Good morning, everyone, and welcome to the MYR Group First Quarter 2026 Earnings Results Conference Call. (Operator Instructions) Today's conference is being recorded. I will now turn the call over to Jennifer Harper, Vice President of Investor Relations and Treasurer, for introductory remarks.

Thank you, and good morning, everyone. I would like to welcome you to the MYR Group conference call to discuss the company's first quarter results for 2026, which were reported yesterday. Joining us on today's call are Rick Swartz, President and Chief Executive Officer; Kelly Huntington, Senior Vice President and Chief Financial Officer; Brian Stern, Senior Vice President and Chief Operating Officer of MYR Group's Transmission and Distribution segment; and Don Egan, Senior Vice President and Chief Operating Officer of MYR Group's Commercial and Industrial segment. A copy of yesterday's press release announcing our first quarter results can be found on the MYR Group website at myrgroup.com under the Investors tab. A webcast replay of today's call will be available on the website for 7 days following the call. Please note, today's discussion may contain forward-looking statements. Any such statements are based upon information available to MYR Group's management as of this date, and MYR Group assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. For more information, please refer to the risk factors discussed in the company's most recently filed annual report on Form 10-K. Certain non-GAAP financial measures will also be presented. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release. With that, let me turn the call over to Rick Swartz.

Thanks, Jennifer. Good morning, everyone. Welcome to our first quarter 2026 conference call to discuss financial and operational results. I will begin by providing a summary of the first quarter results and then turn the call over to Kelly Huntington, our Chief Financial Officer, for a detailed financial review. Following Kelly's overview, Brian Stern and Don Egan, Chief Operating Officers for our T&D and C&I segments, will provide a summary of our segments' performance and discuss some of MYR Group's opportunities going forward. I will then conclude today's call with some closing remarks and open the call up for your questions. We delivered strong financial results in the first quarter, supported by ongoing work with long-term customers and the selective pursuit of new opportunities while continuing to expand customer relationships. Quarterly results reflect strong bidding activity and continued infrastructure investment to support electrification needs across our business segments. We continue to monitor project opportunities and remain focused on disciplined project execution. Safe, reliable delivery and strong customer relationships remain central to our operations. Our teams are focused on understanding our customers' requirements, maintaining clear communication and producing consistent results. I'm proud of our teams for their continued dedication to quality, safety and collaboration. Now Kelly will provide details on our first quarter 2026 financial results.

Thank you, Rick, and good morning, everyone. Our first quarter 2026 revenues were $1 billion, which represents an increase of $167 million or 20% compared to the same period last year. Our first quarter T&D revenues were $541 million, an increase of 17% compared to the same period last year. T&D segment revenues increased primarily due to higher revenue on unit price and time and expense contracts, partially offset by a decrease in revenue on fixed price contracts. Work performed under master service agreements increased to approximately 70% of our T&D revenues. C&I revenues were $459 million, a record high for our C&I segment and an increase of 24% compared to the same period last year. C&I segment revenues increased primarily due to higher revenue on fixed price contracts. Our gross margin was 13.4% for the first quarter of 2026 compared to 11.6% for the same period last year. The increase in gross margin was primarily due to a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion. Gross margin was also positively impacted by better-than-anticipated productivity, favorable change orders and a favorable job closeout. These margin increases were partially offset by an increase in costs associated with inefficiencies on certain projects. T&D operating income margin was 9.7% for the first quarter of 2026 compared to 7.8% for the same period last year. The increase was primarily due to better-than-anticipated productivity and a favorable job closeout, partially offset by an increase in costs associated with inefficiencies on a project. C&I operating income margin was 8.1% for the first quarter of 2026 compared to 4.7% for the same period last year. The increase was primarily due to a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion. C&I operating income margin was also positively impacted by better-than-anticipated productivity and favorable change orders, partially offset by an increase in costs associated with inefficiencies on certain projects. First quarter 2026 SG&A expenses were $69 million, an increase of approximately $7 million compared to the same period last year. The increase was primarily due to higher employee incentive compensation costs and employee-related expenses to support future growth. Our first quarter effective tax rate was 26.9% compared to 28.9% for the same period last year. The decrease was primarily due to a favorable impact from stock compensation excess tax benefits, partially offset by higher U.S. taxes on Canadian income and other permanent difference items. First quarter 2026 net income was a record $47 million compared to net income of $23 million for the same period last year. Net income per diluted share of $2.99 increased 106% compared to $1.45 for the same period last year. First quarter 2026 EBITDA was a record $82 million compared to $50 million for the same period last year. Total backlog as of March 31, 2026, was a record $2.84 billion, 8% higher than a year ago. Total backlog as of March 31, 2026, consisted of $981 million for our T&D segment and $1.86 billion for our C&I segment. First quarter 2026 operating cash flow was $85 million compared to operating cash flow of $83 million for the same period last year. The increase in cash provided by operating activities was primarily due to higher net income, partially offset by the timing of billings and payments associated with project starts and completions. First quarter 2026 free cash flow was $69 million compared to free cash flow of $70 million for the same period last year. This slight decrease was due to higher capital expenditures, partially offset by an increase in operating cash flow. Moving to liquidity and our balance sheet. We had approximately $258 million of working capital, $9 million of funded debt, $460 million in borrowing availability under our credit facility and $163 million in cash and cash equivalents as of March 31, 2026. We improved our already strong funded debt-to-EBITDA leverage ratio to 0.04x as of March 31, 2026. We believe that our credit facility, strong balance sheet and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions and opportunistically repurchase shares. I'll now turn the call over to Brian Stern, who will provide an overview of our Transmission and Distribution segment.

