Charah Solutions, Inc. (CHRA) on Q2 2021 Results - Earnings Call Transcript
Operator: Good morning, ladies and gentlemen. And welcome to Charah Solutions Inc.'s Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After today's presentation, we will conduct a question-and-answer session, and instructions will be given at that time if you would like to ask a question. I would like to now hand the conference over to Steve Brehm, Vice President of Legal Affairs and Corporate Secretary for Charah Solutions. Please go ahead.
Steve Brehm: Thank you, operator. Good morning, everyone, and thank you for joining us today. We appreciate your participation in our second quarter 2021 earnings call, and we look forward to sharing our prepared remarks and answering your questions. We hope you had a chance to review the press release we issued yesterday after the market closed. If not, you can find the press release as well as the supplemental investor presentation you may follow during our prepared remarks on the Investors section of our website at www.charah.com or ir.charah.com. Joining me today on our call are Scott Sewell, President and Chief Executive Officer; and Roger Shannon, Chief Financial Officer, and Treasurer. Following their prepared remarks, we will come back to the customary question-and-answer session. Before we begin, I would like to remind you that our remarks regarding Charah Solutions include statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those disclosed in our earnings press releases and conference calls. Those risks include, among others, matters that we have described in our earnings press release as well as in our filings with the Securities and Exchange Commission, including our quarterly reports on Form 10-Q and our annual reports on Form 10-K. We disclaim any obligation to update these forward-looking statements, except as required by law. During this conference call, we will refer to certain non-GAAP financial measures. We provide reconciliations to the nearest applicable GAAP measure in our earnings press release and supplemental presentation. Again, thank you for joining us today. Now I would like to turn over the call to Scott Sewell, our President, and CEO. Scott?
Scott Sewell: Thanks, Steve, and good morning, everyone. Thank you for joining us for our earnings call today. During the second quarter, we continued to capitalize on opportunities for significant new business. We also posted strong financial results for the quarter and expect this to continue in the second half. This morning, I'll briefly review our progress this quarter in winning awards and advancing our projects. I'll also update you on our bid pipeline, our ESG initiatives, and recent additions to our Board of Directors. Roger will then review our financial performance during the quarter. He will also review our plans for refinancing our bank debt, which we see as a path to significantly improved financial flexibility to grow our business. We've had a highly successful year so far in terms of new awards, which totaled $685 million through early August. This puts us on pace to significantly exceed the $715 million of new awards we received in 2020, which was a record year for us. Our ability to continue to add new customers and new awards with our power generation partners speaks to the essential nature of our services and the reputation, experience, and resiliency of our industry-leading team. The total this year-to-date includes $158 million of new awards received since our first quarter earnings call in mid-May. These recent awards are across all our business lines, remediation compliance, fossil services, byproduct sales, and environmental risk transfer for ERT services. Our ERT services businesses continue to be a compelling one-stop solution for our customers looking to address the environmental and economic challenges associated with retiring older or less economically viable fossil generating assets. We are excited about the potential to grow this business. In May, we reached a binding agreement to acquire the Avon Lake plant in Ohio from GenOn when the plant seizes operation in April of next year. Avon Lake is a 627-megawatt coal plant along Taheri. We will assume responsibility for demolition of the plant and environmental remediation and sustainable redevelopment of the site as we are doing at our Gibbons Creek ERT project in Texas. Speaking of Gibbons Creek, during the quarter, we continued to ramp up activity at the site. Demolition of the plant is underway and is expected to be largely completed this year. Remediation of the ash pond is ongoing and on schedule. We are nearing finalization of the redevelopment plan for the site. We also continue to ramp up activity at the large remediation projects in the southeast on which we started work earlier this year. These include a coal ash reclamation project for Dominion Energy and two long-term ash pond closure by removal projects for a major Southeast utility. These and other remediation projects are on track. The new business awards we have received, which totaled $1.4 billion in 2020 and 2021 to date, position us for strong growth in revenue, earnings, and cash flow this year and next. A significant portion of these awards are large projects that will take several years to complete. As a result, our weighted average remaining contract life has increased to approximately six years currently from approximately three years in 2018. This extended contract life provides greater visibility and durability of revenue, earnings, and cash flow than we have had in the past. Notwithstanding