Sterling Construction at Sidoti Conference: Infrastructure Growth Insights

On Wednesday, 19 March 2025, Sterling Construction (NASDAQ: STRL) participated in the Sidoti Small-Cap Virtual Conference, highlighting its robust position in the infrastructure services sector. CEO Joe Catello emphasized the company’s growth in the e-infrastructure segment, driven by data center projects and reshoring manufacturing, while addressing challenges such as market slowdowns in certain regions and tariff impacts.

Key Takeaways

• Sterling Construction is experiencing an acceleration in data center projects, countering slowdown concerns.
• The company maintains a strong cash position with net cash of nearly $350 million.
• Strategic focus on mergers and acquisitions (M&A) to enhance service offerings and mitigate risks.
• Anticipated growth in manufacturing projects due to reshoring efforts and the CHIPS Act.
• Positive outlook despite external uncertainties, with a focus on margin expansion.

Financial Results

• Cash Position:

- Net cash stands at almost $350 million.

- Gross cash position exceeds $600 million as of year-end.

• Capital Allocation:

- Prioritizing M&A for growth, with a strong buyback program when deals are not available.

Operational Updates

• E-Infrastructure Segment:

- Acceleration in data center projects, unaffected by specific technologies.

- Reshoring of manufacturing is contributing to growth, with a wave of projects expected in the next 12-18 months.

• Transportation Segment:

- Experiencing steady growth, supported by ongoing federal spending.

• Building Solutions Segment:

- Growth in Houston, slight decline in Phoenix, and slowdown in Dallas due to a major customer’s decline.

- Weather impacted production days significantly in January and February.

• Tariffs:

- Minimizing impact through fixed pricing, contract escalators, and domestic sourcing.

- Focus on supply chain disruptions rather than tariff fees.

Future Outlook

• E-Infrastructure Growth:

- Further growth anticipated in data centers and manufacturing, particularly with the CHIPS Act.

- Major chip plant projects expected in 2027-2028 due to permitting complexities.

• Regulatory Environment:

- Hoping for improvements to speed up permitting processes.

• Building Solutions Outlook:

- Monitoring builder numbers in the second half of the year to assess performance.

• Overall Optimism:

- Expressing optimism for end markets and potential margin expansion, focusing on delivering results despite uncertainties.

Q&A Highlights

• Data Center Growth:

- Strong acceleration reiterated in data center projects.

• Manufacturing Reshoring:

- A wave of projects expected in the next 12-18 months.

• CHIPS Act Impact:

- Major impacts projected in 2027-2028 due to delays in permitting and funding.

• Tariff Management:

- Risks minimized through fixed pricing and domestic sourcing.

• Capital Allocation:

- Emphasis on M&A and opportunistic stock buybacks.

Sterling Construction remains optimistic about its strategic positioning and growth potential in the infrastructure sector. Readers can refer to the full transcript for a detailed account of the conference call.

Full transcript - Sidoti Small-Cap Virtual Conference:

Julio Romero, Analyst, Sidoti and Company: Okay. Great. Good afternoon, everyone, and thank you for joining the Sidoti and Company March twenty twenty five Small Cap Conference. My name is Julio Romero, and I cover building products, industrials, engineering, construction at Sidoti and Company. Really pleased to be able to host Sterling Infrastructure.

Their ticker is STRL. With us today, we have Joe Catello, chief executive officer Ron Balchmidi, chief financial officer and Noel Dilts, vice president of investor relations and corporate strategy. We’re gonna kick it off with some prepared remarks by the company, and then we’ll get into some q and a. If you have any questions for the company, type them into the q and a section at the bottom of your screen. And time permitting, I’ll ask on your behalf.

With that, Joe, Ron, Noel, thanks so much for being here.

Joe Catello, CEO, Sterling Infrastructure: Thank you. Let me give a quick overview of Sterling, who we are and what we do. Sterling, we’re an infrastructure service provider that’s broken into three fundamental segments. Our first segment is what we call the infrastructure. In this segment, we help with site selection and develop the sites for large mission critical projects like data centers, large manufacturing facility, semiconductors, ecommerce distribution, along with smaller projects like industrial warehouses.

We do the complete site development from the time the ground was broken until the building is gonna be put in place along with all the underground utilities. Our second segment is transportation. That’s where this company started. We have focused on three areas in transportation, highway, road and bridge, predominantly focused in alternative delivery design build type projects where there’s a high level of value add, aviation, where we work on runways, taxiways, parking garages, etcetera, and then rail, which is the smallest piece of that where we predominantly focus on bridge repair, replacements, or new bridge processes. Our third segment is building solutions, focuses into two different areas.

