Good afternoon, everyone, and thank you for participating in today's conference call to discuss NV5's financial results for the third quarter 2022 ended October 1, 2022. Joining us today are Dickerson Wright, Chairman and CEO of NV5; Edward Codispoti, CFO of NV5; and Richard Tong, Executive Vice President and General Counsel at NV5.

I would now like to turn the call over to Richard Tong..

Thank you, operator. Welcome everyone to NV5's Third Quarter 2022 Earnings Call. Before we proceed, I would like to notify all participants that today's presentation can be found on ir.nv5.com and remind everyone that today's discussion contains forward-looking statements about the company's future business and financial performance.

These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides in our reports on file with the SEC. During this call, GAAP and non-GAAP financial measures will be discussed.

A reconciliation between the 2 is available in today's earnings release and on the company's website at www.nv5.com. Please note that unless otherwise stated, all references to third quarter 2022 comparisons are being made against the third quarter of 2021.

In this presentation, NV5 has included certain non-GAAP financial measures as defined in Regulation G promulgated under the Securities and Exchange Act of 1934 as amended. The non-GAAP financial measures included in this presentation are adjusted earnings per share and adjusted EBITDA.

NV5 provides non-GAAP financial measures to supplement GAAP measures as they provide additional insight into NV5's financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance or a substitute for GAAP.

In addition, other companies may define non-GAAP measures differently, which limits the ability of investors to compare non-GAAP measures of NV5 to those used by peer companies.

A webcast replay of this call and its accompanying presentation are also available via the link provided in today's news release and on the Investors section of the company's website. You may also find today's presentation, which will be referenced during this call on the Investors section of the company's website.

We will begin with the call with comments from Dickerson Wright, Chairman and CEO of NV5, before turning the call over to Edward Codispoti, Chief Financial Officer, for a review of the third quarter 2022 results. Dickerson Wright will then provide closing comments before we open the call to your questions. Dickerson, please go ahead..

Thank you, Richard, and thank you to everyone joining us for this call. For those of you that have gone to our investor website to view the NV5 Q3 earnings deck, let's now turn to Slides 5 and 6 to discuss our third quarter business overview and financial results. We achieved growth in Q3 in all financial measurements.

We delivered $204 million in gross revenues, which is a 10% increase and $36 million in adjusted EBITDA for the quarter, which is also an increase over the third quarter of 2021. Adjusted EPS grew 20% versus Q3 2021 and was $1.50 a share for the quarter.

Although these record results were once again driven across all 6 verticals, we experienced exceptional organic growth in Geospatial Services and our building technology vertical. We are awarded significant contracts in the third quarter, and our backlog grew to $761 million which will be a solid foundation for continued organic growth.

Our M&A activity continues with numerous opportunities in the pipeline. We acquired KMK Technologies, which will strengthen our building technology vertical and solidify our service offerings in health care, hospitality and convention center work. Turning to Page 6. Let's discuss the position and strength of our core business.

The services that NV5 provides are not solely dependent on economic cycles. The reliable delivery of energy through our increasing utility service offerings is ongoing and investment in utility conversion from natural gas to LNG is also growing.

Environmental Health Sciences has accelerated partially due to Hurricane Ian which inflicted a physical and environmental damage and has required improvements to existing structures. Clean energy for buildings has been a significant growth engine for NV5 services as well.

Energy efficiency has become what's expected by business owners, and we see increased demand. Our construction defect or forensic work is growing and NV5 is also positioned there to be opportunistic. On Page 7, we will provide an update on our Geospatial Services.

We secured a record $99 million in new contracts during the third quarter for this service line, exceeding our prior record of $65 million. The services that we provide to federal and state government entities has grown 36% versus the same period in 2021. Offshore Geospatial, including wind farm activities has grown 256% since March of 2021.

We are being opportunistic and -- which is evidenced by building and commissioning the construction of a specialized seagoing vessel to perform deepwater Geospatial evaluations, which we anticipate will be in service and in use in 2023.

The utility and commercial sector of this service are anticipated to be a driver of Geospatial revenue through organic growth and continued integration of new services to the core business. Turning to Page 8.

We will discuss NV5's growth, which is sustainable both in revenue and earnings and focus on 4 pillars of NV5 business model to ensure growth, enhance technology, drive merger and acquisition activity and also add scalability and synergies. Let's go to Page 9 and discuss some of our key wins as referenced on this page.

