Philip Kranz - IR, Dresder Corporate Services Bill Koertner - President & CEO Paul Evans - VP & CFO Rick Swartz - SVP & COO.

Noelle Dilts - Stifel Tahira Afzal - KeyBanc Capital John Rogers - D.A. Davidson Dan Mannes - Avondale Partners Adam Thalhimer - BB&T Capital Markets Alex Rygiel - FBR William Bremer - Maxim Group.

Good morning, everyone, and welcome to the MYR Group First Quarter 2015 Earnings Results Conference Call. Today's conference is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Mr. Philip Kranz of Dresner. Please go ahead, sir..

Thank you, and good morning, everyone. I'd like to welcome you to the MYR Group conference call to discuss the company's first quarter results for 2015, which were reported yesterday.

Joining us on today's call are Bill Koertner, President and Chief Executive Officer; Paul Evans, Vice President and Chief Financial Officer; and Rick Swartz, Senior Vice President and Chief Operating Officer.

If you did not receive yesterday's press release, please contact Dresner Corporate Services at 312-726-3600 and we will send you a copy or go to www.myrgroup.com, where a copy is available under the Investor Relations tab.

Also, a replay of today's call will be available until Wednesday, May 13, 2015, at 11:59 PM Eastern Time by dialing 855-859-2056 or 404-537-3406 and entering conference ID 26840051. Before we begin, I want to remind you that this discussion may contain forward-looking statements.

Any such statements are based upon information available to MYR Group management as of this date and MYR assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.

Accordingly, these statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2014, the company's Quarterly Report on Form 10-Q for the first quarter of 2015 and in yesterday's press release.

Certain non-GAAP financial information will be discussed on the call today. A reconciliation of this non-GAAP information to the most comparable GAAP measure is set forth in yesterday's press release. With that said, let me turn the call over to Bill Koertner..

Good morning, everyone. Welcome to our first quarter 2015 conference call to discuss financial and operational results. I'll start by providing a brief summary of our first quarter results and then turn the call over to Paul Evans, our CFO, for a more detailed financial review.

Following Paul's discussion, Rick Swartz, our Chief Operating Officer, will provide an overall industry outlook and discuss some of MYR Group's opportunities going forward. I will then conclude with some closing remarks and open the call up for your comments and questions.

First quarter 2015 financial results were highlighted by increases in revenue, gross profit, EBITDA, net income and diluted EPS compared to the first quarter of 2014. Year-over-year, revenues increased 13.2%, while net income and diluted earnings per share rose 14.3% and 17.2%, respectively.

Additionally, we repurchased just under 73,000 shares of common stock while continuing to invest in the company's long-term future through the purchase of additional specialty equipment. Also, our balance sheet remains strong with a cash balance of just under $62 million and borrowing capacity of $156 million at the end of the quarter.

In the early part of the second quarter in April, we acquired substantially all of the assets of E.S. Boulos, one of New England's largest and most experienced electrical contractors, which will enhance our T&D presence in the Northeast and further expand our C&I presence outside of our existing markets.

We are excited with the immediate value this acquisition brings us and are pleased to welcome E.S. Boulos and its well-respected leadership team and skilled employees to our family of companies. This is the second asset purchase in about 18 months following the one we made in Alaska during the third quarter of 2013.

Looking ahead, we remain optimistic about the long-term outlook for both our T&D and C&I business segments and we are encouraged by the momentum we've experienced thus far in 2015.

We believe our commitment to developing a strong team of management and craft employees, investment and specialty equipment, existing customer relationships, commitment to safety and strong financial position should enable us to take advantage of growth opportunities going forward, both organic and through acquisitions.

Now Paul will provide details on first quarter 2015 financial results..

Thank you, Bill, and good morning, everyone. Before I get into the first quarter results, I'd like to provide some additional details about the E.S. Boulos acquisition. To supplement the previously disclosed information at the purchase date, E.S. Boulos had approximately $36 million in backlog. Going forward E.S.