the significant awards we have received already, we still have approximately $4 billion of pending proposals on which we expect to hear over the balance of this year and in 2022. As I noted, we expect additional award announcements in the second half that should result in another record year for us. We also have identified close to $7 billion of opportunities across our businesses. We are optimistic about the prospects for converting some of these opportunities into additional new business that will further add to the predictability of our revenue stream and layer on growth well into the future. The regulatory environment continues to be very favorable for our business. As we have discussed on previous calls, states are continuing to become more prescriptive regarding the means and methods of ash pond remediation. At the federal level, we believe the Environmental Protection Agency under the Biden administration will accelerate its efforts on regulatory requirements, beneficiation guidelines, and ash impoundment closure deadlines. As the partner of choice for solving our customer's most complex environmental challenges and as an industry leader in quality, safety, and compliance, we are ideally situated to help utilities and power generation companies deliver on their impoundment closure requirements and needs. In addition, the Biden administration has proposed $1 trillion investment in infrastructure over a multi-year period. The bill has bipartisan support. If enacted, we would expect our byproduct sales business to benefit over time from increasing demand for concrete as fly ash serves as an attractive economic and environmental alternative to Portland cement in the production of ready-mix concrete and concrete products. Next, I'd like to touch on our ESG initiatives. As we noted in our inaugural ESG report earlier this year, sustainability is at the heart of our business. We practice resource conservation and recovery through the beneficial recycling of coal ash, ash impoundment closure services, and the remediation and redevelopment of land for community and commercial use. These activities reduce greenhouse gas emissions, decrease landfill disposal, conserve natural resources, and protect our waterwaste. In the report, we laid out 2021 objectives in the key areas of environmental, data acquisition and reporting capabilities, diversity and inclusion, and safety. We are on track or ahead of plan with respect to these goals. To cite just a few examples, on safety, we undertook steps to improve the quality of site inspections and observations to focus on the quality of our near miss reporting and unsafe observations. Also, we have maintained our excellent safety record with zero lost time injuries this year-to-date and a total recordable incident rate of 0.32, which is below our goal of 0.46 or lower. In terms of environmental, we have implemented cross-training sessions at the site level to increase both the amount and quality of site audits and inspections. Year-to-date, we have not received any notices of violation or notices of deficiency. On data acquisition and reporting, we are developing and implementing methods to track our consumption of water, electrical energy, and fuel and our production of disposal of waste. We are also looking for ways to reduce our water consumption or use recycled water. In another important area, I'm pleased to announce that since our first quarter earnings call, we have added three highly qualified individuals to our Board of Directors. Dennis Whalen joined our Board of Directors effective at our annual meeting in June. He is a retired senior partner of KPMG and brings more than 35 years of global experience in driving innovative growth, aligning risk with strategy, and developing dynamic talent. Dennis serves as a trusted advisor to senior leaders and Board members across the energy, construction, industrial manufacturing, and life sciences industries in both developed and emerging markets. He also has expertise in shaping governance strategy to create long-term value and to unlock the power of diversity. Timothy Alan Simon joined the Board in July. Timothy is an attorney with more than 40 years of experience, primarily in the public sector. He has a deep understanding of the energy and utility industries, having served on the California Public Utilities Commission from 2007 to 2012. More recently, he has been a consultant on utility, infrastructure, financial services, and broadband projects and has been a frequent public speaker on energy, infrastructure, diversity, and inclusion. We expect that Timothy's background and experience will be tremendously helpful to our Board and management team as we continue to provide innovative solutions to our customers while accelerating business and financial performance. Kenneth M. Young joined the Board effective with our equity issuance to B. Riley, which closed last week. Kenny is President of B. Riley Financial and CEO of B. Riley Principal Investments. He has more than 30 years of operational, executive, and director experience, primarily within the energy, communications, and finance industries on a global basis. We look forward to his contributions to our Board. Before turning the call over to Roger, I'd like to thank our dedicated Charah Solutions employees who are working every day to help our customers ensure service, reliability, and to address their environmental and recycling needs. We remain committed to keeping our people safe, supporting our customers, and growing the business. With that, I'll turn it over to Roger Shannon, our CFO.
