Greetings and welcome to the Primoris Services Corporation Third Quarter 2019 Financial Results Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Ms. Kate Tholking, Vice President of Investor Relations for Primoris. Thank you. You may begin..

Thank you, Melissa. Hello everyone and thank you for joining us today. Our speakers for the day will be David King, our Executive Chairman and Chief Executive Officer; Tom McCormick, President; and Ken Dodgen, Executive Vice President and Chief Financial Officer.

In addition to this morning's press release, we have also posted slides on our website that highlight key points we plan to discuss on this call. You can access them by going to our corporate website, www.prim.com, then selecting Investors.

Once on the Investors site, you’ll find the slides in the Events & Presentations section, next to the webcast link for today's call. Before we begin, I’d like to remind everyone that statements made during today’s call may contain certain forward-looking statements including with regard to the company’s future performance.

Words such as estimates, believes, expects, projects, may, and future or similar expressions are intended to identify forward-looking statements.

Forward-looking statements inherently involve risks and uncertainties including, without limitation, those discussed in this morning's press release and those detailed in the Risk Factors section and other portions in our Annual Report on Form 10-K for the period ending December 31, 2018 and other filings with the Securities and Exchange Commission.

Primoris does not undertake any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as maybe required under applicable securities laws. I'd now like to turn the call over to our CEO, David King..

Thanks Kate. Good morning, everyone. Thank you for joining us today to review our 2019 third quarter results. Have you seen in our press releases effective today, I am transitioning out as the Chief Executive Officer and Primoris Board has unanimously elected Tom McCormick to the position of President and CEO.

Tom's appointment is a clear reflection of our company's succession planning and current state, ready to take on the future and fired up after another strong quarter. There's enormous opportunity for Primoris that lies ahead and I'm fully confident that Primoris will continue to thrive under Tom's leadership.

I am remaining as the Chairman of the Board and also assuming the non-employee role of the senior strategic advisor. Serving as the President and Chief Executive Officer for Primoris Services Corporation has been one of my most rewarding experiences and the past four years have been a professional and personal joy for me.

Primoris is truly a great company and we have such great people. Primoris will always be a valued part of my life and I will continue to give it my full support.

I'm looking forward to remaining on the Board as the Chairman and working with the Primoris team on our long-term strategy, allowing me to focus on exploring and pursuing new strategic and acquisitive opportunities for Primoris, while continuing to help to shape Primoris future. With that said, I'll turn the call over to Tom for his opening remarks.

Tom?.

Thank you, David. And thank you for all that you've done for Primoris. Over the past 12-plus years, you've been my mentor and most importantly a friend. Thank you for believing in me and thank you for playing a role in giving me this opportunity.

I wish you the best of luck in your semi-retirement and look forward to continuing to work with you in your new role as Chairman of the Board and Senior Strategic Advisor.

I also want to thank the Board of Directors for trusting me to leave this great company into the future is a company of 12,000 plus dedicated and hardworking employees and I look forward to continuing to work with all of them in my new role. Now on to our results for Q3, 2019.

It was another great quarter for Primoris with record net income, growing backlog and strong cash flows from operations. We continue to successfully implement our strategic plan with a discipline approach to growth and our focus on improving operational efficiencies.

We are reaffirming our full year 2019 EPS guidance and we expect 2019 to be a record year for Primoris. Year-to-date Primoris' revenue was 112% compared to last year.

While we did face some revenue headwinds in the third quarter from weather and project delays, these are timing issues and not indicators of change in our win rates, more softness in our end markets. A large part of our revenue growth has come from MSA revenue which is up 30% year-to-date for new record high.

Of course you can’t continue to grow revenue without winning new business and we’re very proud of our growing backlog. Total backlog is up 19% over last year thanks to gains and both fixed and MSA backlog.

MSA backlog is now 44% of our record total backlog of $3.2 billion and is quickly approaching the strategic target we set for our company which was MSA backlog of 50%. Our internal tracking of new awards shows that we've won more work in the first three quarters of 2019 than we did in all four quarters of 2018.

And we're winning work across all of our end markets with both current and new clients. This underscores Primoris's commitment to smart profitable growth and the benefit of our diversified business model.

We're also making sure we are focused on the right markets and the right clients and if we determine that business unit does not fit with our long-term strategy, we will consider all of our options including restructuring, discontinuing or selling those operations.

We've continued our focus on containing SG&A, reducing our overall costs while increasing spending on initiatives that helps improve efficiencies across the company such as updates to our HR system and consolidation of shared services back office duties.