Boulos, outside electrical work and backlog will be reported as part of our T&D segment. And the inside electrical work and associated backlog will be reported as part of our C&I segment. Now let's move on to our Q1 2015 results.

We enjoyed a strong first quarter in 2015, highlighted by increases in revenues, gross profit, net income, earnings per share and EBITDA compared to 2014. Our revenues for the first quarter of 2015 were $244.1 million, which represented $28.5 million or 13.2% increase compared to the same period in 2014.

The increase was primarily due to higher T&D revenues from jobs of all sizes. On a consolidated basis, material and subcontractor costs comprised approximately 27% of total contract costs in the first quarter of 2015 as compared to approximately 26% in the first quarter of 2014.

Compared to the 2014 first quarter, T&D revenues increased $27.2 million to $189.2 million, while C&I revenues increased $1.3 million to $54.9 million. Focusing on the T&D segment; revenues were $147.9 million for transmission and $41.3 million for distribution in the first quarter of 2015.

This compares to $134.2 million for transmission and $27.8 million for distribution for the first quarter of 2014. The increase in transmission revenue was primarily due to increased work on small to medium sized projects, while the increase in distribution revenue was due to a broad-based increase in distribution work.

Material and subcontractor costs in our T&D segment comprised approximately 23% of total contract cost in the first quarter of 2015 compared to approximately 20% in the first quarter of 2014. In the first quarter of 2015, revenues from our transmission business were 78.2% of total T&D revenues compared to 82.8% in the first quarter of 2014.

In the first quarter of 2015, T&D revenues from our distribution business were 21.8% of total T&D revenues compared to 17.2% in the first quarter of 2014. C&I revenues increased by 2.5% to $54.9 million in the first quarter of 2015 from the first quarter of 2014.

Material and subcontractor costs in our C&I segment comprised approximately 41% of total contract cost in the first quarter of 2015 compared to approximately 47% in the first quarter of 2014. Our overall gross profit in the first quarter of 2015 was $29.4 million compared to $27.1 million in the first quarter of 2014.

Our gross margin was 12% in the first quarter of 2015 compared to 12.6% in the same quarter of 2014. First quarter 2015 and 2014 gross margins included net benefits of approximately 1.5% and 1.7% respectively.

These net benefits resulted from improved contract margins on several projects, primarily transmission projects; cost efficiencies, additional work and effective contract management.

The increase in gross profit was partially offset in the first quarter of 2015 by lower equipment utilization, as several large transmission projects were wrapped up or were nearing completion and lower storm revenues.

Our financial results for the three months ended March 31, 2015, also benefit from margin adjustments due to change orders and project closeouts. It is unlikely that future periods will benefit to a similar extent from such favorable developments.

First quarter 2015 SG&A expenses were $18.6 million compared to $16.9 million in the first quarter of 2014. This was primarily due to a higher personnel cost to support operations, costs associated with the E.S. Boulos acquisition and higher stock compensation costs.

SG&A as a percentage of revenues was 7.6% for the first quarter of 2015, down from 7.9% for the first quarter of 2014. First quarter 2015 EBITDA was $20.5 million compared to $18.2 million in the first quarter of 2014.

Our provision for income taxes increased to $4.2 million in the first quarter of 2015 compared to $3.7 million in the same quarter of 2014. Our effective tax rate for the first quarter of 2015 was 36.9% compared to 37.3% in the first quarter of 2014.

The decrease in the effective tax rate was primarily caused by lower state taxes due to changes in the mix of business between states. First quarter 2015 net income was $7.2 million or $0.34 per diluted share compared to $6.3 million or $0.29 per diluted share in the first quarter of 2014.

We invested $16.4 million in property, plant and equipment in the first quarter of 2015 compared to $12.4 million in the first quarter of 2014. We expect our total 2015 capital expenditures will be similar to the levels of the last two years.

Total backlog at March 31, 2015, was $398.4 million consisting of $275.6 million in the T&D segment and $122.8 million in the C&I segment. Total backlog at March 31, 2015, decreased by $35.2 million from the $433.6 million reported at December 31, 2014. T&D backlog decreased $44.8 million or 14%, while C&I backlog increased $9.6 million or 8.4%.