Roger Shannon: Thanks, Scott. I'll continue with a review of our financial results and provide an update on our cash flow, balance sheet, liquidity, and 2021 guidance. As Scott noted, I will also address our refinancing. Before reviewing our second quarter and year-to-date results, I would like to remind you that the accounting treatment for our ERT services is different from our three other lines of business. Profit and loss results for ERT services are captured in two lines on the income statement, gains on sales of property and equipment net and other operating expenses from ERT services. Thus, the ERT business is not included in our revenues or our gross profit that is included in operating income and adjusted EBITDA. I'll start with our second quarter 2021 results. For the second quarter, revenue increased $11.2 million or 21% to $63.5 million as compared to $52.3 million for the second quarter of 2020. This increase was primarily driven by a $16.4 million increase in remediation and compliance services revenues from the commencement of new project work, partially offset by a $3.2 million decrease in fossil services revenue due to project completions and a $2 million decrease in byproduct sales due to an increase in shipping rates and the dissolution of our joint venture in Ash Ventures, LLC in the second quarter of 2021. Our Q2 gross profit increased $1.7 million or 33% to $6.9 million as compared to $5.2 million for the second quarter of 2020. This increase was primarily driven by an increase in gross profit from our remediation and compliance services from the commencement of new project work and better gross profit margin on our byproduct sales during the second quarter of 2021, partially offset by a decrease in gross profit due to dissolution of our joint venture in Ash Ventures, LLC in the second quarter of 2021 and a decrease in gross profit on our fossil services business due to project completions. The net loss attributable to Charah Solutions increased $600,000 or 18% to $4.2 million as compared to $3.5 million for the second quarter of 2020. The increased loss was primarily due to the absence of $3.8 million of income from discontinued operations, net of tax recorded in the year ago period; other operating expenses from ERT services of $1 million; and a $700,000 increase in general and administrative expense. Discontinued operations reflect our allied subsidiary, which we sold in November 2020. These negative variances were partially offset by a $1.7 million increase in gross profit, as previously discussed, and gains on sales of property and equipment, resulting from the commencement of operations at the Gibbons Creek ERT project and the completion of an asset purchase agreement with a third-party for the sale of certain grinding-related assets. Q2 adjusted EBITDA increased $2.2 million to $6.5 million compared to $4.2 million for the second quarter of 2020. For the six-month period ended June 30, 2021, our results were as follows: revenue increased $12 million or 12% to $115.6 million as compared to $103.6 million for the first six months of 2020. The increase occurred mostly in the second quarter and was primarily attributable to the ramping of new remediation and compliance projects in the second quarter. Byproduct sales decreased in part due to the probable impact of the COVID-19 pandemic on power generation levels in the first quarter of the year as compared to pre-pandemic levels in 2020 and two other factors. Fossil services revenue decreased slightly due to project completions. Gross profit increased $2.4 million or 24% to $12.5 million as compared to $10.1 million for the first six months of 2020. The increase occurred mostly in the second quarter and was primarily attributable to increase in gross profit from our remediation and compliance services due to new project work, partially offset by lower gross profit from byproduct sales and fossil services. Net loss attributable to Charah Solutions decreased $12.3 million or 69% to $5.5 million as compared to $17.8 million for the first six months of 2020. The decreased loss was primarily due to the absence of expenses associated with amending our credit facility in 2020; a gain on a sales-type lease; gains on sales of property and equipment net, partially offset by other operating expenses from ERT services, the increase in gross profit, and slightly lower general and administrative expenses. These positive variances were partially offset by the absence of $6.8 million of income from discontinued operations, net of tax recorded in the comparable 2020 period. Adjusted EBITDA increased $10.3 to $16 million as compared to $5.7 million for the first six months of 2020. Now turning to our cash flow, balance sheet, and liquidity. Operating cash flow declined to negative $3.8 million in the second quarter of 2021 from positive $27.5 million in the second quarter of 2020. The decrease was partially attributable to the absence of cash flow from discontinued operations, which was significant in the second quarter of 2020. During the second quarter of 2021, we made $1.3 million of capital expenditures, and we received $3.8 million of cash from the sale of property and equipment net, resulting in adjusted free cash flow of negative $1.3 million. For the first six months of 2021, operating cash flow increased $1 million to $10.2 million from $9.2 million in the comparable 2020 period. The increase was primarily attributable to favorable changes in working capital, partially offset by non-cash adjustments to income. During the first six months of 2021, we made capital expenditures of $2.8 million. In terms of inflows, we received $34.9 million of cash and restricted cash from the Gibbons Creek ERT transaction and $4.2 million of cash from the sale of equipment, resulting in adjusted free cash flow of $46.5 million. Our cash and restricted cash balances increased to $57.7 million as