MH President’s Message: Good News and Bad News

October 2022


I will start with the good news. McGuire and Hester finished our 3rd quarter (Sept. 30th) with a record-high backlog. We have 51% more work on the books than what we had at this same point last year ($175,043,143 vs. $115,860,859).

What’s even more impressive is that this does not even include over $100 million in additional contract value expected from our UCSF Parnassus project or over $35 million expected on SFO contracts. Backlog in all areas surpasses last year’s numbers.

The bad news is that this year we have had a very tough time making our desired margins on projects. Coming out of the Pandemic, we lowered our margins to keep competitive with what the market dictated. Since most of our work is acquired many months and even years before we build it, we now have been working through many projects that were priced without the hindsight knowledge of the unbelievable inflation we’ve been faced with. Smaller bid margins combined with inflationary impacts on the prices we are paying to build the work are very apparent in our current bottom line.

Also, somewhat strangely, the growth in backlog has not directly correlated with similar growth in the number of people we have working at the front lines, where the money is made. We have seen the number of employees ticking up, but not at the same pace we have been acquiring work. This has been an unusual outcome of a post Pandemic, material shortage, inflationary pricing, and pre-recession market. We expect that going into next year this will change dramatically. The work we have to complete and the people this will require are going to shatter records.

What does this mean? It means more good news.

  • It means we will all be very busy well into the future.
  • It means we will need to continually grow our team of talented employees.
  • It means we will have to plan well, communicate and execute the work in a manner that squeezes the most out of our resources.
  • It means there is tremendous potential to catapult our company ahead.
  • It means the opportunity for challenge and growth within all of our careers is also very promising. We will all need to be continually on our A-game, working smarter, not harder.

I look forward to a year from now when we’ll all be able to look back and see how well we’ve adjusted to this challenge. Thanks for being a part of this great team we have.

Brock Grunt

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