Good morning. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Primoris 2020 Fourth Quarter and Year-End Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

It is now my pleasure to introduce your host, Brook Wootton, Vice President of Investor Relations. Please go ahead..

Thank you, Amy. Good morning, and welcome to Primoris' conference call. Joining me today are Tom McCormick, Chief Executive Officer; and Ken Dodgen, Chief Financial Officer. Before we begin, I would like to make everyone aware a certain language contained in our safe harbor statements.

The Company cautions that certain statements made during this call are forward-looking and are subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC.

Our forward-looking statements represent our outlook only as of today. We disclaim any obligation to update these statements except as may be required by law. I would now like to turn the call over to our CEO, Tom McCormick..

Thank you, Brook. Good morning, and thank you for joining us today to discuss our 2020 fourth quarter and full-year results. We had an incredible year despite social unrest, the pandemic, a significant reduction in the price of oil, as well as the presidential election.

Good weather in the fourth quarter allowed some of our business units that typically shutdown after Thanksgiving to work all the way through to the end of the year. This is a nice boost and a great way to closeout 2020.

The numbers paint a clear picture of the success of our strategy even in a difficult market as we announced record revenue of $3.5 billion for the full-year, up 12% compared to last year. Our earnings per share for 2020 came in at $2.16 per fully diluted share, another record for the company.

Reflecting on our strong overall performance and the cooperative weather in December, our fourth quarter revenue was up 13.6% over the prior year at $897.3 million. Our Pipeline, Power, Utilities and Transmission segments generated especially strong revenues in the fourth quarter.

I want to send a special thank you to all of our employees, whose hard work and commitment to work safely enabled the company to have the success that we all experienced this year. Now let's look at our segments.

Our Pipeline and Underground segment had exceptional topline growth for the full-year 2020, coming in at almost $900 million, up 77.6% compared to full-year 2019.

This was mostly due to pipeline projects in Texas at the beginning of the first quarter of 2020, partially offset by the cancellation of a pipeline project in the Mid-Atlantic and the substantial completion of a pipeline project in 2019.

Our field services were able to produce strong results for the year despite the challenges encountered with the drop in the price of oil, as well as the pandemic and hurricanes that struck the Gulf Coast last year..

Thanks, Tom, and good morning, everyone. I'll begin with our key financial metrics for the quarter and for the full-year, and then I'll cover our balance sheet, cash flows and backlog. Then I'll wrap up with our 2021 guidance before moving on to your questions.

Our fourth quarter 2020 revenue was $897.3 million, an increase of $107.6 million or 13.6% compared to the fourth quarter prior year. The increase was largely due to higher Pipeline segment revenues since we had a number of pipeline jobs in process during the quarter.

We also had higher revenue in our Power and Transmission segments, but this was slightly offset by lower revenue in our Civil and Utilities segments mostly due to the timing of jobs. Gross profit in the fourth quarter of 2020 was $97.8 million compared to $89.5 million in the prior year.

The increase in gross profit was largely due to the higher Pipeline segment revenue and improved margins in the Transmission segment. This was partially offset by lower margins in the Civil and Power segments. For the full-year 2020, gross profit increased by almost $40 million to $370.2 million compared to 2019 due to increased revenue.

Looking at each segment, our Transmission segment gross profit increased $22.3 million to a record $44.9 million, primarily due to higher gross margins on slightly lower revenue.

Gross margins were 9.8% in 2020 compared to 4.5% in the prior year due to higher costs in the prior year, higher margin work in the current year and a little more storm work this year. Our Utilities segment continued to perform well with gross profit increasing by $16.3 million to $133 million due to slightly higher revenues and higher gross margins.

Gross margins were 14.7% compared to 13.2% in the prior year, primarily due to better weather conditions in 2020 and better margins on projects in the Southeastern part of the U.S. Our Power segment experienced $22.6 million decrease in gross profits as slightly higher revenues were offset by lower gross margins during the year.

This was mostly due to the higher costs associated with the LNG project in the Northeast that Tom mentioned. The Pipeline segment increased gross profits by almost $36 million, primarily due to higher revenue, partially offset by slightly lower margins in 2020.

At 10.9%, they were down from 12.2% in the prior year, primarily due to higher costs on pipeline projects in Virginia and Texas this year. The Civil segment gross profit was down $12.6 million this year, primarily due to lower revenue due to timing of projects, as well as slightly lower gross margins.

