Greetings, and welcome to Construction Partners’ Second Quarter Earnings Conference Call.

As a reminder, this call is being recorded. It is now my pleasure to introduce your whole Investor Relations with Rick Black. Thank you. You may now proceed.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Construction Partners’ conference call to review second quarter results for fiscal 2025. 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, May 9, and 2025. 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 considered forward-looking statements made pursuant to the safe harbor 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 1 our earnings press release from this morning for our disclosure on forward-looking statements. These factors and 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, adjusted EBITDA and adjusted EBITDA margin. Reconciliations to the nearest GAAP mea- sures can be found at the end of the earnings press release. Construction Partners assumes no obligation to publicly update or revise any forward-looking statements. And now I would like to turn the call over to Construction Partners’ CEO, Jule Smith. Jule?

Thank you, Rick, and good morning, everyone. We appreciate you joining us on the call today. With me this morning are Greg Hoffman, our Chief Financial Officer; and Ned Fleming, our Executive Chairman. I want to begin today’s call by focusing on our organizational model and how important people are to our strategy at CPI as we surpassed 6,000 employees this month. The core of our business happens in our local markets, now numbering approximately 100 distinct market areas in 8 states. In each of these, our local management team and workforce perform higher-margin, lower-risk projects and generate recurring revenue for repeat customers each year. Our people are the crucial element as we seek to take great care of our valuable customers and operate profitably. This local market model also provides a stable and predictable environment for our teams to bid, win and build work in their communities. In our family of company structure, nowhere our character, experience and talent, more important than in the management teams at our platform companies. In each state, these management teams steward our company culture, drive operational excellence and cul2 tivate both organic and acquisitive growth opportunities. This is why last week, we were so excited to have PRI join us as our platform company in Tennessee. PRI instantly expands our coverage the full length of the state and will include our preexisting operations in the Nashville Metro area. A key strategic criteria in our platform ac- quisitions is an established and deeply experienced leadership team that fits our culture, our focus on safety and our relative market share growth strategy for further expansion. Under the leadership of Jon Hargett, Greg Ailshie and PRI’s entire management team, our new platform company will benefit from decades of collective experience and the technical expertise of seasoned industry veterans. Tennessee is growing, and we see excellent organic and acquisitive growth opportunities within the state, driven by strong economic expansion, favorable demographic trends and a healthy transportation funding program. Turning now to the quarter. Outstanding operational performance led to Q2 year-overyear revenue growth of 54% and adjusted EBITDA growth of 135%. In addition, this marked our highest Q2 adjusted EBITDA margin in CPI’s history at 12.1%. This strong margin expansion during the winter quarter was driven by great project and plant performance. The company’s vertical integration assets in aggregates, services and AC terminals performed well. We continue to focus on building a great organization and as we build scale, the benefits contribute to higher margins. For CPI, tariffs have not and are not expected to be a significant issue for the business as most of our supply chain and raw material inputs are sourced domestically. Our Sunbelt states continue to benefit from healthy federal and state project funding in addition to a population migration that is driving steady workflow of commercial projects. We are not currently seeing any sign of degradation to these fundamental factors that have been supporting healthy and growing markets through our footprint for years. Our backlog is evidence of this continued steady demand for our services as it grew to a 3 record $2.84 billion. Heading into the heavy work season of our fiscal year, we are raising our outlook ranges, which Greg will discuss in his remarks. Taking a closer look at market conditions in our Sunbelt states, local markets are growing and states remain focused on maintaining and improving the wallet of their roads as well as increasing capacity to handle the significant migration to their states. For CPI customers in our public markets, the IIJA and state funding will continue to provide healthy bidding environments. The IIJA provides for significant funds that have not yet been deployed and Congress is focused on the next 5-year reauthorization of the Surface Transportation bill now. Secretary Duffy’s comments in the past few weeks were positive on a reauthorization that continues to focus spending on hard infrastructure, which is a positive for CPI. For commercial and private customers, we continue to experience steady building bidding availability. Manufacturing moving back to the United States and specifically the Sunbelt is also a positive for CPI. Turning now to our strategic growth model. We remain focused on both organic and acquisitive growth. Organic growth and our revised guidance envisions a strong second half of the year, and we continue to have an extremely active acquisition pipeline. Our Southeastern states have great opportunities. And as we enter new states in the Southwest, the map expands and even more opportunities present themselves. In the past year, we have entered into 2 new states, Texas and Oklahoma with platform acquisitions. And through PRI, we now have a platform company in Tennessee. As with our existing platforms, these new companies serve as growth engines for CPI to both expand into new areas through bolt-on acquisitions and to increase market share organically. In both cases, we are able to grow revenues and more importantly, expand margins in what remains an extremely fragmented industry. Moving forward, we continue to focus daily on our CPI strategy and delivering on our roadmap 2027 goals of top line growth of 15% to 20% annually and EBITDA expansion of 4 50 basis points per year through our 3 margin levers: building better markets, vertical integration and scale. In closing, we are very pleased with the second quarter results, and we’re excited and ready for the busy spring and summer work season ahead. I’d now like to turn the call over to Greg.

