Good morning. My name is Ramon, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Investor Relation Third Quarter 2022 Conference Call. This call is being recorded. All lines have been placed on mute to prevent any background noise.

And after the speakers’ remarks, there will be a question-and-answer period. It is now my pleasure to turn the floor over to your host, Granite Construction Incorporated’s Vice President of Investor Relations, Mike Barker. Please go ahead, sir..

Good morning and thank you for joining us. I’m pleased to be here today with President and Chief Executive Officer, Kyle Larkin; and Executive Vice President and Chief Financial Officer, Lisa Curtis. Please note that today’s earnings presentation will be available on the Events and Presentations page of our Investor Relations website.

We begin today with a brief discussion regarding forward-looking statements and non-GAAP measures. Some of the discussion today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding the future events, occurrences, opportunities, targets, growth, demand, strategic plans, circumstances, activities, performance, shareholder value, outcomes, outlook, guidance, objectives, committed and awarded projects or CAP, and results.

Actual results could differ materially from the statements made today. Please refer to Granite’s most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward-looking statements. The company assumes no obligation to update forward-looking statements, except as required by law.

Certain non-GAAP measures may be discussed during today’s call and from time-to-time by the company’s executives. These include, but are not limited to, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss, and adjusted earnings or loss per share.

The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and in company presentations, which are available on our Investor Relations website. Now, I’d like to turn the call over to Kyle Larkin..

Good morning and welcome to our third quarter call. We’ll start this call with an update on our efforts to drive improved gross profit margin across our portfolio of projects. I’m pleased to report that excluding the ORP, our construction gross margin improved to 14.8% in a quarter. I want to congratulate our teams on this accomplishment.

This margin improvement validates all the hard work we’ve been performing across the company to improve profitability. I will talk more about this improved performance later in the call. Before we dive into performance, I also want to mention an update to our divestiture plan that occurred this quarter.

Because we announced in September, we are retaining the water resources and mineral services businesses. These businesses will report into the Mountain Group and the construction segment. Both businesses have performed very well this year in that market outlook to support future growth.

We are confident that decision to retain these businesses is in the best interest of our shareholders, and we intend to invest in and grow these businesses to their full potential.

As a reminder, water resources provide full lifecycle water management, from supply to treatment to delivery and maintenance for government agencies, commercial and municipal water suppliers, industrial facilities and agricultural and energy companies.

Through water well drilling, installation and rehabilitation of wells, pumps and water treatment technology our teams identify and develop water sources, recharge aquifers, and deliver potable water. Mineral services provides mineral exploration services for the largest mine operators in North America, particularly copper and gold operations.

While the business is cyclical and there has been recent weakness in copper and gold prices we believe the push from fossil fuels to electrification will support a strong cycle of growth in the mining industry.

We are well-positioned to support mining partners in this growth not only in mineral exploration, but also through civil construction services on their mindsets. Now, turning to the broader view of our three operating groups.

We remain laser focused on achieving our 2024 strategic plan targets of construction segment, gross profit margin of 14% to 16%, consolidated EBITDA margin of 9% to 11%.

As I mentioned at the start of this call, we are seeing progress in this area, the third quarter gross profit margin, excluding the ORP of 14.8%, which is an improvement quarter-over-quarter from 14.1%. Improvements, we are experiencing are credit to the steps we have been taking to implement our strategic plan throughout the project lifecycle.

We have been focusing on two primary areas of the project lifecycle across our groups. Project selection is one area of emphasis. We are pursuing projects suited to our strengths and we’re being selective with the clients that we choose to work with.

Discipline project pursuit focuses on jobs where we have a competitive advantage based on our knowledge of the project and home market. On Bid Day, we are disciplined on margin expectations and our project portfolio consists of higher quality work that Granite has had in years.

The second area for the project lifecycle focus has been project execution. We are raising the bar by driving consistency and performance through further standardization of processes and communication and best practices across the company.

During the third quarter, we saw our focus on Bid Day margin and project execution gain momentum as demonstrated by our non-ORP construction gross margin. We are pleased with his progress and we are positioned to build upon these results is the work to achieve 2024 plan gross profit margins of 14% to 16%..

Turning to the ORP. We continue to burn through the remaining work on these projects. There’s 150 million cap remaining on the ORP projects at the end of Q3 we expect approximately 90 million to carry the 2023.