Strong operational execution and focus on controlling costs and disciplined contract management, helped us deliver our third quarter EPS of $0.70 per share an all-time record for Primoris which beat last year's record third quarter EPS by 11%. Since going public over 11 years ago, Primoris has never had a losing quarter.

As we look at our individual segment results, I'll start with Power, Industrial, & Engineering segment.

Revenues grew in the segment thanks to the start of several new projects this year while overall margins were down compared to last year remember that last year's third quarter included a benefit from a power project that completed during that time and a partial settlement of a legal dispute.

We had some margin pressure from performance challenges on some individual Gulf Coast projects which made some adjustments including - we made some adjustments including management changes and believe these issues are behind us In the Gulf Coast we're seeing major petrochem projects gaining traction as well as another wave of large LNG facilities.

The benefit that Primoris provides to our clients is our ability to perform multiple roles on these large projects such as site work, incoming pipelines and processed plant interaction. Our latest solar project in Texas is approximately 60% complete is on schedule and on budget.

The opportunities in the solar market are extremely strong with over 30 gigawatts of utility scale solar projects to be built in the coming years which is the largest pipeline of utility scale solar projects in U.S. history. And Primoris is one of the few contractors in the United States and itself perform all phases of the work.

We see the battery storage market as a complement to the solar market with many similar drivers such as state mandated renewable targets and rapidly improving technology. These market forces are driving the transformation of the power generation markets and creating opportunities for Primoris.

The CEO of NextEra said earlier this month, he believes that renewables and battery storage could replace coal generation in the U.S. within a decade. That is a strong statement coming from the major - from the head of a major utility.

Our engineering team is also gaining traction in the green market with their work to recover gas from farm waste, with multiple customers looking to become active in this market. We're seeing an uptick in the micro LNG market, plants that measure output and at gallons per hour, not tons per day.

We collaborate across our business units for these projects to give our customers a turnkey solution. We're about to enter the construction phase of one micro LNG project after successfully completing the engineering.

Within the refinery market, our engineering group has had tremendous success in getting our name out there with large refiners and we are now seeing them move beyond early feet work to bidding on all full EPC projects as alpha units and hydro crackers.

The civil segment also benefits from some of the same drivers in our Power, Industrial & Engineering segment, as they perform site work on projects for many of the same industrial clients. They're seeing some permitting delays primarily due to state elections.

There's a lot of opportunity and projects to look ready to move quickly once they receive permits.

The third quarter margins for the segment clearly benefited from the resolution of three of the five belt and heavy civil claims, but it's worth noting that even without the claim resolution, segment margins would have been within our target range for the segment, a significant improvement over last year's third quarter results.

As we have said in the past, the civil segment is like a battleship and doesn't change direction overnight. But we believe this quarter's results demonstrate that we are now on the right course.

We continue to look for attractive opportunities within the heavy civil market and we believe the design build market continues to offer potential as a design build - as design build work is a kind of heavy civil war that differentiates us and drives better margins than the typical rip and read work.

And we continue with our strategy of keeping the heavy civil team focused on higher margin, very selective work, while we maintained our preference of focusing our resources on higher margin end-markets.

While we were a little disappointed in our third quarter margins in the Primoris T&D segment, which was primarily driven by less storm-related revenues and startup costs as we expanded into new geographic regions, we still have confidence in the long-term opportunities for electric T&D work to be included in our high margin end-markets.

While I'm sure everyone living on the East Coast was thrilled by the lack of significant storms, it did create some downward pressure for the segment which usually sees a third quarter benefit from storm work.

We continue to look at our MSA agreements with our electric utility customers making sure we have the right rates in place for profitable work and trying to diversify our revenue base so we're not overly reliant on any one customer.

We've spoken several times about the renewal of the MSA agreement with one of our largest electrical utility customers and have made great progress on that front and our relationship with the customer remains strong.

Last quarter, I said we expected to finalize the agreement sometime in the third quarter or early fourth quarter, and I still believe it's possible to get it done in the fourth quarter.

The wildfires in the West and hurricanes in the East have highlighted the need for investment and system reliability and grid hardening, creating demand for electric T&D work that should last for many years.

Primoris will continue to partner with our utility customers through long term MSAs to provide safe and reliable solutions to the challenges faced by their transmission and distribution systems.

Our Utilities & Distribution segment had a strong quarter with a good mix of natural gas utility work and good weather conditions leading to improved margins compared to last year's third quarter. Work in California has been somewhat slower than the past, both due to the ongoing fires and the financial challenges of one client.