of June 30, 2021, an increase of $28.4 million from December 31, 2020. The increase was primarily due to the receipt of restricted cash from the Gibbons Creek ERT transaction and for a specific remediation and compliance project. At June 30, 2021, we had gross consolidated debt of $164.8 million. The $5 million decrease in total debt during the second quarter is primarily due to a decrease in outstanding borrowings on our line of credit and principal payments on our equipment and term loans, partially offset by new equipment loans and capital leases. Our liquidity was approximately $37.8 million as of June 30, 2021, slightly lower than the $39.4 million at March 31, 2021. Our as-reported gross leverage ratio improved to 6.6x at June 30, 2021, from 7.7x at March 31, 2021, and our net leverage ratio calculated as net debt to adjusted EBITDA improved to 5.9x as of June 30, 2021, from 6.6x at March 31, 2021. Note that our credit facility leverage calculation is different from our as-reported leverage calculation. And although we did not meet the 4.8x covenant required by our credit agreement, our credit facility leverage was significantly closer to that level than our as-reported leverage. We did not meet the credit facility leverage test because our net debt levels at June 30th were higher than we had anticipated, primarily because of the timing of certain budget assumptions. We also did not meet the fixed charge coverage ratio, although we were very close to meeting it. We are appreciative of the support by our lenders who agreed last week to a waiver of the required financial covenant for June 30, 2021, and an amendment to such covenants for September 30, 2021. As consideration, we repaid an additional $5 million of outstanding loans under the credit facility and the previously accrued $2 million fee associated with the previous amendment to the credit agreement, which otherwise would have been due at maturity in 2022. The amendment increases our near-term financial flexibility and allows us to focus our efforts on a plan to address the structure and maturity profile of our debt. As you may have seen, we are working on a plan to refinance our existing debt. I look forward to sharing more information with you in the future, but under securities laws, I'm constrained as to providing additional detail to you today on this call. Of course, our plans are subject to market conditions and other conditions. As part of our refinancing plan, we issued approximately 2.9 million common shares to B. Riley at a price of $4.50 per share for proceeds of approximately $13 million. In addition, we are working with a leading national bank to put in place an asset-backed lending facility post completion of this planned refinancing. As the anticipated new refinancing does not provide for security interest in our assets, we would be less constrained in terms of undertaking new equipment or project-based borrowing, which would be beneficial in financing our future growth. I'll conclude by addressing guidance. At this time, we are reaffirming our full year 2021 guidance within the following ranges: revenue of $260 million to $300 million, a net loss attributable to Charah Solutions Inc. of $5 million to zero; adjusted EBITDA of $35 million to $40 million; and adjusted free cash flow of $33 million to $38 million. As we look to the second half of the year, results should benefit from an increased contribution from our Gibbons Creek ERT project relative to the first half of the year. Recall that this will be reflected in operating income and adjusted EBITDA, though not in revenues. Another driver of second half results since the continued ramping of recent new awards, including large remediation and compliance projects. In addition, we expect to see improvement in certain ongoing projects that experienced adverse weather or other issues during the first half of the year. As I noted, our 2021 guidance for adjusted free cash flow is in the range of $33 million to $38 million. Results for the first half of the year were $46.5 million, which implies that we expect the second half results to be negative. This expected outcome is primarily attributable to the timing of cash inflows and outflows at our Gibbons Creek ERT project. Recall that we had $34.9 million in receipts of cash and restricted cash when we closed this transaction in February of this year. The cash outlays for demolition and remediation ramp up over the balance of this year will continue into 2022. As we've discussed in previous calls, our guidance is predicated on certain assumptions, which are discussed in more detail in our earnings release. With that, I'll turn the call back to Scott.
Scott Sewell: Thanks, Roger. In closing, we hope you agree that our growth in contract awards, expansion of our service offerings, and our laser focus on environmental sustainability will continue to position the company for long-term success. We remain committed to enhancing long-term value and positioning ourselves to take advantage of the expanding market opportunities while continuing to strengthen our balance sheet and reduce our debt levels and improve our leverage ratios. Importantly, we are closely aligned with our power generation partners, environmental remediation, and sustainability initiatives, which should provide Charah Solutions with significant growth potential for many years to come. Thank you again for your interest and participation. With that, operator, let's begin the Q&A session.
Operator: Your first question comes from the line of Tony Bowers with Intra Ag .
Unidentified Analyst: Nice progress on the quarter. I haven't heard anything about EnviroSource. In the past, we've talked about this being a nice competitive edge for you, winning business. And I believe you've put quite a few samples for different prospect clients through your pilot facilities. So can you give us an update on how that's looking?