The decrease in T&D backlog at March 31, 2015, was due to a completion of work during the quarter that was not replaced. Moving to the balance sheet, stockholders' equity increased to $329.3 million at March 31, 2015, from $322.6 million at December 31, 2014.

A return on equity for the 12 months ended March 31, 2015, was 12.4% as compared to 12.9% for the prior year period. And our return on invested capital for the 12 months ended March 31, 2015, was 15.1% compared to 14.1% for the prior year period.

At March 31, 2015, we had approximately $61.8 million in cash and cash equivalents, no outstanding funded debt and $155.7 million in availability under our credit facility. In the first quarter of 2015, we spent approximately $1.8 million to purchase 72,706 shares of our common stock under the $25 million stock repurchase program.

At March 31, 2015, we had $7.5 million remaining authorization to purchase additional shares under the program, which runs through August of 2015. In conclusion, we had another solid quarter, with growth in revenues, gross profit, EPS and EBITDA, while expanding our geographic footprint through the acquisition of the E.S. Boulos company.

We believe our strong balance sheet and borrowing capacity will allow us to continue our organic growth initiatives, consider additional acquisitions and seek further ways to enhance shareholder returns. I'll now turn the call over to Rick, who will provide an overall industry outlook and our view of MYR's opportunities..

Thanks, Paul, and good morning, everyone. Our company is off to a good start in 2015 as our project teams execute T&D and C&I work across the country and our estimating teams pursue a steady flow of bidding opportunities.

We see strong activity in the markets we serve and remain committed to building on the momentum gained in our T&D and C&I segments from the success of recent projects along with our established reputation in the electrical construction industry.

MYR has benefited over the last five years from the unprecedented boom in transmission construction, which we believe will continue for at least the next five years and offers us continuing opportunities for success.

We also plan to capitalize on our expertise and customer relationships in key C&I end markets to expand geographically into new markets and with national clients. Our growth will continue to be both organic and through a strategy of selective acquisition, supported by an experienced management team.

We recently announced the strategic acquisition of the E.S. Boulos company. Like our other subsidiary companies, E.S. Boulos has established a solid reputation over several decades for their reliable delivery of electrical construction services. ESB's commercial and industrial offerings expands MYR's C&I market segment into a new geographic area.

And the company's power line services enhances MYR's current T&D operations throughout the Northeast. ESB brings immediate value to our operations through its resources and industry expertise. And it strengthens our positions in the markets that we believe hold excellent near and long-term growth potential.

In late April, we also executed our first contract to perform construction services in Canada through our subsidiary MYR Transmission Services Canada.

The project has a contract value less than 40 million Canadian dollars and is referred to as the Keewatinoow switchyard for Manitoba Hydro, which is a large 230 kV switchyard for the converter stations located in Northern Manitoba and is associated with the Bipole III transmission project.

The project is expected to start in the fall of 2015, with completion expected in the spring of 2017. We believe this project will offer MYR Group a great opportunity to expand our operational presence in Canada. We believe that the U.S.

and Canadian T&D markets will remain robust for the foreseeable future with increased capital spending driven by the necessity to replace aging infrastructure, integrate new and renewable generation sources and comply with governmental policy mandates.

In the first quarter, there were a number of announcements regarding planned investments in T&D projects throughout the U.S.

In the Western U.S., the planning entity for the Western Regional Transmission Grid, WestConnect, announced their 10-year transmission plan, including 183 transmission projects in 9 Western states, representing a capital investment of $13.3 billion.

In total, the line project and their 10-year plan represent over 5,000 miles of transmission and include work on 39 separate substation projects. In the Midwest, we were pleased to see the Kansas-based Westar Energy's first quarter announcement of plans to invest up to $1 billion in transmission projects over the next five years.

This planned investment in their transmission system represents 1/3rd of their total planned capital budget over the five-year period. As we announced on our last quarterly call, we recently executed a new seven-year transmission and distribution service agreement with Westar Energy in Kansas.