Public awards, including the City of New York, which was $22 million to support park and educational facility improvements; $13 million from the U.S. Geological Survey to support wildfire mitigation; $8 million for utility service design; and also $8 million in New York and North Carolina for transportation services.

On the right side of the page, you'll see our backlogs has grown in quarter 3 for a 12-month ongoing total of $761 million, which represents over 80% of our planned budget activity. I would also like to update our cross-selling through Q3 on Page 10.

As you know, cross-selling represents inter-office work for our 105 offices of NV5 that would otherwise have been given to subconsultants. You'll notice activity to date of $40.8 million, which represents new and historical wins. Since inception of the cross-selling program, we have brought $174 million of awards in-house.

Cross-selling also serves another purpose. It allows all of our offices to participate in the growth and profitability of the NV5 platform. We'll now transition the presentation to our Chief Financial Officer, Ed Codispoti, to provide an overview of our third quarter performance. Go ahead, Ed..

Thank you, Dickerson, and good afternoon, everyone. If you would please turn to Slide 12 of the presentation, I'll review our third quarter financial results. We had strong growth in the third quarter as our gross revenues increased 10% to $204.1 million compared to $185.6 million in the third quarter of last year.

Net income increased 28% to $16.1 million in the third quarter of 2022 compared to $12.6 million in the third quarter of 2021. Our adjusted EBITDA increased 4% to $36 million in the third quarter of 2022 from $34.7 million in the same period last year.

Our GAAP diluted earnings per share increased to $1.05 per share in the third quarter of 2022 from $0.83 per share in the 2021 third quarter, a 27% increase. Our adjusted earnings per share increased 20% to $1.50 per share in the third quarter of 2022 from $1.25 per share in the 2021 third quarter.

And our cash flows from operations increased 65% to $26.1 million from $15.8 million in the third quarter of last year. On Slide 13, you can see we continue to strengthen our balance sheet.

Our cash increased to $54.2 million from $48 million at the beginning of the year, and our debt is down to $84.2 million from $135.2 million as of January 1 of this year. As a result, our net leverage is down to 0.28x from 0.65x at the beginning of the year.

Moreover, with just $53.8 million outstanding under our $400 million credit facility, we had capacity of $346.3 million as of the end of the third quarter. Our strong balance sheet position, combined with increased cash flows and lower leverage continues to position us well for future growth.

We can fund most acquisitions from cash flows and have the capacity to complete larger transactions as opportunities arise. As a result, the organic momentum we have today, combined with our strong positioning for M&A makes us very excited about the future of NV5. I'll now turn it back over to Dickerson for some closing comments..

Thanks, Ed. Why don't we turn to Slide 15. You'll see there that NV5 has delivered record year-to-date results for growth and profitability, and we believe that our strong performance will continue. We have strong tailwinds from increased infrastructure spending.

We anticipate increased opportunities for utility services, fire mitigation and offshore power generation. Our international offices have driven over 30% organic growth. As you can see, our record backlog and strong M&A pipeline gives us confidence for increased growth and profitability going forward.

As a result of these factors and our strong performance throughout the first 3 quarters of the year, we are reaffirming guidance for full year 2022 for gross revenues of $795 million to $815 million and a full year 2022 adjusted earnings per share of $5.43 to $5.82. I want to thank everyone for your participation in the Q3 2022 results.

We are very proud of the accomplishments of our people. This concludes our prepared remarks..

[Operator Instructions] And our first question will come from the line of Chris Moore with CJS Securities..

Congrats on another good quarter. Right. It looks like the revenue growth guide is still at that roughly 14% at the midpoint.

Can you just -- what's the kind of organic growth versus M&A split there that you're thinking about for '22?.

Well, we're not anticipating M&A for the growth of the company. Organically, it's hard to come up with a number. We're still in the budget process. But from what we're seeing preliminary, we think organic growth is going to be at least 5%, and that does not include what we have in the pipeline and acquisitions we anticipate closing in 2023..

Got it. It looks like Geospatial is -- it was exciting to begin with, but it's really taken off. Can you maybe just talk a little bit further about what you're seeing there? And that's a big jump in terms of record quarters..

Yes. As you know, Chris, in 2022, they had some projects delayed that spilled over to '23. We still are anticipating a larger growth in our Geospatial activities from new projects that will be awarded.

I think what we're really starting to see is we've really developed more of the integration with our Geospatial team and they have a phenomenal opportunity for cross-selling, and we're exposing them more and more each day to our existing core utility business, and it's a Geospatial activity, where they're doing through aerial survey, they're doing a lot of acquisition work.

