Good morning. My name is Andrea and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Incorporated 2023 First Quarter Conference Call. This call is being recorded. All lines have been placed on mute to prevent any background noise. And after the speaker’s remarks, there will be a question-and-answer period. Please note we will take one question and one follow-up question from each participant today. It is now my pleasure to turn the floor over to Vice President of Investor Relations, Mike Barker. Please go ahead.

Good morning and thank you for joining us. I’m pleased to be here today with President and Chief Executive Officer, Kyle Larkin; our Chief Financial Officer, Lisa Curtis, is recuperating from a minor unplanned medical procedure and is unable to join us today. We’re happy to report that Lisa is doing well and she’ll be back with us soon. Please note that today’s earnings presentation will be available on the Events & Presentations page of our Investor Relations website. We begin today with a brief discussion regarding forward-looking statements and non-GAAP measures. Some of the discussion today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding future events, occurrences, opportunities, targets, growth, demand, strategic plans, circumstances, activities, performance, shareholder value, outcomes, outlook, guidance, objectives, committed and awarded projects, and results. Actual results could differ materially from statements made today. Please refer to Granite’s most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward-looking statements. The company assumes no obligation to update forward-looking statements except as required by law. Certain non-GAAP measures may be discussed during today’s call and from time-to-time by the company’s executives. These include but are not limited to adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted earnings per share. The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and company presentations, which are available on our website, graniteconstruction.com under Investor Relations. We’ll also be discussing comparable results, which excludes the effects of Granite Inliner, which was sold in March 2022. Now, I’d like to turn the call over to Kyle Larkin.