Thank you, Jule. Good morning, everyone. I’ll begin with a review of our key performance metrics for the second quarter of fiscal 2025 compared to the second quarter a year ago. I’ll then discuss our revised outlook for fiscal 2025. Revenue was $571.7 million, an increase of 54% compared to the same quarter a year ago. The mix of our total revenue growth for the quarter was 7% organic revenue and 47% from recent acquisitions. As a reminder, we began presenting acquisition-related expenses last quarter as a separate line item from general and administrative expenses on our income statement. G&A expenses are now presented in a manner that differentiates spend incurred to support day-to-day operations from those expenses associated with acquisitive activity within the quarter. The prior year quarter also reflects this presentation. Reflecting these changes, G&A expenses as a percentage of the total revenue in the second quarter of fiscal 2025 were 8.2% compared to 9.7% in the second quarter last year. As we continue to build scale, we are targeting G&A expenses for the fiscal year to be approximately 7.2% to 7.3% of revenue. As a reminder, FY ’24 G&A expenses were 8.3% Net income was $4.2 million in the second quarter and $0.08 per diluted share compared to a net loss of $1.1 million and diluted loss per share of $0.02 in the same quarter last year. Adjusted EBITDA was $69.3 million, an increase of 135% compared to the second quarter of fiscal ’24. Adjusted EBITDA margin was 12.1% compared to 7.9% in the second quarter of last year. In addition, as Jule mentioned, we are reporting a project backlog of $2.84 billion at March 31, 2025. As a reminder, historically, CPI’s backlog has declined 5 sequentially during our heavy spring and summer work seasons. If this were to occur this year, we would not view it as a cause for concern. Rather, we would view it as a return to more seasonal patterns, albeit at a much higher percentage of the next 12 months contract revenue and backlog than in prior years. Turning now to the balance sheet. We had $101.9 million of cash and cash equivalents and $248.4 million available under our credit facility at quarter end, net of reduction for outstanding letters of credit. As of the end of the quarter, our debt to trailing 12-month EBITDA ratio was 3.23x. We remain on pace with our strategy of reducing the leverage ratio to approximately 2.5x in the next 4 quarters to support sustained profitable growth. Cash provided by operating activities was $55.6 million compared to $18.2 million in the same quarter a year ago. As discussed last quarter, the higher-than-expected level of billings and revenue in Q1 was realized as improved cash flow in this quarter. We remain on pace for FY ’25 to convert 80% to 85% of EBITDA to cash flow from operations. Capital expenditures for the second quarter were $41.4 million. We continue to expect total capital expenditures for fiscal 2025 to be in the range of $130 million to $140. This includes maintenance CapEx of approximately 3.25% of revenue, with the remaining amount invested in new growth initiatives. Turning now to our outlook. Based on our recent outperformance and our current expectations for the remainder of this fiscal year, including the addition of PRI, we are raising all of our ranges for fiscal year 2025 results. The increased ranges are as follows: revenue in the range of $2.77 billion to $2.83 billion. In regard to our overall revenue mix for the year, we now expect organic revenue to be in the range of 8% to 10%, up from our prior expectation of 7% to 8%. Net income in the range of $106 million to $117 adjusted net income in the range of $122.5 million to $133.5 million, adjusted EBITDA in the range of $410 million to $430 million and adjusted EBITDA margin in the range of 14.8% to 15.2%. And with that, we will open the call to questions. Operator? 6

— Operator Instructions — the first question comes from Kathryn Thompson with Thompson Research Group.

Just first focusing on just the broader macro view and understanding that you generally have more quick type projects that are completed in 12 months a 12-month period. What, if any, project delays or cancellations are you seeing in your end given just some of the broader macro uncertainty in the U.S. market?

