Good morning. My name is Nadia and I will be your conference operator today. At this time, I would like to welcome everyone to the Bowman Consulting Group Third Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in the Company's filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and the Company is not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, the Company will discuss certain non-GAAP financial information such as adjusted EBITDA and net service billing. You can find this information together with the reconciliations to the most directly comparable GAAP information, the Company's earnings press release and 8-K filed with the SEC and on the Company's investor website at investors.bowman.com. Management will deliver prepared remarks, after which they will be taking live questions from public research analysts. Throughout the call, attendees on the webcast may post questions for management to answer on the call or in subsequent communications, but there will be no live Q&A from the webcast attendees. Replays of the call will be available on the Company's investor website. Mr. Bowman, you may begin your prepared remarks.

Thank you, Nadia. Good morning and welcome, everyone to the Bowman Consulting Group third quarter 2022 earnings call. I am Gary Bowman, Chairman and CEO of Bowman. I am joined this morning by Bruce Labovitz, our Chief Financial Officer. I want to start by thanking everybody at Bowman for your continued commitment to delivering exceptional solutions to our customers and for yet another record quarter to our shareholders. We’ve added many new employees through acquisitions this quarter and I am pleased to have all of you as part of the Bowman team. Also recognize that today is Veterans Day, I would like to – I had a special thank to many Bowman employees who also served as Veterans. Given the strength of the quarter, and the momentum we are experiencing so far in the fourth quarter, there continued to be an apparent disconnect between the behavior of our clients as reflected by the key performance indicators in our business and the recessionary concerns we hear in the media. While we’ve adopted what we consider to be a cautious and defensive approach to managing the size of internal investments and our risk in specific growth initiatives, our pace of new orders and high utilization rates gives us confidence that we will again see growth in 2023. At the time of the IPO, we talked about our five year strategic growth initiative, which included a 12% organic compound growth rate target and an aggressive acquisition program which when combined with the results at a five-fold growth trajectory from a $100 million of net revenue in 2020 to $500 million of net revenue in 2025. Nearly two years in, it was a $200 million plus runrate by the end of Q3 we are ahead of plans. Since our last conference call in August our M&A and integration teams were a bit busy. We closed on three new acquisitions with additional opportunities currently at various stages in the pipeline. Anchor Engineering added marine and waterfront ports and harbor engineering skills to our portfolio of services, while also adding underwater survey. SEI demonstrates our continued commitment to expanding our energy transition and solar infrastructure engineering practice to support finance the complex energy infrastructure requirements. And then in Spatial Acuity reflects our belief in the value of leveraging certain geospatial data collection and reality capture technologies that are in high demand by our customers, while also enabling efficient growth. Each of these acquisitions bring the unique value proposition to Bowman. They all provide a meaningful base of business from which we intend to cross-sell our services and grow revenue. Now let me turn the call over to Bruce who will discuss our financial results in detail and I’ll return to talk a bit about our markets before taking your questions. Bruce?

Great. Thank you, Gary. We are pleased to be here today discussing another record quarter. When I refer to the quarter I mean the three months ended September 30, 2022 and when I refer to last year, I mean the period ended September 30, 2021. Throughout my presentation, I will refer to certain non-GAAP financial information such as EBITDA and net service billing which we also refer to as net revenue. You can find this information together with reconciliations to the most direct comparable GAAP information in yesterday’s earnings release and in our 10-Q, which we will be filing on Monday, since the SEC is closed today in honor of Veterans Day. Last night, we released results for another consecutive quarter of record gross revenue, net service billing and adjusted EBITDA. We continue to deliver exceptional organic and acquisitive growth in the third quarter of 2022 and year-to-date. When you normalize the acquisitions closed during the quarter and in the fourth quarter, we are pacing at a net service billing rate of over $265 million annually. Based on acquisitions closed since our last call, and order trends we’ve been experiencing so far in the fourth quarter, we raised guidance for the year and concurrently introduced net service revenue and adjusted EBITDA guidance for 2023, which we believe suggests as Gary indicated rational optimism about next year. Gross revenue for the quarter increased $31.5 million or 79% to $71.2 million. Year-over-year organic gross revenue growth was 23%. Net service billing for the quarter increased $29.2 million or 82% to $64.9 million. Year-over-year organic growth for net revenue was 25%. Net income for the quarter was $3.4 million or $0.26 per share basic and $0.25 per share diluted. This is an 8.5 fold increase over the prior quarter. Adjusted EBITDA for the…