Good morning and welcome to our first quarter conference call. The typical winter quarter is often a slower one for Granite as many of our businesses are seasonal. Early in the year, many of our locations are focused on maintenance and preparing for the construction season while waiting for cold and wet weather to pass. As everyone is aware, the first quarter of 2023 was not a typical winter quarter. Extreme weather events occurred across the country with the Western U.S. particularly impacted. Atmospheric River became a familiar term in these storms hitting one after another, traveling across the country bringing extreme weather with them. Many of our home markets were in the path of these storms with historic precipitation across Nevada, Utah, and Arizona, and even more intense impacts in California. For context in the Wasatch Mountains of Utah, snowpack more than doubled historical averages, and the same we’ve seen in the Northern Sierra. The Southern Sierra received nearly 300% of normal snow totals. Many locations from Southern California to Central California collected more than 150% of normal rainfall totals. All of this precipitation delayed work while causing true hardship to many of our home market communities, as well as many of our employees. It also impacted our revenue and growth projections for the quarter. This is obviously unfortunate. But as I said in the last call, if it’s going to rain, we want it to rain early in the year during our slowest quarter. As I will discuss today, opportunities also arise with extreme weather. With the good weather in April and most of our regions, our teams are starting to catch up on planned construction, and we are confident that we have the capacity to deliver on our growth expectations this year despite the poor weather of the first quarter. Now, let’s jump into the Construction segment and the performance of our operating groups. Although the weather did not cooperate in Q1, the market is strong as illustrated by the substantial growth of our backlog this quarter to $5.1 billion. This is an increase of $619 million and a 14% from the fourth quarter and a record total for Granite. The growth in backlog during the first quarter of 2023 built upon our momentum from several recent quarters. This is strategic growth. We are winning work while being selective in our bidding. We are pursuing fewer jobs while still winning more work at higher margins than the prior year. This trend is a really nice result for our pursuit teams across the company. I believe that we have a significant opportunity in this strong market environment to continue building high-quality backlog throughout the remainder of 2023. In the California Group, we ended the quarter with another record backlog of $1.9 billion. This reflects a 10% increase from the Group’s fourth quarter backlog and a 29% increase over the same period of the prior year. Despite the deficit and the proposed California budget, bidding activity in the state remains robust, aided by the Federal Infrastructure Bill or IIJA. IIJA funds a variety of projects and creates opportunities for us. One IIJA opportunity that, at first glance, would appear to be outside our traditional transportation scope includes middle mile broadband projects. Although these projects sound as though they would be outside of our core capabilities, they offer scopes of work that align well with our construction expertise. In the first quarter, we awarded three middle mile broadband infrastructure projects where our scope of work consists primarily of excavation. These projects added $132 million to California’s backlog. In these projects, fiber optic cables are laid in conduits, connecting global internet networks to local networks across the State of California. While each state is different, California’s moving quickly to capitalize on the funding provided by the IIJA for these types of projects, and Granite is well positioned to partner with Caltrans to construct them. Our long partnership with Caltrans and local municipalities also allowed Granite to participate in emergency storm response across the Golden State. In the midst of record rainfall, Granite was tapped by Caltrans for critical response projects throughout California in the first quarter, and we secured approximately $100 million of emergency work with $18 million in revenue recognized in the first quarter. We are proud to support our communities with timely, high-quality work when and where the need is greatest. Moving to the Mountain Group, our largest group by revenue in 2022, we increased backlog by $364 million or a 34% since year-end, with a 40% increase since the first quarter of 2022. The backlog increase in the first quarter was led by the Alaska region with an increase of $215 million, largely from two best value projects booked in the quarter. In recent years, Alaska’s funding has been limited due to decreases in oil production and a challenging tourism industry. New federal funding for infrastructure has increased opportunities in Alaska, including best value procurement work. The Utah region, including the Salt Lake City market, continues to be a highlight in the diverse Mountain Group, adding $160 million to its backlog during the quarter. Salt Lake City has been a growing market for several years and has been one of Granite’s key home markets for decades. Last year, we announced significant materials investments in the area, and we expect our Utah business to grow along with the local economy. Finally, the Central Group continued to grow backlog in its home markets, led by the federal division and Arizona region. In Arizona, the Phoenix and Tucson markets, led by the influx of new residents, have been among the fastest-growing economies in the country. The state is investing heavily in infrastructure to support its growth. We are seeing that dynamic in our backlog portfolio. In the federal division, the backlog increase was driven by the recently announced $126 million contract awarded by the Naval Facilities Engineering Systems Command or NAVFAC for the construction of buildings and infrastructure to support the relocation of U.S. Marines to Marine Corps Base, Camp Blaz, and Guam. Granite has been working on various projects in the construction of Camp Blaz for over a decade. Given the high level of government funding available, our federal division has numerous significant opportunities to build this portfolio with several different branches of the federal government. As I take a step back and look across the Central Group, the transformation over the last three years has been impressive. The vertically integrated Arizona region is capitalizing on a booming market. The Texas region has been very successful in winning projects in its home markets. The Illinois region has built an impressive backlog portfolio in the Chicago area, and the federal division continues to expand relationships across multiple agencies. Overall, despite the slow start to the year, the near and longer-term prospects for all of our groups are bright. We have successfully grown our backlog during the quarter, and I believe we will continue to grow quality backlog in 2023 as further projects funded by the IIJA are released for bidding. Now, onto the Materials segment. While the first quarter of the year is generally a slower time for our Materials business, this quarter was particularly difficult. In too many of our markets in the western U.S., wet and cold weather prevented us from delivering the results we expected to start the year. We entered 2023 with healthy order volumes that many projects were disrupted. Overall, weather has improved significantly across our footprint in April. Our teams are often running following the wet first quarters, and I expect them to make considerable progress towards our projections during the second quarter. Last year, I spoke about several investments in the Materials business. These included new reserves of liquid asphalt terminal and automation projects at multiple aggregate plants. In 2023, we have continued investing in our Materials business through small bolt-on transactions in Nevada and the Pacific Northwest. The Brunswick Canyon quarry and asphalt plant in Carson City, Nevada, purchased in Q1, supports Granite’s vertically integrated home market in Northern Nevada. We also recently announced the purchase of Coast Mountain Resources in April, an aggregate vendor for our Pacific Northwest region. These bolt-on transactions and materials assets are representative of the acquisitions that I expect us to continue to pursue as we grow our Materials business and work to further develop and vertically integrate our home markets. Now, I’ll turn it over to Mike to review our financial performance.

