Good day, ladies and gentlemen and welcome to the Tutor Perini Corporation Third Quarter 2020 Earnings Conference Call. My name is Paul and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will be opening the call for a question-and-answer session.

As a reminder, this conference is being recorded for replay purposes. [Operator Instructions]. At this time, I will turn the conference over to your host Mr. Jorge Casado, Vice President of Investor Relations. Please proceed..

Hello everyone and thank you joining us today. With us on the call are Ronald Tutor, Chairman and CEO and Gary Smalley, Executive Vice President and CFO.

Before discussing our results, I will remind everyone that during today's call, we will be making forward-looking statements which are based on management's current assessment of existing trends and information. There is an inherent risk that our actual results could differ materially.

You can find our disclosures about risk factors that could potentially contribute to such differences in our most recent Form 10-K which has been filed on February 26, 2020 and in the Form 10-Q that we are filing today.

The company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. And with that, I will turn the call over to Ronald Tutor..

Thank you, Jorge. Good afternoon and thank you all for joining us. As expected this year is continuing to progress extremely well despite the impact of COVID-19 that we have been experiencing during the entirety of the year.

In the third quarter COVID-19 had lessening impact on our business as the vast majority of our project have been considered essential and are still working. And I will try not to dwell on COVID-19 as a part of life, but we are prospering despite it.

This has allowed us to progress our work subject only to the timeliness of manpower reductions when one of our workers contacts COVID-19, and then we quarantine those workers that work in this area are associated with those employees.

As a result the impact on our workforce so far has not been significant as whenever we been losing people due to COVID we replace them from the unions and then enable to work accordingly.

However, as an aside, most of our public agencies in particular, the Transit Authority agencies have recognized COVID as a cost reimbursable event and are preparing to pay as the direct costs, namely layoffs, cost of sick leaves, et cetera. So, I don't know that we'll get reimbursed for impacts on schedule or loss of revenue. I doubt it.

However, we are being reversed -- or we are being paid some of the direct costs. Moving on, we delivered another set of solid results this quarter with particularly strong performance from our civil and building segments. Our revenue grew 21% year-over-year in the third quarter, driven by double-digit growth across all segments.

We continue executing substantial work on several large civil projects, including California High-Speed Rail, Minneapolis Southwest Light Rail Transit, Purple Line two and three stations as well as Purple Line three tunnels in Los Angeles and the New York Airport Terminal One, as well as on large building projects such as the Choctaw Casino in Oklahoma, and another large hospitality and gaming project in California, and the large technology building project in California.

I don't mention those specific names because they're under confidentiality, but they are what they are. Our revenue growth through the first nine months of this year has been equally strong at 21%.

In fact, we delivered the highest third quarter revenue growth since 2014, and the highest revenue growth for the first nine months of any years since the merger in 2008. We generated $73 million of operating cash in the third quarter, another great results that follow the $92 million of operating cash generate in a prior quarter.

More importantly, we generated $131 million of operating cash through the first nine months of 2020, which also set a new record since our merger in 2008. This was consistent with our expectations for continued strong cash flow in the second half of this year.

We anticipate that we will again produce a healthy cash result for the fourth quarter, concluding which not to be a record year of operating cash. Our operating cash this quarter was largely driven by collections associated with major civil jobs and continued progress made on certain settlements.

Strong cash generation in the third quarter keeps us well ahead of expectations for operating cash through the first nine months of 2020. Operating Income of $83 million was another highlight of our third quarter results. It was the highest third quarter results again since the merger in 2008 and was up 73% compared to the same quarter last year.

The significant increase was the result of continued progress on several high margin civil jobs that I mentioned earlier, as well as a favorable arbitration ruling that we announced a few weeks ago.

Our operating income this quarter would have been significantly higher, had it not been for that a $15 million charge, we were required to take in the specialty contractor segment, due to an adverse legal ruling we received pertaining to a completed mechanical project in California that was concluded for the four and a half years ago.

In a moment, Gary will review all the financial results of the quarter including specifics around the COVID-19 impact year to date. But I'll reiterate that our results for the third quarter were very strong, and particularly outstanding for operating income and operating cash.

Our major design build projects are all advancing well, which gives me confidence we'll continue to see strong growth and profitability this year and next. Our backlog remains solid at $9.2 billion at the end of the third quarter. And importantly, the backlog is of longer duration than what you might expect.