We are actively tracking the plans for transmission expansion throughout the MISO grid system. This is largely driven by the necessity to connect wind energy resources in order to serve higher population areas of the region and achieve renewable generation goals.

In Texas, where we have a substantial operational presence, CenterPoint Energy announced in the first quarter that they will be moving forward on several planned transmission initiatives, including the 120-mile Houston Import Project, which will serve the load growth in the area.

Moving to the northeastern U.S., several announcements in the first quarter point to a very strong T&D market in the coming years.

ISO New England selected National Grid and Eversource Energy to provide a solution for the Greater Boston Reliability Project, which includes a series of new overhead and underground transmission lines and associated upgrades totaling about $740 million that will address reliability concerns in the Boston area and Southern New Hampshire.

At the same time, Eversource Energy announced they will spend approximately $4 billion on electric gas projects to meet the region's needs over the next four years. PSE&G in New Jersey announced that they will continue to spend about $2.4 billion annually over the next 3 years in their capital programs for infrastructure upgrades through 2017.

And Pennsylvania Power & Light announced spending up to $900 million per year through 2018, of which $500 million will consist of new lines, rebuilds, substations and security projects. We believe that all these regional announcements point to abundant opportunities for operating groups across the country.

Distribution work also remains plentiful due in part to the need to replace aging infrastructure. Reliability mandates, the improving housing market. We continue to benefit from the ongoing trend by utilities to outsource distribution work to contractor crews.

We see increased activity with a number of our current clients and anticipate ongoing bidding opportunities with additional clients on new initiatives throughout the U.S. Shifting to our C&I business, bidding opportunities in our key markets in both Colorado and Arizona remain strong.

Although bidding margins remain very competitive, our primary markets in healthcare, data centers, airports and industrial facilities continue to produce solid results as many of our long-term clients expand their existing facility and build in new locations.

As the country's economic conditions continue to improve, we are increasing our focus on C&I expansion in new regions. Outside of our traditional markets of Arizona and Colorado, we have teams executing projects in Nevada, Nebraska. And as a result of the E.S.

Boulos acquisition, we now have projects in Maine, Massachusetts, New Hampshire and Connecticut. We continue to build relationships in these areas that will increase our visibility and expand our opportunities.

Regarding expansion in new regions, we've added a C&I component to our T&D operations in Alaska and are scheduled to open a C&I district office in the Seattle, Portland region during the second quarter.

As we continue into 2015 and beyond, we are excited about the strength we see in the marketplace and the opportunities for MYR Group in our evolving industry. We anticipate continued success over the next several years through our steadfast commitment to safety and our pursuit of excellence in all aspects of our service.

Thanks to everyone for your time today. I'll now turn the call back to Bill, who will provide us with some closing comments..

Thank you for the update, Rick. Our solid first quarter performance combined with our long-term outlook gives us confidence that there are multiple avenues for us to achieve long-term growth across the U.S. and Canada. We promote a culture of excellence within our workforce and MYR's people are among the finest in the industry.

Our success depends on our commitment to maintain a safe workplace and providing quality construction services at competitive prices. Our growth strategy remains grounded in steadfast adherence to disciplined bidding, solid project execution, and risk management. These three business principles apply to organic growth as well as acquisitions.

Overall, we are pleased with our financial and operational performance and we remain very optimistic about MYR Group's long-term future and our ability to deliver value to our shareholders. On behalf of Paul, Rick and myself, I would like to thank you for joining us on the call today and for placing your continued confidence in MYR Group.

I look forward to updating you on our progress next quarter. Operator, we are now ready for questions and comments..

Thank you. [Operator Instructions]. Our first question comes from the line of Noelle Dilts with Stifel. Your line is now open. Your question please..

Hi. Good morning. The first thing I was hoping we could dig into a little bit more is just this E.S. Boulos acquisition. In the press release, you gave kind of like a five-year range of revenues and profitability.

Could you speak a little bit more to just the performance over the past couple of years and how things have been trending there?.

