Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Rich Wesolowski – Sidoti.
Rich Wesolowski - Sidoti
Mike I appreciate your comments earlier in your prepared remarks about how backlog is not a perfect indicator but there nonetheless seems to be a disconnect between the bullish comments on new work prospects and what is now a pretty persistent slide in the backlog during the past year. Do you agree that a rebound in backlog is necessary for you guys to hit that long standing 8-12% growth target, not so much in FY09 but in 2010 and beyond?
Michael Bradley
Well we expect our backlog to grow as we go forward and that is part of our organic growth plan. I would tell you a couple things. One, the group we just recently moved off the LNG project are now operating our Houston office and this is an area where we see some opportunities to significantly grow our business. They are up and running and we are starting to see plenty of opportunities to develop in that group.
As I mentioned we recently added what I would call some specialty turnaround and maintenance capabilities in that area and so we are very excited about the opportunities we see there. The bottom line is the number of opportunities and prospects we are looking at today are stronger than they were during our call during the last quarter. Number two; they are prospects that cross a wider spectrum of the energy space we are focused on. Three, we continue?we have added significant resources to our business development efforts so that we can grow the backlog and the organic earnings per share growth for this company going forward. No question about it. We do plan to build top line growth as we go forward.
I will tell you as I said before, towards the end of last year we cleaned up the LNG project and we are looking at prospects that generate good profitability for this company and we are excited about what we see going forward.
Rich Wesolowski - Sidoti
On the $1 billion prospect list can you clarify what types of projects you include in there? Is it mostly tank work? Is it mostly construction versus maintenance and repair? Because I look at your mid-point guidance of $825 million and the $1 billion suddenly doesn’t look like a humongous number.
Michael Bradley
First of all it is well above $1 billion. Number two, it includes repair and maintenance as well as capital construction. Three, when you look at the AST business I would say it is probably around 25% to 30% of those prospects. The types of projects we are looking at today include, as I mentioned, the ENI substation work which we see a lot of opportunity, simple cycle generation, material handling facilities, air quality control opportunities?so again we are starting to broaden the markets and the types of projects we are looking at. We are able to do that because of the skill sets that we have continued to bring into this company. So I am very pleased and I am excited about what we see going forward.
- To read the full transcript on Seeking Alpha, click here »