The first is what we call commercial, which is light, light commercial building, predominantly multifamily residential. And the second is residential where we are in Houston, Phoenix, and Dallas, Fort Worth. We do two types of services in Dallas. We perform or build the slabs for high volume builders. The top three builders in The US are our top three customers.

And we also do plumbing for those, for those homes as well. In Houston and Phoenix, we just currently do slabs, but we’ll eventually add plumbing and other services to those. We take a look at their overall market conditions. We have very strong tailwinds in the infrastructure with the growth of data centers, the onshoring of the manufacturing plants, and in the future, bills of of chips and and, semiconductors, along with the ecommerce rebounding fairly significantly in the first part of twenty twenty five. Transportation, very slow or very what I call strong, slow, and steady.

We work a % off customers’ money. That business grows at low single digits, but is very consistent and is halfway little over halfway through the federal spending cycle. We’ve got another year and a half of spending to come. And our residential business, building solutions, we see mixed results right now. The Houston market continues to grow.

Phoenix is down slightly, and we see a little bit larger decline currently in the Dallas full growth market.

Julio Romero, Analyst, Sidoti and Company: Excellent. Well, thank you so much for the rundown. Maybe kicking it off with what you’re seeing on everyone’s favorite topic, the data center front. On the last call, you were quite adamant about not only are are you not seeing a slowdown on data center related construction demand, but rather an increase in activities, inquiries, etcetera. So maybe, you know, as you see it, if you could help us understand kind of that disconnect a bit in terms of the broader headlines about DeepSeek and and what we all see there, and concerns related to CapEx for data centers versus what you’re seeing on the ground?

Yeah.

Joe Catello, CEO, Sterling Infrastructure: First of first of all, we we are seeing nothing but acceleration, not only in the the existing projects, but in talking with our core customers on future projects, that they see over the next several years. So, we see just the opposite of what people are worried about, in the news. In addition, I think there’s a there’s a misconception on on a couple different things. First of all, regardless of what chip is used in these plants or these data centers, I should say, they still have to build. We do the groundwork to build them.

We don’t really care what the technology is inside that. And frankly, if they become less expensive, we believe the customers will actually build at a more rapid rate. They have limited capital budgets. They’re building out to their capital budgets. If they could build them for half the price, they’d build twice as much, which is perfect for us because we’re doing the the groundwork for that.

And I also think there’s a little bit of misunderstanding and misconception. There’s an article out on on Microsoft that in going to more of a lease model. It doesn’t matter to us whether Microsoft owns the end facility or Amazon or Meta. It it as long as that’s being built, that’s where we we perform. So if somebody else is building that, leasing it back, that’s still a job that we’re gonna do.

So it doesn’t impact us, like some of the other, other areas that they may impact.

Julio Romero, Analyst, Sidoti and Company: Really helpful context there. One other key in market served by your e infrastructure segment is manufacturing or more specifically the onshoring or reshoring of manufacturing back to The US. Can you just dive into what falls under your manufacturing umbrella as it stands today? I think you’ve talked about semiconductor fab, automotive, biotech, etcetera.

Joe Catello, CEO, Sterling Infrastructure: Yeah. So the projects we’ve seen, we’re we’re still waiting for for the big semiconductor plants to to get started. There’s still a little ways out. But we’ve seen automotive. We’re we’re seeing a slowdown in in some of the solar and battery plants that we had been working on.

But that’s being picked up by things like pharma. There’s what’s been really interesting is we haven’t seen a segment or a market come back. So we haven’t seen pharma as a whole come back, but we’ve seen a couple pharma facilities. We haven’t seen food food come back as a whole, but we’re seeing a couple facilities, and there’s more conversation on on what follows. So we think we’re in the very, very early innings.

We’re seeing a nice, constant, steady pace of a couple projects here and there that we’re working on. We think the wave doesn’t really start for another twelve to eighteen months. By time people start looking for properties, secure them, and start moving the manufacturing back, on a much larger scale.

Julio Romero, Analyst, Sidoti and Company: Got it. And when you say that, you know, the wave doesn’t really start for another twelve to eighteen months, help us think about, like, the sequencing of that. Like, is it gonna be a kind of a rising tide of sorts or more of a of a big hit?

Joe Catello, CEO, Sterling Infrastructure: No. I think I think we’ll see, see an initial hit and then the tide will continue to rise. Right? So we’ll see a upfront slug and then a nice continuation of growth, probably for another three or four years after that after that takes place.

