MDU - Earnings call transcript Q3 2019 | MDU Resources Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello. My name is Jessa and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2019 Third Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. Instructions] [Operator

for be through beginning on number XX:XX The X-XXX-XXX-XXXX ID will Eastern X November XXX-XXX-XXXX. for for XXXXXXX. or for conference today is the XXXXXXX. Time P.M. number to the available replay call conference The at replay P.M. XXth. Again, is This the replay number ID dial the Eastern is Time replay

of Financial MDU your over now Group. to the Jason Officer like and President Vice conference. would Mr. Treasurer I you. conference Chief Resources begin Thank Vollmer, to Vollmer, may turn you

Jason Vollmer

welcome Thank remarks. to being you, Jessa. the Internet I'd like call. over call public third to conference XXXX is This and the conference everyone earnings slides our quarter accompany to live broadcast our will

the of our at would can & to you Events the you find website tab page on like under Investors Presentations view slides www.mdu.com. the them If

Our earnings available also our on website. release is

course meaning forward-looking we of XXXX. will During XXE presentation, Exchange of certain Securities Section the of make this Act the the within statements of

company expectations actual and assumptions, based reasonable materially. on differ may results its the believes beliefs are Although

For refer Item Risk a actual in may that XX-K. Factors Form most to our recent XA differ, to discussion of results factors please cause

questions. After I remarks. today, Dave's For our for CEO remarks and and to will financial key Dave President formal turn highlights we discuss the call will the the then Goodin, over Resources for line presentation of his open MDU

President MDU Montana-Dakota myself of Gas President members CEO Knife President President answer Energy; Construction and Stephanie of Dave of Trevor and our Officer and of and of Services to Barney, Thiede, Resources. Vice Cascade questions will Group; MDU CEO Hastings, President Nicole Natural Corporation; addition Utilities; Accounting Controller Barth, Gas In and Dave available Jeff and CEO WBI Intermountain River Chief team are to of management who Kivisto, and and today be CEO

quarter third $X.XX million announced share. to share million or $X.XX $XXX.X Yesterday per per of compared XXXX earnings third earnings $XXX.X quarter or of we

largely quarter, Our reported XXXX. $X.X combined earnings business million in in utility to earnings The third quarter third of segment $XX.X of the adjusted from XXXX. of the $XXX,XXX of the electric million utility $XX.X Big reported for This the a prior XXXX. down adjustment gross South from result realized project margin the was for related the an million that compared of higher in quarter earnings in Stone absence to in Ellendale quarter increase was to

depreciation mild the in and recovery volume expense also our rates of was and This higher service the had across impact expense to territory. Partially quarter. and offsetting volumes. on decrease from a largely X% also decrease operation electric and Higher depletion temperatures in the negative due results. maintenance final in summer implemented increase a State amortization gross adjusted Montana interim was margin Great increased sales

higher plant Our million the depreciation, as utility compared result seasonal of mainly amortization increased The expense, depletion, property and had quarter as increased year. natural the higher and equipment in well operation payroll-related gas of taxes. segment to was maintenance from a for a increased loss loss balances expense prior costs $XX.X of and loss property $XX.X million a

the X% normalization and was offsetting jurisdictions. weather margin adjustments by retail quarter. from certain approved cost offset gross increase increase was recovery Partially adjusted in volumes in an higher the sales A conservation rate in in

reversal. of release regulatory was that of million a a decrease $XX a to benefit the quarter earnings was The the in third The XXXX. quarter largely million related liability to compared midstream million the third tax business of This XXXX. quarter $X.X in absence pipeline recognized our earnings third in is $X.X and in in had of benefit outlined result tax is XXXX

case higher increased as depreciation and from the Higher expense property earnings. and depletion, organic in growth FERC plant to to also rate due well decrease projects from as contributed recent depreciation, amortization rates equipment a

projects into related placed the organic positive the rate higher case, on volumes, primarily previously to transportation and growth rates service mentioned that had half in Record FERC customer a from were of quarter. impact the XXXX second

a Our XXXX construction million XX% the million third services quarter million. XXXX $XXX.X $X.X business $XXX.X record million, earnings third of reported quarter in record revenues of to compared $XX.X of and third from quarter up revenues

saw and industry higher These specialty increases at the specialty contracting projects. demand increased high both higher due hospitality Inside increased to in contracting workloads Outside by demand high-tech and lines. for the customer utility for construction outside workloads projects continued workloads inside were driven from industries. specialty contracting company

selling, increase the the estimates payroll-related offsetting business costs XXXX in charge increased Partially workloads $X.X on from primarily Results in experiencing. expense, contracts. this general in that to a higher administrative earnings changes is and construction included million was certain due