The real strength, though, in our Geospatial has been analytics. And I think you're going to hope to see in the coming year in 2023, more moves that the company will make to strengthen our analytic capability. And really, this is -- we think this is a differentiator from us and the competitors in the Geospatial arena.

So we're excited about our Geospatial activity. We're looking for more integration, and we're looking for significant cross-selling opportunities with our utility business as we go forward..

Our next question comes from the line of Rob Brown with Lake Street Capital Markets..

And I'll add my congratulations on a nice quarter. Just quickly on the Geospatial business.

Could you go in a little more color on the recovery in the federal and state activity into next year and some of the projects that I think were bigger projects that were delayed a little bit and what are those coming into '23?.

Yes. As you know, Rob, we always try to have -- we've tried to be positioned, particularly in all of our core business and the Geospatial business to not -- to clients that are not subject to increased interest rates or we are looking for really mandated activities and not elective activities.

So those -- there were some defense projects that were delayed that we're spending -- that we're starting to see recuperated now. We've also had some significant new wins that we're not ready to announce quite yet with the state agencies that we think we were anticipating in 2022 that will spill over into the last quarter of 2022 and into 2023.

But what you're seeing in our Geospatial is a combination of 2 things.

It's really the integration with our core business, and we're looking for very good opportunities and new service offerings that we can -- that we could go to our traditional utility clients, and you're seeing their growth through analytics and the delay of projects that were -- the federal projects that you've mentioned that we're now starting to see come to full fruition in the last quarter of this year and hopefully into next year.

So that's where you would really see if a one-off in organic growth was from delayed projects with Geospatial and their cross-selling activities with our core business..

Okay. And then on the utility services business, I think you won a recent LNG contract.

Could you maybe give us some color on the developments in that market and sort of some of the macro drivers there?.

Yes. Well, we're very appreciative of what LNG is, that business is doing this year. The one that you're probably mentioning or referencing is our $60 million award. That was a conversion from a traditional natural gas utility to an LNG storage facility. And we are doing everything in that project, which is defined as EPIC.

It's -- we're not only doing the procurement, but we're doing the installation and the design and construction. And so that full $60 million that you see is work that we anticipate getting for this particular project over the 3 years. And we're seeing more and more utility conversion to LNG so that they can store this and have a greater capacity.

So we're very happy. That's coming from our group that does LNG work, and it's more with our percent of completion related projects..

Our next question comes from the line of Andy Wittmann with Baird..

Sorry, just a clarification. I think the first question was a question on '22 organic growth rate. And then -- but it sounded like you might have answered that you're expecting 5%.

I just want to confirm the at least 5%, was that your organic growth outlook for '23?.

Well, yes, thanks, Andy. Let me be a little bit more clear. We don't know the specific organic growth for 2023. But through the budgeting process that we're seeing, we're right in the middle of our budget process now and the budgets come from ground up from every unit. And what we're seeing is we're anticipating 5% or greater in organic growth for 2023.

I think we've had better than that organic growth in 2022, but we're anticipating at least 5% for 2023..

Okay. I just wanted to confirm that. That makes sense. I mean with the backlog up, what, 12% here into the fourth quarter, it looks like the implicit revenue guide for fourth quarter is not quite plus 12%. And obviously, 12% -- if it would be 12%, that's a lot bigger than 5%.

But any reason to believe that -- any reason not to believe that the backlog -- is it somewhat representative of what the revenue burn rate or the revenue organic growth rate could be? And I guess, specifically, what I'm asking for, are there larger projects in today's backlog that take longer to burn and therefore wouldn't necessarily convert to the same level of growth that the backlog would imply?.

Okay. Well, backlog is never absolute. And the reason we use as a barometer, 65% to 80% or so of what we envision that backlog turning over to be in the budget process because for many different reasons, projects that are recorded as a win as we've seen in Geospatial maybe delayed, maybe pushed over to another period of time.

So we can't count that fully in the backlog. But -- and others that we don't record -- we only record in backlog the work that we anticipate doing in a 12-month period. But sometimes that work is delayed and pushed over. And we've seen some delays in the federal and defense work that Geospatial is doing.

And so that's the only softness, I would see, Andy, from what we have in the backlog. I can't speak of any particular project right now that we're anticipating a delay on, but these things tend to happen. And obviously, we try to steer our business, and I'll mention maybe that in some concluding thoughts I have that are not so interest rate sensitive.