Thanks, Kyle. As we discussed, the weather interrupted operations and material sales. Despite this start to the year, we remain optimistic for 2023. Our record backlog at the end of the quarter, the strong public market environment, and outstanding orders in our Materials business support our 2023 guidance that we provided last quarter. After the first quarter, we have ground to make up, but that work is in full swing with the relatively dry April we have experienced. We believe we have the capacity and resources to meet our revenue guidance of $3.4 billion to $3.6 billion and our adjusted EBITDA margin guidance of 7.5% to 9%. In the first quarter, comparable revenue, which excludes revenue from Granite Inliner in the first quarter of 2022, decreased $58 million while gross profit decreased $28 million. In the Construction segment, comparable revenue declined $42 million year-over-year to $503 million. This decrease was primarily due to lower revenue in the Central Group of $49 million with multiple projects being completed over the last year as newer, lower-risk profile projects come online. The Central Group has done a great job of transforming and building backlog within its home markets over the last year, and these projects are now ramping up. Comparable construction revenue in the Mountain and California groups increased slightly year-over-year during the quarter. I believe these increases would have been much larger, but for the weather impacts. If the weather cooperates, we expect to see solid year-over-year revenue increases from these groups in the second quarter and through the second half of the year. Construction segment gross profit and gross profit margin decreased $22 million year-over-year to $37 million and 7.3% respectively. Construction gross profit was impacted by the weather, as well as a write-down on the I-64 High Rise Bridge Project in Virginia. The I-64 project is winding down, but we experienced additional costs to maintain the project’s schedule. This caused a negative impact to gross profit in the quarter of $11 million, an impact after non-controlling interest of $6 million. In the Materials segment, comparable revenue decreased $16 million year-over-year to $57 million, with gross profit decreasing $6 million to a loss of $4 million. The decreases in revenue and gross profit were similarly driven by weather-related volume decreases in both aggregates and asphalt sales of 21% and 39% respectively. With better weather, we expect these volume challenges to reverse course in the second quarter with strong order volumes. At the end of the quarter, our cash and marketable securities totaled $256 million. During Q1, we typically used cash as many regions across the company are largely shut down due to cold and wet weather. This year, extreme weather prevented projects and materials plants from generating cash. This was compounded by the timing of collection of claims and outstanding retention balances. Historically, our cash decreases in the first half of the year and we generate cash in the second half of the year. We expect a similar pattern this year as operations get back to work. As I mentioned, despite a challenging first quarter, we are not changing our guidance for 2023 nor our targets for 2024. We expect revenue to grow in 2023 and 2024. Our backlog at the end of the quarter and bidding opportunities over the remainder of 2023 strengthened our expectations for growth. Our guidance of 7.5% to 9% adjusted EBITDA margin in 2023 and 9% to 11% in 2024 is unchanged. Our backlog is growing and is of higher quality with higher margins that we believe support our expectations. Now, I’ll turn it back over to Kyle.

Thanks, Mike. I’ll close with the following points. The weather was extreme, and it was a tough first quarter. While unfortunate, the wet first quarter does not change any of our expectations for 2023 or 2024. If anything, the continued growth of high-quality backlog strengthens our belief and our confidence that we are executing on our strategic plan. The growth of our backlog and the opportunities that we see in front of us bolster our confidence in the overall market. I believe we will see abundant opportunities continue to grow as more projects are released. The impact of the IIJA is still in the early stages as agencies work through the process of bringing more projects to bid. This is a very positive sign for Granite and the entire industry. I’m really pleased that we have closed on two materials bolt-on transactions. These transactions provide additional materials resources to support growth in these home markets and are aligned with our strategic plan. Lastly, I want to reiterate how thankful I am to work alongside our employees at Granite, knowing that we are a part of an organization that is instrumental in helping our home market communities overcome challenges that arise during severe weather events like those we encountered in the first quarter. Operator, I will now turn it back to you for questions.