That client has slowed down the release of work this year, but they are not behind in any payments for the post-petition work that we have executed for them.

And we're seeing continued growth in the Midwest, where we currently have strong presence and opportunities along the East Coast, where we have the largest population demographics combined with the oldest distribution systems. The driver replace aging infrastructure systems will continue for many years.

It is not only the distribution systems that need update in the natural gas transmission system needs updating as well.

Earlier this month, the Department of Transportations, Pipelines and Hazardous Materials Safety Administration finalized three rules for more than 500,000 miles of transmissions designed to address the combined challenge of aging infrastructure and increasingly frequent disruptions in services for various reasons.

This is right in the wheelhouse for our Pipeline & Underground segment and we expect this to drive demand for the segment particularly maintenance and upgrade work.

We've been shifting the structure of our maintenance work towards MSA agreements bringing the benefits of stable long-term agreements to the segment, while permitting the wise have pushed back start dates for some pipeline - new pipelines the work has not gone away.

We're bidding multiple spreads on large pipeline projects both union and open shop and the opportunity funnel continues to look as good as they ever have. There are over 17,000 miles of new pipeline projects planned for the next several years.

While the delay of our largest pipeline project is frustrating the decision by the Supreme Court to review the 4th Circuit's ruling was a positive step forward. We're still anticipating a start in the first half of 2020 on the project and we continue to bid other projects for potential backfill.

Clearly this is a bit of a juggling process but it's one that's being faced by all major pipeline contractors right now so we're in good company. We pride ourselves on our safety culture of Primoris and it permeates every aspect of our work.

Every management meeting begins with a safety moment even if we're sitting in the relatively safe environment of our Dallas headquarters. Our work hours year-to-date have increased 37% compared to last year.

Large increases in work hours have the potential to lead increased safety risk and I'm extremely proud of our employees that continue to put safety first.

We continue to enhance our safety program because any action is an accident too many, so we've implemented initiatives like the No Tax Pledge look up and leave and additional peer safety audits and reviews.

I want to wrap up by highlighting our cash flow because we’re very proud of our third quarter results and we know our investors look to our cash flow as an indicator for performance. Winning new work and executing well are important but at the end of the day you need to see the cash.

As we told you last quarter our operating cash flow tends to swing from a use of cash to a source of cash in the second half of the year. And this year was no exception.

Our operating cash flow in the third quarter of 2019 was an inflow of $56.4 million not included in that numbers is the over $100 million in cash we received in October from the combined resolution of claims on three of the Belton, heavy civil projects and the sale of PG&E prepetition receivables.

We expect a favorable resolution on the two remaining Belton claims to be sometime between now and the end of second quarter of 2020. Our strong cash position allows us to continue our CapEx program and initiate a stock buyback while at the same time gives us the flexibility to pursue strategic acquisitions.

We're kicking the tires on multiple opportunities both small and large and I expect we'll move forward with the deal sometime in 2020. With that I'll now turn it over to Ken..

Thanks Tom and good morning everyone. I'm going to review our third quarter operating results our balance sheet and cash flows and then our 2019 guidance before we move on to your questions. Before I review the third quarter results I want to discuss two very positive events that Tom referred to that occurred in near the end of the third quarter.

In September we came to an agreement with TechStar to resolve our claims on three of the five Belton area jobs. This settlement helped improve the civil segment’s third quarter gross profit and enabled us to finally convert some of our unbilled revenue on these jobs into accounts receivable at the end of Q3. That was collected in early October.

Also in September we reached an agreement to sell our pre-bankruptcy receivables from utility customer to a large financial institution. The transaction which was funded in early October resulted in a $2.9 million charge to other expense during Q3.

We continue to work for this customer and they continue to pay us within terms for all post-petition work. Combined these two transactions resulted in over a $100 million in accounts receivable at the end of Q3, they were collected in early October. Now let's discuss our operating results for the quarter.

Our third quarter revenue was $865 million, compared to $909 million in the third quarter of 2018, a decrease of over $44 million. This decrease is primarily due to the timing of jobs in our pipeline segment as we had substantial completion of a West Texas pipeline job in the second quarter of this year.

And we also had reduced volumes on a major mid-Atlantic pipeline project compared to last year. We have discussed our strategy to pursue stable long term MSA agreements and we continued to see the benefit from this strategy in the third quarter as our top three customers were utility customers driven by those MSA agreements.