As a reminder 35 million of the ORP cap expected to carry in the 2023 relates to one small profitable project that is included in the ORP because it is a non sponsor joint venture. Excluding this profitable project there’s 55 million of ORP cap expected to carry in the 2023 related the challenging projects.

Of the four current active challenging ORP projects two are in the closeout or punch list phase and two are completing construction. During the third quarter losses in the ORP, primarily from one project on the East Coast, negatively impacted our results. The losses arose out of the schedule delays which drove increased costs because remaining work.

We expected the payment to be completed this year that is now pushing into 2023. This one project represents more than half of the 55 million and challenging ORP project cap, which is expected to be completed in early 2023.

We believe our forecasts have captured the cost that will arise out of the delays and our teams are diligently working to complete the project as quickly and efficiently as possible. As we move from 2022 to 2023 we believe there are many risks of the ORP has greatly decreased, and our focus will be on the construction segment performance as a whole.

As I’ve said before, we cannot finish this work soon enough. I’m excited to see that the end is in sight for the challenging ORP. Now, I’d like to discuss the transformation of our center group, another area of our strategic plan where we are making significant progress.

As previously discussed, having well developed home markets is key to our strategy. Our vertically integrated California and Mountain Groups model, the structure and portfolio that we’re working toward across the company. In our home markets we have trusted relationships with stakeholders and employees market intelligence and access to resources.

These attributes result in us winning more projects, higher margins and higher levels of customer satisfaction. Region of our center group has historically pursued and constructed large projects across south eastern and Midwestern states. Last year, the region was asked to do two things.

First, de-risk portfolio by changing the types of projects and proceed from complex design build projects to smaller Bid Day best value projects. Second, build a home market within Texas. One focus of this effort has been to solidify our presence in the rapidly growing Houston metro area.

Although Granite has been in the Houston market for over 15 years, and has good relationships with the Texas DOT, the Liverpool to contractors and vendors, we have missed opportunities to strengthen those relationships as we chase work across the country.

The Houston area is a growth market with healthy funding levels, and a resilient pipeline of job opportunities and markets from transportation to water to private site development. We’ve applied to targeted and selected bid strategy.

We believe we have a competitive advantage and can leverage our strength through our expertise in roads and highways, as well as our experiences solar, water, airports, site work and structures. In the third quarter we had three highway project wins and southwest Houston, totaling 145 million.

The projects are in close proximity to each other and should allow us to leverage existing teams and resources we have built in the market. Center Group has done a great job building the foundation for future profitable growth. It will be a key component of Granite reaching the targets set out in our strategic plan. Now turning to cap.

We enter Q4 with 4.1 billion a cap, a sequential decrease of 135 million falling was traditionally our busiest quarter of the year. Year-over-year excluding Granite’s in liner’s cap of 205 million in the prior year cap decreased 45 million.

This again, results from our efforts to de-risk our project portfolio as we move away from large complex projects to smaller projects that fit within our defined risk criteria.

We have seen resilience in our private market work and continue to strength public market opportunities it appears that the additional funding for the IIJA is taking longer to turn into lettings than originally expected. The DOTs are still working through the process of prioritizing and advertising the projects.

We expect to ramp up of opportunities over a period of several years similar to what we experienced in California when SB-1 was first passed. We hope to see a more meaningful impact on the project opportunities over the next six to nine months. The good news is that the IIJA will build upon the current positive market.

We believe we are well-positioned to capitalize on the increased funding through our home markets and large and high growth states that received the bulk of the funding because the projects are released. I’m excited that look at the quality cap across our groups and the opportunities ahead of us in the fourth quarter.

We believe the quality of our cap has never been better and will support our strategic plan and profitable growth. Our successful strategy to target best value opportunities has changed the risk profile of our cap it should lead to more consistent profitability and cash generation for years to come. Shifting to the material segment.

Aggregate volumes remained strong during the quarter, increasing year-over-year across our operating cost. Activity in the markets during the quarter and aggregate orders as of the end of the quarter continues to suggest that the general economy remains healthy despite inflationary pressure and interest rate increases.

The strength is demonstrated by 60% year-over-year improvement in the volume aggregate orders as of the end of the third quarter. Volumes during the quarter increase year-over-year in the Mountain Center groups, but was more than offset by a decline in the California group.

The decline in California is primarily due to a decrease in asphalt paving projects compared to the prior year. By this decline in volumes in the quarter, we are encouraged that pending orders are now ahead of the prior year as we move into the fourth quarter.