Julio Romero, Analyst, Sidoti and Company: Got it. And then, you know, one thing that you’ve also talked about is is, the CHIPS Act. You know, as I’ve been as I understand it, not not necessarily done any meaningful projects related to that as of yet, but just help us kind of frame the opportunity related to the CHIPS Act in the coming years. And then secondly, given that site prep in in relatively flattish land, doesn’t really lend itself to your typical return hurdles, you know, where geographically do you foresee yourself participating in projects related to the CHIPS Act?

Joe Catello, CEO, Sterling Infrastructure: Sure. So first of all, I think, the the CHIPS Act and the CHIP plans are on the on the drawing board. Forget the app itself. There’s you know, there are multiple plans that can plan. What people don’t understand is the amount of upfront work it takes from the time you decide to build one of these facilities to the time you break ground.

First of all, you gotta find these things are three, four, five hundred acres of of land. Right? So you gotta find that right piece of land. You gotta permit it, which takes a lot more time than than people realize to get the permitting through. They’re gonna work with local, state, and sometimes federal government, tax rebates or incentives, to to put that facility in that land.

So as you’re selecting land, you’re you’re kinda negotiating. And then you have to get utilities and water to it. Most of the time, it’s not like, they’re building these in the middle of a metropolitan area. They’re usually fairly far out. So you’ve got the time associated with that.

All that stuff takes years. It doesn’t take weeks or months. It’s it’s literally years of of work. And as you can imagine, the bigger and more complex these projects are, the more complex that prework becomes, to to get all that through. So that’s why when we we say we we really thought late twenty six, twenty seven.

I will tell you with the with the shift that I think is gonna take place from less federally funded chips money to more publicly funded. I think realistically, we’re not gonna see the big wave come to shore until 2728 in that area. I think in between, we’re gonna see manufacturing come on top of the data centers before the big chip plants. Okay? And then we’ll see the chip plants, follow-up right in there.

If they all hit at the same time, that is this is gonna be a a bonanza of, of of of bills.

Julio Romero, Analyst, Sidoti and Company: Got it. And just to clarify, you were saying, federally funded to to privately funded. Privately funded. Yeah.

Joe Catello, CEO, Sterling Infrastructure: Yeah. Yeah. I’m sorry if I No.

Julio Romero, Analyst, Sidoti and Company: Just correcting for the transcript. All good. Yeah. So you talked about permitting, kinda brings up the topic of of the new administration. You know, how does the new administration kind of impact infrastructure funding?

What is Sterling’s exposure to federal funding and and consequently your end markets?

Joe Catello, CEO, Sterling Infrastructure: Yeah. So I I think the good news is today as we sit, virtually no risk, to our current backlog projects or what we see on the horizon. Most of our federally funded projects are in transportation, and those are funded with half federal money and half state money. And those bids and projects don’t come out till the funding is available. So once the funding is there, then that they come out.

So, we’ve seen no slowdown, no pullback. As a matter of fact, with the the extension of the budget, they’ve just approved and appropriated the the rest of twenty twenty five’s transportation spending number. So we’re we’re in really good shape there. The next transportation bill doesn’t come out for another year and a half. Everything we’ve seen, there has been no, no pullback or lack of focus transportation and and what I’ll call core infrastructure in The US.

Where we have seen, pullbacks and I and I think are areas that are highly vulnerable are around grants. And and a lot of these are more pet projects. Some are really critical projects, but they’re more specific projects, maybe a state or or a representative is is pushing. I think we’re gonna see a lot of pullback on those. Some will go through, some won’t.

We currently don’t have any in our backlog and our working on any projects that I’m aware of that would fall under that category. So limited, limited, exposure. As we look forward, though, this administration, when it was in office before, was extremely focused on infrastructure spend. As a matter of fact, the IIJA bill, the infrastructure bill that came out, I think a number, I might be off a little bit, roughly 808 hundred and 50,000,000,000 billion dollars. Originally started out closer to $1,300,000,000,000 under the Trump administration.

And the administration changed, it got pulled back. It actually tried to get pulled back further than 850,000,000,000, but that was as far as it could take. So there’s a lot of people that believe that the current administration actually invests stronger in infrastructure over the next four years, than the prior administration. We believe that to be true as well. We’re very hopeful that is the case, and move forward.