Thanks, Kelly, and good morning, everyone. The T&D segment delivered strong first quarter results, supported by a mix of small to midsized projects across our markets. Execution remains consistent with a focus on safety, quality and reliability. Bidding activity remained steady with increases in revenue and margins from the prior quarter and compared to our first quarter of last year. We continue to deepen relationships with long-standing customers while also pursuing opportunities with both new and existing customers, supported by a positive industry outlook. This quarter, Sturgeon was awarded an MSA in Arizona, spanning transmission, distribution and substations along with EPC program opportunities in the Northwest. Great Southwestern Construction secured the construction of two greenfield substations in Texas. High Country Line Construction was selected for substation work in Arizona, along with the 345 kV transmission line project in South Carolina. L.E. Myers was selected for a 345 kV transmission job and several overhead distribution rebuild projects across Illinois and Iowa. Harlan Electric was awarded overhead transmission work in Pennsylvania. This activity is supported by a strong industry outlook. According to the S&P Global Horizons Top Trends 2026 report, grid infrastructure has become a central focus in 2026 as electrification and digital demand continue to strain existing systems and underinvestment in transmission and distribution modernization presents a potential bottleneck for reliability and capacity growth. This dynamic reinforces the ongoing importance of our T&D project activity across our markets. We expect work to remain steady across the U.S. and Canada, spanning a range of sizes and complexities. Our ability to support this demand is driven by a continued focus on safety and ongoing investment in our workforce. We are proud of our accomplishments in the first quarter and look forward to advancing this momentum in the months ahead. I'll now turn the call over to Don Egan, who will provide an overview of our Commercial and Industrial segment.

Thanks, Brian, and good morning, everyone. Our C&I segment achieved strong first quarter results supported by the health of our core markets. Bidding activity remained consistent and backlog expanded further, reflecting both market demand and the depth of our customer relationships. By working closely with customers to understand their needs, plan projects effectively and execute safely and efficiently, we continue to create opportunities for long-term collaboration across projects of various sizes. These strong ongoing customer relationships remain central to our strategy, reinforcing our position as a trusted partner in the industry. Data center projects and water and wastewater projects are driving the strongest growth in today's construction market. According to FMI's 2026 North American Engineering and Construction Outlook, data center construction starts are up nearly 100% year-over-year. While nonbuilding infrastructure such as power, water and wastewater also continues to grow, supported by committed funding and long-term investment needs. These projects require specialized expertise in grid modernization and complex installations creating multiyear backlogs and sustained demand. The result is a clear divergence within the construction market. Mission-critical electrical and infrastructure work is showing sustained resilient growth, while more traditional commercial building segments remain volatile. Our teams across all subsidiaries continue to execute and pursue a diverse range of projects. We were awarded multiple data center projects in New Jersey, Arizona, California and Colorado, clean energy work in California and multiple water treatment plants in Colorado. These awards reflect the strong and growing demand for data centers and related electrical infrastructure projects across our key markets. We continue to earn significant project awards, reflecting our ongoing ability to deliver value across markets and sectors. In closing, we continue to see steady performance across our core markets, supported by our long-standing customer relationships that drive opportunities. Our employees remain central to this execution with a consistent focus on quality and safety across every project. Thank you, everyone, for your time today. I will now hand the call back to Rick for his closing remarks.

Thank you for those updates, Kelly, Brian and Don. Our first quarter 2026 performance reflects the effectiveness of our business strategies and the value of our long-term customer relationships across both segments. We believe we are well positioned for continued growth as investments in electrical infrastructure increase, supported by safe execution, disciplined bidding and close collaboration with our customers in a dynamic energy environment. Our record of integrity, teamwork and dependable project delivery enables us to pursue new opportunities and deepen long-term customer relationships. I appreciate our employees for their contributions and our shareholders for their ongoing support. As we move through the rest of 2026, we look forward to building on the progress and continuing to strengthen our customer relationships across the business. Operator, we are now ready to open the call up for comments and questions.