We will now begin the question-and-answer session. Please note the first question comes from Steven Ramsey of Thompson Research Group. Please go ahead.

Hi. Good morning. Maybe, to start with on the backlog growth in the quarter both year-over-year and sequential, how much of that was a delay of burning off work in the first quarter and how much of that was fundamental market strength in adding new jobs at good margins?

Hey, Steven. It’s Kyle. So, thanks for the question. The big change is that our teams have done a great job of picking up more work, and it’s not just the fundamental shift associated with the weather in Q1. So, we feel very good about what our teams have been accomplishing over the last couple of quarters. We’ve done a great job improving our backlog, and we saw that in Q1 start to build, and we’re continuing to see it build in April. As you mentioned in our remarks, we are picking up more work with higher margins. If I had to estimate, I’d say there’s about $100 million worth of work that shifts from Q1 into the following quarters in the year for us to hit our guidance this year. So, if you do the math, it suggests we have grown our backlog quite a bit. So that would indicate that we’re really well positioned moving forward. Also, in the backlog that I’ll mention is we did pick up about $100 million of emergency work and we burned $18 million of that in the first quarter. The balance of that $82 million is not in our backlog. Because of the way those contracts are structured, they’re not to exceed contracts and are not included in our backlog today. So, together, our backlog is actually closer to about $5.2 billion, and we expect those emergency projects to burn quicker than our typical projects.

That’s great color. Thank you. And then on the materials acquisitions, it clearly seems to fit the strengths and targets. Are you tracking other opportunities that fit the same profile as these building on existing strengths and then maybe, on the acquisitions that you closed, are these margin accretive or neutral? And will the operations of these acquired plants work better as part of a vertically integrated model?

Yes. I mean, I think the answer on these two recent acquisitions being Brunswick Canyon and Carson City, Nevada, that’s a really nice kind of bolt-on acquisition, low execution risk for us. It’s going to allow us to really engage in the 395 corridor and the US-50 corridor down in Minden, Gardnerville, Carson City, Dayton even supplying aggregates and asphalt up into the Tahoe basin. That’s just a really nice fit into a very strong business we have in northern Nevada. So that’s just a perfect kind of bolt-on for our vertically integrated business. We also have our other one we just announced, which is Coast Mountain Resources, and that’s just another really nice fit into our existing business up in the Pacific Northwest, where we were purchasing aggregates from Coast Mountain Resources for parts of our business in Washington. So, we think that they’re good fits for our vertically integrated model. But also, it’s going to allow us to grow our business and pick up more construction work in addition to materials. I’ll just add on that this is certainly the type of acquisition that we’re looking at as a company. They fit our business very nicely. We start to put together reserve expansions we did last year in Utah, a liquid asphalt terminal in Bakersfield, these two recent materials acquisitions. We’re making reinvestments in our materials business that we haven’t made in quite some time, and that’s certainly going to pay off for us long-term. Nothing’s changed from our investment framework. We’re still looking at some geographic expansion and transformation, but we want to ensure we’re focused on strengthening and growing our existing home markets today.

That’s great, Kyle. Thank you.

The next question comes from Brent Thielman of D.A. Davidson. Please go ahead.

Yes, thanks. Good morning.

Hi, Brent.

Hey, Kyle, any anecdotal detail you can give us about the backlog added in the last quarter, or even, the last few quarters in terms of the quality of work there? And as we think about Granite kind of burning through some of this, the rest of the year into next year, are those less competitive jobs? Are the bid margins that much more attractive than what you’ve seen historically? How does it all sort of align with your 2024 ambitions for profitability for the business?