But the thing the administration could do very quickly that would help these projects immensely is around regulations at this permitted. It is a very, very complex process. It takes way too long, costs way too much money, and and at the Lazys projects more than probably anything else. You know, the contractors can build this stuff pretty quick once they get the green light to go. But you could have more time upfront permitting and preparing this project than it actually takes to build the entire project.

So I think, they they’ve said they’re gonna work on that. I’m I’m holding them to that. We were very hopeful. That will speed this stuff up quicker. So if you talk about the future, whether that’s manufacturing and onshoring or it’s the chip plants, If they do that, those cycles could actually accelerate, which would be great for all of us.

But what I’m talking about is the kind of status quo on the permitting process and and things would stay the same. That’s the timeline that that we see.

Julio Romero, Analyst, Sidoti and Company: Yeah. That got it. That makes sense. And then, you know, what’s your exposure to tariffs? And and can you speak to risk mitigation efforts such as price escalators to to mitigate that impact?

Joe Catello, CEO, Sterling Infrastructure: Yeah. I can go through each one of the areas, but I’d step back at a at a little more macro look and and just say, not too long ago, we went through this thing called COVID. And we saw price escalations of multi % materials, and we all made it through. If If I look at the pricing of materials today versus the peak, they’re significantly lower. So even if we get hit with a 10 or 15 or 25% tariff, and it and it happens in a in a much lower period of time than the rapid fire we’re seeing in COVID, Businesses are gonna get through this.

I I think people are grossly overestimating the the impact of this. We will get through it, right, at the end of the day. The supply chain disruption and not having material is a heck of a lot more difficult to manage your way through than a price increase or a tariff on material. So we’ll we’ll figure that out. However, you know, it’s maybe it’s a little unfair for me to be that bullish on it because we have a lot less exposure than other companies to the tariffs.

If we take a look at our transportation business, for the most part, we get fixed pricing guarantees on that project upfront. So they’re building in inflation into that in some way, shape, or form. If you take our pricing and went to the spot market pricing, ours would always be higher, but more guaranteed pricing. There are some escalators in, in the federal contracts, if pricing moves too much as well that helps you. But at the end of the day, the vast majority of our materials have to be made in The US for those projects if there’s federal money on it anyway.

So they’re coming coming from The US, much less vulnerability there. In e infrastructure, the most most of the stuff we do is above ground. We’re doing piping underground utilities, but it’s a relatively small percentage of our overall cost and expense. As we got through COVID, everybody was pleasantly surprised and happy with our margins as we went up. We had to do some crazy things during COVID where we’re changing p b exchanging PVC for stainless steel.

It’s pennies a foot to tens of dollars a foot, and we still manage to get through it. So we’ll we’ll get through that. Our our biggest risk in in e infrastructure is around fuel pricing, but we’ve got some escalators built in our contracts now and after COVID. And the way that we sequence or break up our contracts, each phase gets repriced. So our our liability to a contract is years as months.

So that really helps us mitigate mitigate that risk. In building solutions, concrete, you know, is is, our biggest material. I think, the risk there is a lot of the cement powder. The majority of the cement powder still comes from overseas. A lot of it comes from Turkey.

Some of it comes from Mexico, some other places. So the Mexican piece could have an impact on all of us, on on cement or concrete cement prices, which relate to concrete total prices on that. The rest of materials are are insignificant, cabling and rebar. If if Asia gets a tariff, you can get it out of Turkey and some other places. So I think we’ll see a lot of these supplies move around the globe.

People get creative in in where they get it from. But we, I can tell you I I personally have not lost one minute of sleep worrying about the tariffs. I worry more about supply chain disruptions and material availability than they do with the tariff fees.

Julio Romero, Analyst, Sidoti and Company: Got it. I I appreciate you point pointing out the multiphase, kind of dynamic of a lot of your work. That’s important. And then also the fact that you have price escalators in the federally funded projects within transportation because that’s typically where I would think it would be the hardest to get escalators built in. So Yeah.

Appreciate that.

Joe Catello, CEO, Sterling Infrastructure: They still fight you, Adam. It’s not it’s not they’re just government. They’re not that easy.

Julio Romero, Analyst, Sidoti and Company: Maybe moving to building solutions for a bit, you mentioned the three key markets, Dallas, Houston, Phoenix. You mentioned, you do plumbing in Dallas and not yet in Houston, Phoenix. But can you just speak to demand trends across the three geographies, especially given affordability concerns and and what rates are today?

Joe Catello, CEO, Sterling Infrastructure: Yeah. So, let’s start with the with the most positive one, which is Houston. We haven’t seen any slowdown in Houston. It’s continuing to grow. It the rates we saw through, through last year and the year before, so we’re we’re excited about the Houston market, and we we don’t see any change in that.

