Okay, great. Well, excited to get the conference kicked off here with Sterling Infrastructure. It's been an extraordinary story here in the last few years, an extraordinary stock as well. Very pleased to have Joe Cutillo, CEO, and Sharon Villaverde, CFO, here to talk with us. I thought maybe just to kick things off, just you know, I think still lots of people still getting a little bit up to speed on Sterling. I thought I'd maybe pass it to Joe just to spend a couple of minutes talking about what it is you do, Joe, within your three businesses, and then I've got, you know, certainly some more pointed questions here around things that we hear a lot about the story. So I'll turn it to you. Sure. Thanks. Thanks, Brent, and thanks for having us. I'll give you a 50,000 foot overview of Sterling. We're, you know, we're focused on infrastructure services, and we break our business down into three segments. Our first segment is what we call E-Infrastructure. In this segment, we do predominantly site development for data centers, large manufacturing facilities, e-commerce, distribution, or any mega site development activities that are needed. We'll do smaller jobs like stadiums and stuff like that occasionally, but it's really focused on mission-critical projects, and the reason for that is our size, scale, and ability to execute is part of the critical path of completion is the service we pretty much guarantee. So the way we go about it is, if you have a project and you want to start pouring the pad to build the facility on June 1st, we guarantee it will be ready on June 1st, a nd we have the size, horsepower, and capabilities to do that. A s you can imagine, if we're part of a $3-$4 billion project, if that site development is two weeks late, that project will be 6-8 months late. So you got the cost of capital, the lost production, everything else. It's the most highly variable piece of a build. It's the most critical piece of the build, and that's what we excel at. Our second segment is Transportation. It's where the company started a long time ago. We focus really in three areas: highway, aviation, and rail. That business has seen tremendous growth over the last year and is gone from a very low margin to a good, solid mid-margin business that we work 100% off customers' money and has become what I call the cash cow of the company to invest in our higher margin, higher growth businesses. The last segment is what we call Building Solutions, and this is focused in Houston, Dallas, and Phoenix. As the only areas we are, it's our smallest segment, but we do slabs for the Big Three builders and currently doing plumbing for them as well on all new homes. So, the majority of those homes are first-time homes and kinda one move- up homes. We're not doing mega mansions. A very high volume, very high pace, and just like on the E-Infrastructure, the time to get that slab done is critical to the overall build time to the builders. So that's the value proposition. Good. Joe, I mean, you know, the roots of the business were sort of the civil infrastructure, transportation business, and you've evolved a lot. It's not a substantial portion of your operating earnings anymore. Y ou know, I wanna ask some questions, particularly around the E-Infrastructure. I think a lot of people are focused there. But maybe before that, what's sorta next with the strategy? Where do you wanna take the business, whether that's adjacent areas in the three segments or, you know, would you add another leg to the stool? Yeah. So I think it is interesting when we step back. In 2016, 95% of our business was low bid, heavy highway work. Today, less than 10% of our business is low bid, heavy highway work, so we're a completely different company. W e've built a great platform for future growth, not only from the organic side of what we have in place, but we're to the point now where we allow our customers to really drive parts of our strategy by letting them ask us or tell us where they would like us to go. In Building Solutions, we've added plumbing and some other things and geographic expansion based on customer feedback. As we look at E-Infrastructure, not only are we expanding geographically with customers across the country, I will tell you we're in early conversations with some of the big mega guys on data centers for national deals, multi-year, partnerships with them. They're getting very concerned about capacity over the next three to five years with everybody coming out and building these, but they're also asking us to add incremental capabilities. So we always try to look one step ahead of what we're doing today. So today we're doing the site development. In data centers, we dig all the duct banks. There's no reason that we wouldn't start doing dry conduit in the duct banks. From there, that leads into the electrical on the duct banks. From there, it leads into the mechanical. We're just constantly looking at what is that next step, where are the customers asking us to provide that, how do we either partner up with people or build those capabilities ourselves? That would come through acquisitions. We can't spell electrical. We can't spell conduit, but we certainly can buy really good companies, tuck 'em in, and leverage those relationships. The platform overall is poised to grow. We're focused on Building