I wish a very happy new year to all of our shareholders in this first month of 2023! The past year continued to present many unknowns between the pandemic, the challenges of supply and labor shortages, inflation reaching a 40-year high, rising interest rates, the impacts of natural disasters, unprecedented cybersecurity threats, and so much more. However, our Ahtna team remained resilient, evolved and innovated to meet ever-changing demands, and rose to meet the challenges. Construction cost increases seem to be levelling off, but we expect supply chain and labor shortages to continue to be challenges over the course of 2023.

We were fortunate to close out the federal fiscal year-end with multiple large contract awards, which will be important for driving our volume this year. As the end of the fiscal year approaches, the Department of Defense (DoD) and other federal agencies rush to spend the remainder of their budgets due to “use-it-or-lose-it” budget rules. Failure to use these budgets before the September 30 federal fiscal year-end could cause Congress to decrease these budgets drastically for the following years.

Ahtna has seen dramatic growth in construction over the last seven years. In just 45 days, we were awarded $100M in bonded jobs – three times as much as the total bonded jobs awarded in 2015. These awards included projects within Alaska as well as the lower 48.

I made a site visit last fall to one of our most geographically distant construction projects, our Las Olas project in Fort Lauderdale, Florida. The $7.5M project involved the demolition of existing dock structures, a pump station and buildings, and installation of a new seawall and docks. Our team excavated 160,000 cubic yards of material by hydraulic dredging and hauled for disposal using our newly acquired 45-ton dump truck.

Closer to home, Ahtna Construction & Primary Products Company (AC&PPC) won the Palmer Airport Improvement Project for $8M to construct 3,400 linear feet of taxiway and 72,400 cubic-foot subgrade infiltration system for improved drainage. This project includes the construction of Taxiway N and extension of Taxiway J, while removing Taxiways B and L. An additional 2.5-acre aircraft parking apron will also be constructed.

The ADB/Southwest Concrete and Paving (SWCP) Joint Venture (JV) was recently awarded the Redding Airport Fire Retardant Pit and Taxiway Renovations contract from the United States Army Corps of Engineers (USACE) Sacramento for $20.1M. The Government has indicated that they would like to add $4.4M more to the project this year to complete mission-vital objectives for the U.S. Forest Service. The ADB/SWCP JV was able to secure key subcontractors and greatly reduced the competition as the subcontractors signed on exclusively to our team for this bid.

Ahtna Marine & Construction Company (AMCC) and Ahtna Design-Build (ADB) have been working with the government on some sole source opportunities in lock and dam construction repairs along the Mississippi River for the USACE. The largest of these projects was the $14.9M Lock 27 concrete repair and damaged gates replacement. We are in negotiations now for another $38M in potential awards on this project. Our major subcontractor will be J.F. Brennan Company, with whom we have a mentor/protégé JV under AMCC.

The Sacramento USACE awarded the Ahtna Government Services Corporation (AGSC)-Great Lakes Environmental & Infrastructure (GLEI) JV a $38M modification award on our Natomas Reach A Levee reconstruction contract, which takes that contract up to $113M. This will be a 2-year project that involves extensive repairs along approximately 3.5 miles of levee along the Sacramento River just north of Old Town Sacramento, which is very close to Ahtna’s Sacramento Office.

As you can see, we have projects located all over the country and are always looking to recruit qualified shareholders for positions. Our latest job openings are available on the Ahtna website at www.ahtna.com/careers and you can contact our Shareholder Enrichment department at shenrichment@ahtna.net to be connected with training and development programs. They hosted some fabulous Facebook live events last year on union apprenticeship and laborers training programs and have more great career development events planned for this year.

Ahtna employees give back to their communities throughout the year by volunteering their time and making donations to local charities. These efforts ramp up during the holiday season. For the fifth year in a row, Ahtna worked with the Copper River Native Association (CRNA) to sponsor a Children’s Angel Tree for 25 foster children. Arrangements were made with Spark’s Grocery – a small local business in Glennallen with a variety of goods and gifts – to accept donations from Ahtna employees. Foster parents were able to bring the children to Spark’s to pick out their own Christmas present. The foster parents got to see the children’s joy, CRNA was able to bring some unexpected happiness to local children, Spark’s Grocery had extra business during a time that has been tough on small businesses, and our Ahtna employees had a beautiful opportunity to share with others during the holiday season.

I hope you enjoyed a special holiday season and wish you health, happiness, and resilience in this New Year!

Thank you,

Tom Maloney, Chief Executive Officer
Ahtna Netiye’