The Phoenix market, I call schizophrenia. It’s up one or two months and then down one or two months. And and that net, I would say it’s it’s on a slight decline, right now, for the and it will be for the for the first half of this year. The Dallas market is where we’ve seen the biggest, shift from from real strong growth last year in the first quarter. I mean, it was it was on fire, to the Dallas market that slowed down.

Now there’s a couple different pieces of of Dallas we need to need to think about. The overall market is down. Our plumbing business is down slightly. We’re seeing more of an impact in our slab business, and that impact is driven by our biggest customer is down beyond the what I’ll call the market being down. Right?

So they’re down more, which impacts us, obviously, more. So we’re trying to figure out what’s driving that dynamic, with that customer. But the other thing that we’re seeing is it goes back to exactly what you said, the affordability issue, and it’s hitting first time homebuyers a lot harder than the move up homebuyers. So we’re actually seeing and and the reason our plumbing business is down less is we’re seeing better market momentum in the mid range houses where we tend to do more of the plumbing than the entry level, than the entry level houses. So we’ll see if that dynamic continues, but those tend to be people that are relocating that are relocating professionals that have a better chance of of buying a house or sold a house in another market are coming in for that that kind of next level of one or two tiers.

Julio Romero, Analyst, Sidoti and Company: Got it. And then, yeah, historically, weather has been a big swing factor to results in that segment. Just if you could speak to how that’s built into your full year outlook.

Joe Catello, CEO, Sterling Infrastructure: Yeah. We I think we’ve got it built in right for the full year. I will tell you, we’ve seen in January and February, like, we’ve never seen, you know, in Texas, not not as much Phoenix. We lost 50% of January and over 50% of February between snow, rain, hail. With stuff we don’t normally get here, we’re normally in long sleeve shirts and baby shorts.

We’re not in winter coats and gloves. That’s for sure. So we’ve had just really a rough a rough winter. March, the good news is March has been pretty good, so we’ll, we’ll try to make up a bunch of crown in March. We can we can make up ground pretty quickly.

We’re hoping the last couple weeks of March stay beautiful, and we can, we can run from there. But we, first couple months were were tough, and we’re coming off tough comps. Our our first quarter last year was a bar burner. We we never expected our first quarter to be as strong as it was last year. The builders came out really, really hard and fast.

It was great, but we’ve got, you know, kind of a tough comp in February. So full year, I feel good about kind of where we are. The builders are still kind of sticking to their total numbers. The second half will tell us, you know, if if they’re gonna hit those numbers or not. We’ll start to get there in July on this timeframe.

Julio Romero, Analyst, Sidoti and Company: Really helpful there. Maybe turning to capital allocation for a bit, you know, you’ve got net cash of almost $350,000,000 Your gross cash position is above $600,000,000 as of the year end. So you’ve been very clear about being growth oriented. So I wanna ask about M and A, but but before getting into that, just given where the stock is, you know, how are you weighing kind of being more opportunistic with regards to to share repurchases versus m and a?

Joe Catello, CEO, Sterling Infrastructure: Yeah. Well, m and a is always our first priority, but as you know, timing is everything. Right? And sometimes there are deals, sometimes there are not deals. When we’re waiting for deals, we we believe our stock is really undervalued.

We’ve got a strong buyback program in place that that will we’re utilizing.

Julio Romero, Analyst, Sidoti and Company: Very good. You know, on your fourth quarter call in February, you you talked about, you know, organic and inorganic growth opportunities with regards to maybe doing a little more scope and e infrastructure, some some dry utility work. And, potentially, which perked my ears up was looking at some electrical and mechanical as an adjacency that you would kind of explore, if you could expand on that to the extent that you can.

Joe Catello, CEO, Sterling Infrastructure: Yeah. So, if we look, our first priority for acquisitions is the infrastructure. Second is building solutions, not to get off the infrastructure. But we think there’s gonna be some unique opportunities in building solutions as things soften. People tend to think about selling their business as they’re getting, up in their careers.

So we think some some interesting opportunities may arise in there. The infrastructure are first focused, in really two areas, expanding geographically, the site development that we do. There’s a couple geographies we really like to be in that we’re not today. And how do we get into those geographies? One of them is Texas.

And we’re sitting here in Texas today, and we do $0.00 of site development for, for our major customers in Texas. But the other area is this whole mechanical, excuse me, and the electrical. The reason we like it is is multifaceted. First of all, we touch a lot of that work today. So we’re preparing all the trenching, everything that’s coming into the building.