During the third quarter, these three utilities accounted for 22.9% of our total revenue and year-to-date they accounted for 21.5% of total revenue. Gross profit in the third quarter was $108.4 million compared to $106.5 million in the third quarter of 2018, an increase of $1.9 million despite the lower revenue.

Gross margins for the quarter increased to 12.5% compared to gross margins of 11.7% in the prior year. The increase was primarily due to increased gross profit in our utility segment from favorable weather conditions and higher margin work and the civil segment due to our TXDOT claims resolution.

Our SG&A expense was $49.8 million in the quarter compared to $51.6 million in the third quarter of 2018, a decrease of $1.8 million primarily due to decreased compensate as -- compensation related expense. As a percentage of revenue, SG&A was 5.8% in this year's third quarter third quarter consistent with the prior year third quarter.

However, when you look at our 12 months trends in SG&A expense, we’ve improved to 6% down from 6.6% just one year ago. While we will always have some quarterly seasonality reflected in our SG&A we expect our 12-month trend to remain in the low 6% range going forward.

Interest expense in the third quarter was $5.2 million which included $600,000 noncash unrealized loss on the change in fair value of our interest rate swap agreement, this compares to interest expense of $6.4 million in Q3 of the prior year but that included $2.3 million of additional expense related to early retirement of our senior notes.

The effective tax rate on income attributable to Primoris was 29% for the quarter and we expect this rate to be applicable to our full year earnings before tax. Third quarter net income attributable to Primoris was $35.6 million compared to $32.7 million in the third quarter of 2018, this was an increase of almost $3 million.

Turning to the balance sheet and cash flows; we ended the quarter with $43.8 million of cash on our balance sheet. Our cash flows from operations as Tom mentioned was $56.4 million in the third quarter a strong and expected reversal from the first half of the year which is typical given the seasonality of some of our segments.

And with over $100 million that we collected in early October fourth quarter cash flow is shaping up to be strong as well, given our growth in earnings, our relatively low debt-to-equity and our strong cash flows, last week our board of directors approved a $50 million stock buyback the largest in our company's history.

Our total debt at the end of the third quarter was $367.5 million down from $412 million at the end of Q2 primarily driven by the 5$5 million payoff of our revolver. Our debt-to-equity ratio now sits at 56.2% which is much closer to the level we prefer.

During the third quarter we spent $21.4 million on capital expenditures including $16.9 million for construction equipment and vehicles and the balance on facilities. We expect CapEx for the fourth quarter to be between $15 million and $20 million.

We have continued to invest heavily in our equipment and facility this year, and we expect to complete our facilities’ upgrades in the fourth quarter this year which should result in lower capital expenditures in 2020.

Fixed backlog was $1.8 million at quarter end, MSA backlog has grown to over $1.4 billion, driving our total backlog is in the end of third quarter to $3.2 billion. As Tom mentioned earlier, our guidance for 2019 remains unchanged at a $1.60 to $1.80 per share.

We have held this guidance steady all year knowing that the timing of our work can fluctuate significantly from quarter to quarter due to weather, customer delays and accelerations and other reasons beyond our control.

It's the nature of the industry, in which we operate, but the strength of our business model is that we are not reliant on any single industry, customer or job to achieve our results. With that we can now turn to your questions.

Melissa?.

[Operator Instructions] Our first question comes from the line of Lee Jagoda with CJS Securities. Please proceed with your question..

So Ken just starting with your segment margins and in particular the power and the transmission piece, can you breakout sort of the portion of the drag in those two segments that's more transitory - and how much you might expect to linger into Q4.

And maybe just a quick reminder of what normalized margins in those segments should look like going forward?.

Yes so normalized margins in the Power segment we normally expect kind of low-double-digits. Last year this time we were much higher than that because as Tom mentioned we had Carlsbad going on and we also had the ATM settlement which is pretty significant. So the drag in this quarter was primarily in our open shop industrial group.

And we think this is just a one quarter issue that shouldn't continue much into our fourth quarter this year..

It's primarily - Lee this is Tom McCormick. It’s primarily due to the performance on a couple of projects that are now behind us. We made some changes in our management team and changes on that project, they are just more one-off the jobs that we have going on in that group right now are actually doing very well..

Got it.

And how about on the transmission side?.

Yes on the transmission side long-term we expect them to be similar in terms of low double-digits. Last year, they were higher than we would have expected at this point time because of a particular job that had higher margins as well as quite a bit of storm work last year.