Solutions and E-Infrastructure first, but we would love to add a fourth leg. We like the grid. We think there's gonna be many, many years spent of spending on the grid. The challenge we have is our margins are very high, our cash flow is very good, and we're very picky on acquisitions, and we just haven't found anything that fits the financial parameters for us, that we'd feel comfortable paying some of the multiples that are out there for those. Joe, some of those sort of opportunities around what you're already in, would you consider those more tuck in, or can those be relatively larger acquisitions? Yeah, I think it's a combination, right? We certainly are always looking at and doing tuck-ins. You know, these are small businesses that give us other capabilities or asset-capable assets to do more. We would love to do larger deals, a nd we, you know, we've looked at deals up to $2 billion in size, so we're not afraid of a large deal, b ut we're very picky, and if it doesn't meet our criteria, or, and it's not accretive day one, we're not really interested in it. Something at that size, I mean, especially as well as your stock's done, would you use your stock as currency for something like that? Yeah, I think we'd use a multitude of things. You know, we've built the balance sheet. We got $600+ million sitting on a balance sheet. We got virtually no debt. We throw off, with no acquisitions, close to $1 billion over the next three years. So as we put some acquisitions in there, it'll be more. Our single biggest challenge right now, Brent, is doing enough deals fast enough. That's really putting the cash to work. Okay. I'm sure no one wants to talk about E-Infrastructure, but I'll ask some questions here. I guess first, and Joe, I think even for myself, trying to understand and comprehend the visibility you have outside of the backlog. You've talked a little bit about this in terms of Phase I, Phase II, Phase III, but maybe if you can just walk through how you... The visibility that you have within the business beyond what we see in the print on the backlog. I think this is probably the most confusing thing for people to understand. We have visibility in a couple different ways. First of all, guys don't wake up today and say: We're going to build data centers. Okay? All these guys have three- and five-year plans, and they're working today on data centers they're going to build three and five years from now. They've got capital budgets. You have to go find land, you have to procure land, you work on all your subsidies with the local, federal, state governments. You're working all of that stuff. That takes, on average, three years minimum, okay, to go, I should say, not on average. Some take five years, and that's the fundamental difference between data centers and the manufacturing plants that are continuing to come back. Everybody thinks it's, you know, you decide to make a chip plant, and federal money comes out, and you start it the next day. It's three to five years from the time you decide to do it to the time you break ground. So we see those coming in 2026, 2027. We see the data center guy, the big guys' capital budget plans. T hen the other piece of that is, when we win these jobs, and we book them, we only book the first phase. So these are multi-phase jobs. They can be anywhere from three to five incremental phases on them, generally, and manufacturing plants are pretty much the same. We love that. Now, it's hard for the investment community to understand that we won a $200-$300 million job when you only put $50 million in backlog. But we know we have five or six subsequent add-ons that will happen to that, as long as we don't screw up the project, and we've never lost one, okay? What we love about it is, it doesn't lock us into any long-term pricing and risk. So we finish a segment, we bid that next segment, and we move on. It also enables us, from a productivity standpoint, everybody says: "Well, why are your margins so high?" and all that stuff. We pick up several points of productivity by knowing what those future phases are and trying to stage those accordingly through the project, where we can actually pick up productivity down the road, right? So, it's a really nice thing. At the end of the second quarter, we had roughly $500 million of work that we know is out there that's connected to our jobs. That number will continue to grow as we continue to add data centers. Our data center volume was up 100% year- over- year. It's now 40% of our backlog. If it was 100%, I know everybody gets nervous and all that stuff, it'd be fantastic. Just great margins and all that, but the other thing to keep in mind, you know, we've got some questions on, well, you're worried that data centers become too much of your portfolio, and I would say no, first of all. Second of all, our assets are fungible. I don't care if it's a data center or a big manufacturing plant or a mega site for whoever knows what it's going to be. It doesn't matter to us. Bigger is better. That's where we make our hay. Okay. Joe, I'm just thinking about Phase II, Phase III, Phase IV. How often would you lose that to a competitor b ecause you're already on site- We've never lost it. Okay. Actually, we turn down more jobs to do those future phases b ecause we have a philosophy that if a customer makes a mistake