Yes, it aligns really nicely. You can kind of go back a few years; our backlog was made up of a lot of risky work, and we methodically said we’re going to get the right kind of backlog in our business. We’re moving away from high-risk design-build projects, and really focusing on a 100% design-bid-build. If we want to do the best value, we’ll focus on CM/GC and progressive design-build. That has been a significant shift. The big test for us was whether we could replace these big risky mega projects with work that we can deliver successfully; we’ve proven we can do that across the west. The backlog you see today reflects that. We’ve demonstrated that we could do it. We have record backlog in terms of quality, and we believe it’s the best quality backlog we’ve had in a long time. Our margins are up. The backlog that we have has less risk than we’ve seen. We feel good about that. That’s driving the confidence in our numbers as we move forward. Obviously, we had wet weather in Q1, but our story and what we’re focused on as a company hasn’t changed, and it’s really just more of a timing issue for us. We feel even better after our backlog numbers came in.

Yes. And Kyle, moving past the ORP is a big part of the story change. You mentioned some of the I-64 related headwinds this quarter as that nears completion. Just maybe a status update on the performance of the other ongoing projects in the portfolio, and I guess where that whole portfolio stands now.

Yes. We don’t have a portfolio, which is the good news, but we still have a project of significance with I-64 and we’re obviously disappointed that the forecast couldn’t hold. Our team is working hard to get that project wrapped up per our plan. We expect to be done in the middle of Q3, which has been where we expected that project to finish. A lot of our costs are associated with ensuring that we get the job done in the timeframe that we expect in Q3. It’s unfortunate and has impacted our gross profit at the full $11 million, but if you back out non-controlling interest, the impact’s around $6 million. Still, we’re not changing our guidance, and it won’t prevent us from achieving what we believe we can do this year.

Okay. Thank you.

Thank you.

The next question comes from Brian Russo of Sidoti. Please go ahead.

Yes. Hi. Good morning. Just to reiterate, how much revenue was delayed in the first quarter due to weather that you expect to recapture in the second quarter? Did you say it was about $100 million?

Yes. I’d estimate around $100 million, and that’ll shift to subsequent quarters.

Okay. So, not all will be done in the second quarter; we should distribute it over, say, the second and third quarters during the high construction season.

Yes, I think that’s fair. I’d go on to Q2, Q3. Obviously, some of this emergency work that we still are going to deliver on that $80 million will happen relatively quickly. We already saw that $18 million burn fairly fast at the tail end of Q1. So, I’d expect that to go into Q2, early Q3, and then the rest of it, we’ll just distribute across.

Okay. Great. And then just on the storm work. So, it doesn’t cannibalize any of those projects that you had planned to do in the first quarter. It really is incremental work added on top of what you had in the backlog, say, as of December.

That’s right. It’s incremental work. Our crews have been doing emergency work already over the last quarter, and this month, and that’ll continue on. But it’s not replacing work for us; it’s additive in our minds. That’s why some of the projects we were looking to start earlier shifted a little with the weather. The emergency work provided a nice fill in the void, but it’ll be additive.

And has the storm restoration work similar margins in the improved backlog that you guys have been conveying for 2023?

It’s similar. Yes. I would say there’s no real deviation in the grand scheme of things. The work consists mostly of slope repairs, roadway reconstructs, drainage cleanouts, and those types of things that have to happen quickly. There can be slight delays in getting paid. In some cases, you have to reconcile time cards and equipment hours, and those types of things. So that’s the only slight change in emergency work and in contracting with them; not to exceed contracts just add a little difference versus our typical contracting with local agencies and DOTs.

Okay, great. And then along with reiterating the 2024 targets on margins, it looks like you still have a $300 million range on the revenue line. Given what you’ve seen last year and going into this year – do you sense that you’re trending towards the top end of that range, just given the tailwinds we see in the public market spending and funding environment?

