Construction Partners - Q1 2026

Transcript

Operator (participant)

Welcome to the Construction Partners first quarter earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Rick Black, Investor Relations. Please go ahead.

Rick Black (Head of Investor Relations)

Thank you, operator, and good morning, everyone. We appreciate you for joining us for the Construction Partners conference call to review first quarter fiscal 2026 results. This call is also being webcast and can be accessed through the audio link on the Events and Presentations page of the Investor Relations section of constructionpartners.net. Information recorded on this call speaks only as of today, February 5, 2026. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay listening or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are forward-looking statements made pursuant to the Safe Harbors provision of the Private Securities Litigation Reform Act of 1995.

We will be making forward-looking statements as part of today's call that, by their nature, are uncertain and outside of the company's control. Actual results may differ materially. Please refer to our earnings press release for disclosure on forward-looking statements. These factors, as well as other risks and uncertainties, are described in detail in the company's filings with the Securities and Exchange Commission. Management will also refer to non-GAAP measures, including adjusted net income and adjusted EBITDA and adjusted EBITDA margin. Reconciliation to the nearest GAAP measures can be found at the end of our earnings press release. Construction Partners assumes no obligation to publicly update or revise any forward-looking statements. With that, I would now like to turn the call over to Construction Partners' CEO, Jule Smith. Jule?

Jule Smith (CEO)

Thank you, Rick, and good morning, everyone. We appreciate you joining us for today's call. With me this morning are Greg Hoffman, our Chief Financial Officer, and Ned Fleming, our Executive Chairman. I'd like to begin by thanking the approximately 7,000 employees across our family of companies for their hard work, expertise, and dedication to both safety and operational excellence. Our people are at the heart of everything we do. They are also the stewards of our unique and strong family of companies' culture, one of our key competitive advantages as we continue to grow throughout the Sun Belt. Thanks to their efforts, along with favorable weather during the quarter, we delivered a strong start to fiscal 2026, exceeding our expectations and prompting us to raise our outlook for the year.

First quarter revenue increased 44%, while adjusted EBITDA increased 63% compared to the prior year. Adjusted EBITDA margin reached 13.9%, the highest first quarter margin in our history. We also closed the quarter with a project backlog of $3.09 billion, underscoring the robust demand across our markets. Project demand throughout our footprint remains strong. On the commercial side of the business, steady project bidding is supported by ongoing population migration to the Sun Belt, reshoring trends as more manufacturing and supply chain capacity move back to the United States, and the continued build-out of AI infrastructure. Our teams are actively bidding and building a wide range of commercial projects that reflect these macro trends. A few examples to highlight.

In Southern Oklahoma, we are currently negotiating contracts to provide work for a large national retailer on a new distribution warehouse and a food manufacturing facility in Ardmore. In Central Texas, north of Austin, we're currently working on a facility to provide power to data centers in the area for one of the Magnificent Seven. In Santa Rosa County, in the Panhandle of Florida, we have just completed work on a large distribution facility for a leading soft drink bottler. This new facility will bring in 350-400 new jobs to the area, fueling growth that will create more demand for our services. Finally, in York, South Carolina, we are currently working on a large site work contract for a new data center in the greater Charlotte metro area.

These are just a few examples of the approximately 1,000 commercial sector projects we will participate in building this year across our eight states and over 110 local markets. On the public side, both the federal and state governments are continuing their investment in infrastructure to keep up with the growing economies in the Sun Belt. In Q1, we have seen strong public contract bidding throughout our eight states and expect total federal, state, and local contract awards in FY 2026 to increase approximately 10%-15% over FY 2025. This is particularly true for the small and medium-sized recurring maintenance projects for state DOTs, cities, and counties that represent a majority of our work. On Capitol Hill, both houses of Congress continue to work with Secretary Duffy on completing a five-year reauthorization of the Surface Transportation Program by September 30.

We expect the size and shape of this bill to be known this spring. From what we have heard so far, we expect the reauthorization to provide a significant increase in the annual funding amount going to the states by per capita formula, which is good news for CPI. Both the administration and many members of the Congressional Transportation Committees have stated that they believe the formula method to the states is the best means to prioritize hard infrastructure investments needed to support a growing economy and to ensure timeliness in building these projects. Turning to our growth strategy, we began fiscal 2026 with two large and strategically important acquisitions that were completed in October in Houston and in Daytona Beach, Florida. Both businesses now have been fully integrated and are operating well.