by picking a competitor, then they should live with that mistake and learn from it, is one. T wo, if we jump in in the middle of a bad project, we don't know where it is, right? So we'll just let them finish it out, and our strongest customers and our strongest relationships are off jobs that we did again. It goes back to that. We guarantee to get it done, and once they go through the process and it doesn't get done on time and the costs associated with it, the small premium we charge for that is well worth what we call the insurance policy. Okay. You know, your business is largely Southeast, Mid-Atlantic, maybe a little bit up into the Northeast, you would say. I guess the question would be, I mean, some of these data centers are moving outside of the traditional clusters. Yeah. Is there still buoyant opportunities there for you down the road? Does that require you to move into areas that are less traditional for you? Yeah, I think- Does that add risk? We had a great success last year that's turned into two more data centers in the Rocky Mountains. Yeah. This is kind of how it works. We had one of our large customers come to us and ask us to go to Idaho out of Georgia to do their data center, right? I said, "So that's a long way to go from Georgia to Idaho, and it's not gonna be real economical." T hey said, "You don't understand. This isn't about economics. We need to get this done." So what we did is, we took our yellow iron assets from our transportation business in the Rocky Mountains. We took the project management teams and the estimating teams from Colorado, or from Georgia. We call it the brains and the brawn model a nd we went up, and we said, "We can put this together and do the job." T hey said, "Great!" So we did the job. It's turned into two more data centers and a manufacturing plant, and not only did we get more with that customer through the Rocky Mountains, we picked up a manufacturing plant and another data center with the GC, an engineering firm that we worked with. It was the first time we'd worked with them s o they were new, and their feedback has been: "We haven't had anybody able to develop sites with the speed and consistency of what you've done. Will you go with us to other parts of the country?" So we'll follow the customers. What is gonna get really interesting on some of these multi-year kind of conversations and partnerships, it will drive us to look at geographies that we're not in today and how to either cover them or partner with people that we can help our customers get through those. Interesting, a nd can you produce the same margins? Yes. Okay. Maybe just sticking with that theme, Joe, if you go beyond the Rocky Mountains... I mean, can you go beyond the Rocky Mountains, where you've already got some assets in the civil side to leverage, or do you really need to do an acquisition to move into another territory? Yeah, I think once we start getting outside of where we have assets today, y ou know, a couple hundred miles for us to go is not a big deal, but I'll tell you, when the industrial work slowed down, we've never gone after the Virginia, Maryland market. We've just... Most of the jobs have been too small there. There's several jobs that are larger, that are coming out in that area, and we've started to focus more in that. I was just in Georgia yesterday. We're talking about putting an office in that region, 'cause we could have several hundred million dollars of work there next year, which is really nice, as a new market, so we'll expand as far as we can, logically, with our assets, but in those other areas, we'll have to start looking for acquisitions. Okay. J ust also within the infrastructure outside of data centers, I mean, manufacturing had been a nice tailwind for you preceding years. Maybe it still is, but, you know, obviously some of the kind of leading indicators, PMI and orders, haven't been particularly good lately. What, what does the pipeline tell you there, the urgency of customers to move on those types of projects? It doesn't matter, you're getting lots of data centers, but- No, we love the manufacturing too. Yeah. The manufacturing will be a little lumpier. But I think people are confusing two things. The manufacturing stuff we're doing is an added capacity to people that are manufacturing in the U.S. today. If that was the case, I would tell you, "That's gonna slow down," right? 'Cause the manufacturing numbers are down. These are more strategic moves, where companies have made a conscious decision to move manufacturing from, mostly from Asia, but from other countries, back into the U.S. W hen you talk to 'em, they'll say, "Yes, it's gonna cost us twice as much to build the factory here, and it'll cost us 20% more or 30% more for the product, b ut this is a strategic initiative to help the supply chain, so we don't run into what we ran into during COVID." So I think those activities will continue. We're still very early in that. I think we'll have multiple phases of stuff coming through a nd when you talk to the big engineering firms, they're working on a lot more than I had even realized t hat is looking at coming back to the U.S. So we think it'll be a little bit lumpy, because, again, the start time to kind of get it going will be there. But we see that continuing through 2026, 2027, and then that's when