During the quarter we saw revenue and gross profit increase over the same period in the prior year and saw a decrease in gross profit margin is lower asphalt volumes and inflationary costs continue to impact several profitability.

We expect that the energy surcharges introduced during the second quarter will continue to offset inflationary pressures and boost revenue and gross profit in the materials segment. Now, I’ll turn it over to Lisa to discuss our financial results. .

Thank you, Kyle. In the third quarter revenue decreased 5% from the prior year comparable revenue which excludes Granite Inliner 65 million of revenue in the prior year increased 1%. Third quarter gross profit increased slightly resulting in a gross profit margin of 12%.

In the construction segment, quarterly comparable revenue declined 16 million year-over-year to 848 million. This decline was primarily due to a $73 million decrease in the Central Group as ORP projects approach completion and as our teams mobilize to recently awarded projects.

Revenue in the California group increased 8% year-over-year as the group executed on record cap that it carried into the third quarter. Mountain Group, which is now home to water resources and mineral services saw its comparable construction revenue increased 12% to 362 million.

This increase was primarily driven by strong performance in our solar power business and Washington region, and was supported by the continued strength of the Utah region. The construction segments gross profit for the quarter was slightly down from the prior year.

Comparable gross profit, which excludes Granite Inliners gross profit of 5.4 million increase 5% with an overall improved gross profit margin of 12% for the quarter. The ORP ended the quarter with a remaining cap of 150 million, a decrease of 45 million from the prior quarter.

Challenging ORP cap which excludes a profitable California Group ORP project totaled 115 million at the end of the quarter. The amount of challenge ORP cap expected to carry into 2023 is approximately 55 million with the majority remaining on a single project that our teams are working to complete.

Third quarter net ORP losses to Granite, which excludes non controlling interest totaled 13 million on revenue of 44 million compared to a loss of 5 million on revenue of 99 million in the same prior year period. The losses during the quarter were primarily from one project on the East Coast.

Construction segment margin excluding the ORP was 14.8% a sequential improvement from growth margin of 14.1% in the second quarter. material segment revenue increased 24 million or 17% compared to the same period in the prior year. Comparable materials revenue, which excludes Granite Inliners 5 million of materials revenue increased 22%.

This increase was driven by strong aggregate sales volumes from each group and price increases implemented in April that more than offset the volume decreases in asphalt sales compared to the same prior year period. Materials gross profit increased 1 million compared to the same period in the prior year with gross profit margin of 13.6%.

This is up sequentially from 12.7% but down from 15% in the same prior year period. While we are seeing gross profit margin improvement, margins are down compared to the prior year due to lower asset volumes and inflationary costs. Turning now to our non-GAAP financial metrics.

Adjusted EBITDA and adjusted EBITDA margin for the third quarter was 97 million, or 9.6% compared to 81 million an 8% in the same period in the prior year. Adjusted net income for the quarter increased 20 million year-over-year to 63 million and adjusted diluted income per share of $1.41.

This compares two adjusted net income of 43 million and adjusted diluted income per share of $0.93 in the same period in the prior year.

The increases in adjusted EBITDA and adjusted net income were driven by strong performances from our California and Mountain Groups, as well as lower SG&A resulting from the sale of Granite Inliner and decrease incentive compensation expense.

Our third quarter results reflect the progress we’re making toward consistent profitability across our portfolio projects as we work to meet our targets within our 2024 strategic plan. Now on to our cash and financial position.

For the nine month ended September 2022 our operating cash outflow was 15 million compared to a cash inflow of 60 million in the prior year. During the third quarter operating cash inflow was 89 million as projects that we’re starting in the first half of the year generated cash. We expect strong cash flows to continue in the fourth quarter.

Our cash and marketable securities balance rose sequentially to 317 million as of the end of the third quarter.

on a year-over-year basis cash and marketable securities are lower, reflecting year-to-date share buybacks of approximately 71 million net debt repayments of 75 million, investment in our materials business and a decrease in operating cash flow.

Revolver availability stands at 267 million, and our debt at the end of the quarter is 288 million, down from 340 million in the prior year. Now I’d like to discuss our 2022 guidance.

This guidance update reflects the addition of the water resources and mineral services businesses which were not included in the continuing operations guidance provided earlier this year. We expect our full year revenue to be in the range of 3.2 billion to 3.3 billion.