As it includes certain very large design build projects, such as all of those on the purple line in Los Angeles, as well as even the residue of high speed rail that are expected to continue advancing for another four years.

It really should come as no surprise to anyone that our backlog is decreased this year given our strong revenue growth, combined with a relatively low volume of new awards during the first six months of the year, compared to last year.

That lack of awards is simply up, projects being stopped, work not going out to bid while all our agencies try to determine how they're going to fund all of their growth desires. These are all delayed until I believe after the election, and there's a direction going forward and at the very least rescue packages by the federal government.

We booked $625 million of new awards and contract adjustments in the third quarter of 2020. The most significant of these included $121 million for our share of the South Coast Light Rail project in Massachusetts. We're in a joint venture with Middlesex, a local contractor in the area.

$75 million of additional funding at Rudolph and Sletten for various building projects in California, a $54 million mixed use building project in California, and $47 million military facility for Black construction.

Speaking of Black, they are not only having the extraordinarily successful year, but the future bodes extremely well because all the discussions for many years of the marines moving from Okinawa to Guam is absolutely taking place with bidding opportunities in a range of over $2 million over the next 18 months on the island of Guam sponsored by the U.S.

Navy. Black's revenue and profits are growing at nearly double any prior previous years with an extraordinary increased in all the constructions on Guam where we been dominant for the last 40 years.

We believe that our backlog still has the potential to grow over the next few quarters as we've already submitted several bids for new large projects that are pending customer decisions and contract awards in the coming months.

For example, we are waiting the outcome and next steps related to the bid our team submitted for the Honolulu Rail Transit P3 project. We are also awaiting decision regarding our submitted bid for the early stage work on what will eventually be the $8 billion Sepulveda Transit Corridor P3 project at Los Angeles.

In addition, we anticipate bidding in early December. The LAMTA's $450 million LAX Airport Metro Connector project with an award expected by the first quarter of 2021. As well as bidding on several large civil segment projects during the first half of 2021.

As we noted, last quarter, several major bid opportunities over the next year have been deferred, while public agencies await federal supplemental funding and budgetary certainty. Once we move past the election results, we are optimistic that the sorely needed federal funding for infrastructure will be authorized sooner than later.

Most in our industry continue to expect that the federal government will approve a substantial supplemental funding package aimed at supporting state and local transportation agencies, critical infrastructure needs, as well as their tremendous revenue shortfalls necessary for them to continue to function.

Other large forthcoming bids include the $2 billion Newark Airport Air Train, $2 billion JFK Airport Landway development project, the $1.4 billion portal bridge replacement in New Jersey, which we now expect to bid in the third quarter next year, and the $1.2 billion Metro North Penn Station access in New York.

It also appears that in the third quarter of 2021, we expect to bid the $2 billion Bay Area Rapid Transit Silicon Valley phase two extension, which is a very large tunnel in the excavation and support of two stations.

Further out on the horizon, we are looking forward to the $4 billion West Santa Ana Transit Corridor and a $1.5 billion East San Fernando Valley Corridor both for Los Angeles Metropolitan Transit Authority.

In New York, we have been following as we spoken to previously to $3.5 million Port Authority Bus Terminal and of course the $2 billion LaGuardia AirTrain.

Our building segments larger perspective opportunities include proximately $2.1 billion for six large hospitality and gaming projects in Virginia, California, Louisiana and North Carolina, an $800 million new hospital in Northern California, the $500 million, Burbank Airport Terminal replacement and a $265 million veterans own facility in Northern California.

In fact, we were provided a Notice of Intent within the last few days by confidential customer for one of those six hospitality projects with a value of approximately $350 million, the construction of which is expected to begin in the second quarter of 2021.

In all, we are tracking approximately $30 billion of project opportunities, literally $20 billion of which are several bidding over the next 18 months and more than $10 billion of building projects, bidding or proposing over the next 12 months with significant work and vision to be formed on many of them by our specialty contractors units.

As you can tell, as we've been asserting for some time, the volume of prospective projects remains unprecedented, despite the funding challenges presented by COVID-19. Our large civil opportunities are likely to grow even more once the federal government finally authorizes the long anticipated infrastructure program.

Finally, though our year to date earnings per share results are head of budget expectations. And we have been able to offset all of the impacts of COVID-19 to date, we remain cognizant of the uncertainties.