We know that many of our competitors and much of the project is interest rate dependent. In the backlog, we don't see a tremendous amount of commercial work that would be very dependent on interest rates. But those also have a tendency to be delayed or canceled.

But I don't -- I can't name anything in particular right now from the backlog that we're anticipating not going forward..

Okay. I guess just on the profit margins. Year-over-year, they're actually down. I mean, your profit margins are always very high, but they are down year-over-year. I guess, against a really strong quarter for Geospatial which tends to be some of your highest margin work, I guess I'm a little bit confused as to why that would be the case.

So could you talk either Ed or Dick, about what it was in this quarter's mix of business that led to the -- or maybe it was the prior year comparison, that led to the decline in year-over-year margins for the third quarter?.

Sure, Andy. This is Ed. So you're right, the margins do appear that way. But in reality, it's more of a temporary impact that we've had this particular quarter. And I say that because -- for a number of reasons. For example, you do have about $1 million of acquisition-related costs embedded in that G&A for op expenses this quarter, which is nonrecurring.

You also have some travel expenses that are particular to the third quarter that are not recurring and professional fees for various project suite that we have that really are discrete in this third quarter. So when you adjust those back to where they should be, if you look at the operating margin last year was about 10.2%.

When you adjust those things out, it should be very close to 10% or so. So I wouldn't look at it so much. I wouldn't look into that too much. If you look at the 9 months, the margin -- the operating margin went from 21.9% to 22.3%. So look more at the year-to-date period than the quarter because the quarter has some noise in it..

Our next question comes from the line of Michael Feniger with Bank of America..

Just a follow-up on Andy's question. The EBITDA -- gross revenue was up 10%, EBITDA was up only 4%. You were kind of explaining some of the quarter pressures. I guess you guys guide on a revenue and EPS basis.

Does EBITDA in the fourth quarter kind of grow in line with gross revenues in the fourth quarter? Just trying to think about that because your EBITDA was up 14% in the first half then up 4% in Q3 on a year-over-year basis. I'm just trying to assess this temporary nonrecurring impact in Q3.

Do we see some of that in the fourth quarter as well?.

No, in reality, this -- I see it more of as a Q3 phenomenon. For Q4, we expect to normalize those margins. Again, it was really timing. So as you said, we guide using adjusted earnings per share. In that case, we are adding back, for example, acquisition-related costs that I mentioned earlier.

But if you look at face value on the income statement, it's going to impact those operating margins, but we add those back for purposes of adjusted earnings per share. So again, Q3 had a number of nonrecurring items in it that created that noise. We expect to resume more normalized margins going forward.

Having said that, there are some lines of business that, again, for timing reasons, have had some fluctuations in their margins. And so whether that equalizes in Q4 or in Q1 of next year, it's a matter of time. But we expect to continue to expand those margins over the course of the following year..

That's helpful. And just if you did no more M&A, how much incremental revenue do you get next year just from closing some of these acquisitions this year? I know we talked about at least 5% organic growth next year.

But just curious if we don't do any more M&A, how much this carries over into next year?.

When you look at 2022, the acquisitions that we completed this year were really more strategic in nature. So from the perspective of the financials, they weren't very material, to be honest with you. So you could use that as a basis. And like Dick said, we always target at least 5% on a consolidated basis.

We would -- as we complete the budget process here over the next month or so, we'll know more, but that's the minimum kind of target that we'd like to achieve..

And Mike, this is Dick. We're very -- still very active in M&A. And -- but unfortunately, we can't choose a specific time when a certain acquisition is going to close. So we have not, in our budget process right now, we have not anticipated any acquisitions. Although they -- we are confident that some will happen.

We have not anticipated anything in the budget process. So the 5% that Ed has mentioned, that is the purely organic growth, and our total growth will be supported by acquisitions that are intended to happen in 2023..

Perfect. If I could just squeeze one more in. You guys are flat, like really strong growth in Geospatial, seeing momentum in utilities, offshore wind, the LNG opportunity. I guess what in the portfolio, Dickerson, is lagging? What to -- you're seeing these robust growth rates in some of these really attractive areas.

Just curious if there's other pockets in the portfolio that are holding back the total growth from being much stronger..

That's a very good question, Michael. I think it's -- and I would say that the strategy of NV5 is to have -- with these verticals, is to not have everything in 1 place or 1 basket. So we really -- the first structure is we try to have 70% of our work towards the public sector that are not so economic dependent.