Both California and Mountain has strong cap heading into the fourth quarter and weather permitting. We expect both groups to have a busy quarter to close the year. Our guidance for SG&A as a percent of revenue is unchanged, at a range of 8% to 8.5% for the year.

Regarding the annual effective tax rate, during the year, we recognize two significant discrete items with the SEC investigation settlement charge and the deferred tax effect of no longer classifying water resources and mineral services as held for sale.

Excluding these two discrete items our adjusted effective tax rate range remains in the low to mid 20s. With the inclusion of water resources and mineral services, we are increasing guidance for adjusted EBITDA margin to arrange a 6% to 7%.

With OERP projects nearing completion, we believe that they will not pose a significant drag on our profitability in 2023.

While we have not yet completed our budgeting process for 2023, we expect that the midpoint of our 2023 adjusted EBITDA range will be at least 8% as we continue to work to improve our profitability and alignment with our 2024 targets.

Finally, we continue to invest in our vertically integrated business with a current focus on investing in our materials operations. We expect that full year capital expenditures for 2022 will be between 120 million and 130 million, 10 million from our previous guidance.

We will continue to be opportunistic and investing in automation, materials, reserves, and strategic assets that will further strengthen our business. Now I’ll turn it back to Kyle for closing remarks. .

Thanks, Lisa. I’ll close with the following points. As we complete the fourth quarter and move into 2023 we believe that we will no longer need to talk about the challenge to ORP and will instead be focused on what we expect to be improved consistent performance in our construction segment.

Outside of the ORP, I’m pleased with our performance across the company. We are making incremental improvements that we believe are necessary to reach our 2024 target of 9% to 11% EBITDA and our third quarters non-ORP gross margin of 14.8% demonstrates the progress we have made.

In the materials segment, we continue to see strong volumes in aggregate sales and encouraged with asphalt orders ahead of last year at the end of the quarter. The market environment remains strong across our home markets, as demonstrated by the strength of our cap and the opportunities that we see ahead of us in the fourth quarter and into 2023.

The impact on the infrastructure bill has been slower than anticipated by the industry we know that funding is there. It’s only a matter of time until we receive the benefits from this generational investment in the country’s infrastructure. Finally, we are executing on our strategic plan.

I believe Granite is better positioned to take advantage of the opportunities ahead of us and the company has been in many years. We are positioned to drive consistent profitability and sustainable growth for years into the future. Operator. I’ll now turn it back to you for questions. .

Thank you. Ladies and gentleman we will now begin the question and answer session. Our first question comes from Michael Dudas with Vertical Research Partners. Please go ahead, sir..

First question for Kyle. Yes, we can’t wait not to hear ORP ever mentioned again. So that’s an certainly you’re making some great progress there. How do you, you look, you see you. So you’re encouraged about Bid Day, what you’re putting into the backlog.

Can you maybe reflect on the risk and margin profile what’s going into the backlog amongst your divisions? And relative to what you’re executing off that backlog? And is the how that gap has narrowed? And are the type of opportunities you’re putting in the backlog from the margin today kind of fit with what you anticipate could be generated in 2024? Or is there still a market that or execution issues that need to be addressed to achieve those targets?.

We feel really good about the cap that we haven’t placed today. We’ve been working on our capital last couple of years transforming our cap, de-risking our company, really working hard to shift away from those really large design build projects that we had in the past. And that’s really across the board.

And the donut chart that we share really highlights the fact that we reduced that design bill portion, going back two years in Q3 20% of our cap is now down to 5%. So that’s a big evolution for us, and really speaks to the de-risking of our portfolio. That also shows that about 43% of our cap today is best value.

These projects that are really negotiated, were hired for the value we bring to the client that we do fairly well on relative to certainly the design build projects as the projects get larger. So the teams have been working really hard. We’ve been getting more money on Bid Day, as we’ve indicated, and that’s in our cap today.

So we’re going to burn through some of the work that’s been on the cap for a while and we’ve been adding new work that has a higher margin profile than what we’ve had seen a year ago. The last three quarters now including Q3 I can say we’ve picked up more work with higher margins. And so we’re right where we want to be.

And I think that’s really, really pointed in the right direction. That’s how we’re bridging to the 2024 on gross profit targets..

And the execution from the margin bid to executed is narrowed betters still needs a room for improvement..