2019 gross margins benefited from the resolution of a large portion of our Belton claims with TechStar. And in 2020, we resolved the remaining two Belton claims with TechStar, but they only had a small impact on gross margins.

But even without the claims benefit in 2020, the segment had solid gross margins driven by good project execution and a few project closeouts. SG&A expense in the fourth quarter was $50.2 million, up from $48.6 million in the prior year.

The slight increase was primarily due to incentive compensation and IT expenses as we continue to upgrade some of our IT infrastructure partially offset by lower travel expenses as a result of the pandemic. Our 2020 SG&A expenses were $202.8 million compared to $190.1 million in the prior year, primarily for the same reasons as our Q4 increase.

For the full-year, SG&A expense was 5.8% of revenue compared to 6.1% in 2019. We expect our SG&A expenses will be in the high 5% to low 6% range for 2021 as well. We also incurred $3.4 million of transaction cost in Q4 2020, primarily related to our acquisition of Future Infrastructure.

Interest expense in the fourth quarter was $2.8 million compared to $2.6 million in the prior year, which was in line with expectations. And for the full-year, interest expense is $20.3 million essentially flat with 2019.

With the additional debt raise to fund the acquisition of Future Infrastructure, I expect 2021 interest expense to be approximately $7 million per quarter. The effective tax rate on income attributable to Primoris was approximately 28% for the year, slightly lower than we anticipated due to higher pretax profit and lower state income tax.

We expect that our effective tax rate to be approximately 29% for 2021, but that rate may vary slightly, depending on the mix of states we work in this year. Fourth quarter net income attributable to Primoris was $31.8 million or $0.66 per fully diluted share compared with $26.9 million or $0.53 per fully diluted share in the prior year.

For the full-year, we recorded a record $2.16, which surpasses the $1.61 per share we didn’t set in 2019. Operating cash flows in the fourth quarter were $120.4 million and for the full-year, our operating activities generated almost $312 million of cash flows compared to almost $118 million in 2019.

This considerable increase in operating cash flows is due to higher net income and a continued focus on working capital and negotiating good contract terms. In the fourth quarter, we invested approximately $10 million in property and equipment, and for the full-year, we invested $64.4 million of which about $42 million was for construction equipment.

We expect our 2021 capital spending to be in the $60 million to $80 million range with almost all of that spent on construction equipment this year. Our balance sheet at year-end was strong as we ended the year with $326.7 million of cash.

Borrowing capacity under our revolver was $148.5 million, providing a total available liquidity of $475.2 million at year-end. Total debt was down to $316 million and our weighted average interest rate was down to 3.7% compared to 4% in the prior year.

With the acquisition of Future, last month we borrowed a $100 million under our revolving credit facility and increased our term loan by $400 million.

Over the next 12 months, we expect to use our cash flow to support the continued organic growth of our company and reduce debt and we continue to look for acquisitions that compliment our growth strategy. Fixed backlog at the end of the year was $1.64 billion and our MSA backlog was $1.14 billion for a total backlog of $2.78 billion.

While this is down compared to 2019, when you exclude the impact of the ACP project, our backlog is essentially flat compared to the prior year. That's something we are proud of given the amount of revenue we burn this year. Compared to the end of 2019, our MSA backlog is down $280 million.

This is due to us terminating some unprofitable contracts during the year, reduce spending by a couple of our utility customers and reduce spend by some of our industrial and pipeline customers. We expect our MSA backlog will increase in 2021 as we add new utility customers and layer in the acquisition of the Future's backlog.

And concluding with our 2021 earnings guidance, we expect that earnings for fully diluted share will be in the $2.40 to $2.60 range.

This includes the operating results of Future Infrastructure partially offset by about $6 million to $8 million of incremental intangible amortization expense, and approximately $12 million to $13 million of incremental interest expense. Our early estimate is that Future should contribute between $0.30 to $0.40 in EPS in 2021.

And with that, we can turn it over to your questions.

Amy?.

Your first question today comes from the line of Lee Jagoda with CJS Securities. Please proceed with your question..

Hi. Good morning, and congrats on the results..

Thanks, Lee..

So just starting with the current – I’d say, unfortunate situation in Texas.

Can we speak to sort of how your company can be part of the solution both in terms of the immediate term solution and then longer-term looking at grid hardening and further improvements to the infrastructure down there?.