However, as interest rates rise and we've had nominal contributions from our real estate transaction business, we see that softening somewhat and we're not anticipating in 2023. And we started to see the softening in the real estate area because of the significant rise in interest rates.

And so although we feel pretty confident in the budget going forward, we don't -- where you're probably seeing some lack of growth has been anything that has been sensitive to interest rates..

Our next question comes from the line of Jeff Martin with ROTH Capital Partners..

Dick, I was wondering if you could give us an update. There was a discussion at your May Investor Day about a Western utility undergrounding 10,000 miles of distribution lines.

I was just curious if there's any development on that opportunity? And if so, are you positioned to capture a material amount of business from that?.

Well, I don't think you're more curious than I am, Jeff. But yes, we think we have -- I can tell you, we've really focused on that particular utility. We've hired 4 additional people that are all direct.

So our President and Operating Officer, Alex, has assured me that all of these people will be contributing to the revenue from that very initiative with the underground utility. I don't really want to mention the name, but you've been reading things and knowing the fire mitigation and what they're doing.

They've really put a focused effort in doing that. And we had, through one of our strategic initiatives, we hired a key person there. And recently, we hired 3 more people for this. And so we're anticipating a contribution in the fourth quarter, but we're thinking even more of a contribution in 2022.

But that is that specific utility that we did mention in the Investor Day. You've got a good memory, Jeff..

Okay. So it sounds like some positive developments. Is that some....

No. It's making traction, believe me. And I only ask about it every 37 seconds, but it's certainly getting traction..

Excellent, excellent. And then I wanted to thank Ed for the color on the transaction-related costs that were onetime in nature in the quarter that probably benefit future M&A. Along the same lines of M&A, I wanted to get your thoughts on rising rate environment. I believe your BofA facility is a variable rate based facility.

How does the higher interest rate come into play with perhaps making -- pulling the trigger on a larger transaction than you normally do on the acquisition side?.

A couple of things, Jeff. First of all, luckily, we've been able to bring down our leverage as you saw and so that helps a lot. We -- if you look at ironically, while rates have gone up, our interest expense has gone down sequentially quarter-over-quarter so that we're positioned well.

From an appetite for M&A perspective, really, we view M&A in the same way. Our borrowing costs will continue to be relatively low in the sense that they're at leverage -- at the leverage we're at now, we're [indiscernible] we're below 1x. Our rates are LIBOR plus 1%. And so they're really not, again, on a relative basis, too significant.

And so it wouldn't have a shy away from any good opportunities that would come our way..

And Jeff, we are expecting an increase in interest rates. Now we are sensitive to that. Maybe I'll mention a little bit more of that in our concluding comments, but it's a very good question. And we try not to be leveraged because for that very reason because of this increase in borrowing fees..

Yes, okay. And then I was just curious if I could put in a request that in the future, you disclose a quarterly bookings number or book-to-bill. When you're not doing much M&A, it's easy to back into off the change in backlog.

I'm getting about somewhere probably between $270 million, $280 million of bookings in the quarter which would imply 2/3 of that is non-Geospatial.

Just wondering where the bigger chunks of that bookings in the quarter came from?.

It's at a -- the recommendation is well taken and received, we will include that. So your question is how much -- were you asking a question on what we booked this quarter in the core business? I'm trying to find....

Am I backing into that number, right, the bookings in the quarter were around $270 million, $280 million. And I'm doing that by changing the backlog on a sequential basis plus revenue in the quarter, the way of backing into it. And then if Geospatial was close to $100 million, I was just curious what the other $180 million consisted of.

Was that a lot of utility, was it your typical grouping within your different verticals? Or was there any vertical that had a larger bookings in the quarter?.

Well, I think our specific bookings in the quarter, I think we announced the LNG in the fourth quarter though..

We did, that was one..

Yes. We won that LNG project, which was significant in the third quarter. We may not have recognized the booking until we could actually announce it. But a lot of the activity is coming from our utilities and from our gas conversion and energy business as a whole. So I would suspect that the majority of that came from that -- those areas.

There isn't any 1 huge specific project that I can mention in any of the core business. And then we have ongoing work, continued work in our CQA work and our forensic work. But in specific bookings, it really was in our LNG, our natural gas energy and our utility services business.

And if you look -- go back to Page 9, you can kind of see that we're mentioning about what is that, $35 million, $45 million, about $60 million and all of those were -- primarily the majority of those were to the core business. There were some Geospatial work in the California -- University of California and USGS Geological Survey.