It’s better, yes, our execution, even outside of the ORP, there’s an opportunity for us to do what we’re already really good at and become what we say is the best and we’ve made progress. We think there’s still opportunities for us to continue focusing on our execution and get even stronger outside of ORP.

But yes, our execution is getting stronger across the board..

And my follow up is just can you remind us in Q4, 2021, what the weather impacts were and how we start in 2022. And just discuss sense of I can recall where those dry, wet or in between, amongst important regions..

It was wet out in the West. We didn’t have the strongest Q4, as a company we didn’t have strong Q4 necessarily in California. I can tell you the numbers that I’ve already seen and we’ve seen in October indicate that we’re already way ahead of where we were last year in the month of certainly on the west. .

Thank you. Our next question comes from Steven Ramsey with Thompson Research Group..

Can you talk about how much of the EBITDA margin raise was due to keeping WMS versus the other previous core segments? And does the FY ‘23 and ‘24 margin commentary include WMS in it?.

I’ll take that and if Kyle has any comments he can add to it. So for the increase, yes, the majority of that is the benefit from adding water resources and mineral services into our continuing operations. And we did have some ORP fades in the quarter but this more than offset the increases from adding in water and minerals.

And so for our guidance looking out what we provided for 2023 and still our 2024 outlook it is inclusive of the water resources and mineral services businesses. So it is all in..

And then if you think about the vertical integration of California being kind of the goal for the rest of the country, if I understood that commentary do you plan to acquire quarries around the country to make the Central Group more like the Western group? Just any color you can share? And to add to that, does the 2024 margin target count on this happening to any degree?.

The short answer is no, it’s not counting on that vertical integration expansion to get those targets met. Now, that’s really using the business that we have in place today. And we do anticipate continuing to grow our company we want to do deals that are, I guess, less risky to start.

And those are the more built on type acquisitions within our home markets today. So that’s certainly easier to do out in the west, we want to look certainly like California and our Mountain Groups and other areas of the country.

And one area that we would want to go with certainly down in the markets of Texas and Florida, where we have our business operations already there. I think that’s going to be to come. But that’s certainly on the list of things that we want to get accomplished over the next two, three years..

And one more quick one on IIJA projects.

How much can you take on in the central region? And do you expect projects from government funds like this? How much will they align with your operating plan to have a quicker burn smaller project focus in that region?.

Well, I think they align really well. I mean, we haven’t seen the IIJA today. I think that’s something that we’re looking forward to seeing. I think it’s a little bit behind what we originally anticipated in terms of project letting await this year and starting to see a impact in terms of construction early next year in 2023.

But our teams across the country are very well-positioned. I mean, the formulaic portion of that is really based on population, we’re in those locations, even in our Central Group, I think the work that we’re picking up is kind of indicates the fact that we’re competitive.

And the margin profiles they have, and that work is consistent with the targets that we have a longer term as a company. So we think we’re very well-positioned.

I think another highlight that I’ll share the amount of work that we’re really bidding in the bid pipeline today, that’s active, is well above what we were pursuing at this time last year. So the markets are strong, and that’s across the board. So we feel really good about the opportunities that all of our teams are in front of them today.

And that’s an advance of the IIJA..

Thank you. Our next question comes from Brian Russo with Sidoti. .

Just the recent contract wins in Texas and California, just trying to get a sense what’s the competitive bidding like or the behavior? What separates you from your competitors maybe just the macro environment, maybe just the balance sheet that is enabling you to win these awards at the margin profile that you’re targeting..

So that is really our strategy around these home markets. That’s where we do our best. That’s where we have local knowledge, local resources, we have the labor. Sometimes we have the materials, and we understand the owners, and we understand the regulators in those markets. So that’s really the key for us. That’s what we do best.

And that’s probably why we changed our strategy to really focusing on these home markets. We’ve had home market as a company, we certainly have them out in the west. And the real shift for us is on these teams that were historically chasing large projects throughout the United States.

We’re focused on developing a whole market strategy for those states in those markets. And that’s going to allow them to really be successful in the long term..

And then I was surprised maybe you mentioned this earlier where you could elaborate. I was surprised to see the margins down in the materials despite the energy surcharges implemented in the second quarter.

Is there some contract lag on that or how should we look at year-over-year quarterly margins going forward?.

Yes. I’d say there was still a little bit of lag on that. We won’t have that the energy surcharge will completely get us hold until the end of the year. So it’s been slowly decreasing our amount of exposure. But certainly there was still a little bit of lag in some of the pricing that we had out early on.