Earlier this week, we announced another acquisition in Houston, GMJ Paving Company, a leading asphalt paving contractor focused on public infrastructure projects across the Greater Houston metro area. GMJ's hot mix asphalt plant, located in Baytown on the east side of Houston, expands our coverage of this major metropolitan market and complements our existing Houston assets exceptionally well. This acquisition represents our twelfth hot mix plant in the Houston market, further strengthening our geographic footprint and providing incremental throughput opportunities at our nearby liquid asphalt terminal at the Houston Port. Last August, we made our first entry into the Houston market with our acquisition of Durwood Greene Construction, and then we significantly expanded operations in October through the acquisition of Vulcan's asphalt construction assets in Houston.

With the addition of GMJ, we are further strengthening our market position and expanding our team with highly skilled, experienced operators who bring deep local market knowledge and strong customer relationships. This positions us well to serve one of the most dynamic and rapidly growing markets in the country. Expanding our footprint into new markets while gaining market share exemplifies our model and underscores a core element of our growth strategy, entering the right markets with the right partners. Currently, we see a very robust pipeline of acquisition opportunities across our existing footprint and surrounding states, and we continue to have dialogue with a number of sellers as they determine the best future for their businesses and their valuable workforce. We believe our model as a family of companies with a strong organizational culture, makes us the acquirer of choice in our industry.

We also remain focused on organic growth as a strong driver of building shareholder value. This quarter, we will bring online an HMA greenfield in Georgia. This new facility will serve the dynamic Brunswick, Georgia, market with its port facility and migration to the Golden Isles regions of South Georgia. As a key part of our organic growth, there are several more greenfield facilities that we plan to bring online later this year and early next year. Before turning the call over to Greg, I want to reiterate the vision we shared last October through our Road 2030 growth plan. This plan outlines our path to again double the size of the company to revenue of more than $6 billion by 2030, utilizing the same strategy we have successfully executed for over two decades.

The plan also targets EBITDA margin growth to approximately 17% and is expected to generate more than $1 billion EBITDA dollars annually. Finally, we're excited about the start of this fiscal year as we prepare for a busy work season building on a record backlog. I'd like now to turn the call over to Greg.

Greg Hoffman (CFO)

Thank you, Jule. Good morning, everyone. As Jule mentioned, we had a strong start to our fiscal year, which I will review in more detail before discussing our raised outlook ranges, and then we will open the call to questions. I'll start with a review of our key performance metrics for the first quarter of fiscal 2026. Revenue was $809.5 million, an increase of 44% compared to last year. The breakdown of this revenue growth was 3.5% organic growth and 40.6% acquisitive. Gross profit in the first quarter was $121.5 million, an increase of approximately 58% compared to last year. As a percentage of total revenues, gross profit was 15%, compared to 13.6% last year.

General and administrative expenses as a percentage of total revenue in the first quarter decreased to 7.7%, compared to 7.9% last year. Net income was $17.2 million, and adjusted net income was $26.4 million. Earnings per diluted share for adjusted net income was $0.47. Adjusted EBITDA was $112.2 million, an increase of 63% compared to last year. Adjusted EBITDA margin was 13.9%, compared to 12.2% last year. You can find GAAP to non-GAAP reconciliations of net income and adjusted EBITDA financial measures at the end of today's earnings release. Turning now to the balance sheet.

We had $104 million of cash and cash equivalents, and $163 million available under our credit facility at December thirty-first, net of a reduction for outstanding letters of credit. As of the end of the quarter, our debt to trailing twelve-month EBITDA ratio was 3.18 times. We remain on pace with our strategy of reducing the leverage ratio to approximately 2.5 times by late 2026, to support sustained profitable growth. To that end, we anticipate cash flow generated to effectively fund this week's GMJ Paving acquisition without the need for additional long-term debt, demonstrating the strength of cash flow from our operating model. In the first quarter of fiscal 2026, cash flow from operations was $82.6 million, up from $40.7 million in Q1 of fiscal 2025.