Okay. Thanks, Bruce. Now I want to take a moment to address our positioning relative to the general economy and the state of our markets and our plans for capital allocation including mergers and acquisitions. As I did last call, I'll start with the macro environment for our industry markets and our customers. Bottom-line is the demand for infrastructure investment in the built environment remains strong overall. Signals from our clients suggest most sectors in markets continue to experience an imbalance between the demand for our work and our industry's capacity to meet that demand. In the residential market, that includes mixed use for rent and for-sale housing, demand from homebuilders for developable and billable lots remained strong on the directly or through third-party developers. Housing stock continues to remain low from a historical perspective relative to demand and builder balance sheets are as healthy as they've ever been. Builders and developers of for-sale multifamily and mixed-use projects are adapting their models for the current demand climate and we have every indication they will remain active in their inventory creation efforts to be positioned to benefit when conditions reach equilibrium and revert to a more normalized supply and demand dynamic. As Bruce mentioned, revenues from our for-sale residential clients represented just 11% of our revenue in Q3 and 12% year-to-date. Overall, we are beginning to realize our goal of deconcentrating building infrastructure within our revenue base. Transportation and traffic engineering continues to grow and provide an opportunity for capturing incremental market share as it increases in concentration within our revenue mix. As our transportation traffic team grows through acquisition and hiring, so too does the size of the opportunity set for which we compete. Through acquisitions, we have both expanded and deepened our transportation credentials, which has resulted in an…

[Operator Instructions] And our first question today goes to Alex Rygiel of B. Riley. Alex, please go ahead. Your line is open.

Thank you. Good morning, gentlemen. Gary and Bruce, a very, very nice quarter.

Thank you, Alex.

Couple quick questions here, couple quick questions. First, organic growth has been fantastic, 25% in the current quarter. Can you talk about some of the reasons why Bowman is taking share?

Alex, they contributed to our organic growth is the synergies with our acquisitions. I can't measure that. But I would guess maybe one-third of that organic growth is from synergistic opportunities we've been realizing.

I think the scale that we're creating as we grow the national footprint and we grow the size of labor and the configuration of the workforce that we have and the adaptability of – and the ability of multiple pockets of labor to cover for other pockets had allowed us to be nimble and very responsive to opportunities and not be constrained in any way by geographic limitations. And that's really afforded this ability to go after stealing market share from other providers.

Very helpful. And then, you talked a little bit about – and thank you for the metrics on what is driving organic growth being kind of volume versus price mix. That's very, very helpful. As it relates to price and in theory as it relates to a tight labor market and labor inflation, clearly, that price is obviously driven by increased cost of labor. So maybe can you address, number one, whether or not your pricing program is keeping up with the rise in labor rates? And number two, how sticky is that during sort of recessionary periods kind of like, what we're seeing in kind of other end-markets?

Yes. So I think the first thing to kind of point out is labor in our industry isn't like a commodity traded daily with fluctuation in pricing that is ongoing. It's a relatively fixed with incrementally increasing costs. But it doesn't move on a curve on prices relative to interest rates. So there is a creep certainly that's occurred. And then there is a likewise creep in rate. We think we have kept up and with rate inflation, meaning, sort of the cost of labor and an opportunity to charge clients. They are not always directly connected. Sometimes it is – sometimes you're a little bit ahead of labor because you can feel the constraint in the market and take advantage of it. Sometimes you're behind labor because labor has – understands the constraint in the market. We're seeing a settling of that dynamic and I think inflation in the marketplace seems to have sort of settled a little bit. And likewise with the two parts of our business, the cost of labor and the opportunity with that, I think we're finding that to settle in a little bit. But they move together. And if we – our clients are quick enough to know that if they sense that the labor market cost is coming down, rates will either lead or follow that but they don't necessarily cross. So you don't see one dive particularly below the other to where you have an imbalance that causes loss.

And then lastly, as your revenue mix shifts here a little bit, clearly, from a couple of years ago, but even kind of moving forward in some of these newer markets that you're getting into, how do you think your profit margin might be impacted by that shift?

So we – fundamentally, our premise is that it's more about scale than it is about distribution of revenue between markets. I don't know that we're ever going to get to a point where one is going to be so -- take over so dominantly over another. And when you look at our gross margins, there's points here and there, but there's not tens of points here and there. So I think the bigger thing you may see as we shift the distribution is the percentage of gross to net. We would find probably expands a little bit as transportation becomes a bigger part of our business. It's just sort of a dynamic and characteristic of that market to us. Gary, you have anything you want to add?

I think you've all covered and covered well.

Thank you.

I am doing a good job.

So, I don't know that that mix – some of the things that – we could see a couple of points from technology becoming more pervasive in some of the work that we do. And that, Gary, I think we focused a little bit on geospatial because it does provide some opportunity for leverage on time spent. But fundamentally, we are a people business. And the people do the work and the multipliers are generally sort of consistent. The bigger – one of the other efficiencies you get is when you get larger, longer-term contracts. That's not necessarily a mix within the markets, but a mix of how the revenue is constituted.

Very helpful. Thank you very much. Good luck.

Thanks, Alex.

Thanks, Alex.

Thank you. And the next question goes to Brent Thielman of D.A. Davidson. Brent, Please go ahead. Your line is open.

Hey, great. Thanks. Congrats on a great quarter.

Thanks, Brent. Good to see you come back.

I guess, the first question, the outlook in the 2023 suggests sort of around 140 basis point improvement in EBITDA margin over 2022. Is that simply reflective of your ability to better leverage your SG&A? Are you assuming improving terms on bookings and new contracts? I know your cost and labor is rising and I imagine you're leveraging that to some degree. But maybe you could just talk around that increase in margin in the next year.

Yes. Principally, Brent, I would say it comes from the realization – realizing scale of SG&A over a much bigger top line. We've spent a lot of time and energy and money in the last 1.5 years building an infrastructure to support the size that we – to over-support with the size that we had grown too because we had to build the infrastructure around going public and dealing with M&A and integration, all that. We believe we're going to start to realize some of the leveraged benefit of that over the next year. I don't think that it's overly weighted with a spread between fees and labor and increase in gross margin. We do think that our – as I said – there is a little bit of margin to be had from, I think, some of the technology channels that we are building. But principally, I would say, it's about overhead scale.

Okay. And when you think about this, call it, $50 million increase in revenue at the midpoint on the guidance, what kind of pull on existing resources, does this require? I mean how much more utilization can you extract from your existing workforce versus kind of the talent acquisition you're going to have to go out and do to drive that?

Brent, it's – we are being very successful in the talent recruiting market. So it's – we are really not – everybody, is working hard and everybody is stretched. But we are not recognizing this by continuing to stretch our workforce more like we are successfully adding to our workforce.

Okay. Okay. And then, you generated a lot of free cash flow this quarter. I mean, the guidance suggests sort of a similar level of EBITDA into the fourth quarter. I mean, do you think you can see similar levels of cash conversion this quarter, Bruce?

Yes, I do. I think we are starting to hit that – the glide path of where the cash flow is coming through. We are focusing a lot on sort of the pre change in working capital. As we think about it because the organic growth rates that we're producing are consuming a lot of cash almost as if we're making acquisitions in ourselves on a regular basis. But still, the bottom line of growth, if you look at the trend over the year, we've certainly seen that that improving. And I don't know that it's going to turn straight up, but it's going to continue on a path of improvement.

Okay. And then on building infrastructure, Gary, I'm just curious what the backlog informed you about sort of where the underlying markets in that business are going. But hear a lot of discussion around the industry around large sort of industrial and non-residential facilities and projects being developed. I am wondering if that's becoming just a much more meaningful driver of the business now. Just be curious if you could dive into that business segment. What's driving the growth right now?

And - my outlook on where that stands, it's not driven so much just looking at the numbers. It's been spending a lot of time in the past several months being out in the field, talking to people listening. Our share of building infrastructure, which is the commercial data centers, industrial distribution type facilities has increased as a share of our building infrastructure. We're not seeing any softening in commercial markets, retail markets. And so far, we're not seeing softening in many of our residential markets. We are seeing some significant softening in some residential markets out West. So we – and we are – and everybody is aware of that sensitive to it. We're moving work around. Bruce mentioned, I think Bruce in his comments that our staff is the talents of commercial markets and residential markets pretty easily, a fungible one to the other. Bruce and I work together so much. We finish each other's sentences. So we're getting, we're staying ahead of that. So far, we're staying ahead of that. We are certainly sensitive to where that's headed.

Okay. Sorry, just one more from me. It would seem to me that the buyback that's been authorized is sort of a message and you can go out and buy our own stock right now at or maybe cheaper than where you're finding acquisition targets. I guess how does that sort of inform your reasoning around doing deals in the near term and your capital allocation sort of priorities right now?

Yes. Brent, the program is more defensive than it is offensive. We are still committed to growing through acquisition and deploying capital into good acquisitions. We don't -- we're not setting up a trading desk to be active in the market. It's really a message that says the Board understands that there's volatility in the market, understands that the price of the stock as of the meeting yesterday was highly undervalued and that we want to send a message to our shareholders' existing and prospective that we believe in the shares in the stock in the future of the stock and to the extent that there is an inefficiency in the market relative to valuation will be there. But we are still very much focused on capital allocation in the ideal world to be around acquisitions that grow the – sort of have a future impact exponential potential value in terms of what they add to us. So I don't want – the message to get out that -- the message to be that we turned our focus away from growth and toward market. But that we're communicating the confidence we have and our willingness to allocate capital in the event that is needed or the right opportunity – we're needed to step in.

Okay. All right. I appreciate it guys. Thank you.

Thanks. Brent.

Thank you. There are no further questions at this time. Mr. Bowman, I turn the call back over to you.

Thanks, Nadia, and thanks everybody, for participating in our call this morning, especially thanks to our investors for the faith you continue to showing us and wish everybody, good morning. Thanks, everybody.

Thank you. This now concludes today's conference call. Thank you all for joining. You may now disconnect your lines