Scott Sewell: Sure, Brian. Tony, sorry. I appreciate the question. Definitely, something that -- we're obviously busy in the quarter and a lot of things and EnviroSource is one that we continue to be laser-focused on, especially when we talk about all of our ESG initiatives and everything else. So continue to make very good progress on EnviroSource, working closely with two potential customers here throughout the back half of the year to bring one to market. So hopefully, you'll be hearing some more updates on us as we move forward. But really, one of the exciting things or one of the things that excites me about the work we're doing on refinancing and restructuring our debt is going to provide us some more flexibility. I know Roger in his prepared remarks, gave a little bit of insight into that. We can't discuss the details of our plan, as you can appreciate, due to SEC guidelines, but we're really excited about the flexibility and growth opportunities that our new plan is going to give us. Roger, anything else you want to add?
Roger Shannon: That's right. I completely agree with that. We'll obviously be able to talk more later, but would refer everyone to the filings that we put on the SEC yesterday evening along with our earnings release. But certainly, looking forward to the increased flexibility we expect to have once we finalize that, and we'll be very supportive of these technology initiatives that we talked in the last call, that we did have some financing alternatives on the table, and those remain, but we've kind of been -- as we work with our potential customers and have been working with these providers and kind of holding back until we have a better view on what we'll be able to deal with in the future, which we think will be significantly better.
Scott Sewell: But the long story short, interest continues to be strong for EnviroSource, and hope to have something soon.
Unidentified Analyst: So to interpret this, the ability of you to actually provide EnviroSource of your own balance sheet that will remove an impediment to implementation?
Scott Sewell: That's correct.
Roger Shannon: That's right.
Unidentified Analyst: Fair enough. Thank you.
Scott Sewell: Thank you, Tony. And sorry for the mix-up early on there. I was looking at the queue, and Brian's name was on the queue, and you were coming through. So I appreciate the question, as always.
Operator: Our next question comes from the line of Brian Butler with Stifel.
Brian Butler: Just kind of the first, can we talk about revenue and EBITDA guidance for the full year? And how to think about that pace in the back half for the third quarter and the fourth quarter? I mean, just talked maybe through the segments where we see the kind of the growth. Is it weighted one quarter versus the other?
Scott Sewell: Sure. I think one of the things that we stated, at least in the earnings call, was really reaffirming guidance. We continue to be very confident in the back half of the year. Our plan -- we knew Q2 was not going to be one of our best quarters for the year and things were going to shift kind of quarter-to-quarter here, but still feel very, very solid of where we're going to lay in the balance of the year. Our revenues between $260 million, adjusted EBITDA between 35 and $40 million. So still reaffirming the balance of the year. And as our projects ramp, we are going to have a strong back half. Roger, if you want to talk a little bit more on the details of the back half?
Roger Shannon: Yes. It's -- we -- in our budget, we had expected an uptick in the contribution from the ERT projects. As we talked about, the ERT projects do not flow through revenue and gross profit, but rather go through two new lines on our P&L gain on sale of property and equipment net and then the offset is the other operating expense from ERT services. We did have -- we were impacted significantly in Q2 by some weather events at the Gibbons Creek property. So the contribution for that second quarter was less than expected. But things have been picked up and rescheduled through the rest of the year. So that is a recovery that we expect to make over the course of the year. As you look at the different segments across the quarter and year-to-date and going forward, obviously, we had a very strong quarter in remediation and compliance, just under $32 million of revenue compared to $19.9 million in Q1. That reflects the ramp-up of these new awards that we've talked about. Byproduct sales, we had a sequential improvement to just under $20 million for Q2 from $15 million in Q1. We talked at Q1, and we expected that to increase both seasonally as more concrete is used during the warmer months as well as increased production from the plants. We did have a decrease in services from Q1 to Q2 as we got into a transition from some of these service contracts that wound down and then resulted in a start-up of some remediation and compliance projects that was expected. So we went from about $17 million of services in Q1 to about $12.5 million in Q2. Mainly, like we said in the prepared remarks, some termination or some wind downs on some projects that kind of been reemerged as remediation projects.
Brian Butler: Okay. Would it be fair to just kind of think it through the segment on the revenues? Because I know the ERT doesn't impact it. But just thinking through the revenues. So is it fair to look at it as construction contracts kind of run at that $30-plus million pace for the third quarter, fourth quarter, and then you're going to see some material improvements in the product sales and the services? Is that a fair way to look at it?