Noelle, I'll take that. When we talk about how you should look at this going forward, what I would suggest you do is come up with some amount within that range for total revenues. I suggest you take 60% of that going forward in our T&D segment and 40% of that in our C&I segment. I'd then suggest you – the other way around.

Then I suggest you take the operating margins you currently see in both of those segments and apply that to the revenues. I think that would be a good way of looking at the business going forward..

Okay. And then I think there was a little bit of disappointment. You've had some really nice T&D backlog growth over the last two quarters. We saw a little bit of a pause here.

Do you think this is just kind of the natural lumpiness in the market or – and just project timing or do you feel like there's been a bit of a change in the overall market and the conditions?.

Noelle, I haven't seen a change in the market, I mean, other than what we've previously said, which was kind of a shift from large projects and kind of that delay out of the large projects and a shift to probably mid and smaller size projects. I think we've seen that for the last year and a half. I don't think anything's changed that way.

The large projects are still out there. It's just when the permitting is done and I guess they're released, they'll be available to the marketplace. So haven't seen any major changes..

Okay. And then my last question. You guys talked a bit about seeing some favorable closeouts in the quarter and that was a benefit that you wouldn't expect to continue to the same degree.

Can you give us a sense of just how much of a benefit that was in the quarter and how to think about margins on an ongoing basis?.

First, I think we show you the net benefits. We called that out. I don't want to take it any deeper than that, but I think the margins going forward should – I would just take the LTM and use that. We don't really see a change in the market. I mean, we are in a competitive industry, but as Rick said, jobs will come out when they come out.

But what we wanted to point out is, we are experiencing some closeouts and we don't want our investors to always count on that there'll be closeouts like that..

Okay. Thank you..

Thank you. Our next question comes from the line of Tahira Afzal with KeyBanc Capital. Your line is now open. Your question please..

Thank you. Good quarter, guys, given all the weather nuances..

Thanks Tahira..

Okay. I guess first question. For me, you've seen a great margin performance on the C&I side last year. You are seeing some of that sort of bleed away over the last couple of quarters in particular. Could you give us a sense as execution gets back on track, momentum builds, because clearly, your book to bill still pretty good over there.

How should we look at margins in that segment?.

I guess I would look at that as similar to what you've seen in the past. I don't see anything out there that's going to change where we're at right now or what we've seen in the past.

I would say every quarter, we assess our projects – cost to complete, change orders that have been received, any issues that are on the projects, good or bad and we adjust our cost to complete and reflect that in our numbers.

So quarter-to-quarter, you will see slight changes, but overall, I don't see anything that's going to really change those margins..

Got it, Rick.

So would it be fair to use the last 2 years, so something like 6% to 7% as good bookends?.

I think that would be fair..

Okay, great. And then second question. I am kind of asking a lot of companies on the utility side. We've seen this Tesla announcement around storage. I know it's still in its early days, but a lot of the utility folks are in a buzz about its potential on the renewable side, including utility scale renewables.

So would love to get a sense, I mean to the extent this ends up being a decent storage solution. You see sort of the biogeneration mix already leading to maybe more of these large renewable type of transmission projects coming back on the map..

From my standpoint – and then I'll turn it over to Bill, I think it's too early to tell if there's a lot of buzz out there about it. Really haven't seen anything that's affected the market as we stand today.

Bill?.

I don't really have anything more to add. We obviously are out talking to our utility clients virtually every week and trying to keep a finger on their pulse as to what they're spending and how they see things evolving. And that -- really don't have anything more to add..

Got it, okay. And then Bill, you've seen a pretty good record with some of the merchant transmission guys in the past. There's some pretty outsized opportunities there; who knows exactly what the timing is going to be. But would love to get a sense of how your discussions are going on some of the merchant projects out there..

Okay. We obviously are establishing relationships with many of the – well, I guess called non-traditional players. I do think some of these projects are going to happen. The ones that cross multiple states certainly have more challenges to overcome than those within a state.