Kathryn, for us, we’re seeing just business as usual. We do have projects that we book and burn within a year. We continue to do a lot of those projects. But the overall macro economy, I feel like there’s a little bit of a disconnect between what you might read in the news and what we’re experiencing on the ground. We haven’t seen any delays. We still have a healthy bid sheet in the commercial markets. So I would say we’re really just business as usual.

Okay. That’s helpful. And could you tell a little bit more about – you’ve had 2 acquisitions kind of on the heels of each other, one in Texas last year and then in Tennessee announced last week. And it both appears to have higher structural margins versus CPI’s core. Tell us a little bit more about what you can in terms of kind of why the margin differential and what it is that you’re looking for from an M&A standpoint?

Yes. So we’re excited about PRI joining us. And you’re right, the acquisition of Lone Star 7 helped us raise our margin profile going into this year. But what we – as I said in our prepared remarks, what we really look for in these platform acquisitions is a great management team. That’s going to be the basis for years of future growth and performance. So PRI, we’re excited. They do have a nice margin profile in the mid-teens. They do a great job in Knoxville, but also throughout the state and the pavement preservation expertise that they bring is something that’s going to be very valuable to CPI. As far as the overall acquisitions, I’d just love to let Ned weigh in a little bit on some of his thoughts from a Board level.

Kathryn, I hope you’re doing well today. I think we see a lot of opportunity. The Jule has done a great job of making sure the organization is ready. Greg has done a great job to make sure that the balance sheet is ready. And – but understand, we look at a lot of acquisitions and we pass on a lot of them because from the very start, especially when we look for platform companies, we’re looking for great people, excellent markets, good assets, bolt-on opportunities in growing markets. And one of the things that I think is really key, and we really, I think, proved that up with the Lone Star acquisition is integration is a core competency. It has been since we founded the business. It was in the previous company that Charles ran. And so this is an organization that is prepared for and understands how to integrate companies. And interestingly enough, we see a lot of opportunities because of the culture that’s been built here from the start. They want to be part of this team. And so Jule building the organization and really having a family of companies is key to it, and Greg has done a terrific job of keeping the balance sheet. So yes, we may tip a little bit above 3 like we are today, and then it will go down. When you look at our cash flow generation at 85%, it’s pretty phenomenal. But we are going to always look for great platform companies that are generally led by people that we want to bring on as part of our team. And there’s a lot of those opportu8 nities. But make no mistake about it, we pass on a lot of opportunities.

Okay. Very helpful. And then final question just is on capital allocation. You have 8-plus percent cash flow through and recently announced acquisition, obviously, which you just talked about. How should we think about capital allocation priorities in 2025 and in terms of where debt-to-EBITDA levels and how you’re managing that?

Well, as Greg said, we’re on track to get back within our leverage ratio, our target leverage ratio in 4 quarters. We’re on track for what we said when we acquired Lone Star. From a capital allocation standpoint, with the cash flow that’s generated, we’re going to pay down debt. But we’re also going to make good smart acquisitions and continue to run our strategy as a growth company.

The next question comes from Tyler Brown with Raymond James.

Jule, I just – I kind of want to come back to PRI and maybe just talk a little bit more about that business. I think it only came with maybe one HMA plant. So does that kind of imply that it’s just more focused on paving crews or specialty services? Or is there something unique about Tennessee where you can just buy FOB and don’t need plants? Maybe just a little more color there.

Yes, Tyler, good question. It’s a little bit of all that. So PRI, as we said, stretches almost the length of the state of Tennessee, which is a long state. And so in Knoxville, they do a lot of traditional things that we do in their East division. And in their Central and 9 West division, they do paving, but they also do a lot of pavement preservation, which we’re excited about because we do that to a certain degree in Alabama and Georgia, but these guys are experts at it. And so – and to your point, in the West, they have really good relationships with some producers there. And so they’ve chosen to buy FOB and to maintain their market share that way. But we’re going to be expanding over time, just like we do with all our platform companies. We’re excited to have Tennessee and taking over our Nashville operations, which is something we – back in 2022, we had as a goal, but we had to find the right platform management team. And so our Tennessee operation and folks led by Josh Miller, they’re excited to be part of – and so I see PRI following the typical platform model of integrating into our family of companies and then just looking for great growth opportunities.

Tyler, this is Ned. I think one of the things that Jule and the team has done terrific is this is just the first chess move and really the second chess move in Tennessee. This is a growing state. There’s lots of opportunity there. And not only did we get a wonderful company that’s got nice margins, but we got a great management team that we can grow and add bolt-ons on. So this is just our start in Tennessee.