we think the big mega projects are really gonna hit. I t'll be interesting because the size and scope of these chip plants relative to the stuff being built today is astronomical a nd whether it's us or, you know, the electrical side or the mechanical side, is there gonna even be enough capacity to do these things? It's gonna be a food fight, to say the least. That's okay. It's a good problem. Yeah, it's a good problem for all of us. Yes. us. Yes. I mean, Joe, maybe just thinking a little nearer term, I mean, you've had some top-line pressure in the segment. Part of it's been sort of, maybe all of it's been reprioritization of what you want to pursue. What needs to happen to sort of reinvigorate that growth, and when do you think we can see it in that business segment? Yeah, so I may have confused people on the call. Sometimes I don't speak as clear as I should. We didn't make a conscious effort to go away from the industrial jobs and all that. What ultimately into data centers, we're going towards data centers. We'll continue to grow there in manufacturing. I mean, frankly, what happened is with the interest rates continuing to go up, most of these jobs are privately funded, and they're highly dependent on interest rates. There is a breaking point. Happened in the Northeast about the second quarter of last year, in the Southeast, late third quarter of last year, where the projects just didn't make sense. So the few projects that were going out were incredibly cheap, and we just said, "We're not gonna waste our time and go practice for the sake of swapping dollars. So we'll continue to focus on data centers, and when that comes back, we'll go back after it," right? That's always been great fill-in work, and the challenge with that is you don't have as much visibility to it. It's not uncommon for us to do a bid today. Somebody will come to us this week, we'll put in a bid this week, we'll start next week, and we'll be done before the end of the quarter. These are $3-$10 million jobs, right? So they're very high turn. What we like about them is, if we're in between big jobs or we've got crews rolling off a big job and they're, you know g oing to have a week to go to another job, we could fill it in and just use that, and we get great utilization out of it. That will come back with interest rates. So I think realistically, you know, we had the rate decrease yesterday. Nothing's a toggle switch. It takes time. I think as we get into the second quarter of next year, we'll start to see those projects coming back, would be my best, best guess today. So that's another tailwind. In parallel with that, Amazon is starting up their program again. They're starting it a little bit earlier than we anticipated. We thought 2025. They're talking about some stuff actually in 2024 still, which is nice. So we think that'll be another potential tailwind in the 2025 for us. When you think about all these things and the mix effect that happens in this segment, and the margins have been incredible here lately, has the view changed on what's the right kind of margin range for this business group? You know, certainly if in the second quarter, we had $40 million less of the industrial work than we had the year before. That's lower margin. You know, that's probably 4 or 5 points lower than our big stuff. So depending on the portfolio shift, that could impact the margin some, but the way we look at it is, it'll probably flatten out. We don't see it going backwards significantly. We still think we got 100 to 200 basis points of margin growth. So if I take that, and I couple that with lower margin, we might flatten, right? So, I think there's a lot of fear, and rightfully so. The economy is kind of iffy right now and questionable, and a lot of people have high margins. W e're gonna wake up, and the margins are gonna go backwards. The thing that would drive margins backwards faster than anything is if these big projects stopped, and we don't see. We see the data centers getting bigger. We see the manufacturing plants getting bigger. If they went to $10 million data centers, like in the DC area, yeah, that our margins would go down as a result of that, but we don't see any of that happening. That would be the biggest impact. Yeah. Okay. Maybe some questions on Building Solutions. We've got a rate cut. I'm sure everybody's out buying homes right away. They've been waiting. What are you hearing from maybe your home builder customers? You're in advantage markets, Texas, Arizona. Maybe just some feedback there, Joe, in terms of what the pipeline looks like for some of those business. It's a little bit mixed right now to be honest. I think we certainly were and still are, and it'll take a little bit for the rates to hit, but the affordability, it's a mess, right? People cannot afford these homes. Now, we've seen nice growth through all of this, but in the Houston market is just continuing to be on fire. It's growing. Homes are a little bit cheaper there than the Dallas market, and we haven't seen any sort of slowdown. In Dallas, we've seen one of the big builders slow down. They're saying it's land related. In the second quarter, we had a tremendous amount of rain, and it put their development. They had a great first quarter, ran out of land, and the development schedule is behind, which we believe, but we