We expect to convert 75%-85% of EBITDA to cash flow from operations in fiscal year 2026. Turning now to our outlook. We have raised all of our ranges for fiscal year 2026. Revenue in the range of $3.48 billion-$3.56 billion, net income in the range of $154 million-$158 million, adjusted net income in the range of $163.5 million-$168.7 million, adjusted EBITDA in the range of $534 million-$550 million, and adjusted EBITDA margin in the range of 15.34%-15.45%. Our revenue outlook for fiscal 2026 continues to anticipate organic growth of approximately 7%-8%.

Consistent with historical seasonality, we anticipate the first half of the fiscal year to contribute approximately 42% of the annual revenue and approximately 34% of the Adjusted EBITDA. In the second half of the year, during our peak construction season, we expect to deliver the remaining 58% of revenue and approximately 66% of Adjusted EBITDA. Lastly, as Jule mentioned, we had a project backlog of $3.09 billion at December 31, 2025. We have approximately 80%-85% of the next twelve months' contract revenue covered in backlog. And with that, we will open the call to questions. Operator?

Operator (participant)

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Your first question comes from Adam Thalhimer with Thompson Davis & Co. Please go ahead.

Adam Thalhimer (Analyst)

Hey, good morning, guys. Great quarter.

Greg Hoffman (CFO)

Morning, Adam.

Ned Fleming (Executive Chairman)

Morning, Adam.

Adam Thalhimer (Analyst)

Hey, Jule, can you give some more color on the acquisition pipeline? You said it was robust. I'm just curious what the mix there is between potential platform deals and potential tuck-ins?

Jule Smith (CEO)

Yeah, Adam, as you know, we talk to a lot of folks all the time, and we look at a lot of things. I would say we're continuing to be busy with that. We did three platform acquisitions last year, and so that's created a lot of new opportunities in Texas, Oklahoma, and Tennessee, now that we have a great management team in each state. So we're busy, but at the same time, we pass on a lot of things that aren't a good strategic, cultural fit. So, you're gonna see us continue to make acquisitions that we think are just compelling and great strategic fits. Adam, why don't I let Ned weigh in on the big picture, you know, as we look toward our strategic growth model?

Ned Fleming (Executive Chairman)

You know, Adam, I would say over the last 25 years, it's as active now as it's ever been. I think what you're really starting to see, both on the platform side as well as the tuck-ins, I mean, obviously, when you do 3 platforms in a year, it gives you a lot of opportunities for organic growth as well as tuck-in acquisitions. But the generational transfer continues to give us opportunities to do acquisitions, both what I would call tuck-ins as well as platforms. But obviously, given last year with the 3 platforms, we've got a lot of tuck-in acquisitions in those states, as well as a lot of organic growth opportunities in those states.

But I would say it's as robust as it's been in 25 years, maybe, even to some extent, because we did three platforms in one year, and so we've got more opportunities.

Adam Thalhimer (Analyst)

Awesome. Thanks for that. And then, Jule, I wanted to ask you, you said in your prepared remarks... I think you mentioned this, a site prep job for data centers. Just wondering, I haven't heard that before. Just wondering if you could expand on the size of that project and what your scope might be.

Greg Hoffman (CFO)

Yeah, Adam, you know, we wanted to highlight just a few of the commercial projects we were doing currently, because we talked about that there are several macro trends that are driving the commercial markets now. Migration to the Sun Belt, but also the reshoring, which is creating a lot of manufacturing facilities moving back to America and people wanting to build in America. And so I just thought, let's give a few highlights of these. And there was a long list to choose from, but data centers are part of that, and we're building more data centers than I had the time to list in the remarks, but it's one part of what we do. Factories, distribution centers.

Jule Smith (CEO)

... there's a pretty strong demand for those things in our southern and southeastern markets. So we don't travel around and specialize in data centers, but they're a big part of what we do. And sometimes, like in South Carolina, we're participating more in the site work, and it's a larger contract, and sometimes we're doing the paving for a data center, just like we would do for an Amazon warehouse or a school project. So we did wanna highlight just some of the commercial projects that are getting bid and built now.

Adam Thalhimer (Analyst)

Yeah, thank you for detailing that, and, I will turn it over. Thanks.

Jule Smith (CEO)

All right. Thanks, Adam.

Operator (participant)

Next question, Kathryn Thompson with Thompson Research Group. Please go ahead.