This of revenues in business third Our million XXXX record period also $XXX.X reported for from construction to reported materials million quarter business third of up $XXX.X XX% earnings third the quarter the same of record revenues quarter, XXXX. million. $XX.X in million, $XXX.X compared

higher sales, our a revenues operation, drove of and many in along from states services contracting result gross seen of earnings. of as Higher across strong margins with material economic the conditions increase

the sales than million Additional the positive a made XX from material year gains over volumes higher quarter. had that sales the $X months acquisitions were prior asset on also last impact and approximately

higher the general third the earnings and higher quarter of administrative interest selling, acquired expense related increase were offsetting Partially since that companies XXXX. to expense, in were and largely

payroll-related experienced higher also We costs.

quarter. like the That And his the over for summarizes call turn financial highlights to remarks. to Dave the now for I'd formal Dave?

Dave Goodin

of reported $X.XX share everyone. to year. third afternoon, last good per we and compared Jason, you, earnings quarter share thank $X.XX per Well, Yesterday,

on earnings example our this our higher well within year is track $X.XX than and performance deliver to time to earnings earnings are and value positioned XX% XXXX of two-platform year-to-date per business the we strong last guidance a This of Our narrowed direct of share. model. are $X.XX

and our on report plan us operational execute our the more to and came employees and operating quarter strong together During results. than XX,XXX helped financial

industries complete various across to markets. our With and projects infrastructure companies geographic these employees continue

the benefit our do of heart only Building nation so a Not infrastructure a Strong we our but continue America, shareholders is strong does economy. our because as

organic on regulated our focus companies. growth to continue infrastructure improvements and at energy delivery We

a and customer associated Our In safely in the in state full upgrading with expanding utility year growing increase $X.X of this balance electric with became facilities Montana. quarter will earlier of later. for of and total serve and the our new a September which seeking This $X effective recovery third this year revenues to quarter, costs rates implementing the of our base. implemented had settlement finalized one annual effective million regulatory utility year by the million

state North Dakota an rate. increase from the We transmission cost to for our approval of also received adjustment

operate utility XX-megawatt and determination This filing Dakota simple-cycle turbine. with the by if gas-fired combustion of electric will state natural for its Our XXXX completed North own approved, be service an and of to facility, advance gas $XX previously in an is related million settlement the with The natural utility filed case of state filed construct. state a the to filed to of rate to joint cost a expected approximately Washington. increase a in agreement for Minnesota prudence and

transportation handle our we And At natural XXth our pipeline continue levels remaining we the the with record production business organically to gas Bakken, consecutive volumes. to quarter of grow production in at increased reported volumes. record

XX placed million projects group Line Lake will gas these per capacity. the quarter, project in Billings, pipeline approximately Dakota XXX North cubic construction continued two the Together of Northwestern day Demicks transportation near and add project service into the Section feet Montana. During natural on

and here Bakken its the expected in capacity also cubic Policy in project project. business to of for Expansion expected on This add North begin feet is working Environmental the This another is is review Expansion process Construction million project day per FERC Lake Demicks to in in will early be of prefiling service with on the November. Act National process XXX XXXX.

in increasing on second long-term continued per had XXX the based commitments project our record an gas Bakken, been to per release the design capacity time. this levels we has for feet cubic feet capacity now of XXX original project cubic increased of in announced million design This of transportation We natural capacity day. million day and which yesterday customer are the production the of that

Now I'd to platform. turn to like construction our

We are momentum the seeing construction we with pleased businesses. our in continued are

businesses at time standing year. $XXX and now this at last is record services backlog combined backlog than a quarter $X.XX higher million some Third levels billion with at both materials

