materials and the company works to lock in material pricing early. Regarding seasonality, both Renda and CFO Cody Gallarda acknowledged some unusual weather, such as snow in Texas. However, they explained that the geographic diversity of their active projects helps mitigate widespread disruptions, and they do not foresee a significant impact on overall operations.

Brent Thielman inquired about the history of the non-M&P legacy projects, the company's capacity to take on new business given its current capital structure and bonding capacity, and whether cash flow should accelerate as new core projects ramp up.

Answer

President and CEO Frank Renda stated the non-M&P legacy projects were from the 2018-2019 timeframe and should be complete in 2025, noting the Civil segment performed well outside of these. He affirmed they will be highly selective with new work. EVP and CFO Cody Gallarda highlighted the company's strong cash position and confirmed a high probability of cash flow acceleration as new, smaller, quicker-turn projects bridge the gap to larger ones starting.

Brent Thielman asked for a pro forma cash balance after recent transactions, an update on non-M&P legacy projects in the Transportation segment, and the remaining risks associated with executing the M&P backlog.

Answer

CFO Cody Gallarda clarified that the real estate transaction netted about $25 million in cash after debt paydown but did not provide a full pro forma balance. CEO Frankie S. Renda identified a legacy bridge project in the Midwest as the source of a write-down, noting it's scheduled to open in November. Cody Gallarda added that while M&P operational work will finish by mid-2025, claim pursuits may continue, but they expect to collect what is recorded on the balance sheet.

Brent Thielman of D.A. Davidson Companies inquired about the methodology for the 2025 revenue guidance, the impact of a longer backlog conversion cycle from larger projects, and whether the company expects its book-to-bill ratio to remain above 1x in 2025. He also asked about any changes to revenue seasonality.

Answer

Executive Jeff Thiede explained that an increase in large, complex projects, particularly in data centers, is extending the backlog conversion timeline. He also expressed optimism about market demand and the company's ability to grow its bookings. Regarding seasonality, Thiede noted that the company is not significantly impacted by weather and works year-round, implying no major shifts in cadence. Executive Maximillian Marcy added that the backlog burn rate could differ by up to 10 percentage points from historical norms due to the project mix.

Brent Thielman asked about the sources of strong E&M bookings versus weaker T&D backlog, performance in slower commercial markets, the margin profile of new contracts, and the M&A pipeline strategy.

Answer

CEO Jeff Thiede attributed strong E&M bookings to high demand in data centers and institutional markets, explaining the T&D backlog softness as a matter of project timing. He noted the company's ability to pivot resources from completed projects to growth areas. Thiede also stated that margin enhancement comes from disciplined project selection, favorable contract terms, and execution via their 'repeatable playbook.' On M&A, he confirmed they are seeking culturally aligned companies to expand geographically or strengthen market position, emphasizing a focus on the right value and metrics.

Brent Thielman asked for a bridge to explain the expected decline in net interest income from $150 million in 2024 to $80 million in 2025. He also inquired about the timing of a potential inflection point in the Energy Solutions backlog, wondering if it could occur in 2025.

Answer

Incoming CFO John Regan explained the lower interest income is due to the impact of the share repurchase program and, most significantly, the repatriation of large cash balances from joint ventures back to the JV partners, which had previously been earning interest for the consolidated company. Regarding the Energy Solutions backlog, COO James Breuer stated that 2025 is a 'reloading year' and that an upward inflection is more likely in 2026, as the timing of final investment decisions (FIDs) for large projects ultimately rests with clients.

Brent Thielman inquired about the status of the wallboard price increase planned for early 2025, asked about any extraordinary costs in the cement segment, and questioned if adverse weather was impacting the current quarter.

Answer

CFO D. Kesler confirmed a wallboard price increase was announced for early February but avoided speculating on realization. He highlighted that cement margins were impacted by an $8 million headwind from two large, non-typical maintenance projects. He noted that while weather is a factor in the current quarter, January is always a difficult month to use for trend analysis.

Brent Thielman from D.A. Davidson & Co. asked for clarification on the Wallboard price increase delay, sought qualitative details on cement backlogs and visibility for 2025, and questioned if the Texas Lehigh maintenance would lead to a normal investment cycle.

Answer

CFO Craig Kesler attributed the Wallboard pricing timing to multiple factors, primarily the need for clarity on single-family construction demand. Executive Michael Haack noted that while Eagle doesn't carry formal cement backlogs, project discussions remain positive. Mr. Kesler added that the Texas Lehigh clinker cooler replacement is a major, infrequent project that should significantly improve the plant's reliability, implying a return to a more normal maintenance cadence thereafter.

Brent Thielman of D.A. Davidson & Co. inquired about the quality and mix of the Everus backlog, its impact on future margins, and potential headwinds from weaker construction sectors.

Answer

Jeffrey Thiede, President and CEO of Everus, explained that the record backlog is diversified across data centers, semiconductors, and industrial projects. He noted that while the market is competitive, margins are comparable and can be enhanced through operational excellence. Thiede also highlighted Everus's ability to pivot resources from slowing markets, like Las Vegas hospitality, to high-growth areas.

Asked for clarification on the expected sequencing of Aggregates demand throughout the year, particularly if volume pressure would continue in Q2 before flattening in the second half.

Answer

The analyst's view is correct. The full-year Aggregates volume guide is down low-single-digits, with a path to flat. Q2 may still see some pressure due to Q1 weather and a slow April. A recovery is expected in the second half, especially in Q3. The guidance is conservative and does not include potential upside from weather catch-up or an interest rate-driven recovery in private markets.