Kathryn Thompson (Analyst)

Hi, thank you for taking my questions today. Just first wanted to focus on organic growth, just to reconfirm that you had kind of low to mid single, around 3.5% organic growth in the quarter, but you also gave guidance for a 7%-8% organic growth range for the full year. Could you help us bridge what you're seeing today, and also how much adverse weather in Q1 may impact, or may have impacted the quarter? Thank you.

Jule Smith (CEO)

Yeah, Kathryn, good question. Our organic growth expectations for the fiscal year are still 7%-8%, just as we normally do. In Q1, the difference between our organic growth and what sort of that 7%-8% range was about $19 million. And when you looked at that, there were two factors that really created that. The first is, in North Carolina, we had about three projects that we expected to do in Q1 that got a late start, just due to the customer not being ready for us, and those are now underway. The second thing, as you can imagine, we in 110 local markets, we have competitive dynamics across the board. Some markets are healthy, some markets are more competitive. We had one market where irrational competition, we said, "You know what?

Let's move equipment and do work at higher margins in some adjacent markets." It just so happened, where that equipment moved, was acquisitions we've made in the last 12 months, so that revenue was counted as acquisitive growth. So that happens from time to time, but we still anticipate our organic growth being in that normal range for the year.

Kathryn Thompson (Analyst)

Okay, great. Thank you for that. As you-- maybe you, you have given color about, you know, obviously, very active M&A in calendar 2025 and into early 2026. Could you give just maybe a little bit more color in terms of your strategy and thoughts in terms of integration and how that has progressed over the past 12-15 months? Thank you.

Jule Smith (CEO)

Yeah. Kathryn, I—you know, we've done seven acquisitions since the Lone Star acquisition last fall, and integration is a big part of what we do. As Ned has said on these calls before, it's a core competency that CPI has developed over two decades. And so we have to be good at integrating these companies. I would say, for example, in Houston, Durwood Greene has done a great job of integrating with Lone Star, our platform company, since August. But then those guys have done a great job of integrating the Vulcan assets in October, and they just had a great day one earlier this week with GMJ. And so as we can integrate these companies in, we start to create organic growth opportunities in the future.

When you have a great management team in that market, and you can continue to add, that's where we start to compound both the top line and the bottom line and start to make 1 + 1 = 2.5, and that's part of our strategy, and I would say it's gone well.

Kathryn Thompson (Analyst)

Okay, great. Thanks very much, and I'll hop back in the queue.

Jule Smith (CEO)

All right. Thanks, Kathryn.

Operator (participant)

Next question, Andrew Whitman with Baird. Please go ahead.

Andrew Wittmann (Analyst)

Yeah, great. Thanks for taking my questions. I guess, maybe for Greg, I wanted to ask about the seasonality of the business. We heard your comments here about the first half, second half revenue and EBITDA splits here, and obviously, the first quarter came in very strong and ahead of at least the street's expectations. But the ramification of that means that the second quarter guidance actually looks a little bit light. And so I was just wondering if there's something we need to understand there. Certainly, the weather here in the last couple of weeks in the South has been particularly notable. I'm wondering if that's a factor, or if there's something else that explains the second quarter implied guidance there.

Jule Smith (CEO)

Yeah. No, no, Andy, I think that, you know, what we say a lot is that our first half of the year and second half of the year are very similar year-over-year. And our weather within each half of that year balances out. You have some good weather, and you have some bad weather. You know, I think that we're essentially reiterating what we said from the beginning, that, you know, it's gonna be a standard year with the expectations that we gave to the market. So I don't think there's any negative connotation. I think it's, you know, just reiterating what we said at the beginning of the year.

Andrew Wittmann (Analyst)

Okay.

Jule Smith (CEO)

Yeah.

Andrew Wittmann (Analyst)

Got it.

Greg Hoffman (CFO)

... Sorry, did you want to add, Jule?

Jule Smith (CEO)

Yeah, I just want to say, you know, we don't try to overthink things like that. You know, yes, weather was good in the first quarter. We don't know what the second quarter will be. You know, certainly the last two weeks throughout the Southeast and Texas, we've had some ice and snow, and so you think, well, that should affect January. But when you look, the first two weeks of January were really good, so we're right on kind of plan. And we expect winter weather in January. If you remember last January, we had a lot of snow. We even had snow on the beaches in Pensacola. But by the end of the quarter, you know, it turned out to be a really good quarter. So, I would just say we don't really try to overthink it.