This year they're a little bit lower than where we would expect them to be as we continue the transition and growth of that business. But only because we didn't have any storm work we shutdown a small division that we just didn't think was operating properly.

And we've been investing in that business in terms of expansion cost and that's a continuation of what we've been doing over the course of the past couple of quarters as well.

So, this business unit, this segment will kind of continue in the single-digits for another quarter or two as we continue this evolution of the business that we bought from Willbros..

And then just flipping over to civil, looks like there is about $13 million of unapproved change orders that your I guess hoping to get back.

What's your expectation on the collection and the timing there? And then ex the Belton issues it looks like the civil segments back on a pretty good track with gross margin somewhere in the mid single-digits now that, that's all fixed.

Give any updated thoughts on that business from a divestiture perspective?.

Yes, so with respect to with respect to the claims that you mentioned at beginning. Those claims are related to the final two jobs which we have not settled yet and are going through the Triple-C litigation process with TxDOT. So, we don't have any idea when the ultimate resolution will be. I think Tom touched on it..

In - that aspect, I think as I noted earlier, the expectation is been anytime between now they could reach out to us and sell these claims anytime between now. If they go through the CCC - process it will be probably late second quarter of 2020..

And we're opening - that will be the outside of the longest time we would have to wait in order to settle those, now with Tom..

With respect to heavy civil again we have the caliber we're going to do with them. They actually as I noted in my presentation that - they are making higher margins. They are starting to turn around as we do with all of our business units. We evaluate what their future is how they fit into our long-term plans almost annually.

We're certainly not going to do anything with heavy civil until we get these two claims resolved. But they are doing much better that aircraft carrier started - it has turned and it's doing better. So we'll look at it. It's just something we're in the process of doing now..

Our next question comes from the line of Sean Eastman with KeyBanc Capital Markets. Please proceed with your question..

Tom many congratulations on the CEO appointment and David congratulations on the semi-retirement..

Thank you, Sean..

Thanks Sean..

First question from me is just on the - starting on the cash flow. So nice reversal in the third quarter, sounds like over a $100 million locked in for the fourth quarter with the civil settlements in the PG&E receivables.

And can we sort of just layer on top of that $100 million, what’s normally really strong 4Q seasonally for free cash flow, is that sort of the way to think about how the fourth quarter plays out overall?.

Yes, I don't know, if you would layer on the full normal of Q4 effect just because some of what we did is part of that effect, but yeah you can definitely it will little probably layer on a good significant chunk of it and we are expecting Q4 to be very strong for us..

And then - so three of five civil settlements are all done.

I'm just wondering, from a kind of dollar outstanding claim perspective, how far we are today versus how much is left?.

With these discussions going on and hopes of entering into some more discussions with TxDOT facilities I'd really rather not go into that level of detail..

Okay, that's fair..

Sorry about that, but..

No, no that’s..

I don't want to set a target for them..

Yes, that makes total sense. And then, okay - on the PI&E segment, it looks like the revenue then bookings were better than we expected in the third quarter. But yeah, I'm just wondering what's flowing through there when those kind of big solar jobs wrap up.

And whether you could just talk to visibility and backlog in that segment up to 2020, do we need something sizable to hit in backlog, in the coming quarters to keep growth going there in 2020.

Any kind of commentary around those moving parts would be great?.

So if I look at the union side of that, the union side is actually - they are able to make their revenue targets just with - large grouping of smaller projects that they've been winning. There hasn't been a large power project out there and they've done extremely well doing it and they're making profit on these jobs.

Same thing with the - non-union the open shop side of it, most of it has been smaller projects $30 million, $40 million, $50 million. But they have a lot number of projects that they are expecting awards on like fourth quarter or early 2020. Pre, as far as the solar group has a number of opportunities out there. I think those opportunities go on.

If we look three years out, they're all large projects. Right now, we're in the middle of construction on the larger solar plant ever built in Texas. And the opportunities we have all are in that in that price range or even greater. So I think there's a lot of opportunity out there for us.

We’re trying to be very selective of - who we partner with, who our clients are and what projects we go after to ensure that we're successful. But there is opportunity out there for the next several years..

And just to close it out on this topic would you say, as we look at solar versus petrochemical versus power and LNG.

Are those ones still on the table there or is solar kind of emerging as the real growth driver as we look out into next year?.

No there is still a lot of petrochem opportunities out there. Our bid slight is - our estimating group is extremely busy. Same with the LNG, there is another wave of LNG, larger LNG projects and what’s unique about our company as we pursue the smaller LNG projects on a full EPC basis.

So as I noted earlier - they measure gallons per day versus - gallons per hour versus tons per day. So they're much smaller plants. We can actually do a complete design build on those. And then we play a unique role in the larger LNG projects where we can do - we can do paving, we can do underground, we can do the site work as we have in the past.

We can do the roads and we can actually build our process unit, OSBL work for them. We're not going to take on the large scope of $500 million but anything smaller than that, we will certainly look at..

Our next question comes from the line of Adam Thalhimer with Thompson Davis. Please proceed with your question..

David I'm sorry to see you go and Tom congratulations..

Thank you..

Oh! Adam - Adam I've enjoyed it and Tom will do an extremely good job. He's a very gifted individual..

But I’d appreciate the work we've done with you..

Yes, no I appreciate it..

He’s not going anywhere. He will still be around..

Yes, he is not on the call.

Hey I want to start with the buyback just - is the thought to fully execute that or did you just want the optionality given where the stock is?.

So our thinking is that we will fully execute it. We just don't know what the timing will look like. And we're going be opportunistic based on where the stock price is - from time-to-time over the course of the next roughly 14 months..

And then, I wanted to ask you about the large California electrical contract which segment is that going to flow through the transmission work out in California.

And then when does that start?.

Are you referring to the electrical contract I spoke in my statement earlier that was actually a contract that’s here in center part of the U.S. in Texas in Southeast U.S. area. We are doing some work, okay. I know where you’re talking about that project is actually in the works that work is ongoing it is ramping up.

And it will fall - right now it falls under our pipeline and underground, just because it's part of the work that ARB is doing for that client..

So it will stay in the pipeline?.

Yes, for now, it will..

And then lastly, I just – can you give us some additional color on the underground bidding? And I'm just curious whether you guys are seeing any kind of shifts in the market, maybe Texas slowing down, other sales picking up, or is Texas just super strong still for pipeline bidding?.

Yes, there's – what you see the change that we see is, we see clients partnering up to share risk on those jobs, but we don't see the jobs and number of jobs going away.

They're being much more quiet about publicizing those projects and they ask us to be quiet about publicizing those projects just because of the issues, potential problems that creates for them in getting permits. But I think like for the next couple of years, sitting down with clients that I've spoken to, they don't anticipate falling down..

So that's within Texas and outside?.

Within Texas and outside, yes..

[Operator Instructions] Our next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question..

Ken, the sale of receivables, does that account for all of the pre-petition receivables you had or is there any more left there?.

No, that pretty much accounts for it all..

And then I get started to beat on this, but I guess back to the two industrial projects, I think you can appreciate this just given what's gone on around the sector.

Maybe, can you help with the size and maybe scale these projects maybe relative to the business overall and I guess any more detail that you can offer on kind of where those jobs are at?.

Yes, these are all small projects less than $18 million in size. And losses on them, the write-downs on them are relatively small, as you can imagine. If you look at across all our spectrum of projects, our average project size is $4 million.

We'll do projects up to, power project, couple of $100 million; obviously, a pipeline job much larger than that. But for the most part, our average project size is very small. And these projects kind of fit into that mold..

And then pipeline margins, strong as I think since 2017.

Maybe just help me flush out kind of moving pieces there, what was abnormal and what wasn't?.

Yes, most of that was normal. As you know, we're on standby with Atlantic Coast Pipeline. So we were able to redeploy some crews and some equipment to other jobs, so we had the benefit of some quick burn projects during the quarter that started in Q2, that had some good strong margins for the quarter.

So, I think as you know, our normal margins for pipeline is kind of 10% to 12%. And so the smaller quick burn jobs and our ability to deploy quickly, it had good weather conditions enabled us to get a little bit better margins than we normally would..

And then jut lastly on Civil.

I think you guys said backing out to Belton jobs, kind of backing that target margin area you want to be at; is there anything to kind of think about within that segment going forward in terms of new jobs ramping up versus others and maybe there's some drag on those margins as we think next few quarters?.

Not really. I think we set some standards couple of years ago when we started having issues in that group with respect to the type of work we're going to pursue and how we're going to estimate the work and what we included in those estimates and how we're going to track progress on them. And it seems to be working.

So we're going to continue that, and just make sure that we can continue to turn the ship, so to speak..

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. McCormick for any final comments..

All right. Thank you all for joining us today. Before we end, I want to thank our employees, both in the field and in the back offices, who work tirelessly every day to deliver great results for the Company and our shareholders. Have a good day..

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..