And as such, based on our current assessment of market conditions, and our forecasts for the remainder of the year, we will maintain our 2020 earnings per share guidance in the range of $1.80 to $2.10. With that, I turn the call over to Gary Smalley to present the details of our financial results. Thank you..

Thank you, Ron. Good afternoon, everyone. I will start with a discussion of our results for the third quarter, including cash flow, followed by some commentary on our balance sheet and then our latest 2020 guidance assumptions.

Revenue for the third quarter was $1.4 billion, up $253 million, or 21%, compared to $1.2 billion for the same quarter last year. And as Ron mentioned, it was our highest quarterly revenue more than 10 years, and feature double digit growth across all segments.

The strong growth was driven by increased activities on the large infrastructure projects that Ron referred to earlier, as well as on certain building projects in California and Oklahoma.

The COVID-19 pandemic only had a minor impact to revenue of approximately $40 million in the third quarter, well under the $130 million revenue impact in the second quarter.

The impact in the third quarter was largely associated with the single building project, where our customer requested that we slow our pace of progress probably until the beginning of 2021. Civil segment revenue for the quarter was $612 million, up a strong 17% year over year, driven by contributions from the same larger infrastructure projects.

Revenue for the building segment increased significantly to $508 million, which is up 22% compared to the same quarter of 2019, also predominantly due to the California Oklahoma building projects I just referred to.

Specialty contractor segment revenue was $322 million, up an impressive 29% year over year, primarily due to increased activities on the Newark Airport project and hospitality and gaming project in California.

Income from construction operations for the third quarter was $83 million, an increase of 73% compared to $48 million for the same quarter of last year.

The significant increase was due to contributions associated with the significant volume growth we experienced this quarter across all segments, along with reduced G&A expense due to the impact of the favorable arbitration decision that we announced recently.

The third quarter COVID-19 impact income from construction operations was only approximately $3 million compared to $9 million in the second quarter. But about $2 million of the $3 million of third quarter impact been in the building segment.

We are hopeful that barring any significant worsening of the pandemics effects upon our operations, the largest impacts are behind us. As Ron mentioned earlier, we took a charge of $15 million in the specialty contractor segment due to an adverse legal ruling on mechanical project in California.

So our income this quarter included approximately $5 million of net positive impact resulting from the favorable arbitration ruling and the adverse legal ruling. Civil segment income and construction operations was $70 million compared to $51 million for the same quarter of last year.

The segments income grew 39% year-over-year, primarily because of strong contributions from our large mass transit projects in California.

This growth in the civil sector income was even more impressive when considering that it was reduced by $8.4 million of incremental non-cash, non-cash amortization expense in the quarter related to the increase equity interest in the joint venture that we acquired in the fourth quarter of last year.

Even with this additional amortization expense, the civil segments operating margin was once again strong at 11.5% for the third quarter of 2020 compared to 9.7% for the same quarter of last year. So civil segment operating remains at the high end of the 10% to 12% margin range we've historically seen for the segment.

Building segment income from construction operations was $16 billion more than double the results for the third quarter of last year. The strong increase was mostly driven by contributions from certain projects in California and Oklahoma.

The building segments third quarter operating margin was 3.1% compared to 1.8% for the same quarter last year, with the increased margin reflecting contributions from certain higher margin projects. Building segment operating margin for the full year of 2020 is still expected to be in the 2% to 3% range.

Specialty contractors income from construction operations for the third quarter was $10 million, up 34% compared to $7 million for the same quarter of last year.

The increase was primarily due to the segments volume growth, as well as the net positive impact mentioned earlier that resulted from the favorable arbitration decision and adverse legal ruling, partially offset by various other immaterial adjustments to project estimates.

We remain optimistic that as especially segment's newer, higher margin projects continue to advance, its operating results will improve significantly. Other expense in the third quarter was $8 million compared to other income of $2 million in the third quarter of 2019.

The other expense for this year third quarter included a charge related to the resolution of a dispute pertaining to a past business acquisition.

Interest expense for the third quarter of 2020 was $26 million, compared to $17 million for the same quarter of last year with the increase primarily due to non cash debt extinguishment costs related to our debt restructuring transactions in August of this year, the majority of which we had budgeted for the fourth quarter.