also think that market has slowed down a little bit right now, but we haven't seen it with all the builders, just one of them, and they'll kick it back on. They don't make money. But what we really feel good about is if you just look at the population growth in Houston, Dallas, and Phoenix relative to the houses being built, there's still a gap, right, so they still have to get more homes built to get people into them, and they'll figure out the affordability. My philosophy is just really simple: Builders don't build homes. They're all public. The top three are public companies. They don't build homes, t hey buy land, they design homes, and they sell them. I f they're not selling homes, they don't get any revenue, and they don't get any margin, right? It's really that straightforward a nd right now, they're still making 20%+, close to 30% on these homes. So they have room to move if they have to, and they'll do something, right? C ertainly, with interest rates, that helps them. Are you prospecting any new markets in that business? Are you happy with where you're at? W e like where we're at. We think if we were gonna go geographically somewhere else, Florida would be the next place. Just logical, the types of homes, the population growth is important to us. Same customers. What we're really focused on is geographically expanding west in Dallas. So Dallas, Fort Worth, everybody calls it the same. I mean, it's from our east operation in Dallas to Fort Worth is now three hours to get over there, right? So can we keep going west? There's a lot of building going west, and should we put another operation west? We added plumbing in Dallas last year. That's been a fantastic business for us. We love that. We're looking at how do we add plumbing in Houston and Phoenix. The Phoenix market would give us a tremendous competitive advantage. Right now, it takes longer to get plumbing done in Phoenix than it does to build the whole house. So there's a tremendous demand. We just are trying to find the right one to buy, to get in there or do it organically now that we have the plumbing business. Okay. Anything interesting you can tell us about how quickly that plumbing business is growing? I know you gave the initial numbers. I think it was around $50 million, but... Yeah, it's growing very nicely. We love that business. Right. I wish I had three more of them. Sorry, I'll try. Yeah, I wish I had three more of them. Let's put it that way. That's a great business. Okay. Well, I know we have a few minutes. I wanna talk about transportation as well, Joe. Your schedules look good. Maybe you can talk through what you're seeing in terms of schedules for prospects, there, things to add to the backlog. T hen, you know, there are some inbound questions just around concerns around state budgets. Some things in the economy look a little shaky. Maybe what you're seeing where you play. I t's fair. It's, you know, we're halfway through the funding cycle. It's, it's been phenomenal. It hit faster than historically, and it hit faster. Everybody can tell you anything they want. If you want the fact, it hit faster because there was a tremendous amount of COVID money in the States. The states were able to transfer for transportation, so it was great for us. We loved it. But to your point, there are haves and have-not states out there right now. So we are going to see certain states in the country that are really struggling with their budgets, and if they don't have the funding, they're not gonna get the federal matching funds. The good news is the states that we're in are in very good financial shape, and we see very good project flow for the next two and a half years. So we believe that not only are we in good shape with our backlog for the next two to three years, over the next two years, we'll pick up another two to three years of backlog, and we will not see any slowdown in bid activity for another two and a half years. Even at that time, we've got really strong backlog to get through till the next funding cycle hits. So we feel the highway business is in the best shape it's ever been in the history of the company. Our margins are the best they've ever been. We still have upside on margins in our markets, and we'll continue to drive that. We saw 57% growth in the second quarter. I mean, we historically have grown that at 3%, and we told everybody this: until we hit a certain margin, we were not gonna grow that business. We hit that margin, and we grew that business, and we have more margin. T hat goes across our company. I think, you know, a lot of times people say, "Well, why aren't you growing this?" Or, "Why don't you..." We can go grow the company tomorrow. It's really easy. Everybody, it's why we don't talk about growth. You can grow the company. We can grow the company 30%. It's not a problem. Margins are gonna come down, a nd you're gonna take on riskier work, and that's where a lot of companies get in trouble. So we've been disciplined not to do that. We're there with transportation. It's pretty exciting. You know, it's become a great, great cash generator for us, and we feel very good for the next three-to-five years here. But I want to ask on that, I mean, just so we understand what's really moving. I mean, the cash conversion's incredible has been incredible. Is that, you parse out what's