Yes. So speaking of chess moves, I mean, it sounds like there’s something unique about the pavement preservation piece. Is that something that you can replicate at the other platforms?

Yes. I mean, Tyler, you’re right. Pavement preservation is, in a sense, just another way of taking care of the infrastructure. And every DOT cities and counties use this as a tool in their toolkit to maintain infrastructure. And so we certainly have participated in that, but 10 PRI does it at a different level. And so whether it’s chip ceiling, bog ceiling, crack ceiling, there’s just different ways that states extend the life of their pavements.

Interesting. Okay. Great. So if I could switch gears, Greg, can you just kind of help us a little bit with the modeling? So just based on what we know today, kind of what is the implied revenue contribution from M&A? I could probably do the math and back it out, but that’s always scary. And then how much do you think hangs over into ’26 already based on what you’ve already completed?

Yes. So well, first of all, I’ll start with that. Hanging over into next year is about $150 million to $160 million in revenue. So that’s part of the answer. The other part of the answer is if we’re kind of backing into 8% to 10% organic growth for the full year, I think that kind of will lead you to the breakdown of acquisitive and organic.

Okay. Yes, I can kind of work that math. And then just real quickly on the enterprise value, just to make sure that I have it all correct. So do you have what you’ve spent year-to-date on M&A? Basically, I’m just curious what the balance sheet looks like pro forma here into Q3. And was there any equity component to PRI? Or is it an all-cash deal?

It was – Tyler, it was an all-cash deal at the typical multiples that we typically pay. And we expect our leverage ratio and our balance sheet to trend back down pretty steadily toward that 2.5 over 4 quarters.

The next question comes from Adam Thalhimer with Thompson, Davis. 11

Congrats on the quarter and the PRI acquisition. Jule, you mentioned Southwest acquisitions. Could that be a new state? Or are you referring to tuck-ins in Oklahoma and Tennessee?

Yes. Adam, specifically, what I was talking about is as we move into a new state like Texas and Oklahoma, our map expands. And so we just have more conversations with folks in those states, and we see that happening. But we’re also talking a lot to folks in the Southeastern states as well. So it’s a busy time for acquisitions. As Ned said, we pass on quite a number of them, but there are ones that we see as just great strategic fits. But I was specifically referring that as we move into new states, we just have more opportunities to talk to folks in those states.

Got it. And then you briefly mentioned tariffs, but I was curious, I can’t remember if you said anything about whether there’s any inflation related to tariffs or not. Are you seeing that?

We’re not. Most of our supply chain is domestic, almost all of it. We’ve not seen anything related to inflation from tariffs. And as you know, should things go up, we would simply put it in our pass-through model and pass it on. But we just – it’s really been pretty much a nonissue for us, both on the supply chain and cost side, but also on the demand side in working with our customers. It’s just – it’s not been a real factor so far.

Okay. And then lastly, can you just remind us what assets that you had in Nashville and kind of how they’re going to integrate with [ PRI ]? 12

Sure. Back in 2022, we made the deal with Blue Water, and we’ve got 3 asphalt plants in a construction operation. Our asphalt plants are all in the Nashville suburbs east of Nashville. And we’ve been managing that from Huntsville, and our Alabama guys have done a great job of stewarding those assets, but we always knew that we wanted to find a Tennessee management team and platform company, and that’s what we were able to do this month.

The next question comes from Michael Feniger with Bank of America.

I did want to just ask the organic growth, 11% in Q1, in Q2, 7%. It’s clear based on the guide from Greg, you guys are going to still be doing high single-digit organic growth in the second half. We’re seeing the national data like construction spending, especially on the private side is slowing. Do you think it’s slowing in – is it just not slowing in your regions? Or is it – is the underlying market slowing and you guys are gaining share because you’ve bought some assets over time, giving them bonding capacity, so they’re able to kind of go out that and maybe win more work. So it’s kind of just a question when we see the organic growth, how much do you kind of think is you guys gaining some share out there? Or how much is it just really strong markets in your core regions?

Yes, that’s a great point. I think you’re good – you’re right to bring that up because that’s a good part of our story. in that as we make these acquisitions, they’re generating new organic growth. So it is new volumes to us. We’re creating essentially our own growth through some of our acquisitive growth. Generally, though, I would say that – and I’m not sure what metric you’re citing there, but we believe that in our markets, they’re still 13 very strong both on the public and private side, and we’re continuing to see new bidding activity every year year-over-year.