We had a very nominal income tax expense of $37,000 for the third quarter of 2020, compared to income tax expense of $5.6 million for the third quarter of 2019. The nominal expense on this year's third quarter primarily resulted from benefits associated with the Cares Act, which was enacted in March of this year.

Under the Cares Act, the net operating loss or NOL that we generated in 2019 may be carried back up to five-year as under previous rules NOLs were only allowed to be carried forward.

This allowed us to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal tax -- statutory tax rate was 35% rather than the current rate of 21%. The majority of the NOL benefit was recorded in the third quarter of 2020 when the final tax return information was received from our joint venture partners.

Net income attributable to Tutor Perini for the third quarter of 2020 was $36.8 million or $0.72 per diluted share compared to $19.3 million, or $0.38 per diluted share for the same quarter of last year.

This near doubling of net income and EPS of this year's third quarter was due to the facts I mentioned that drove the increases in revenue and income from construction operations, as well as the tax benefits I discussed.

As Ron indicated earlier on a year to day basis, our EPS of $1.43 ahead of budget, and this is even after a $0.21 per year to date EPS unfavorable impact from COVID-19, as well as $0.12 of net unfavorable impacts that resulted from a couple of adverse rulings, one in the second quarter, one in the third quarter, which are partially offset by the favorable arbitration decision in the third quarter.

Next, let's discuss operating cash, which was definitely one of the major highlights of our third quarter. Our operating cash generation for the quarter was $73 million, a very solid result for us.

Even more impressive is that our operating cash generation year to date through September 30, 2020 was $131 million, which as Ron mentioned, was the highest result for the first nine months of any year since our merger in 2008.

Strong cash contributions associated with increased project execution activities on certain higher margin projects, driven by our near record backlog at the end of last year were enhanced by progress made on the resolution and collection of certain disputed balances.

Our year to date operating cash is well ahead of our budgeted expectations and 18% better than operating cash performance through the first nine months of last year. As Ron mentioned, we expect to finish the year strongly and anticipate that we will set a new record for operating cash in 2020.

Lastly, we anticipate operating cash to comfortably exceed net income for 2020, which will mark the fourth time the last five years that we have accomplished this goal. Our net debt as of September 30 2020 was $673 million, up modestly compared with $641 million at the end of 2019.

During the third quarter, we refinanced our debt replacing our former $350 million credit facility with a new $175 million revolver and securing the $425 million term loan B. The financial markets were favorable at the time we executed refinancing and then as a result, demand for our term loan B was robust.

This enabled us to upsize the term loan B and at the same time drive more favorable interest rates and other terms than expected.

We use the portion of the proceeds from the term loan B to repurchase $130.1 million of our convertible notes and placed $69.9 million of the proceeds into a restricted account, which will be drawn upon to pre purchase or retire or remaining outstanding convertible notes at or before the maturity date in June of next year.

As a result for a strong cash generation in the third quarter, our new revolver had a zero balance as of September 30, 2020. So we had ample liquidity for anticipated business needs.

As many of you may know, our previous credit facility included Spring Forward maturity provision, whereby it would have matured on December 17, 2020 for convertible notes for still outstanding at that time. We're very pleased with the outcome of a refinancing, which eliminated this issue that had been a source of concern for some investors.

In addition, our refinancing enabled us to extend our debt maturities and provided us with increased liquidity under more favorable terms compared to our prior debt facilities.

We were well within the limits of in compliance with our debt covenants at the end of the third quarter, and we anticipate that we will continue to be comfortably within our covenant limits in the future.

As Ron stated earlier, we are maintaining our 2020 EPS guidance range at $1.80 to $2.10 per share based on a strong year to date results and our expectations for continued solid performance for the remainder of the year. Now, let me provide an update of some of the assumptions in our guidance.

G&A expense for 2020 is now expected to be approximately $230 million to $235 million, which is lower than previously anticipated, mostly due to the impact of the favorable arbitration decision in the third quarter.

Interest expense is now expected to be about $76 million, of which $20 million will still be non-cash and includes approximately $8 million of debt extinguishment costs. Our effective income tax rate for 2020 is now anticipated to be approximately 15% to 16% with the reduced tax rate driven by the tax benefits we realized in the third quarter.

Finally, capital expenditures for the year are now expected to be approximately $55 million to $60 million, of which about $40 million to $45 million will be for owner funded project specific equipment. Apart from these all are the assumptions remain unchanged from last quarter. With that Ron, I'll turn the call back over to you..