Well, our backlog is extremely encouraging. We’re excited about it. The tough part with the backlog — especially when you have best value — is a lot of these contracts have varying preconstruction service portions. They vary from a few months to a few years in some cases on these services. So, it’s hard to convert our backlog into revenue. It also depends on how many task orders owners are willing to put out within those CM/GC type contracts. But we feel like our confidence has grown as our backlog has increased. To get to that 2024 number, we feel good about that. I think on the EBITDA margin side of things, we’re feeling encouraged as well. We are getting more work on bid day. We’re seeing that quarter-over-quarter and year-over-year. I’ve mentioned that I think on the last three or four calls now. We’ve seen a significant shift since 2021. The backlog is only getting stronger by quarter. We continue to focus on getting the right work that’s less risky than what we’ve had in the past. Our focus has not changed. We’re extremely focused on operational excellence as an organization. We put our construction playbook in place mid-last year, and that’s taking hold across our organization. We expect that to help us execute at a higher level as a company. We’re getting our automation projects and our materials business online, and we believe that’s going to start paying off for us this year and into next year. Our strategy and what we’re trying to do align nicely with where we’re headed. It’s just unfortunate that the weather in Q1 put everything on pause for us, but we feel like it isn’t changing anything we’ve been working on.

Okay, great. Thank you very much.

Thank you.

The next question comes from Michael Dudas of Vertical Research Partners. Please go ahead.

Good morning, Kyle, Mike, and a shout out to Lisa. Hope she gets well soon.

Yes. Thank you.

Kyle, relative to your very strong backlog, a couple of questions. One, you did mention Caltrans, and there are some budget issues in California. What’s your Sacramento insights or contacts saying, and is some of the concern on funding alleviated by the SB-1 or the IIJA funding, and regarding business moving into 2023? Maybe you can comment a little bit on some of the activity in the private sector customer base and where that stands. We’ve been hearing some mixed results on heavy and light non-res. So, I want to see if you have any thoughts on that.

Yes. I think we highlighted the Caltrans budget issue just because it’s out there, and we don’t want anyone believing that Caltrans doesn’t have funding and that there isn’t a robust market in California. We’ve actually seen lettings in California increase, in terms of awards, not decrease. So, we feel really good about what SB-1 has done for the State of California and the opportunities that are out there as part of that. And also the IIJA. We’re seeing a really nice market in California, and our backlog increase really reflects that. The private sector has been strong for us too. I’ve mentioned before that we don’t correlate strongly with residential; we don’t do a lot of residential on the construction side. We do sell some materials into the residential market, like concrete aggregates, but it’s not significant. Again, we correlate more towards transportation. On the private side, we’re seeing really robust opportunities in mining, rail, industrial projects, and solar. Those parts of our private market continue to remain very strong.

And Kyle, my follow-up on the materials business and the order book you had, you indicated it is quite strong, even with the delays aside. How does pricing look relative to a year ago, and what are some of the pricing dynamics talked about in the California markets from January 1? How does that look in your book, and where do you stand on liquid asphalt on the cost side? Any tailwinds or headwinds that we should anticipate during 2023? Thank you.

Yes. Well, it’s a lot different. Last year in Q1 and into Q2 and parts of the year, we saw a big bump in natural gas and diesel that impacted our materials business last year. We’re in a different position today. We added an energy escalator last April to help us offset those costs moving forward. There’s no doubt that impacted our materials business in 2022. In 2023, we’ve already seen those costs on liquid asphalt, natural gas, and diesel stabilize. They’re still elevated but have stabilized, and our pricing has been able to hold. We expect to keep our pricing up, and so far to date, we've been able to do that. As I mentioned in the prepared remarks, we’re seeing our order volumes up, and our backlog in terms of sales is very strong. We still feel good about our materials business despite the slow Q1 with the weather. We think we’re going to come out of the gate here in Q2 and Q3 very strong for the year.