It does place the contractor and the engineering firms in a somewhat difficult position, because we now have new players coming into the service areas of incumbent players and existing customers. And we have existing customers that now want to branch into other utility service areas, and we are trying hard to support all of that.

But it definitely has its challenges and not just for contractors, but also engineering firms and the other parties that support transmission development..

All right, thanks a lot, Bill. And I'll hop back in the queue..

Thank you. Our next question comes from the line of John Rogers with DA Davidson. Your line is now open. Your question please..

Hi. Good morning and congratulations on the quarter. I was wondering if you could just go back to your comments relative to project closeouts and some of the benefits you saw in the first quarter.

Can you give us a sense how much of that you considered unusual because if I remember right, you had some of that in the first quarter a year ago as well? And seasonally, your margins typically pick up as you go through the year, but maybe you could just put a little more color around that?.

John, you are correct. We did have some of that last year. And as you know, we've had a lot of large projects that are getting wrapped up or have been wrapped up. I think for us, it's just we want to point out that at some point, the benefits associated with those large projects will go away and just to be mindful of that. We do put in our Q and our K.

We talk about the net benefits and so the net benefits are embedded in there. So I think that's probably as far as we'll take that. But again, as we've said about the margins and whether it C&I margins or T&D margins, I don't think we see any dramatic change.

And I'll still hold to the range that I've said on calls before of between 12% to 14% that I can still see that based on our mix going forward..

Okay.

In terms of the gross margins?.

Yes, gross margins..

Yes. Okay. And then in terms of the expansion of the C&I business that you spoke about, can you give us a sense of what your regional breakdown is right now and especially with the acquisition and how you see that evolving over the next couple of years.

You mentioned the new locations and what you are targeting there?.

When you talk in terms of regional breakdown, we've said what states we are in. I don't really want to take it down into revenues or margins state-by-state. We haven't previously done anything like that..

I guess what maybe – let me ask it this way. You gave us some numbers on what you'll now have, I guess, in the Northeast. But presumably, most of your work previously was in Colorado, New Mexico and Arizona.

Are you attempting or thinking that you can get a more balanced portfolio there over the next couple of years or is it still going to be dominated by those regions?.

Well, those are very strong markets for us. I mean, its areas that we've competed a long time. We have clients that want us to grow into other areas, and we have customers that want us to go into those areas. So it gives us a foothold to start in those areas, so it's a base of business and a place to start.

And we hope to develop those into what I would call district offices, which are similar to our other districts. So we are focused on growing those areas, but with a strong customer base that'll bring us into those areas..

John, as Rick indicated, we are in Colorado and Arizona. Colorado is bigger on a revenue basis than Arizona, but we have great expectations for both of those states. The Boulos operation, we do like the Northeast, we obviously have a T&D business there, know a lot of the utilities.

We have great hopes for expanding our C&I business through them in the Northeast. And the other situations are more opportunistic kind of things. If the general contractor and owner that we may have worked with in Arizona or Colorado now is building a data center or an airport in another state, so it's kind of opportunistic that we would follow them.

We would like to broaden our base on the C&I business and we certainly can't say we are a national C&I player today. That wouldn't happen overnight, but we would like to broaden our C&I base..

Okay. And then if I could, just in terms of the cash flow. You sold or at least booked some gains on sales of equipment. Was that just – I know that occurs irregularly, but it was larger number this quarter.

Are there more – is there something going on in the market that will give you some opportunities for that? And secondly, I guess Bill, what are you seeing in terms of acquisition opportunities and kind of your read of multiples or pricing out there?.

Let me first address the equipment thing. In spite of our best efforts to be clairvoyant on our forecasting of equipment, we end up with some equipment assets that are underutilized and we don't want to sit on them forever. So if we have equipment that we don't see a near-term use for, we will put it on the auction block.

I think we've picked up a nice gain. I wouldn't say that's going to be a recurring thing every quarter, but we are constantly going through our asset list. We are culling equipment that where we don't see sufficient utilization.