Thanks, Gary. In summary, we delivered a very strong quarter underscored by double digit revenue growth across all segments. Obviously excellent operating income, particularly good margins in the civil and building segments. And most importantly, very strong operating cash flow, all of which within line or exceeded our expectations.

As we said before, and over and over, we're hopeful that the impacts of COVID-19 will continue to diminish and we will continue to monitor the developments and any potential impacts of COVID-19 on our business.

Furthermore, I believe our business will continue to grow into 2021 and beyond, not only based on our solid backlog, but the number of large project opportunities ahead that we have been monitoring, some of which we've already bid and others that we expect to submit bids over the next 12 to 18 months.

As a reminder, we are still seeing limited competition for many of the larger projects that we are pursuing, and expect that this will continue to be the case well into the future. Our marketplace continues to be the largest, the most complex infrastructure projects in the country where we believe we have the best opportunity to succeed.

We continue to believe we're in a multi year period of solid growth and increasing profits, and more importantly, the collection of our unbuild receivables. And importantly, we are delivering on our goal to significantly improve cash generation, something which we will sustain in the future.

Thank you And with that, I'll turn the call over to the operator for questions..

Thank you. At this time, we would like to take any questions that you may have. [Operator Instructions] One moment please while we pull for questions. Thank you. Our first question is from Steven Fisher with UBS. Please proceed with your question..

Good afternoon, guys..

Hi, Steven..

Hi, guys. Just, Gary, thanks for some of the input on the Q4 guidance. Maybe just a few other points there. Just curious how you approached that guidance that it's about $0.36 to $0.66 range. I have that right.

What are the key swing factors operationally for that? How should we think about the margin is at the same kind of proportion of profitability we expect from the segments in Q4 as you achieved in Q3?.

There really shouldn't be any change. We had a number of legal settlements in the third quarter and some good, some bad. We continue to resolve issues that are non litigation in the fourth quarter. I believe the fourth quarter will be very consistent along the lines of the operating results of the third quarter.

That's why we remain competent, well, the confident we'll achieve our target goals for earnings..

Okay. That's helpful.

And then in terms of the cash flow, what do you guys have on the docket for potential resolution and collections from that process in the fourth quarter, versus just ongoing operational cash flow?.

I am confident that we've got two or three ongoing resolves on projects. We've been settling everything amicably with no lawyers. I expect that fourth quarter to be another positive cash flow results. I'm reluctant to say to what extent that it will not be small. We will have a very positive cash flow fourth quarter..

Okay. Fair enough. And I guess it will wondering if you can maybe weigh it on a bit of a debate that we observe in the marketplace.

As we're hearing mixed messages about the -- I would say, maybe as you really see guys, the building construction market, where things kind of been picking up over the summer, and it's hard to tell that just kind of peak construction season along with some pickup following shut down during the pandemic, versus other folks that are saying there's just not a lot of visibility.

We're seeing project deferrals and cancellations. And I'm curious where you guys stand on that? I know, you mentioned $10 billion of building opportunities.

I'm just kind of curious if you're seeing enough positive momentum to call this the start of the next cycle? Or is it just sort of a lot of inquiry activity and just not clear of what's actually going to move forward.

Curious for your perspectives on that based on your customer discussions?.

Well, as you know, even building business is hardly our focus. However, we do have a large building operation. My feelings about the building business are that it's been decent, there continues to be new work. We continue to have many public sector opportunities in the building business that continue to grow. I don't see it as a growth sector.

It's hard for me to get confident that it has even a smidgen of the potential if the civil group to ask. However our people have shared with me. They believe they'll be able to sustain our levels of revenue.

And since we have no aspirations of growing the building business, I don't see it is an issue, but I don't see it as a potential for growth that has to take place in infrastructure and civil work..

Okay. And then maybe just shifting to civil side, since the large projects were a nice meaningful contribution here. How do we think about -- what is the timing of peak profitability on those projects? And then, when do you buy -- when do you need to replace that backlog? And how smoothly do you think that process is going to go.

I'm just kind of curious since we haven't resolved the election yet. Hard to know the timing of when those State BOT [ph] bailouts or support may come.

So how do we think about when we might peak on the profitability contribution of the current backlog that you're seeing nicely now, versus the need to replace that?.