Thanks, Kyle.

Thank you.

The next question comes from Jerry Revich of Goldman Sachs. Please go ahead.

Yes. Hi. Good morning. Hi, Kyle. Good morning, everyone. And all the best to Lisa.

Yes. Thank you.

Kyle, I’m wondering if we could just talk about the economics of the aggregates acquisitions. If you don’t mind, what’s the synergy value-add that you folks are able to add to the equation because you’re vertically integrated in those markets versus standalone results? The standalone aggregate companies trade at 13 to 17 times EBITDA. I’m wondering if you could just talk about how the multiples compare on the assets that you acquired, including synergies.

Well, first off, I’m not going to share necessarily the multiples that we paid. They’re not huge transactions for us. To put you in context around Coast Mountain Resources, that was about a $27 million acquisition for us. Those are really nice vertically integrated deals for us, whether it’s the CMR acquisition or Brunswick Canyon in Nevada. The synergies really are that the materials are attached to our construction business; that’s where we see the uplift. It allows us to do all the things that we want to do due to vertical integration. This enables us to schedule our orders, ensure that we have quality aggregates in our business, and take advantage of recycle opportunities. There’s even some tax advantages. Without getting into the specifics of the deals, I can tell you that we wouldn’t pursue these if we didn’t think there was value creation for the company. We feel really good about them, and the teams are excited to have them as part of their businesses. Again, the integration risk on these is very low, and it gives us confidence on how we can strengthen our home market positions. We want to continue this in different parts of our business as an ongoing effort.

Super, thank you. And Kyle, in terms of the margin progression year-over-year, as we think about full-year margin guidance, you folks are looking for, call it, 200 basis points of margin expansion. Can we talk about how that looks by quarter? Are you expecting to be on that base in the second quarter? How quickly are things coming back off of the first quarter?

Yes. I don’t know if I can give you a quarterly breakdown on the margin progression. Certainly, if you go back over the last three years in 2021, we were at 12.5% and in 2022, 13.7%. In 2023, we expect to be at 14% or higher. These are not ORP numbers. As you look at the full year, we see our margins continuing to progress to where we want to be in 2024. I think most that follow our company know that there’s a focus on annual results because we anticipate weather interruptions along the way. So, I think the margin progression will continue through the year, likely strongest in Q3, and then go through the normal cycle thereafter.

Super. In terms of areas where you were weather impacted in the first quarter, does it snap right back into the second quarter because people are trying to make up for lost days, or does it take time to ramp up into the second quarter just from your activity level standpoint?

I think it snaps back fairly quickly. Our Central Group wasn’t as impacted certainly as our business out in the west. Our Mountain Group is used to the seasonality; they’re obviously with businesses in Alaska; they’re used to cold, wet, and snow. I think our Mountain Group faced more challenges than most, especially Nevada and Utah, where they experienced really high snow levels. However, we have the capability to deliver what we’ve set out to do this year. California was the hardest hit. We look back over the last couple of years and what our team needs to do is in line with what we’ve shown we can execute in the past. We aren’t concerned; we need the weather to cooperate at the end of the year to continue delivering. But yes, we have the capacity, teams, and confidence; this is just a timing issue for us. Things just shifted from Q1 into the following quarters.

Super. Thank you, Kyle.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Kyle Larkin for any closing remarks.

Okay. Well, thank you for joining the call today. As always, we want to thank all of our employees for the work they do every day. Nothing is more important than the safety of our employees. This week is construction industry safety week, where annually we renew our commitment to safety. As a company, we have never been safer, and I look forward to visiting teams across the country to recognize their efforts as we work towards another record setting safety year in 2023. Thank you for your interest in Granite. We look forward to speaking with you all soon.

The conference is now concluded. Thank you for attending today’s presentation, and you may now disconnect.