And at the same time, we have lots of additional equipment needs that we acquire the use through some kind of rental agreement. We rent it for a period of time and conclude that maybe we ought to buy out the lease or to buy the equipment. We're constantly trying to manage our asset portfolio to have the right assets to do the book of business we have.

On the acquisition front, some deals that we've seen seem to be priced very high. There's still a lot of cheap, private equity money out there chasing deals. We are trying to remain disciplined as we pursue things. But there are some really pricey deals out there and we think we need to be disciplined as we look at it.

In terms is there an overall trend in acquisition multiples. I wouldn't say there's been any change that I've observed. It's very regional. Some command very high multiples; some are better values. So we are obviously looking for the ones that we think are good values, number one. And number two, culturally fit us.

With the Boulos transaction, I think we paid a fair price for that and I think culturally, that management team fits us very well. They talk and act the same way we do, which is not always the case as you look at acquisitions..

Right. Thank you..

Thank you. Our next question comes from the line of Dan Mannes with Avondale Partners. Your line is now open. Your question please..

Thanks. Good morning guys..

Good morning, Dan..

A couple kind of quick follow-ups on the acquisition.

First, Paul, I might have misheard did you say 60%/40% T&D versus C&I or the other way around?.

Yes, I misspoke. It's 60% C&I, 40% T&D..

Okay, great. And then secondly, two other quick ones on this one.

First, how did this deal originate? Was this an auction or was this a company you knew and kind of pursued independently?.

There was a sell-side advisor that Eversource had retained to handle the transaction. So there was sell-side advisor. I'm sure we weren't the only party approached. I wouldn't say it was an auction, but they definitely did check the market and it gave an advisor to help them..

Fair. And then from a margin perspective, obviously, they've been running a little bit lower than you guys, at least in aggregate.

Did I catch your comment correct, Paul that you would expect their margins to migrate to yours? And what does that require operationally to make that happen?.

You did catch my comment correctly that I think they'll be similar to our operating margins and I don't really think it takes that much for that to happen..

Okay. And my last question here is as it relates to Boulos, how much of their previous T&D revenue related to Eversource? And by divesting them, does that actually increase the opportunity? Just I know sometimes, affiliate rules actually are – make it even more challenging to work with sister companies..

Well, certainly, Boulos was owned by Eversource. They were very careful; I know Eversource wasn't just handing them business. They had to competitively bid every contract they got from Eversource. I wouldn't say Eversource in the recent history was their largest customer.

So Eversource did a good job of managing the regulatory side of it, making sure they were prudent, and making sure they didn't give their captive subsidiary any unfair advantage. So we obviously hoped to continue doing business with Eversource both through our other subsidiaries that already have a relationship with Eversource as well as Boulos.

And Boulos has some capabilities on the substation side that regionally we didn't have as strong a presence as maybe what we wanted in that market. So we'll be continuing to pursue Eversource, both through Boulos as well as other subsidiaries..

Sounds good. And then one last one in another area. First of all, congrats on the first win up in Canada. I know that's something you've been – that's a market you've been after for a while. I guess I just wanted to follow on there. That's the northern end of the Bipole III job, as you mentioned.

And I believe you guys have already been named one of the, I believe, five bidders on Bipole III.

Can you talk at all about your position on that project, especially given the size relative to what's right now a pretty modest footprint in Canada?.

That's a project that we continue to look at. We assess the risk with it. We'll continue to develop our estimate once the bid package comes out. I do think we – it is a project that fits into what we do as a base business. And then it's just figuring out our approach to it. So that's part of the strategy going forward..

All right. We'll look forward to an update in future quarters. Thanks, guys..

Thanks Dan..

Thank you. Our next question comes from the line of Adam Thalhimer with BB&T Capital Market. Your line is now open. Your question please..

Hey, good morning, guys. Congrats on a good quarter..

Good morning, Adam..

The Westar agreement that you mentioned, can you give a little more color on that? As they ramp up the key spending, how much would flow into your backlog and is it exclusive, that kind of stuff?.

As far as that, it is a multiyear MSA agreement and it is sort of reading in our Qs and our Ks. We only track three months of MSA in our backlog. So I don't think we have said previously what's the total annual value of that contract and I don't want to start getting into that on a contract-by-contract basis..

