NV5 Global, Inc.

your organic growth. So last quarter you were expecting 5 to 7 percent organic growth and I noticed on your slide deck this time that you have it at 5 to 9 percent organic growth. So I was wondering which of the businesses that you have in the organic base has improved since last quarter to give you that confidence?

Well Andy this is Dick, good to hear from you again. Let me give an overview. We measure our growth not by just aspirational but what is the backlog? So we've seen significant growth in the backlog of our infrastructure business, we've seen significant growth in our technology business, specifically those with the data centers and we expect to see further growth with the software business in support of our geospatial services and I'll mention a little bit more in the concluding comments but we measure our, so we're optimistic about the organic growth really based on the backlog that we have going forward.

Okay, last question for me. I guess Dick this one's probably for you. NV5 has never been a company to really do a lot of buyback or any buyback but the stock is obviously less expensive than it's been in the past and it sounds like from your overall tone that while M&A is still very much a part of your culture and it always has been, it sounds like there's a little bit more focus on organic maybe today or the last few quarters than there has been over the last few years and so that brings into the question like as your balance sheet continues the cash flow better, what you're going to do with the cash? I was just wondering if buyback is something that you've thought about or considered in terms of your capital allocation strategy and go forward basically?

That's a very observant question. We've announced a 20 million dollar buyback and at the time that we can do that and the time that we don't have some conflicts that would prevent that, we fully intend to buy that back. So on the acquisition side, obviously we look for the arbitrage of the price of our shares and what we're buying things at but we have the flexibility and we did this earlier on. We will probably be using much more of that cash that you talked about and we have been, we're not giving stock in the acquisition. We may give restricted portion of that but that has a cliff-vesting period of three years but the actual stock or lettered stock, we replace that with cash and so therefore the acquisitions are immediately creative because we have more income coming in without increasing the share count.

Great. Thank you for the perspective. Have a good evening.

Your next question comes from the line of Sam with William Blair. Please proceed.

Thanks for taking our questions. I wanted to ask a bit more on the topic of tariffs. I appreciate you don't directly have much exposure to supply chains but I was curious how these tariffs might impact your clients' projects. Have any clients shared they may need to slow down their own projects or pause projects as a result of these tariffs and their impact, their ability to complete the pieces of the project that might come before you guys get involved?

Well Sam, let me give a macro answer and then for specificity we can really best hear from each of the reporting segments and how they see things but the, all of our work, a very small portion of it is international. All of our work is domestic and it's based on materials which are very limited because we're consultants but the materials that we're using there are all usually materials that are not subject to tariffs or they are domestic. So we have very, very limited exposure to tariffs. We're not worried about the supply chain. Those are not things that we see as a major impact on our business negatively. So it's not that we are importing things that are subjected to a tariff for the activity that we're doing but as I said I think maybe Ben or some of our segment chiefs can report what they may be seeing.

Yeah, I mean we haven't seen any immediate disruption from it and it's obviously a very rapidly changing landscape and we're watching it very closely. Andy, Kurt and Alex, you want to add some color to that?

Yeah, in the building side we've actually seen more focus using the digital building to make sure that equipment count and material count is more accurate. So less delays in projects that have already been budgeted for. So we've seen increased focus on that and then the construction schedules have not have not slowed down yet.

I guess the geospatial, the only products that we really kind of deal with is our software group but that's an inherent good and not subject to tariff.

Infrastructure, a lot of our projects already had Buy American and we're just not seeing the impact of tariffs at this point.

Got it, got it. Very helpful comment, thanks guys. Maybe switching gears here a little bit, maybe to ask about your utilities business and the fire hardening services you provide. I think last quarter was still pretty early following the California fire disaster. You shared these types of events usually you know lead to a pickup in business over the near to midterm. Have you guys begun to see that pickup at all or is it still too early in this process?

It's still a bit too early to actually have the contracts in place but we are seeing activity relative to fire hardening.

We have a municipality initiative where Los Angeles which is really impacted by the fires. They as you well know they have now have 60 days for these local municipalities to get the permit process to get building so we feel a real we are outsourcing business and our private provider business where we actually we have our fees based on a percentage of the building permit. We see a tremendous opportunity and activity with the municipalities as they start to rebuild. On the bigger picture you mentioned, yes we haven't seen any of the real construction uptick tremendously until we get that permit processing where we are will be very embedded and involved with the municipalities and helping them to accelerate the building permit process. I

appreciate it. Thanks guys.

At this time this concludes our question and answer session. I would now like to turn the call back over to Mr. Wright for closing remarks.

Well thank you everybody for joining the call today and as you know we are very pleased to report to our shareholders in a successful quarter one and we really have a positive outlook for the remainder of the year. I use a word and I think that's really important for all of our people and our segments reporting and that's the word adapt. Adapt to what the commercial circumstances are. We don't have any impact now on tariffs. We don't know where DOGE is but whatever that is, if we have the ability to adapt and be flexible. So given an example, our geospatial group, mainly a tremendous amount of their work has been with the federal government and for now fortunately it's with the Department of Defense and that administration seems to be they are going to increase defense spending so we will be hopefully will be impacted positively. But adapt, we think it's important that now they look for other areas and we're starting to position ourselves with other areas and so they're not so dependent on specific services. And so they're cross-selling and Ben mentioned that will be with utilities and commercial sectors where they now will have that whole segment of business and so here's where the word adapt comes in. If they are, if the defense business continues but also now they developed a further service with the commercial activity and the utilities, well then their business will prosper. And this really is the same for all segments. We have to know the environment we're in and we have to adapt our services and our organization so that we are part of that. So that's really important. Where I was pleased and I'd like to really point this out to our investors was you'll notice the cash flow conversion, close to 100% of what our EBITDA was. So we are in a strong cash position. I was also pleased to see that our leverage has dropped to 1.3 and we now have 53 million dollars over 53 million on cash on hand that we can use to grow and promote our organic growth but also if we see opportunities that we can support and strengthen the platforms we have, we have the cash to do that and we're not so worried about using SOC. So those are very important things to look at in the quarter. Our quarter, really the other thing that I was very encouraged with and I'd like to point this out to investors is we did some major acquisitions in the beginning of the quarter in our software area and learning that business we ended up doing things that position us for further growth. We had a very good profitable quarter that could have been better once we realized that Ben mentioned the amount of employees we felt that the staffing of that and as we learned better that we had 40 people that we can now that no longer with us and we'll see the benefit and the growth of the company in the second quarter as we realize even further benefits from that. So we're encouraged with the outlook. We're encouraged with the year. Because of the political environment we are reaffirming a strong guidance for the rest of the year and so we're not projecting any slowdowns and we feel very encouraged with the year going forward. So I want to thank everybody for your questions. Thank everybody for participating in the call today and we will be available and working in and anything that you may think of or want to address with us please feel free to do so. So anyway thank you for the call and we appreciate we appreciate being able to report these positive results to you. Thank you.

Thank you. This does conclude today's conference call. You may now disconnect.