Great. And I just would love to talk about the price versus cost. We’re seeing lower oil. I’d imagine over time, that filters through to lower liquid asphalt. Just how are you seeing the pricing in the backlog that’s going to come through in the back half? And just the bidding environment, just your margins have actually expanded. I’m just wondering with this price versus cost spread, how we kind of think about this as we kind of move through the year with what we’re seeing right now in diesel and liquid asphalt.

Yes. It’s interesting, Michael. So usually, a barrel of crude and liquid AC correlate pretty well. Interestingly, they didn’t at all in Q2 – our Q2, crude went down, liquid AC basically stayed flat. It has come down a little bit in April and on into May, but not proportionally. And then as far as diesel, natural gas, diesel has come down, not in Q2, but since Q2, the natural gas has gone up. So everything is moving in really strange directions. But I think generally, overall, when you talk about our cost environment, it’s stable.

Michael, I just wanted to circle back just for a minute on the organic growth. We give this number to you guys quarterly just to help you. But the reality is you’ve really got to look at organic growth sort of in an annualized basis to get a meaningful number, and that’s why we try to give you an annualized basis of 8% to 10%, which was higher than we saw at the beginning of the year. And you’re exactly right. As you’ve heard us say before, today’s acquisitions become tomorrow’s organic growth. When we do a bolton acquisition or a platform with CPI behind them, they’re going to find ways to take advantage of opportunities in their market over time, and that’s really what drives organic 14 growth.

Helpful, Jules. And just if I could squeeze one last in there. Just are you hearing or seeing anything on the funding side from your DOTs in terms of pauses or delays that might have occurred? And just how do you think about just going forward, it might be getting ahead of ourselves, but how do you think about that reauthorization at some point next year? Is that coming up in conversations at all? How do you guys kind of manage towards that, if that is something you kind of have to manage towards? Just kind of curious if you could kind of comment on your DOTs, what they’re seeing in the funding levels, any delays and how you think about that reauthorization?

Yes, Michael, it’s not too early to talk about it because those conversations are going on in Washington on Capitol Hill. We had one of our platform company presidents, Todd Johnson, testify in front of the Transportation Committee last week on reauthorization. So we’re very encouraged by what we’re hearing from this administration. Just to speak on the current funding, when people hear that the larger grant projects got paused, I would say 2 things. First, most of what CPI does is through the formula dollars anyway that go to the states. But even the grant projects, most of those, as the administration has said, is going to continue on. They just want a chance to look at it and make sure that those dollars are being spent for the best and highest purpose. And I would say this administration’s focus on hard infrastructure and making sure dollars go to hard infrastructure is good for CPI. The White House just last Friday, released their budget – and even though a lot of the federal spending areas were reduced, the transportation budget actually increased. And so we feel like this administration is focused on building the infrastructure needs to support economic growth, and that’s a good thing for CPI. 15

The next question comes from Andy Wittmann with Robert W. Baird.

I wanted to start with some questions on the backlog. And specifically, if you could comment on how the margins, the implied as-bid margins in your backlog today compared to the profit margins that you’ve recognized over the last year or so? And then secondly, I guess, maybe for Greg, a technical question, but I’m just kind of curious as to how much of your backlog that was reported this quarter was due to acquisitions.

Andy, I’ll answer the first part, and Greg can answer the second. Our backlog margins continue to be healthy as is shown by our raised guide for EBITDA. But I would also say CPI over – is typical that as our crews and our teams go build the projects, they find ways to win and grow margin in the backlog, and that creates good quarters like the one we just reported. So we’re seeing a lot of bid opportunities, and so that creates a healthy bidding environment. but then we find ways to go grow the margin. And that’s typical for CPI. I’ll let Greg answer on the breakdown of that backlog add.

Yes. So of the add, Andy, about $133 million, $134 million due to acquisitions and $50 million to $60 million due to just organic growth sequentially quarter-over-quarter.

Very helpful. And then just for my follow-up, I wanted to ask a little bit, Jule, about – I’m thinking back to the Analyst Day actually, and you talked about becoming increasingly vertically integrated. This has always been part of something you’ve done. But I thought at that date, it seemed like there’s other areas that you were thinking about. It always seemed to me like these would be areas for really good tuck-in acquisitions inside your 16 platform companies. I would just like to hear you talk about that a little bit in terms of progress on that initiative to kind of fill in other services around the platform companies that you already have. What you’ve done, if any, there or what you see as potentially happening here inside of your M&A pipeline?