But a lot of that was booking or bookings that we did in the quarter, and the majority of that you'll see was in the core business, transportation, utility and energy..

[Operator Instructions] Our next question comes from the line of David Marsh with Singular Research..

Obviously, you guys continue to be pretty acquisitive. I was wondering if you could just kind of recap for investors more generally some of the criteria you look at when considering acquisitions.

And then perhaps maybe just comment broadly on what the acquisition landscape looks like and in terms of opportunities that you're seeing and what you think the outlook is on that front..

Thanks, David. As you know, we can't speak of any specific acquisition, but we can certainly speak of the strategy and the areas we're looking for and what purpose we see in the acquisition space. I think we are really -- we've been focused on technology.

We think technology that will enhance all of our service offerings, but particularly will enhance our Geospatial work. So we're -- so I would anticipate you're seeing some acquisitions involving technology.

I think you'll also see acquisitions that we want to build up our owner's representation work, where we are the owner's rep on various projects, and maybe not so much transportation related but more on facilities and building related. We'll do that. But we have the luxury now with our acquisition program.

Our verticals, our platforms are pretty established. So we're looking for any acquisition that would support those existing platforms.

So we're not looking for any huge acquisitions, but acquisitions that we consider huge, $100 million or so, that will enhance the existing platforms we have with the focus being on technology -- acquisitions for technology and technology that will increase the stability of a platform and support their organic growth.

So I think that -- those are the general areas we're looking at. And I can say this, the pipeline is very robust. We have a number of opportunities right now in due diligence, a number of opportunities that we hopefully, very soon, we'll be able to announce and we think that would support our work going forward.

But those acquisitions now, we're being much more selective in the areas that I mentioned..

And in terms of pricing, I mean, are you seeing any moderation in the terms at all with rising rates? Or is it pretty much holding steady because everybody has some liquidity available and it's still pretty competitive?.

Well, I think it's anecdotal right now. But I'm going to mention our aversion to debt and why that puts us in a better position. We've noticed some softening from financial investors who need to borrow money somewhere. And with increased interest rates, that makes up 1 or 2 things.

That makes either them less competitive or they're looking for better terms with the target. So we're starting to see some of that but it's still too early to see any sea changes in the price of acquisitions. I think time is certainly going to tell.

And I think as people become more and more levered, I think they would be less likely to complete an acquisition, and we think it's better -- it's prudent to be less levered or having less borrowing when interest rates are increasing..

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..

Thank you, operator. I just wanted to mention a couple of things and really a lot of is in line from the questions that were asked. We've all seen disruptions in the public market conditions and the disruption in the overall economy because of inflation and the fight against it.

It was previously thought for many years that debt or leverage allowed for a company to be opportunistic in pursuing growth. The thought was debt at historically low interest rates was an ideal way to grow the business. But we -- at NV5, we'd never really subscribe to that theory of allowing debt to be the driver to grow the business.

We always believe in debt to be used very selectively and to grow our business out of the cash flow or profits of the company. And as you can see, we've had a focused effort on decreasing our amount of leverage. So let's fast forward to present day. We at NV5 are in a very good position.

We have minimal debt or leverage and we continue to try to reduce that. And in fact, you'll see over 30% are reduction of leverage or debt in Q3, down to 0.28% of EBITDA. And we know many other financial firms will go as high as 5x leverage. That's just not what we do.

So we think that our lack of dependence on debt to grow our company has really put us in an excellent financial or robust activity, both for M&A and to fund future initiatives and future projects that we're doing, projects that you heard me mention in my comments.

We're completely funding a project for our deepwater surveying that we're going to do for Geospatial with a ship design specifically to do that.

So we have -- and this has caused us to have the advantage of staying focused, not being distracted on opportunities in front of us, opportunities that the nation has to do with infrastructure improvements, things that are not dependent on economic cycles.

And so our -- the strength of our balance sheet, our continued focus on business and the lack of debt to support our growth, we remain very optimistic about our continued performance. We remain optimistic about the fourth quarter of this year, and we look forward to a positive 2023.

I'd like to close by thanking everyone for your support of the company and what we're doing. And of course, we could not do it without our wonderful employees and our impassioned leaders in our business. So once again, thank you. We want to be stewards and we want to be prudent in our growth and we appreciate your continued support of the company.

So we look forward to talking to you about our results in the fourth quarter. And hopefully, we'll have more positive things to report. Thank you..

This concludes today's conference call. You may now disconnect..