Alex Dwyer : Hi, guys. This is Alex on for Sean this morning. Thanks for taking our questions. So on e-infrastructure, can we just talk about the external supply chain environment, kind of how this has trended in the recent months? I’m just wondering if this has gotten any better or worse? And then in 2023 segment, it won’t be comping off a year without Petillo, so there won’t be that margin headwind from the lower margin work. So is it fair to expect some healthy margin expansion in this segment this year?
Joe Cutillo: Well, let me talk about the supply chain first. On the two biggest drivers on supply chain for our e-infrastructure, our pipe and diesel fuel, we’ve seen diesel fuel at least stabilize. So it’s a little more predictable than what it was when we had to go from 2 something a gallon to 5 something a gallon. And I think it was 45 days. It was — that’s a little hard to predict, right? So it’s stabilized. So I think we’ve got our pricing models and contracts built more effectively around that. So theoretically, we should see, as we get into later in the year after the second quarter, some pickup in margins related to that, for sure. Pipe still remains a long lead time item. And so what we’ve ended up doing is still a little bit of a hit.
But I’ll tell you, we’re getting better at scheduling the project, knowing that the pipe is going to be out towards the end. We’re starting to see, for the first time, some equipment availability for what I’ll call the traditional machines, excavators, dozers even seeing some articulated trucks just in the last few weeks on the market available for cat. So that’s a good sign. Some of the specialty stuff is still lead long lead times. But I’d like to see their pricing come but I’m not sure we’re going to see that pricing is up about 30% on equipment. So I think it hasn’t necessarily gotten a lot better, but it’s at least stabilized and a more predictable overall and we can manage that more effectively.
Ron Ballschmiede: And maybe for clarity, we expect both units e-infrastructure units to increase revenues. I don’t want to make a mistake that we’re going to be down in the Northeast. They have a very nice backlog and a good opportunity list, if you will. They just tend to have a little bit smaller — they had to sell more pieces of it, but we expect them to have another good year. So in answer to your question of margin versus between the two, if overall, at today’s run rate, it’s about a 2% delta all in for the different type of scope of work that we do in the Northeast compared to the Southeast Southern or United Southeastern part of the United States. That number — that will stay about the same. It will inch down in a big year or slower or mix and things like that.
But that’s sort of a permanent call it, 1.5 to 2.25 until something happens, humbly different happens. But we don’t expect that. That’s what we — that’s what is our success. And with the union environment, that is what our clients prefer that we do and our clients are important to us.
Joe Cutillo: Yeah. I think the real — we will always see a net shift down with the addition of Petillo and the other services. But we believe that in the second half, we will claw back some of the some of the erosion in margin that we saw from the supply chain. So again, it’s stabilized. I think our pricing and our new jobs are much more firm and the — what I’ll call the risk of diesel going back up to $7 or $6 or $5 a gallon versus $3, we built it in that way or if we built it into $5 going to $8 or $9, I think it’s much lower than it was this time last year.
