Kelly Huntington: Yes, I can address that. So that was a part of the variance when we look at year-over-year and it does come from higher profitability from prior acquisition and some contingent compensation expense related to that. And we did see some strong favorable closeouts during the quarter. So that was, it was a significant driver of the increase in SG&A expense, especially when you look year-over-year.
Sangita Jain: How should we think about that going forward? Do you expect to have more of these payments for the rest of the year? Or does that taper down?
Kelly Huntington: So, that could continue to be a factor in the second quarter, but I would expect that that would not be a material factor as we go into the second half of the year.
Operator: And the next question comes from the line of Justin Hauke from Baird. Please go ahead. Your line is now open.
Justin Hauke: So, I guess I just wanted to circle back on the solar projects. Obviously, that’s not new and your timing saying they’re going to be done sometime in the third quarter is kind of what was the expectation before. I guess just for thinking about the margins and how those roll off. I mean approximately how much revenue are those projects generating? And then are you still with the gross margin adjustments that you made on them, are they still earning a profit or is that basically running at zero margin at this point? And I’m just trying to understand the magnitude of how that drag could reverse once those are complete.
Rick Swartz: I was going to say those projects are difficult projects for us that handful. We’re getting them behind us. They are very, very low margin projects for us. So, they are slightly negative for us on that side. So, they are pulling us down. Weather continues to be an impact on those projects. And as I said, they’ll be finished during that beginning of third quarter timeframe. So, for us, we really haven’t disclosed what the revenue was on those projects and we’re in discussions with our clients and they don’t want to say much about those projects. So, that’s about as deep as I can get into it.
Kelly Huntington: And I would just point to some of the disclosures that we have in the 10-Q that just provide a little bit more background on that 6.1% margin we had in the quarter, and some of the puts and takes from that perspective, that gives a little bit more detail.
Justin Hauke: Yes. No, I saw the 250 basis points net. I was just kind of trying to understand, I mean, is this 10% of the T&D business, is it 5%? I mean, just kind of directionally on that because that kind of helps understand like once those roll off, what it would be considering that they’re running at very low margin or negative margin?
Rick Swartz: I don’t know, if there’s anything to add on.
Rick Swartz: No, I would say it would take us more towards our mid-range of our guidance of where we should be at somewhere in their lower to mid-range without those projects.
Justin Hauke: I guess my second question just maybe bigger picture. Your distribution revenue is actually up pretty strongly, up 20%. I guess we’ve heard some commentary that the utilities have been pulling back work under their MSAs, maybe it’s shifted to more transmission or they’re restricting hours just to make sure that they don’t kind of run over their CapEx budgets for the year. But years was up nicely. So, I guess, are you seeing that or what are your customers saying in terms of kind of their progression of how they plan to roll out under your MSA contracts for the year?
Rick Swartz: Justin, I think when we look at it, we’ve always said between whether it’s transmission or distribution, our MSAs are a lot of our dual purpose and we do both transmission and distribution work for the same clients. So, it’s really how they roll out their work during that quarter. And for us, margin profile is very similar. We don’t care which one we do. So, it’s just being able to support our clients. So again, it can always shift quarter-to-quarter based on the work they’re releasing us. But I don’t think we’ve got anything that’s specific that says they’re going to shift. And again, we only report 90 days of backlog in our MSA. So, we’re forecasting what we see for the next 90 days. We’re not forecasting that out a year, but our clients aren’t pulling back overall. We haven’t seen that. So again, good spend from them and I really don’t care which bucket it goes into.
Justin Hauke: No, and that’s a fair point with the 90 days because that’s different from how some of your peers report their backlog. So, thank you very much. Appreciate it.
Operator: [Operator Instructions] The next question comes from the line of Jon Braatz from KCCA. Please go ahead. Your line is open.
Jon Braatz: Kelly, could you give us a little more detail on the gross margin impact from your I think it was a joint venture investment that you have and I think it contributed 60 basis point improvement. Can you give us a little more specific on that?
Kelly Huntington: Sure. And that relates to a couple of joint venture projects that we’re nearing the finish line on and have had some strong results. And so that contributed to a favorable effect on the C&I segment in the quarter.
Jon Braatz: Anything going forward from those JVs?
Kelly Huntington: They’re getting closer to the finish line. So, we’re not quite finished with that. They’re not fully closed out, but I would expect that this was a larger contribution that we saw in this quarter.
Jon Braatz: Larger in the second quarter? Did I hear that right?
Kelly Huntington: I’m sorry. No, larger in the first quarter.
Jon Braatz: And Rick, sort of from a big picture standpoint, sort of as always, the utilities are facing a little bit higher cost of capital. And are you seeing any reluctance to go forward with some of their capital spending because of the higher cost? Any reason to think that maybe some projects could be pushed further out to the right?