Well, I think you've actually answered it. But short-term, we have crews out now working with our clients and helping to reestablish power. I think is – as recent as yesterday, we’re close to 300 full-time equivalents still out working, restoring power to clients damage from the storm.

Long-term, exactly, as you said, it's helping our clients to build additional capacity, whether that's transmission capacity or it's power generation, it's also in grid hardening. So next time something like this happens, they're prepared that they can withstand it, they have more capacity to help withstand it. We're available to our clients.

We have the crews and the capabilities to be able to do that. So – and we're extremely close to them here and some of them are here in Dallas, so we’re there, we’ve got to know where they are and we're even working on some of this now..

Got it. And then if I think about Q1 historically before Future, Q1 has typically been sort of a breakeven to making a little bit of money quarter just because your utility customers are snowed in, et cetera.

I guess, the first part of it is, is the work that's needed in Texas, a positive or a negative for Q1 specifically, and then layering on things like Future, and then the work on the solar stuff within the Power segment, it would appear that Q1 versus historical might be abnormally profitable.

Is there any way you can speak to that?.

Well, I don't know if we're there yet that we could say that. One thing I would caution you is that, we literally here in Texas lost a week of revenue just from last week. So we had some people working last week, the very few.

So now we'll get some of that back in the work that we're doing on this recovery, but typically the storm recovery work just replaces revenue you would generate – you would burn anyway. So I think renewables, I got to look and see how fast is projects are progressing and what the revenue burn is that that should help offset it and Future will too.

But Future typically based on clients are again being utility clients. They start off a little slow in a year as well, coming back from holidays, getting the design work done and then issuing work order.

So I don't know if I could say that that's going to offset and make Q1 a profitable quarter with a little bit higher upside than we've seen in the past or not, we'll know that in coming weeks..

Okay. And then one more for Ken, and I'll hop back in queue. Just on the SG&A side, it looks like you guys are doing a great job keeping costs down.

Are there any specific actions you can talk to that you've done already on the SG&A side to keep these down permanently? And are there any other things you're looking at in terms of projects that could further reduce your SG&A levels both absolutely and as a percent of sales?.

Yes. I mean, most of the projects that we implemented to reduce G&A are done now and fully baked in, and so we don't have really much in the way of incremental projects. We're going to continue to monitor it though. It’s something that's kind of ongoing. We'll definitely get the dilution from continued revenue growth.

But then what we also have now is the additional G&A from the Future acquisition. And we're going to have to look at that a little bit further and see how it lines up with our historical G&A percentages. We may need to do a little streamlining there long-term..

It sounds great..

I think there's some do that. .

Yes. I will hop back in queue. Thanks..

Thanks, Lee..

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

Hi, team. Congrats on closing out the year strong..

Thanks, Sean..

Thanks, Sean..

My pleasure. I just wanted to – just to be clear on the Future contribution. So the guidance includes the incremental amortization and any transaction fees those are not adjusted out of the guidance.

Is that correct?.

That's correct..

And those things should roll off into the out years and so that contribution should step up around that, right?.

Yes..

Okay. Terrific. And just wanted to ask on the Pipeline & Underground segment, I mean, you guys are sort of appropriately measured in your outlook commentary there. But it sounds like you got a lot of the 2021 plan and backlog.

Can you give us an idea of what's reflected in the guidance from Pipeline & Underground revenue? And is that over 40% of the plan in backlog as of today kind of normal at this point in the year? Or is it above normal? I'm curious about that..

It really depends on the year and the timing of projects. So there's years when we'll go into – we'll go into the year and we've got hardly anything baked in the backlog and other years when we've got quite a bit baked, it all just depends on the timing of the projects being awarded and when they're going to start.

We normally don't give – and then with respect to 2021 in general, we normally don't give revenue guidance. But we had a – if you go back to 2018 and 2019, I consider those kind of be normal years for pipeline for us, we had a really good year in 2020 as you can see.

I'm not saying we're going to go back to 2018 and 2019, but it's going to be down in 2021..

Okay. Got it. And last one for me.

I'm just curious with some optimism around the business cycle around the reopening of the economy, et cetera, whether you're seeing any firming in the prospect activity in the Gulf Coast industrial markets, whether it be refining or chemicals? Is there any kind of signs of life of sort of an inflection there?.

I would say a little bit, not anything to just get you too excited right now. There's activity and we're seeing in primarily smaller projects. I haven't seen anything, just a step change yet, so not yet..