(Operator Instructions) Our first question comes from Sangita Jain of KeyBanc Capital Markets.

First, can I ask about C&I margins, which were very, very strong in 1Q. If you could help us understand what led to the strength and what we should expect going forward?

Yes. I said our backlog margins were similar to what they were in the past, but we had less risk in our contracts. We've been focusing on carrying less risk in our contracts along with project execution and making sure that we continue to do as much prefabrication as we can. We do it in a controlled environment where we're taking that labor risk out of the field. So we continue to double down on that. We also had some projects that were nearing completion that had some potential upsides. With that being said, our margin profiles coming into this year were at 5% to 7.5%, and we're looking to increase that going forward for the rest of the year. We're looking at a 6% to 9% margin profile and operating kind of in that mid range on the C&I side.

That's helpful. And then can we talk overall guidance for the year because your revenue performance was also very strong in 1Q, and I think you said 10% in each segment for the year? How should we think about T&D margins, which also came in towards the high end of your range?

Yes. Previously, our margin profile on T&D was at 7% to 10.5%. As we look at what's in our backlog and the quality of our backlog work, we're upping that margin profile to 8% to 11% with the goal of operating in the mid part of that range. There can be lumpiness quarter-to-quarter depending on which projects are starting and finishing. For revenue growth, we came into the year saying we have that 10% growth. When we look across both segments as a whole, about 12% growth this year is where I would forecast, knowing it can be lumpy quarter-to-quarter depending on how subcontractors come into our mix or materials are delivered. So I'd look at that overall 12% growth on revenue.

Our next question comes from the line of Manish Somaiya of Cantor Fitzgerald.

Congrats team on a fantastic quarter. Rick, I wanted to just go back to the C&I business. I think you mentioned that fixed price contracts are now about 86% of the mix. If you could just help us understand where that mix has been over the past year, over the past couple of years? Perhaps that's what's driving some of the upside in C&I based on solid execution?

It's solid execution. As I said, there's a little less risk in our contracts, more favorable terms and conditions, and we're managing our projects very well. That mix has been similar over the past. Fixed price is a big component of how we do C&I work. We are good at executing it as a whole and our customers trust us and continue to release that work. Again, the contracts have a little less risk contractually than historically.

Okay. Helpful. And then, Kelly, if you could talk about cash flow from operations and free cash flow. Clearly, Q1 was exceptionally strong. How should we think about it for the rest of the year?

Sure. We delivered another strong quarter from a cash flow perspective, and we were able to maintain our DSO in that mid-50s range, which is significantly below our historical average. Looking forward, we could see DSO rise to the low 60s, and that will depend on the timing of new awards and the weighting between projects with more favorable billing structures versus more MSA-like work. As I noted, MSA work in T&D represented 70% of our revenues, which was an uptick from recent quarters. We like that work. It's recurring and predictable, but it can represent a headwind from a DSO perspective. Regarding cash flows, we've been talking about CapEx trending to about 3% of revenue on a full-year basis, above our historical average, driven by opportunities on the T&D side that is the more capital-intensive side of the business. With first quarter being light from a CapEx perspective due to timing, we will see an increase in CapEx as we look at the rest of the year.

Our next question comes from the line of Julien Dumoulin-Smith of Jefferies. Brian Russo is on for Julien.

I was wondering if you could elaborate a little bit more on what's driving the structural margins higher now in both segments? Is it confidence in labor productivity and better contract terms? Or is it more a function of electrician labor constraints in the end markets that you serve? Is that driving better bidding power for you and the E&Cs?

The tight labor market today isn't really turning into margins yet. It remains fairly competitive. It may change in the future, and we continue to be selective on larger projects because we don't want to be the first on those projects. There are plenty of opportunities and great conversations with clients. The margin increases are more attributed to better contract management, better terms and conditions, and better execution on our project side in the way we're laying out projects, doing prefabrication, kitting material and being more efficient. Hopefully in the future we'll see more margin improvement because of labor tightness.

Should we assume gradual improvement in segment margins as lower margin projects are burned off and replaced in the backlog with higher margin profiles? Is that the expected progression?

Quarter-to-quarter it can be lumpy. We've given the new margin profiles: 6% to 9% operating margin for C&I and 8% to 11% for T&D. We plan on operating on a yearly basis in the mid range of those. Quarter-to-quarter variance will occur depending on weather, project timing, which ones are finishing and which are starting. So on a yearly basis look at that, but expect lumpiness quarterly.