Roger Shannon: Well, I think we'll continue to see ramping in the construction contracts. Because like I said in prepared remarks, we had kind of mobilized over the quarter at the two large southeastern utility projects, those are kind of getting going. So there was some additional contribution in Q2 that wasn't there in Q1, but we're not there yet on kind of the full ramp. So that will continue. Same thing on the Dominion project, that will continue to pick up over the course of the year. So we'll see a significant pickup in construction or R&C type projects over the course of the year. Byproduct sales, same thing, we see continued sequential pickup in that as production continues to pick up from our customers and demand from concrete. And although the infrastructure bill is getting closer and hasn't yet been signed, you just kind of again point out that we expect a significant tailwind from that once that comes in, driving the increase in concrete usage and the benefits of our fly ash sales as an important cement substitute. Services, I think there will be -- I don't want to necessarily go into kind of giving guidance specifically on this quarter versus next, but I think it will be probably pretty consistent over the rest of the year with where we were in this quarter. And then like I said, from the ERT, not going through revenue, we expect a significant pickup, including recovery of some Q2 weather-related events from Gibbons in the second half of the year, and that's progressing well.
Brian Butler: Okay, that's helpful. So on the ERT, ERT in the first half was about $7.5 million, if I've calculated it correctly. So the second half should be better than that, especially if you're making up a little bit from the slower second quarter. That's correct?
Roger Shannon: No, I would -- well, yes, that's right. That's right. So we had a big number in Q1 from an ERT project that had carried over from the previous year. So that's correct. The Gibbons number -- the Gibbons Creek number in kind of Q1, Q2 -- starting in Q1, we had expectations of a higher number in Q2, a significant amount of rain in the area affected our scrap sales for the quarter. So we've had less than $1 million so far in net contribution around $1 million from Gibbons in addition to the $5.6 million when they are carried over from the previous year. So you're correct. It will -- we do expect a significant pickup over the second half of the year from Gibbons Creek.
Brian Butler: Okay. And then, on the -- on kind of the award contract -- I'm sorry, I didn't say it right. The award book on that build for the second half, I mean, you're looking at exceeding significantly the 2020 level of the $715 million -- How big can that be? I mean are we looking at $750 million, $800 million? I mean, I guess, what's in that pipeline that can realistically close or be awarded in the next, call it, six months?
Scott Sewell: Yes, Brian. Great question. You think about '19 being a record year award for us, 2020 beating '19 with $715 million. And right now, sitting here year-to-date at $685 million on new awards. We're continuing to make significant progress with our customers and getting new work and converting the pipeline. The pipeline that we discussed, the next 18 of -- the next couple of years in the near term, billions and billions of dollars for us to convert. When we think about the back half of this year, hard to put an exact number on it, but we're -- we feel very good about our ability to significantly eclipse last year's record of new awards. We have several that we're working on right now that are very close to being contracted. And we are in that range that you're talking about or even higher than that. There's definitely a couple of paths that we can go that excite us, but too early to put an exact number on whether it falls in 2021 or if it falls in 2022 at this point. But all I can say is that we still have very good optimism and clear line of sight into continuing to grow the pipeline and convert new awards and continue to build on that -- on the previous successes that we've had to give us that kind of very predictable revenue stream and earnings stream into the future.
Brian Butler: Okay, that's great. And one last one for me on the infrastructure bill that you kind of pointed out that it could be beneficial. How do we think about the timing of that if that money gets flowed and you start to see maybe increased demand for cement? Is that really a 2022? Or is it potentially even further out than that when you see the benefits?
Scott Sewell: Yes. Any answer from this side would really be really looking into the crystal ball here and guessing. Definitely, zero impact to 2021, we could see some impact in '22, depending on what the bill actually looks like. But we would see it in '20 -- back half of '22 and beyond, most likely. But the demand for -- even without the infrastructure bill, the demand for our products and services continues to increase. So we're not relying on that, but we think that's definitely something that we'll just provide added demand and added value in the future if it does come to fruition.
Operator: At this time, there are no further questions. I would like to turn the call back over to management for any closing remarks.
Scott Sewell: Great. Thank you, operator, and thank you, everyone, on the call. I appreciate, as always, your interest in the business and we look forward to talking to you next quarter. Thank you.
Operator: Ladies and gentlemen, that does conclude today's conference. We thank you for participating. You may now disconnect.