transportation versus E-Infrastructure, and t hey're both great, right? I mean, so the fundamental difference is transportation, we work off customers' money from day one. In E-infrastructure, a competitive advantage we have is you get a big job like the Hyundai battery plant job is an example. We roll out, we got 200 pieces of equipment. They're $750,000 a piece, operators on them. Normal cycle, you get paid in 30 days, but by the time you get out there, get through a billing cycle, you're 45-60 days before you get the first payment. In that 45 days, we'll have $20 million of cost. $20 million. People say, "Why do you have a competitive advantage?" There's not many guys out there that do site development that have $20 million, right? Then they're not gonna go put up $20 million to do it. Within 60 or 90 days, we're back in positive on that, right? So if you watch our cash flow on these big jobs, we go way negative for the first 30-45 days, and then the next 60 days, we become positive in, in how we bid it and, and where we put the money, and then from there, we're cash positive. So, and we love it that way because when a customer says, "You gotta show us you got $50 million of cash in your bank to get the job," not a lot of people show up at the bid table. Joe, you laid out 20% gross margins for the company a few years ago. You're tracking pretty quickly toward that. Can you get there still organically? Yeah, we'll get there. Yeah, we'll get there quicker than people think. Organically? With the portfolio that we have today, ± 0.5 point. Yes. Yeah, and we feel good. We've got. We still have margin expansion in every one of our segments. We think 100-200 basis points in all of them, and if you put that in, we're gonna be right pretty darn close to that number a nd that's why it's making the acquisitions even harder, right. Now, we're looking at deals. We want deals that are making 25% or 30% margins, and we find a lot of small deals, and that's why we can do the tuck-ins. It's just where, you know, could we get something of size that's got $50 million-$100 million of EBITDA would be great. We just haven't found it yet. Okay. Yeah, and when we get to 20, as I tell our team, 25, right? How do we get to 25? Never stops. That would certainly put you in the upper tier to where you already are. Maybe just to close this out, I do- Yeah, yeah. Let me add one thing, though. Yeah. I do think realistically, you know, by driving margin helps us focus on priorities, right? The best customers, the best products, where do we grow, where do we go? At some point in time, though, candidly, we will have to probably add a business that has lower margins in total, and we'll have to take the time to say, "Okay, how do we take and continue to inch them up?" Just like we have with all the businesses we have today. Especially as we're looking at the fourth leg, right? We haven't seen anything in a fourth leg that has those sort of margins. But if we, and we're not gonna buy something that has 7% or 8% margins, but if we found the right strategic fit, instead of 20% margins, had 15%, still pretty good for our world, right? W e thought over a continuum of time, we could get it to 18% or 20%, that may make sense for us. Okay. Yeah, I do have two more now. C-suite's been such a huge component in driving so much value here from where you were to where you are today, and I think the question, Joe, is maybe a little bit more for you. Sharon, you've stepped into Ron's role. Your commitment here as CEO for the next few years, 'cause you're an important piece of the wheel here, y ou've driven a lot of value, and I think it'd be good for people to hear. I'm getting that question more and more. I think I'm getting old or something. I guess I'm getting worried- You look great. or somebody knows I'm gonna die. No, last year I signed a multi-year commitment with the board, so I'm here for at least two or three more years. Okay. Yeah. As long as I'm having fun, I just get in trouble if I don't work, so it's safer for me. Okay. I mean, anything else you want to close out with, Joe, as we're hitting the end here? No, I think you know, the world's a crazy place right now, and I think everybody's on eggshells these days. But we've got the same great tailwinds we've had. We had the headwinds on the small stuff. But we'll get through it, right? We've still been able to grow. The mission-critical stuff is phenomenal. Data centers, again, I was with the team yesterday. Every time I meet with them, and every time I think we have our hands around the growth rates, there's more jobs and bigger opportunities coming out there, more players in that field. So we feel really good. Next three to five years, that's gonna continue to grow like a rocket. Throw in the manufacturing that's lumpy when we hit them. When they come out, they'll be great. Just, you know, every quarter we're not gonna get one, right? That's it. Try to explain that to people. They just don't come out every quarter. But no, we feel really good. T hen with the interest rate drop, I think we'll have more. Anything we were really worried about going into next year, that certainly helps those, those markets, substantially. So we feel really good about next year, and the year after, so... Very good. We appreciate your time. Thank you. Thank you. Thank you, guys.