And again, that was where we missed the natural gas probably along with everybody that hits at the end of Q1. So we did have some pricing out in advance of that. But we expect really, if you look in the comments, we spoke about our backlog and really, of materials in California is up. So it’s up versus where we were last year at this time.

So as you look forward, we think we’re well on our way. And again, I mentioned October, the numbers that we already saw on October are really encouraging that we’re ahead of where we were last year this time too..

Our next question comes from John Ramirez with D.A. Davidson..

This is John Ramirez from Ben Tillman.

How are you? Do you mind recapping the ORP remains and what the burn is expected for the remainder of 2022 and how much is left into 2023?.

Yes. I can cover that. And so just even to recap further to show the progress that we’ve made on cap. We entered the year with 314 million. And so for at the end of Q3 we’re down to total ORP cap of 115 million. So we burned 44 million of revenue related to ORP cap in the quarter. So but to clarify of the 115 million.

And we’ve talked about this before, we do have one project the profitable project, but we’ve included it in the ORP because it is a non sponsor joint venture. And we are not entering into those type of projects moving forward. So really, at this point in time are challenged, ORP is 115 million at the end of Q3.

So at the end of the year, we anticipate that our challenged ORP cap will be right at about 55 million. So we’ve really made good progress through the year. If you look at it in totality for portfolio, the 100 and the 314 million was about 8% of our total cap.

So by the end of the year, and entering into 2023 the challenged ORP will only be about 1% to 2% of our overall cap. So that’s why as Kyle was said earlier that we really don’t anticipate to be talking about the ORP, entering into 2023..

And you said that’s 115 million at the end of 2Q?.

At the end of Q3 115 million of our challenged ORP..

And yes, and I just want to know, given the funding and bidding environment, when do you expect to see more meaningful growth in cap? I know you talked a little bit about that move into ‘23.

But can you give some color in terms of the projects, and how it aligns with the smaller projects with faster burn?.

I mean, we’ve had these big projects as part of our cap historically. So it’s kept our cap high. As we start shifting towards smaller projects, we are going to start turning those projects quicker than our historical large projects. So there will be a little bit of shift in cap.

But in general, our team has done a really nice job picking up work and offsetting that decline that we saw in the ORP. Again, our bid schedule today is really strong. And we feel really good about our opportunities in front of us.

Even that’s an advance of the IIJA and I expect if we continue to pick out work at the pace that we’ve seen, and we see the opportunities continue, I expect Q4 to be a really strong quarter for us..

Thank you. Our next question comes from Jerry Revich with Goldman Sachs..

Hi, this is Adam Beavis on for Jerry today. Thanks for taking my question.

I was wondering if you could elaborate on the decision to retain the water resources and mineral services business? Is this more a reflection of the current environment we’re in for M&A or should we expect this business to remain as part of the portfolio on an ongoing basis for the long term?.

So the quick answer is you should expect it to be part of the portfolio for the long term. But the decision was really based on valuation. We were in exclusivity with two buyers for those businesses, the credit market changed over the last a month or two.

They were looking to retrain, and it was to a level that we didn’t think was in the best interest of our shareholders or the company. And so that was really the change. I can tell you, I think businesses have been performing well, the markets are very strong.

We have great leadership, and we have great teams in those businesses, so we’re excited to have them as part of the agreement portfolio. Our balance sheet is strong, too. So we don’t see it as having any sort of providing a hindrance on our ability to grow the company either. So hopefully, I answer your question..

And someone asked about the margin guidance earlier. I have a similar question on revenues.

Is the entirety of the revenue guidance increase from the inclusion of water resources and mineral services? Or is there any contribution from better performance in your core civil and materials business?.

So we did the, adding in water resources and mineral services obviously does impact our revenue guidance. At this point in time for 2023. We were really just providing a little bit of insight for what we’re seeing for next year for our adjusted EBITDA.

But definitely even with the update that I provided this morning, for the rest of the year, we increased revenue to the range of 3.2 billion to 3.3 billion. So yes, so definitely there’s improvement there for adding in those businesses back into continuing operations..

Thank you. Ladies and gentleman, this is the end of our question and answer session. I would now like to turn the call back over to Mr. Larkin for his final remarks..

Okay, well, thank you for joining the call today. As always, we want to thank all of our employees for the work they do every day. And thank you for your interest in Granite. We look forward to speaking with you all soon..

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect..