Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure Agreement to Acquire CEC Facilities Group Webcast and Conference C all. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Tuesday, June 17, 2025. I would now like to turn the conference over to Noelle Dilts. Please go ahead. Thank you, Joanna, and good morning to everyone joining us. I'm pleased to be here today with Joe Cutillo, Sterling's Chief Executive Officer, and Ron Ballschmiede, Sterling's Chief Financial Officer, to discuss our agreement to acquire CEC Facilities Services, which we will refer to as CEC today. We announced that this morning. Before we begin, please note that today's call contains forward-looking statements intended to fall within the safe harbor provided under the securities laws. Factors that could cause results to differ materially from what we discuss today are described in the risk factors section of Sterling's SEC filings, including its annual report on Form 10-K for the year ended December 31, 2024, and its other SEC filings, as well as today's press release and slide deck. Also note that management may reference financial measures not recognized under US GAAP. I'll now turn the call over to our CEO, Joe Cutillo. Thanks, Noelle. Good morning, everyone. Over the last year or so, we've discussed the strategic rationale of adding electrical and mechanical services to our e-infrastructure segment and the value we believe it would bring to our core customers. During that time, we looked at multiple businesses but were unable to find the right one. Today, I'm excited to let you know we have found that business and have signed a definitive agreement to acquire CEC Facilities Services, a leading non-union electrical contractor focused on high-growth, mission-critical markets. CEC is headquartered in Irving, Texas, and provides design, installation, and maintenance services for complex electrical infrastructure across high-growth sectors. We are excited to welcome their outstanding team to the Sterling family. We've been disciplined in our search for the right electrical or mechanical contractor to complement our e-infrastructure platform. We wanted to make sure that the business had significant exposure to mission-critical markets like data centers, semiconductors, and manufacturing, had high margins and strong free cash flow, a great entrepreneurial management team, a scaled platform with opportunities to grow, and most importantly, a culture aligned with ours. CEC is a very strong fit with these characteristics and checks every box. As we look at the combined service portfolio of Sterling and CEC, we begin to touch the full project lifecycle. Within our e-infrastructure business, Sterling is typically engaged at the earliest phases of large-scale mission-critical construction projects. This early involvement gives us valuable visibility into our customers' project pipeline. Based on the strengths we're seeing in the data center market, we believe there's an opportunity for strong, durable growth for many years to come. Additionally, the semiconductor and manufacturing markets should continue to strengthen into the later part of the decade. We're already delivering the earthwork and much of the underground infrastructure, including duct banks and conduit, for these mission-critical sites. With CEC, we can now own the next critical phase of pulling wire, installing power systems, and supporting long-term maintenance and service. Together, our combined capabilities allow us to deliver high-value end-to-end e-infrastructure services. This combination will improve project execution, accelerate project timelines, create even stickier customer relationships, and allow us to better capture value across the full lifecycle of a facility. In terms of the structure of the transaction, the total upfront consideration at closing totaled $505 million, consisting of $450 million in cash and $55 million in Sterling common stock. This represents a 9.6 times multiple at the midpoint of CEC's 2025 estimated EBITDA range. Additionally, the company has an earn-out contingent upon achieving certain operating income levels through December 31st of 2029. Our current timing expectations suggest that the deal will close in the third quarter for about five months of contribution to Sterling. The Hart-Scott-Rodino review is currently underway. Now, I'd like to give you a little more detail on why CEC is such a good fit. One of the first things that drew us to CEC is that over 80% of sales are from mission-critical markets, including semiconductors, data centers, and advanced manufacturing. CEC's customers in these markets include Texas Instruments, Samsung, Intel, and Meta. All these customers demand excellent execution and service, which CEC delivers. We believe their ability to consistently deliver superior service to their customers is a key element in CEC's top-tier financial performance. Strategically, we believe we can leverage a strength across the business to unlock new customer relationships and drive geographic expansion. Sterling brings a strength of data centers. We can pull CEC into those relationships. CEC brings depth in semiconductors. They can help expand our reach into that market. From a geographic perspective, CEC is strongest in Texas with reach across the Rocky Mountain, southwest, and southeast regions. We believe that we can pull CEC into some of our projects in the southeast while CEC can help provide a springboard for growth in Texas. In addition to new construction, CEC brings recurring service revenue capabilities, including maintenance, retrofits, and system upgrades, allowing Sterling to stay engaged throughout the asset lifecycle. Further, CEC's advanced in-house training center, CEC University, and modular fabrication capabilities are impressive differentiators that enhance safety, quality, and efficiency and reduce build times. As I've said many times before, the most important part of any acquisition is the people. The CEC team shares our values of safety, quality, and commitment to excellence. Ray Waddell, CEC's founder, built this business from the ground up. We are pleased to announce that Ray will remain with Sterling in a strategic leadership role overseeing the success of CEC and helping drive growth and strategy across our new electrical platform. Daniel Williams, who has served as CEC CEO, will continue to lead the organization. Shifting to the financial profile, CEC has top-tier performance within the electrical contractor space, a testament to their strong customer relationship and execution. CEC has a long track record of growth, which we're expecting to continue into 2025 and beyond. Margins that are well above the industry average, strong cash flow conversion driven by a capital-light model, and a high-return business with excellent return on invested capital. Moving to backlog, we see robust tailwinds continuing across CEC's key markets, giving us high confidence in the strength of the pipeline and long-term demand outlook. The combined value of CEC's contracted backlog, unsigned backlog, and future phase opportunities is approximately 1.9 times their 2025 revenue expectations, reinforcing our conviction. Our expectations for full year 2025 CEC results include revenues of approximately $390-$415 million, which represents a 12% year-over-year growth at the midpoint, EBITDA of $51-$54 million, a 13% margin, adjusted EPS accretion of approximately $0.63-$0.70 per fully diluted share on an annualized basis, which represents roughly an 8% increase to Sterling's 2025 adjusted EPS guidance. The portion of CEC's revenue and earnings contribution to Sterling in 2025 will depend upon the timing of the closing. This acquisition marks a major step forward in Sterling's e-infrastructure strategy. It expands our reach, deepens our capabilities, and positions us to better serve the high-growth, high-demand sectors shaping our economy. We're thrilled to welcome the CEC team to Sterling, and we're confident that together we'll deliver even greater value for our customers, our people, and our shareholders. With that, I'd like to open it up for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Adam Thalhimer at Thompson Davis. Please go ahead. Hey, good morning, guys. Congrats on closing the deal. Hey, Adam. Thanks. Joe, can you give a little more detail on how much of the business is based in Texas and how you see that changing moving forward? Yeah, a little over half of the business is based in Texas, but we've seen rapid expansion with them, especially in the data center space, reaching out into the Rocky Mountains and down in the southeast. What's interesting to us is their kind of expansion is following where we're expanding. As you recall, we expanded into the Rocky Mountains a little over a year ago with data centers. We're currently actually working on a data center in Wyoming with CEC. Down in the southeast is obviously growing very rapidly, so they've expanded into there. We think it's a great opportunity. We can further that expansion much more rapidly through the southeast and leverage both those teams and maybe some facilities and assets in the Rocky Mountains for both of us to expand faster. Oh, okay. So you guys actually have experience working together. That's interesting. Are you thinking that this will go into the e-infrastructure segment or do you see this being its own standalone segment in the financials? Yeah. It will go into e-infrastructure. Now, we will drive the electrical and mechanical platform to expand that strategically so that we will go beyond just e-infrastructure. We are not going to limit it to that area, but it will fall under our e-infrastructure segment. Okay. And just lastly, what were the actual amount of shares issued for the deal just for modeling purposes? I don't have the exact number. It's off a 20-day average, trailing 20-day average, which is a little over $190 a share. So you can back into the math on that. Perfect. Thanks a lot. Thanks, Adam. Thank you. The next question comes from Louie DiPalma at William Blair. Please go ahead. Joe and Noelle, good afternoon. How are you, Louie? Doing well. Congrats on the deal. It seems there are significant cross-selling opportunities. Joe, can you provide more color on your comment about Sterling being able to use CEC's Texas presence as a springboard to expand your e-infrastructure business in Texas? Yeah. I mean, CEC has a very strong presence in Texas. There's obviously a lot of projects, both in data center and in the semiconductor space, either taking place or coming up. We think we can certainly leverage some of the relationships in the semiconductor space to build those relationships back with us. As we talked about, we're actually getting ready and looking at incremental jobs within Texas in the data center space and doing that from today from either Utah or Atlanta. With their presence and their footprint, this may help us expand that not only from afar, but also from an organic standpoint with a beachhead in Texas, Louie. We're leveraging both customers, existing customers. They can leverage our customers. We'll start from a distance, but it'll just help us drive that ability to either put an organic beachhead here. We're still looking for acquisitions in Texas. We just haven't found anybody of size or the right one to do that. Great. I know you just hired a new CFO, but from your perspective, how do you think of CEC's margins at 13%? Do you see any ability to drive those margins higher for data center customers and semiconductor customers? You bundle the electric and mechanical work with your other services. Yeah. Anybody that's followed us knows we're very good at continuing to drive margins higher and higher, and we will work on the same thing with CEC. We feel very confident in the data center space. If we can couple the electrical with the site development and do it all at the same time instead of these are done in series instead of in parallel, that not only takes a significant amount more time for the customer, but it also costs a lot more because you're doing several of the operations, the same operations, multiple times. We think that we can drive productivity, improve margins, and actually take out significant time in the overall project timeline. That's the value proposition to the customer at the end of the day. It's easier for them. It's more efficient. They save another month to two months of build time. It's of high value. Fantastic. Thanks, Joe and Noelle. Thanks, Louie. Thanks, Louie. Thank you. The next question comes from Brent Thielman at D.A. Davidson. Please go ahead. Hey, thanks. Good morning. Congrats on the transaction. Thanks, Brent. Joe, I want to follow up just on the revenue synergy discussion. How advanced are those conversations with some of those customers and their respective footprints just in terms of pulling one another into those territories where maybe there is not critical mass and revenue? I think what I am getting at, Joe, is this something that we can see leveraged relatively quickly? We have not been able to talk to the outside world about CEC, obviously, but we have talked to our customers about the value of adding electrical mechanical to the portfolio. We have had high receptivity. As you may recall, we did a really small acquisition here about six months ago that does the dry conduit, dry utilities, I should say, in data centers. We were able to rapidly move those into existing contracts. This package will take a little bit longer, Brent, from a standpoint that they would go into next generation of builds or new builds coming up. It is not something we would be able to replace like the dry utilities and existing work that we are doing. Maybe we get lucky and something like that happens, but we are not planning on that. What we're working on, and we'll be working on very quickly, is matching the teams up and getting into the 2026 build schedule and how do we start leveraging that for expanded growth. Okay. And then it looks like it, I mean, it's coming with the backlog. I guess we're approaching mid-year here. Maybe you could just talk about the levels of visibility for the business out into 2026 as we sit here today. Yeah. What we like about the business is their backlog is very much like ours. It falls into three categories. Obviously, the signed backlog that's in, and that's projects they're actively working on beyond their WIP schedules today. They've got what we'll call one, where there's an LOI or some sort of commitment, but the contracts aren't signed. There's a small piece of that that's in there. They also have the same future phase work that we have, which is they're on sites, doing work. The entire project hasn't been released to them. They're getting it released in segments, and then they continue on. The piece we haven't really talked about a lot that we're also excited about is the ongoing maintenance that takes place after these facilities are built and getting into that service recurring revenue side. How do we continue to drive that, grow that, and do more? They have very good visibility for the rest of this year, very good visibility into 2026, and the project pipeline that is coming out for the remainder of 2025 into 2026 looks extremely positive for them at this point in time. I guess just the last one, I mean, this seems to be a platform to build off of within this sort of mix of services. Joe, presuming they may come with their own M&A pipeline to the table. Kind of your thoughts on how you want to approach this over the next few years in terms of this particular vertical? Yeah. No, that's certainly something we've already started looking at, and they have some very good ideas that they've brought to the table. We think we can do multiple tuck-ins over the next 12 months in this space. They're going to be smaller, obviously. If the right larger-sized deal is strategic and fits in, we certainly wouldn't be shy of doing that. Right now, I'd like to get them on board, do a couple of tuck-ins here in the next 6-12 months, and lever that on a couple of different fronts, geographic expansion potentially, along with a couple more capabilities that we're looking at. We'll continue to grow out the platform. The earnout is a pretty substantial earnout as far as targets to hit. They have to just about double the business in that timeframe, and that team is pretty confident they can do that. That is without acquisitions. That is organic. We are excited about the growth projections and the opportunities over the next three to five years. Okay. Excellent. Thank you. Thank you. The next question comes from Julio Romero at Sidoti & Company. Please go ahead. Thanks. Hey, good morning and congratulations on the deal. Thanks, Julio. Hey, so we know, Joe, you've had a high bar with regards to acquisitions in terms of the number of deals you've evaluated in the past. I guess what attracted you to CEC in particular? What did CEC bring from a capability perspective that perhaps other deals you've looked at perhaps didn't bring to the table? Yeah. As we've talked, we've looked at a lot of deals in this space. We've looked at a lot of deals in general, but we've looked at a fair number of deals in the space. What I've said to others is a lot of the deals we've looked at, it wasn't that they were necessarily bad businesses. It was their customer concentration and service offering. A lot of the electrical mechanical businesses we've looked at are kind of 75%, 80% work in the commercial space and have 5%-10% in mission-critical. That could be some data centers or some semiconductors or some manufacturing. What we really like with CEC is their portfolio looks a lot more like ours. They've got well over 50%, close to 80% of their work is in mission-critical space when you start looking at their work and backlog. The heaviest is semiconductor. As I've said, we really wanted somebody with semiconductor experience because that's where we have the weakest relationships, but the demands and needs of a semiconductor facility are the exact as a data center. That helps us bridge and build those connections to that customer base. Our strength is in data centers. They've been doing data centers for the last couple of years. It's growing very rapidly. They saw kind of year-over-year growth similar to what we've seen on a percentage basis. We feel like we can really lever that with the conversations we have had with our customers and their capabilities to expand the data center piece. The manufacturing is pretty easy. It's pretty straightforward. We'll work collaboratively on that. We looked at kind of the, I call it puzzle pieces that fit together and puzzle pieces that don't. They fit very well with our core capabilities, where we're going strategically, where they could help us get strategically, where we could help them get strategically. Their financials were as good or better than any that we've seen out there. We put it all together and are pretty excited about it. They couple that with they've got a great team of people, very entrepreneurial, very excited about what Sterling can help them with and what they can help us with. It is a good marriage. Really helpful there. Joe, you mentioned that your customers have been talking to you about adding electrical to the portfolio for some time now. Does adding CEC help you win more work as these mega projects and, in particular, the semiconductor fab facilities come to market over the, call it, 2027- 2029 timeframe? Does that full-service offering make you a more attractive bidder for those type of projects? Yeah. The way we look at it is the most important thing to our customers are reliability and cycle time, right? They have to know that they can trust their partners to get the job done. If you can do it faster, you're adding significant value. We just inherently know that by combining these two pieces of business, we can do both of those better. If we make our customers' lives easier and their projects' months shorter in total time to build, we feel like we'll get more work. Or more importantly, we'll pick the work that we want and take the most attractive and the best projects. Very helpful. The last one for me would just be on you touched on it a little bit earlier, but it looks like service revenue is about 6% of the CEC revenue mix from 2024. I believe that is something that is new in the infrastructure. A little bit higher than that. Is it okay? Yeah. It's close to 20%. Work on existing facilities, Julio, is about a little, it's 19%, so about 20% of backlog, and it's trending higher. It's a little tough to, on-demand services, you're right, is more like 6%, but when you start to look at work on existing facilities, it's higher than that. Strategically, this is important to us because as we look at it, we certainly have a three to five-year good visibility into the build cycle continuing. We are also realistic that at some point in time, the build cycle will slow down. We believe the next play there is retrofitting a service program to get you to the retrofit of these facilities for the next generation of technology that then comes in. This is where we will be talking more and more about the lifecycle of a facility and how we get a bigger piece of that pie. Once we are in, we stay there until something else comes along and takes out the facility. Is the services piece weighted to any market in particular? It's greater today in the semiconductor space. Yes. Got it. Great. Congrats again. Thank you, Julio. Thank you. We have no further questions. I will turn the call back over to Joe Cutillo for closing comments. Thanks, Joanna. Thanks again, everybody, for joining the call today. If you have any follow-up questions or would like to set up follow-up calls, please contact Noelle Dilts. Her information is in the press release. I hope everybody has a great day and is as excited about this as we are. Thanks. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.