Yes. Andy, you’re right. Part of our vertical integration strategy is services and as well as liquid asphalt terminals and aggregates, which, as I said in our remarks, those facilities really contributed very much to this quarter. And so that part of our strategy is working well. But on the services side, as we’ve said before, 2 of the most value-added acquisitions we’ve done in the last few years didn’t have any asphalt plants. They were in our existing markets and added services. And so we continue to look for those kind of opportunities. But I will say we can also grow those services organically. We just this month were awarded our first project in the upstate of South Carolina in Greenville that has a significant grading component. And our platform company, King Asphalt, is going to be growing those services organically in-house with some grading and utility crews. And so that’s an example of being able to vertically integrate more services, whether we do it organically or make a good acquisition, it’s a way to capture more margin.

Yes. And Angel, let me add to that, that some of those, to Jule’s point, don’t show up in the M&A side. They show up in the – we talk a lot about our organic CapEx, right? So if we’re spending 5%, 5.5% CapEx, 3.25% of that is maintenance CapEx those other – that other percentage to get to that 5% to 5.5% is focused often on those adding services in the various companies.

The next question comes from Brent Thielman with D.A. Davidson. 17

Great quarter. Just a follow-up. And Greg, I’m not sure if you said it, but your CapEx expectations for this year just with PRI added now.

Yes, still around $130 million, $140 million – $130 million, $140 million, sorry.

Got it. And then obviously, you’ve done PRI, J. I’d love to hear what are the attitudes of sellers right now? I mean, obviously, a lot of noise in the world in the market, maybe in your corner of the country, things are great. But have you sensed any shift in attitude maybe that’s encouraged the pipeline to grow a little bit more because folks are getting a little bit nervous about the environment. Just be curious what you’re hearing from potential targets.

Yes, Brent, good question. I would say that we have a very active pipeline and sellers are reaching out and talking to us, but it feels very much like it’s still the typical things that drive them, which is their families planning, their life planning. I really don’t think any sellers that I’ve talked to and we’ve talked to a lot recently are being driven by the headlines of today. They’re more focused on what’s long-term best for their business and their families. And a lot of them think that getting their employees and their businesses to be a part of CPI will be a good thing for their organization. And so that’s helping us get to sit down in front of a lot of them.

Okay. Maybe just the last question, maybe from just a balance sheet management perspective. I mean you’ve scaled the business a ton here in the last 12 months. I guess part of the question is with that scaling up, is there a certain level of cash you want to maintain 18 on the balance sheet? And I guess the second part of it would be, obviously, you want to maintain leverage targets, you’re going to grow EBITDA. Is there any appetite to reduce debt levels here in the next 12 months?

Yes, absolutely. I mean we’ll – we said in the remarks that we’re going to generate from EBITDA, about 85% of that would turn into cash from operations. Sure. We’re going to use whatever makes sense to pay down debt there. And certainly, that’s factored into our discussion of leverage ratio over the next 4 quarters and getting back down to that 2.5x. As far as cash on the balance sheet, I guess we’re always thinking somewhere in the neighborhood of 3% to 5% of revenue just as a way to keep our operations rolling every day.

Got it. If I could slip one more in. I think I’m batting clean up here. So just on – Jule, when you look across the platform and state budgets, are there some markets like you’re particularly excited about when you look at those budgets and what you see coming here in the next 6 to 12 months in terms of funding for infrastructure projects?

Yes, Brent, I read an industry report a couple of weeks ago that talked about how with the federal infrastructure increase that IIJA created with the Surface Transportation bill and the states doing their own initiatives, certainly in our footprint, there’s been sort of a snowball effect in contract awards, and I agree with that. We’re seeing that. So all of our states, we have healthy bid list, clearly, being in Texas and Florida. Those are just outsized programs because of the outsized growth of those states. But – when you look at Tennessee and South Carolina and Georgia and North Carolina, it’s just a healthy environment right now. All of those states have taken initiatives to supplement the increased 19 federal funding. So we feel like 2026 is going to be a very – continue to be a significant increase in transportation funding. In 2025, contract awards in our states are up around 15% to 16% just over last year. So just as we’ve been saying for a while now, it’s a healthy bidding environment.

At this time, I would like to turn the call back over to management for closing comments.

I’d like to thank everyone for joining us today, and we look forward to talking next quarter.

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 20