We're not in any way trying to communicate something about the second quarter. We're just sort of trying to say that's our normal revenue and EBITDA split in the course of a normal year.

Andrew Wittmann (Analyst)

Okay, that makes sense. I appreciate that. And then, I guess you had a comment on your view on the public sector bidding. I think you said that you expected the awards to be up 10%-15%. I don't know if you had a similar comment on commercial. Certainly sounded like, you know, the projects that you're doing are keeping you positive there as well. But did you have a view on where the awards or could be, or the increase in backlog could be on the commercial side? Is it the same level of strength? Is the public stronger? Just maybe some context around how you're seeing that developing as the year plays out.

Jule Smith (CEO)

Yeah, Andy, I would say the commercial market, we've continued to use the word steady. I would say, if anything, we feel like this spring and summer could be stronger on the commercial market. But the reality is, when we look at our backlog, it's stayed pretty steady. If anything, it's gone up, Greg, I think a couple% in the public.

Greg Hoffman (CFO)

Yeah.

Jule Smith (CEO)

But the reality is that could be just that the acquisitions we made, last spring and summer with Overland and PRI focus a little more on the public side of things. What we do have is good data on the public, awards from ARTBA, which says, look, the state, local, and federal, when you look at the overall contract awards, it's gonna be up 10%-15% this year, and that's, that's the data we really go by and what we see.

Andrew Wittmann (Analyst)

I see. Just final cleanup question for me. Greg, I didn't know if you could quantify how much of that revenue got switched between, in that competitive market where you moved the crews out to the acquired market. Is that a quantifiable amount of revenue? I'm just kind of curious to help inform the understanding...

Greg Hoffman (CFO)

Yeah.

Andrew Wittmann (Analyst)

of the quarter a little bit better.

Greg Hoffman (CFO)

Yeah, Jule, when he addressed that earlier, talked about $19 million of maybe moved into or, you know, addressed in different markets. I'd say it's about half and half.

Andrew Wittmann (Analyst)

Okay. Okay, great. That's all, that's all I wanted to know. Thank you so much.

Jule Smith (CEO)

Thank you.

Greg Hoffman (CFO)

Thanks, Andy.

Operator (participant)

Next question, Ethan Trollinger with Raymond James. Please proceed.

Ethan Trollinger (Analyst)

Hey, good morning, guys. This is Ethan on for Tyler.

Greg Hoffman (CFO)

Good morning, Ethan.

Jule Smith (CEO)

Hey, Ethan.

Ethan Trollinger (Analyst)

Thanks. Yeah, so Greg, I know not a ton has changed on the M&A front, but just from a modeling perspective, could you update us on what the M&A rollover impact to revenue is in fiscal 2026 based on the guidance?

Greg Hoffman (CFO)

Yeah, absolutely, Ethan. About $260 million-$280 million, and the remaining three quarters are gonna be from acquisitions.

Ethan Trollinger (Analyst)

Okay, great. And then Jule, just-

Greg Hoffman (CFO)

Sorry, Ethan, I'm sorry, that does include GMJ, the acquisition we just made recently.

Ethan Trollinger (Analyst)

Okay, very helpful. And then, Jule, just a bigger picture question, but you guys closed the GMJ acquisition in Houston earlier this week, which I think is maybe the third acquisition in Houston, say, the last six months. I was hoping to get a little more color on the evolution of that market. Could you maybe talk about how the margin profile in Houston has changed or is expected to change versus maybe the Durwood baseline? And do you guys see even more M&A opportunity in that market longer term?

Jule Smith (CEO)

Yeah, Ethan, love to talk about Houston. Houston, we're very pleased with how Brad Greene and his management team, Jonathan, Daniel Greene, those guys are third-generation Houston contractors. And so that management team, combined with the Lone Star management team, Houston has started off great. They've made a meaningful contribution to this quarter. Those guys did a great job of integrating the Vulcan workforce into their operation. And then with GMJ, the acquisition we made this week, that's an example of where not only their asphalt is plant geographically helps us more on the east side of Houston, but Lupe Munoz and his family and his business, they really have a strong niche in the public infrastructure paving.