On the T&D side, can you talk about some of the recently signed MSA awards and the cadence of layering that into backlog, the Xcel $500 million five-year MSA and the Kentucky MSA highlighted last quarter? Neither of those are in backlog yet. Is that accurate?

The Kentucky one wouldn't be in complete backlog yet; we're not burning it fully so the whole amount is not in there. On the MSA side, we only count 90 days of that work in our backlog. The Xcel one is starting to have some activity but a slower start as we said it would. We see that ramping up this year slowly and into next year. Good activity and great opportunities going forward.

Your 10-K referred to any large transmission or T&D project awards granted this year would not start construction or generate revenue until 2027 at the earliest. Is that insinuating that you're still in discussions on some high-voltage transmission projects?

Yes, we anticipate with our conversations that some of those large projects will start rolling into our backlog this year. We see that happening, with ongoing conversations with clients and continuation into next year. We feel we'll have some large projects come into our backlog in future quarters.

Our next question comes from Ati Modak from Goldman Sachs.

Some of your peers are increasingly stepping into C&I data center exposure. How are you thinking about your exposure on a relative basis? You've guided to a very strong year and the fundamentals look strong. Does it create more competition or pricing risk for project awards?

Not overly concerned. We have long-term client relationships with many data center providers. We've been doing data centers since they started, not just entering the market now. We continue to expand that market with very good conversations with clients. We want to balance business and not have 100% of resources on data centers. We haven't seen margin pressure from new entrants; there's a lot of work. It's about keeping strong relationships with clients.

You mentioned transmission line awards and 345 kV work. What does the outlook for 500 kV and specifically 765 kV lines look like for the rest of the decade? How are you positioning for that?

We feel well positioned. There hasn't been much 765 kV done in the country, but we have performed that work in the past and have great conversations with clients. Project timing is the issue. I think 765 kV projects probably won't start until mid next year at the earliest. We have long-term alliances with clients building that work and ongoing conversations, so hopefully more to come this year and next year. There's great activity in that market.

Our next question comes from Brian Brophy of Stifel.

Congrats on the nice quarter. Big picture question: How would you compare the environment you're seeing today and over the next couple of years to the demand environment during the CREZ project in 2013 and 2014? What do you think the market implications are?

I can't say exactly what the margin impact will be. During the CREZ days, margins increased not just on our work but across peers. That was primarily in one area with about 2,500 miles being built out in Texas. Now you have a build-out across the U.S. over the next decade. I think it's going to be amplified from what we saw then. We aren't seeing it fully yet. Our conversations with clients go beyond the next year or two; we're talking about projects starting in 2030, 2031 and beyond. Clients are concerned about how they will get material lined up and how they will secure labor. We are having very good conversations.

Our next question comes from the line of Justin Hauke of Baird.

Thank you for the updated margin targets. I wanted to clarify: the 6% to 9% for C&I and 8% to 11% for T&D, are those multiyear targets or are they just for this year given pull-through?

We see those on a yearly basis this year; we feel those are our margin profiles we can operate within. Looking beyond, I don't see the market getting softer, but we haven't given guidance beyond this year. That's where I see it for this year with great opportunities in future years.

You mentioned prefab capacity as a way to control risk and improve execution. Kelly, on CapEx, you've got a lot of net cash, about $152 million. Is expanding prefab capacity an area where you expect to deploy capital if you don't do acquisitions?

Absolutely, that is an area where we continue to invest. We've been doing prefab for a long time, and our teams are continuing to push the limits on how we can perform more work in a controlled environment to be effective at the job site, especially in congested areas, and to support more consistent execution. The vast majority of our capital expenditures go to the T&D side of the business, but prefab is part of our growth in CapEx overall.

Our strong balance sheet allows us to invest in prefab but that won't use up all the cash. We continue to look for acquisitions. There's good activity in the market with some high-quality companies. The 12% organic revenue growth is our base; the right acquisition could add to that. We're looking to potentially do acquisitions with cash or do stock buybacks as well.

I would reiterate Rick's point: we are in a very strong financial position with almost no debt at the end of the quarter and $160 million plus in cash on the balance sheet. We are well positioned to support strong organic growth and pursue the right acquisitions.

At this time, I'm showing no further questions in the queue, and I would now like to turn the call back over to Rick Swartz for additional closing remarks.

To conclude, on behalf of Kelly, Brian, Don and myself, I sincerely thank you for joining us on the call today. I do not have anything further, and we look forward to working with you in the future and speaking with you again on our next conference call. Until then, stay safe.

Thank you very much. This concludes today's conference call. We thank you for your participation, and you may now disconnect.