Well, the reality is if you take Purple lines two, three, the purple line three tunnels and high speed rail, which probably constitute $4 billion of our backlog, all time margin. Those are just beginning to peak in revenue as you all know, we earned from costs. And that we're just speaking, we will see peak revenue over the next three years.

And then it'll line down toward completion in year four. So I think we have a very solid high margin, revenue package and civil over the next three years. One of the obvious things is, of course, civil building pipeline can't be shut down indefinitely.

I anticipate from all of the agencies I talked to and their principles, that we're not going to see any heavy activity until the second or third quarter next year, once they're assured they're going to have a rescue package from the government, their revenues stabilized, then we can have a better handle on how and when we replace our major works backlog in the civil business.

As I pointed out, also, our competition continues to be minimal. There's a handful of contractors willing to bid the large work that we do. So we continue to see that as a great future. However, before we can replace backlog, we got to get the owners to get them out into the marketplace. And I see a lot over the next six months..

Okay. Thanks a lot, Ron. Appreciate it..

Sure..

Thank you. Our next question comes from Brent Thielman with D.A. Davidson. Please proceed with your question..

Yes, thanks.

On the civil business a lot of growth this year, still have a pretty large backlog sitting on at the end of the third quarter? Ron, do you need some more key wins in that segment over the next couple quarters? Any order for the business to grow next year, do you still feel like you have like still need to grow go into 2021?.

Well, as I said earlier, the existing work will ramp up in revenue. The only one we still continue to struggle with delays is of course high speed rail. But that is just what it is. But the balance of them will increase in revenue.

So I think we'll be able to sustain a level of growth over the next couple of years to make big no ands, ifs or buts, we've got to start replacing that backlog for the year 2022 and 2023.

And that's why I'm hopeful and assuming that the government will release funds so that all of the dozen major projects that we've been talking owners about for years and telling you about that are ready to go out on the marketplace will in fact go into that marketplace.

But I would say that with our existing backlog and run rate, the next few years look good. But we need obviously to replace that backlog with new work..

Yep. Okay. And then on the -- everyone on the building segment from a different perspective, great levels of profitability for the business at least.

Any other opportunities, like new work out there that you're going after that they can do with that business or that project extend to the segment?.

Yes. There's another large project actually larger than Newark that we're looking at and, and talking about. There are periodic, very large building projects that we happen to have a particular appetite or skill for. And there seems to be a couple of those on national basis. But they're the exception or not the rule.

The building business is what you typically see, 2% to 3% margin business, where we generate a relatively consistent level of revenue. And with a few ups and downs, that's where it falls. The secret is when we get those large opportunities that are profitable, because of their size and risk. And those do happen but not too often..

Okay. And then you mentioned Guam, 2 billion and work you go after over the next, I think next 18 months mentioned you are the dominant player there.

I mean, any sense that you think realistic that we could expect for you [Indiscernible] Guam?.

Well, we've double our revenues this year and doubled our profits, the highest revenue we ever had and the highest profits we have unless I'm missing my own numbers, we doubled them. And next year it should be bigger. We're literally flooded with work to bid there. And we are the only construction company with a major presence on the island of Guam.

We have dominated it since Mr. Black founded the operation in 1960. I bought Black in 1995. It's an extraordinary operation, and we're overwhelmed with work. And there is a limit, but how much more can we do. We are already sitting with $600 million in proposals and waiting for the Navy to make a decision.

Our backlog in Guam between Guam and the Philippines and Diego Garcia sits at $490 million. It's the operation is just dramatically increased size revenue profitability, and it will probably continue to until we just reach a limit to our own capacity..

Yes.

And then that $600 million Ron, I mean, imagine that is staggered over the next or award just staggered?.

No. Those are bids that were sitting that we've turned in and got for bid, they owe them all to us. And one of our biggest complaints with the Navy is they did these projects, and they sit on them and look at them. For six months, we have no idea whether we're going to get overwhelmed with a whole slew of new work or we'll get one or two of them.

So that's the challenge to try to manage the amount of work we do there. But right now, it's just been phenomenally successful. And we continue to support them and move people there to help execute the work..

That's great. Thanks for taking the questions..

Thank you. There are no further questions. At this time, I would like to turn the floor back over to Ronald Tutor for any closing comments..

Thank you, everybody, and we'll see you next quarter..

That concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day..