They have great relationships with public grading contractors that do work in Texas, and so that's really very complementary to what Durwood Greene has historically done. And so this is an example of just adding not only management team and workforce, but it's also adding market share in Houston.

Ethan Trollinger (Analyst)

Okay, that's great color. And then just one last one. Obviously, you know, Houston's uniquely big compared to some of your other markets, but are there other big metros that you aren't in today that could come together like Houston, or did just the stars kind of align there? Could you maybe talk a little bit more about that?

Jule Smith (CEO)

Well, I mean, I think it's, this is Ned, by the way. It's as a board and as a company, strategically, we're always looking for metropolitan areas like Houston. You know, we've historically, for the last 25 years, invested capital in growth areas. Houston is maybe the second fastest growing city in the country. So yeah, there are other metropolitan areas that are like that, that we've identified, that we'll continue to look for the right companies, particularly on the platform side, to be able to invest in those areas. So, I think one of the things historically we've done a really good job of is being in the areas where the demographic growth drives organic growth for the country.

Ethan Trollinger (Analyst)

Awesome. Thanks, guys. Really appreciate the time.

Greg Hoffman (CFO)

All right. Thanks, Ethan.

Operator (participant)

Next question, Nandita Nayar with Bank of America.

Nandita Nayar (Analyst)

Hey, everyone. This is Nandita Nayar on for Mike Feniger. Thanks for taking my question.

Greg Hoffman (CFO)

Thanks, Nandita.

Nandita Nayar (Analyst)

So you mentioned, you know, leverage is currently around, you know, 3.20 times, and, you know, you plan to delever to around 2.5-ish by the end of the year. Could you just talk a bit more about your, you know, confidence in hitting that target? And also just, you know, could we see you guys doing, you know, more M&A this year? And, I mean, I think the answer to that would probably be yes, just given the strong pipeline. But just curious, would those also mostly be funded by cash from ops, just like GMJ?

Greg Hoffman (CFO)

Yeah, sure, Nandita. That's right. Yeah, 3.18 is where we are currently. We're still very positive about hitting that guidance of, you know, getting closer to 2.5 times by the end of the calendar year. And, you know, I think that what will continue, what you'll see continuing is, you know, what you'll see in our cash flow, is that we've, you know, had $250 million worth of purchase price and only borrowed $140. And, like you said, GMJ, the expectation is that that purchase price will be covered in cash as well. So, you know, we keep doing that.

The business keeps generating cash like it has historically, and what it does or what it has done throughout the beginning of this year, we should be good with that guidance.

Jule Smith (CEO)

And Nandita, I would just reiterate, we're gonna continue to look at opportunities. We're gonna pass on opportunities that aren't strategically compelling, but we're not gonna... GMJ is a great example of one where we said, "Look, this is a great opportunity." And so we're gonna continue to make acquisitions. We're gonna continue to use cash more and more to pay for those. And you'll see as that EBITDA rolls through, the leverage ratio will come down.

Nandita Nayar (Analyst)

Gotcha. That's super helpful. Just another one, guys. You know, we've been hearing a slight change in the tone regarding the reauthorization bill with, you know, some conversations around CR potentially entering the discussion. Just curious what you've, you know, what's the latest on the ground that you guys have been hearing regarding the reauthorization?

Jule Smith (CEO)

Well, as I said in the prepared remarks, we feel really good about both houses of Congress, both committees on transportation are working on the reauthorization, and the expectation is they'll get that done by September thirtieth. We like what we're hearing about the size and the scope of it, and the fact that it's gonna be focused more on hard infrastructure, the funds coming to the states through the formula method. So, but, you know, we've had CRs in the past, and that's really just a continuation of where we are. But if you look back, what we expect is guided by history over the last two decades. And when you look at it, they've always reauthorized the five-year plan, and they've always reauthorized it for higher than the previous bill.

So we fully expect that history will continue to repeat, and that we'll get a new surface transportation bill at a higher level for the next five years.

Nandita Nayar (Analyst)

Gotcha. That's super helpful. Thank you, guys. We'll pass it along. Thank you.

Operator (participant)

I would like to turn the floor over to management for closing remarks.

Jule Smith (CEO)

All right. We wanna thank everyone for being with us today. We look forward to speaking again in the future.

Operator (participant)

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.