Margins Recovery
Q: Are margins back to normal after inflation impacts?
A: Margins have returned to normal levels, as work now reflects current costs and our backlog has healthy margins. The price and cost dynamics are behind us, and we're back to our normal operating model. -

Revenue Guidance and M&A Contribution
Q: How much of revenue growth is from expected M&A?
A: We expect mid-teens revenue growth at the midpoint of our guidance, with about half organic and half from acquisitions, totaling approximately $125 million to $130 million in acquisitive revenue. -

Backlog Expectations
Q: When do you expect backlog to normalize?
A: Our backlog set another record this quarter, but we can only sell so much ahead of our resources. It wouldn't surprise us if backlog decreases sequentially, but it gives us good visibility and allows us to stay patient at the bid table. -

Energy Costs and Margins
Q: Did lower energy costs benefit margins, and what's the outlook?
A: Lower diesel and natural gas prices provided a slight tailwind to margins. We operate within a stable range and take these slight tailwinds when we can get them. -

DOT Bidding Outlook
Q: What are your expectations for DOT bidding in coming months?
A: We have quite a bit to bid on, as DOTs release work for the spring and summer. The bidding environment is active, with significant lettings in states like North Carolina and South Carolina. -

Election Year Impact
Q: Does the upcoming election create uncertainty for your business?
A: Infrastructure funding is the most bipartisan issue in Washington. We don't see the election affecting IIJA funding or surface transportation funding, so we don't expect a significant impact on our business. -

Labor Availability and Costs
Q: Are labor constraints still affecting operations?
A: Labor conditions have returned to normal. While finding skilled operators remains challenging due to generational retirements, it's an advantage for us as we invest in attracting and retaining our workforce. Labor costs are now a pass-through and not out of control like after COVID. We don't feel like we're running with ankle weights anymore. -

Acquisition Strategy Amid Strong Markets
Q: Are strong markets impacting your ability to do deals?
A: The health of the markets doesn't significantly affect sellers' willingness. Sellers are thinking long-term about what's best for their families and businesses. Our acquisition pipeline remains active across the Southeast. -

G&A Margin Expectations
Q: Is the higher G&A margin this quarter the new run rate?
A: We expect G&A to be around 8% for the year. This quarter's G&A is about what we anticipated, and we expect the year to turn out as planned. -

Public vs. Private Work Mix
Q: How is the mix between public and private work changing?
A: We anticipate a mix of 63% public and 37% private work this year. The public work includes cities, counties, DOTs, and airports, and the mix can vary each quarter. There's strong activity in both sectors. -

Private Sector Trends
Q: What are the current trends on the private side?
A: We're seeing strong demand in manufacturing, heavy industrial, and facilities like headquarters and pharmaceutical sites. Residential remains steady, while there's less activity in traditional office buildings and retail. -

Third-Party Sales Performance
Q: How did sales of HMA and aggregates to third parties perform?
A: Third-party sales remain consistent, comprising 10–12% of our annual revenue. This area, focused on the commercial private market, continues to be a strong component of our business. -

Organic Growth Strategies
Q: How are you driving organic growth, and can you flex labor to increase it?
A: We continue to focus on organic growth by adding labor and equipment, investing in high-value growth initiatives. While backlog is strong, we're investing to expand our capabilities and workforce to support additional growth. -

Greenfield Projects and M&A
Q: Do greenfield projects lead to additional M&A opportunities?
A: Yes, establishing greenfields can lead to acquisitions. For example, our Waycross plant led to discussions with the Littlefield company. Greenfields allow us to enter adjacent markets and build market share, sometimes followed by acquisitions. -

Cash Flow Expectations
Q: Will strong first-quarter cash flow continue throughout the year?
A: While first-quarter cash flow was strong due to higher margins and revenue, we expect cash flow to return to more traditional patterns for the rest of the year. -

DOT Letting Activity
Q: How does current DOT letting activity compare to last year?
A: DOT activity is similar or even more active than last year. States are using both IIJA funds and their own funds to address infrastructure needs due to population migration. The bidding environment remains strong across all our states. -

Competitive Bidding Environment
Q: Are you seeing fewer bidders due to full market conditions?
A: With everyone having a lot of work, there are probably fewer bidders, although it's still a competitive environment. This is a sign of a healthy market. -

Affirming Guidance
Q: With a strong start, why not raise the full-year outlook?
A: We assess our business in two halves, with revenue typically 40–60 and EBITDA 30–70. We'll revisit guidance after the second quarter. For now, we're reaffirming our guidance and feel good about our position. -

Weather Impact on Operations
Q: Has weather affected operations in Q2?
A: January was cold due to a polar vortex, which is expected in our seasonal business. We anticipate less favorable weather in January and use this time for equipment maintenance, preparing for the work season ahead. -

Modeling Gains on Sales
Q: How should we model gains on sale per quarter?
A: Gains on sale of equipment are part of our strategy and typically amount to around $1 million per quarter. The prior year's gain was a one-off event. -