Okay. Helpful. Again, nice work guys. Thanks for the time..

Thanks, Sean..

Thanks, Sean..

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

Hey. Good morning, guys..

Hey, Adam..

Hey, Adam..

Hey, can we talk a little bit about the high level, the outlook for California. Curious both on the pipeline and the industrial side..

Well, the industrial side, again, they got that one large biofuels project, and there'll be burning revenue on that project I think through this year, probably into early next. They've been able in the past – they’ve been successfully – that group used to do a lot of power plants, they do a power plant about every year and a half, every two years.

That's seen in a lot of that, but they've been able to replace a lot of that rent loss revenue with smaller projects, smaller capital projects, and they've been successful doing that, and then renewables, of course. So the pipeline, you're probably talking about more of the underground or gas utility portion of that that group has.

That's really what they do. And they do some electrical transmission work for the utilities out in California. They haven't seen a drop-off from some of our companies. So we have seen a little bit drop-off from a major client that just came out of bankruptcy, just now has a new CEO.

And so we expect that some of that will pick back because they got a lot of grid hardening that they're going to do. But we had to get back to CEO some time to get her organization and business structure in place and then determine what their path forward is. So we're down a little bit out there and we were down last year out there.

But we're expecting this is not going to pick up a whole lot this year, but I don't think it's not going away by any stretch of imagination..

Okay. And then Tom, can you – on the solar side, can you run us through – it's kind of quick, I couldn't quite catch, I think you said something about a $1 billion would be kind of what was flowing in and out of backlog, or you might hit a $1 billion in solar backlog at some point over the next two years.

What was that comment?.

Yes. What I said was we have about – we have $450 million – hang on, let me get to that part in here. We had like $470 million of projects, renewable projects in backlog.

And that – we've been – typically what happens in that businesses that were – you go through an estimating process with your clients and then you're granted – you’re told that the project is yours – typically we'd get a limited notice to proceed, but we’ll start engineering, we'll do some engineering. And so we don't ever put that into our backlog.

We may put the value of the limited notice to proceed, which is $9 million or $10 million or $11 million in the backlog, but we don't put the whole project into backlog. And we've been told that there's another $500 million, so we’re sitting here with about $430 million in backlog in renewable projects.

We've been told unofficially, but there's another $570 million of projects that they go forward once they get financial backing and the financial support, which is that they've already gotten, most of that is just the approval start from their respective companies that will finalize our contracts with those clients and then that work will go into backlog.

Those projects, that $570 million of projects are also projects that are slated to be built, designed and built in 2021 and 2022. So if that happens, we'll have over a $1 billion of renewable work in backlog for projects that we built in 2021 and 2022..

Yes. In backlog or in process..

Backlog or in processes..

But the $570 million, those are incremental projects. It's not existing – it's not like the next phase of projects that have already started..

They're incremental projects and there are different stages of progress, right. So every client handles them a little bit different. So some of them, they go through and get an estimate, get an agreement on what the price is, have an agreement on what the scope is. They'd go back to their senior management and get the project approved and funded.

Then they move forward to others, they go out and they sell the project to a developer or whoever. I mean, they're all different depending on who the client is..

And then just last one for me and I'll turn it over.

What's been your experience so far with the margins in solar?.

They've been in at low double-digit 14%, 15%..

So pretty good, actually..

Yes. They're nice margins..

Yes. Adam, when you think about – the work is very different, but they tend to ironically enough kind of resemble how pipeline projects work. They're generally fixed price projects. They generally are bid at kind of low double-digit margins.

And if we do a good job and manage our costs and are efficient, we can get some margin accretion as we push our way through and close them out..

Okay..

And they're really – they're not a typical, they're atypical construction type projects like mobile manufacturing more than it is construction..

Yes. The work is very different than a pipeline project, right. But in terms of how they financially wind up working out, they could be similar to a pipeline project..

Well, that’s great. It helps offset the decline in pipeline, okay. Very good. I'll turn it over. Thanks guys..

Thanks..

Appreciate it..

Your next question comes from the line of Julio Romero with Sidoti & Company. Please proceed with your question..

Hey, good morning..

Hey, Julio..

Hey, Julio..

I wanted to ask about the streamline segments and what your margin origin range looks like for the three new segments?.

I’m sorry. You broke up a little bit.

Can you repeat that?.

Sure.

I wanted to ask about that the new segment structure is what normal – targeted margins like for maybe Energy and Utility segment?.

For the Energy segment, it's going to be kind of 11% to 13%. In Utility segment, will probably be a little bit broader, but we've normally said that that's generally kind of 12% to 14%..

Got it.

And this question was asked earlier, but non-electric grid modernization, just thinking longer-term, in your experience does a storm, well, you probably haven't experienced a storm like this, but has past storms in Texas kind of increased like a sustained appetite for increased CapEx into greater liability or does that sort of taper-off as people's memories kind of path over time?.

Well, I mean, there's always a storm. The grid hardening work that comes, that follows hurricanes, right. The problem with the grid hardening is certainly when you – I guess that's a bit different type of work, but when you're talking about doing grid hardening or going underground with utilities.

The numbers I've heard is anywhere from 7% to 10% more expensive to put power, utilities, underground than it is to build overhead.

When you are talking about the result of what might happen as a result of this storm that hit Texas this last week, it's more – creating more capacity, whether it be transmission capacity or energy generation capacity to make sure that you have – that you can provide – what services that people need when storms like this occur.

This is a little bit different. To me it would be more power generation or we're bringing more power generation online. And obviously, perhaps, doing some winterization on the wind farms that apparently didn't occur and they've lost that power generation capability and then having the transmission capabilities because you're going to lose.

And then when you have storms like this, you're going to lose some transmission capabilities because you're going to have some failures. I mean, it's just the nature of the basement to get some zero temperatures, ice storms, lines freeze, power lines come down, it just happens..

Got it.

And just thinking about your backlog and the mix of MSA-based to non-MSA-based, if I pro forma the Future Infrastructure backlog into your backlog, I mean, does that – does that mix look closer to 50% MSA to non-MSA?.

Hold on. We’re seeing a lot of pro forma or….

The way I thought about it, you said $350 million I think of estimated backlog for Future Infrastructure, right. And if I assume that all – like it's kind of close to that 48%, 49% range..

No, that's right. That's exactly right..

Okay. And I guess just last one for me is on the CapEx guidance. I think you mentioned $60 million to $80 million all based on buying new equipment. Is that extra $25 million or so I think that step-up, I guess it's related to what you were talking about on the past for this year.

Is that related to the new Future Infrastructure business and buying equipment for that business?.

There's only a small portion of that that's in there for Future or actually – I mean, there's a percentage of it based on their revenue. It's probably 2% to 2.5% of their revenue. It's just – last year we held CapEx down just because of the pandemic and I want to make sure we reserve cash.

And it's pretty – if you go back in past years, we've historically spent anywhere between $60 million to $90 million or $70 million to $90 million in CapEx. So just getting back more to the traditional numbers has been consistent with how we've operated in the past..

Thanks for taking the questions..

Thanks, Julio..

Thanks, Julio..

Your next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question..

Hey. Thanks. Good morning..

Hey, Brent..

Hey, Brent..

Hey, I know it's going to get re-segmented, but the utilities and distribution group haven't seen the same growth in 2019 and 2020 that gotten used to in preceding years.

And as some of that – and there's some seasonal factors things outside of you and your customer's control, but I know backlog isn't always a perfect leading indicator of the business.

I'm just wondering how you're thinking about that into the 2021?.

Yes. I mean, we have been down, but part of the reason we've been down a little bit is because we chose to trade revenue for profit.

We went through and did a full review of all of our contracts and said, which ones are we making money on and which ones are we not? And so – and we talked about this in previous quarters about how we walk away from some contracts and terminated some, there were just not profitable where we couldn't negotiate good profitable, renegotiate profitable rates with some of our customers.

Other customers, we’re very successful in negotiating good rates. So the reason for the slower revenue growth and decline is because we've been kind of cleaning up some of that in order to produce better margins overall, and be more disciplined in that respect. Our continued growth is going to be driven by a number of different things.

Geographic expansion, Tom talked about in his comments about expanding out into the West. We've got a new customer in the state of Utah. But we are going to have some ebb and flow depending on our customer spend, where they are in the rebuild process and our geographic expansion.

And that'll be further complimenting now by the acquisition of Future because I think as we mentioned before, Future is mostly telecom, but there was a nice chunk of gas utility work that they did as well down in the Southeastern part of the United States..

And the other part of it is when you go and do the utilities, especially gas utilities work, a lot of it's going in and replacing all old age systems in urban environments and rural environments.

When you finish that build out, then you're doing new installs as things like the pandemic occur that stopped new construction, then that type of work drops off. We'll still do work for those clients in those regions under current MSAs or existing MSA. But then it drives us to go out and find other MSAs and other areas to work to.

And it takes a little bit of time to get those clients to allow you to come into an area, demonstrate that you can work, that we'll do that typically with why you'd bring in a few crews. And it just takes time to build that relationship to the point that you can take over some of that work. It's just a process..

Okay.

And with the addition of some of the telecom capabilities, do you think that will actually help you get some new customers on the utility and distribution front?.

I’m counting on it, we're counting on it. And I think will help – the telecom side get new customers because we have – we're in geographic areas that the Future doesn't operate right now. We're already seeing them be pulled by customers that we have relationships built into those regions. So it's working both ways..

Great. And then you guys have a massive backlog here in the power business, and it sounds like a good chunk of that is solar related.

Can you just talk about, I guess, the non-solar related stuff and bookings activity? What you're seeing outside of that within that business unit and how you see that point over the next 12 months in terms of growth opportunities?.

Yes. We've got – we do a number of things that are non-solar. Now you heard me talk about looking at – getting into wind is one of them that we're going to start looking at, but a lot of it is renewable fuels, bio-diesels, green diesels. We were actually doing studies for our clients right now.

Some of those projects were turned into construction projects for us. We're actually doing a large construction project that you heard me reference for biofuels project at California. That's about $200 million plus. I have another $50 million project that we’re going to do some construction on here in the Gulf Coast.

And some of the projects we're dealing with clients, some of the projects you deal with developers. So there's a number of opportunities out there, developer projects have a tendency to take longer to become a real project.

They have to go out and get the prudent process then they have to allow front-end engineering, the support staff and they have to go out and get the financing in place and then get funding to move forward with the project just takes a little while.

So we started years – several years ago, looking at those opportunities even with methane recovery and facilities are in landfills. So we've got our fingers in the fire in a lot of different areas, working with developers and clients on those projects. It's just – it takes a while.

I don't know what we have in our plan for those outside of solar in our business plan right now. I couldn't speak to that at this moment..

Yes. As you recall, Brent, that segment has a number of different business unit, includes our Canadian operations and includes our industrial operations on the West Coast, our industrial operations along the Gulf Coast.

So it's a broad mix of work in and around industrial facilities, refining and petchem, Canadian oil sands, Canadian midstream, et cetera..

Okay. And Ken, I imagine – just a final question, the guidance reflects some normalization in civil margins maybe back to the mid-high single-digit.

Is that fair?.

That's correct..

That's correct..

Yes. Okay. Great. Thank you..

Thanks, Brent..

Thanks, Brent..

Your next question comes from the line of Lee Jagoda with CJS Securities. Please proceed with your question..

Hi. Just one quick follow-up on an earlier comment. So I think earlier you mentioned that the Energy segment target margins were in that 11% to 13% range. I assume you're speaking to the new Energy segment.

Is that correct?.

That's correct, Lee..

And I guess the follow-up is, I don't think you've gotten to the low-end of that range since 2015 if I look at the segment together, so has something changed structurally that you should achieve that range going forward? And when do you actually expect to be within that range?.

I guess I was thinking about it more from the – that's a good question. I'm glad you clarified that. I was thinking about more from that old power and industrial. When you layer in heavy civils, that's a good point. It probably will not be 11% to 13% when you layer in our Civil segment, it will probably be kind of 9% to 12%..

Yes. You’re absolutely right..

Yes. Because that will set several dollar average..

Heavy civil traditionally is just a lower margin business..

Right. That makes sense. I was surprised that it was as high as it was, so can you can clarify….

Great question. I appreciate you asking about that..

When we finished the job in the Northeast and you'll see margin start triple up in that segment. Right now they got some revenue, they got a burn that has no margin in it at all. So we got to get past that project, but renewables picks those numbers up pretty nicely..

Right. No. That makes sense. Perfect..

And there are no further questions at this time. I would like to turn the call back over to Mr. Tom McCormick, Chief Executive Officer for Primoris..

Thank you, Amy. I'll just conclude by saying 2020 was a very successful year for the Primoris family of companies, as well as for our shareholders and our customers. We are off to a strong start in 2021 and are looking forward to seeing what challenges and opportunities the year brings. Thank you all for joining us today..

This concludes today's conference call. Thank you for your participation. You may now disconnect..