The Construction backlog. revenues, third that and guidance revenue a XXXX to This the business narrow billion. to quarter range $X.X earnings reported at billion now Materials us to strong record $X.X performance business led of

will Given the strong about our economic remainder environments, of the Knife at out River we finish are seeing across XXXX. we they how are optimistic footprint,

revenue guidance to the record At a continues resulted High backlog. demand And this levels. to range to construction both we segment service outside third our $X.XX Group operate third quarter, Construction billion and at and contracting $X.XX for revenues, XXXX earnings quarter of increasing for consecutive are record in inside billion. now service, for Service

the services the of of announced electrical Washington. Northwest. This the currently division Electric Services, is companies subsidiary located one of Construction as business MDU OEG which quarter Pacific a operate during headquartered Pride largest assets acquisition a the Inc. the and of in of Construction contracting will in Redmond

We Electric Bellevue in Redmond the the presence have our and Pride are and Seattle, the we very to excited markets. to add team strengthening to

I conclude, third our to we with want results. very pleased to quarter that So reiterate certainly are

what projects our we has Our organic produce two-platform business value and as focus to utilize been Resources significant long-term MDU and doing. are business both on that's model execute acquisitions to growth just our at we plans

We act to a our integrity with we are a Building on committed tagline to operating and focus while on America. with of continue safety Strong

that certainly your interest Operator? I MDU questions. to the and open commitment and in to ask line now Resources appreciate we

Operator

from Citi. question [Operator Ryan ahead. comes Please go Levine first Instructions] the Your of line from

Ryan Levine

growth afternoon. percentage service What year-over-year acquisition? construction and material driven was of by Good EBITDA

Dave Goodin

materials about to I be Dave on move and able after to Dave, over appreciate start Ryan? off then services. segment. Barney Ryan. respond to And Jeff with talk We'll the we'll that would question that you

Dave Barney

growth how do doing? About acquisitions. that. of on new was can I EBITDA Yes, from XX% Hi, the are Ryan, you

Dave Goodin

Jeff?

Jeff Thiede

transaction Yes. their Pride Thanks, for We the closed on essentially had so September we weeks of Ryan. performance. two XX,

of We're it's this we results from a expect Electric acquisition. impact the We an So great successful quarter. Inc. for in future. excited and not a about Pride as fit think this division OEG

Ryan Levine

in the Great. to you financial quantify what impact Are Or Electric of are longer-term disclosure? you your able Pride deal limited is? the

Jeff Thiede

in a that they going disclose and We're us this the company. sure. services at great the for Pacific And will a that complement contributor Northwest think to be time that's it's Yes. not we

Ryan Levine

then, that the And what future potential what for services you construction looking characteristics in acquisitions? vein, you're on are -- are Okay. in

Jeff Thiede

equipment strategy a inside are services We not that and electrical, look that our grow. currently are of areas to have is And such which country go we as the second provide for called we organically. acquisitions, companies same look with to what as outside. we or in choice, our we as far But located and grow similar mechanical,

a So culture lot country looking of got we've fit performance. and where other we the can we find are strategically companies we cover at that our of areas markets that and

Ryan Levine

certain a MDU size the there would fit in or scope that characteristic Is umbrella?

Jeff Thiede

have financial, safety and in of range million course, We in a with $XX about it's range fit be going performance, the well the million revenue. to ability of team. And to to companies $XXX of their as our as

Ryan Levine

you. great. Okay, Thank

Jeff Thiede

Thank the questions. you, Appreciate Ryan.

Operator

is to further call would Time This to back PM Again, closing for Eastern PM for replay be there the conference like At replay XX. the are XXXXXXX. no number conference ID management Instructions] number remarks. now will [Operator available replay on XX:XX time today XXXXXXX. over for X this the the at turn I is questions. Eastern The November conference Time through for beginning ID

Dave Goodin

you, Thank Jessa.

at been acquisitions. along And again, produce on to projects, focus our we plans, that. significant long-term we're Our execute value MDU doing as growth organic has with Resources here business just

ratings for XX continued last our XX balance credit maintain solid increasing a years. And we it position. while for to strong provide competitive to good shareholders years, dividend continue and have We a sheet, liquidity a consecutive for the

thank beyond. of We are Operator? the as this employees Resources. and participation executing Strong and well continued appreciate for on a Building you opportunities XX,XXX as more America, safety on again We the in MDU year and to us many, today interest your ensuring ahead are our call your than projects of committed many

Operator

Resources MDU you Thank today's conference Group concludes This for your participation. call.

You may now disconnect.

MDU Resources (MDU) 30 Oct 192019 Q3 Earnings call transcript