We’re doing that site work today. We dig it, and we wait. Then we wait. And electricians nothing against electricians. We hope to have some someday.

But speed is not usually the first thing that comes out of their mouth when we when we talk about it. So we have to wait for their trades to come on to the site, and get that worked up. And then we fill it. We put concrete around it. We fill it.

Make it look like a smooth area. We think that by having this, not only can we increase the the amount of work we’re doing on every one of these projects, we think we could take a month to two months of time out of the cycle time of the project itself. That time is of high value to the to the customers. Right? So it’s a logical next step for us, to move, get a get a little bigger piece of the pie with the customer, but add value to them that we can bundle it and and put a package together.

The other thing that we like about it, just like our site development, is what we think from what we see, the next three to five years of data centers continues like a rocket ship. But at some point in time, it will change. Right? And I don’t know if it’s five years or seven years, but it will change. These services and assets that we have are fungible.

We don’t care if it’s a data center or a chip plant or e commerce distribution center or maybe it’s something to do in energy, if that takes off. It it’s the same work for us. It’s just different end customers. In both of those products, we can move to other end markets as the world changes. You know, in 2022, our biggest customer was Amazon distribution centers.

They were, I don’t know, 70 I think 70% of our work, some very large number. In 2023, we had $0 from it. Right? The world changed that fast. We were able to pivot those resources.

That’s how we got further into data centers. We’re starting to dabble with data centers, and we said we’ve gotta go stronger and harder in data centers. It’s really a nice flexibility. It reduces our risk significantly, if a market shifts or changes that we could we could pivot and rotate it to others.

Julio Romero, Analyst, Sidoti and Company: That’s really helpful context because I guess, you know, looking at electrical and mechanical kinda leans into your value prop of to some of these mega project developers of the committing to a site deadline and saying, hey. I’ll get it done for you the first phase on time. You don’t have to worry about the front end at the very least. So that kind of lean you know, leans into that then at the same time gets more value from it. Is that fair?

Joe Catello, CEO, Sterling Infrastructure: Yeah. That’s exactly how we think of it. Time time is the most critical thing right now to these projects. Right? I mean, if they they certainly have a budget and everything, but if this project’s six months late, you got billions of dollars of capital tied up, and the revenue they generate off these is pretty sizable.

Right? So it’s a it’s a it’s a big number for.

Julio Romero, Analyst, Sidoti and Company: How do you just keep it simple. How do you throw off so much cash and so consistently?

Joe Catello, CEO, Sterling Infrastructure: Well, first, you know, we work off customers’ money. Second, I think we are very good at managing our capital expenditure, capital risk, right, how we how we generate revenue and maximize the return on the assets that we have. We do a really good job at that. And our if you have really high margins, then you work off customer money, then you manage your capital well, then you tend to throw off a lot of cash. Right?

We don’t have a bunch of overhead costs. We’re we’re very lean. We’re very frugal on that that standpoint. We run very decentralized, so the operations have the support they needed in their businesses, but we don’t have hundreds of people in corporate. We got a very small corporate office.

I think we got 22 or 25 people in corporate. So that’s that’s how how we do it. We’re we’re margin focused. We’re not revenue focused. We we like margin.

Julio Romero, Analyst, Sidoti and Company: With about thirty seconds left, just any kind of, aspects of the story that are often overlooked in your view and any other key It’s

Joe Catello, CEO, Sterling Infrastructure: it’s it’s really challenging for us. You know, we came into twenty twenty five, in the strongest position we’ve ever been in. I would tell you the first quarter is only gonna make that stronger, on where we are with the jobs that we’re seeing, the tailwinds that we’re seeing, the projects that we think are coming out this year and next year. It’s the first time that we’ve talked not only about the next year, but we’re starting to talk about jobs at twenty seven and what what we look like at twenty seven in the first quarter of twenty five. We’re normally talking about how we fill 25 at this point in time.

So we feel very good about our end markets, our customers, and we’ve got margin further margin expansion, and we can get the infrastructure and transportation, which only helps the bottom line more. So we’re we’re as optimistic as we could be. The outside world is a little schizophrenic now or crazy, but I can’t control. We’ll just keep delivering great results and people will figure it out at some point.

Julio Romero, Analyst, Sidoti and Company: Excellent. Well, Joe, Ron Noel, thanks so much for taking the time.

Joe Catello, CEO, Sterling Infrastructure: Yep. Thanks, Joe.

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