In our relationship, Adam, is not exclusive. We obviously need to perform. We were the only one awarded an alliance, but that doesn't mean they're not going to reserve the right to bid jobs. And certainly, it's up to us to perform up to their expectation. It's a good relationship for us, but we're going to really have to perform for them..

And when do you see their spend starting to ramp up?.

Well, they've had a significant spend ongoing. We did some of that ourselves, but I wouldn't say their spend with us is ramping up here in 2015. But they have been spending a lot of money on transmission and their distribution system in prior periods as well..

Got it. And then that Greater Boston Reliability Project that you mentioned.

Is there any kind of an agreement existing on that or is that just something that you're watching?.

It's something that our project teams are tracking. What I went through earlier, a lot of the stuff from our districts and our marketing people that we continue to manage and market towards..

Okay. And then lastly on distribution, can you give us any kind of a flavor for – the degree to which you're back to maybe a more normal environment, like the mid-2000s.

Where are we versus where we were 10 years ago?.

I'm not sure I would characterize the mid-2000s as normal. I think that was a pretty frothy market and a lot of things going on a lot of underground construction as well as overhead work. We are certainly not at that level, but it's a whole lot better than it was two years ago.

It's pretty broad-based and we're seeing it in the Southeast, the Northeast. I mean, it's pretty broad-based..

Great. Thanks, Bill. Thanks, guys..

Thank you. [Operator Instructions] Our next question comes from the line of Alex Rygiel with FBR Capital Market. Your line is now open..

Thank you. Good morning, Paul and Bill..

Good morning, Alex..

Bill or Paul, what do you think the organic growth rate could be this year? Is low single digits reasonable or could we exceed that?.

We don't forecast and provide guidance on revenue. We definitely think our focus is on the long term. A single-digit growth over the period, but we don't provide revenue guidance. But we do feel that we've got some single-digit growth in front of us for the long term..

And could you comment a little bit on the margin profile of work you're looking at up in Canada versus the U.S.? Is it similar, maybe a little bit better, a little bit lower?.

There's plenty of competition in Canada, too, so don't be led to believe there's not competitors up there. There probably aren't quite as many of them, but there's plenty of competition there. And we are trying to make sure we don't bid the market.

We are trying to bid our costs and make a reasonable margin on our costs, but there's plenty of competition in Canada..

And can you provide us any update on the two AEP transmission projects that I think started recently or are going to start recently?.

Well, we started them, got a lot of the work in front of us, so I don't really have anything more to add on that..

They're very early in the execution stage right now..

Perfect. Thank you very much..

Thank you. And our next question comes from the line of William Bremer with Maxim Group. Your line is now open..

Good morning, Bill, Paul..

Good morning, Bill..

Can you give us a sense – let's go to C&I. I know that there was one project that impacted the quarter.

Backing that out, can you sort of give a sense of what margins would've been there?.

I guess I don't know which project you're specifically referring to. We have ups and downs across both segments every quarter. So it would be hard for me to tell you which that is and back it out..

All right. And then you sort of give us the backlog for ES.

Is the backlog also at those same percentages?.

Pretty close..

Pretty close..

Okay.

And given the new markets that you're looking to penetrate, not just with this acquisition, but maybe with some additional capacity, what type of SG&A run rate should we utilize, given the growth prospects you have across the platform?.

I'll say what I've said before. I think a range of 7% to 8% of revenues is acceptable for us..

Okay, great. That's all I have, gentlemen. Thank you..

Okay. Thanks, Bill..

Thank you. I'm showing no additional questions in the queue at this time. I'd like to hand the call back over to management for any concluding remarks..

Well, I'd like to thank everyone for participating on the call. We have a lot of work in front of us and remain optimistic about the future of our market, particularly some of the new markets that we are getting into. Look forward to talking to everybody next quarter..

Thank you, ladies and gentlemen. This does conclude the program. Thank you very much for your participation. You may now disconnect..