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8 distribute stock as equity deep into our organization. Ev- ery employee has the readily available opportunity to be an owner of NV5. TZL: NV5 had a fantastic Q1 – $95.5 million in total rev- enues, a 47 percent increase year-over-year. You men- tioned two key indicators of why the firm was so suc- cessful, and why the 2018 outlook was raised: cross-sell- ing within existing offices, and an optimized integration process for acquisitions. Can you elaborate on those two points and discuss how they work, and the processes that are in place that make cross-selling and acquisition inte- gration so important for your business model? DW: Cross-selling is a key process of NV5, not only to drive organic growth, but to promote a team concept with all of our offices. We structure biweekly conference calls with all offices and the services they offer. Cross-selling is not only promoted but rewarded. The office with the highest organ- ic growth through cross-selling is recognized and awarded. Integration of new companies is essential to the success of NV5. Prior to the acquisition the culture of the acquirer and the acquired must match. NV5 believes in a culture of part- ners and fellow shareholders aligned with the same goals. TZL: NV5 acquired Butsko Utility Design Inc. in Janu- ary, and followed that up with the acquisition of CSA in February. In 2017, your firm reported seven acquisitions. Since at least 2015, the aggregate value of acquisitions has seen a dramatic increase. What is the M&A outlook for the rest of 2018 and 2019? DW: The M&A outlook for our market and sector remains robust. The valuation when the reduced tax rate is taken into consideration remains basically stable. There still tends to be a good market for viable buyers that do not require ex- ternal financing. We envision this continuing through the remainder of 2018 and 2019. TZL: Through Q1, the firm has also grown organical- ly by 10 percent, a huge increase compared to organic growth through Q1 2017. Why has organic growth been so strong? DW: Our organic growth has been driven principally by three factors: our intentional integration of all our offices by a pragmatic cross-selling initiative; our purposefully flat organization that insists on our key leaders being the di- rect contact with clients; and benefits derived from a strong backlog and project weather delays that spilled over to Q1. TZL: NV5 has specialized capabilities across five verti- cals: construction quality assurance; infrastructure; en- ergy; program management; and environmental. What segment is the firm’s bread-and-butter? Which segment do you see increasing in the future, and what area might cool down? DW: Our organization is structured to embed ourselves with our clients. We feel that infrastructure design is the first interface with the client and feeds other support ver- ticals. We see an increasing demand for infrastructure im- provement projects. Infrastructure in turn supports the or- ganic growth of all our verticals, in particular programman- agement and energy verticals. Some of our verticals will CONFERENCE CALL, from page 6

grow faster than others, but we do not see a decreasing or cooling down of our offerings. TZL: The majority of NV5’s contracts originate in the public sector and the quasi-public sector. However, NV5 has also expressed an interest in obtaining more private work. What’s the broad-brush strategy to gain more pri- vate-sector clients? DW: We have found that a healthy mix of public and quasi- public and private clients allows for continuity of revenue and organic growth. However, we feel that public and qua- si-public clients are not as susceptible to down cycles in the economy. We also strive to be an organization built on cli- ents and client relationships, not just projects. Having a strong civil engineering and survey practice as well as geotechnical and material testing gives visibility with the private sector client base. TZL: For a firm like NV5, integration of acquired compa- nies is crucial. Communications, logistics and marketing, employee morale, culture, client relationships, and geog- raphy all figure into the equation. Based on your experi- ence, what is the single most difficult aspect of integrat- ing an acquired firm? DW: Integration of acquired companies just doesn’t happen on its own. From experience, we know that you must have a process that is clearly understood by the acquired firm. We have to be perceived as approachable as well as transparent, and convey that the integration is a collaborative effort. The most difficult aspect is developing a relationship of trust, that we do not have all the answers, and that change that may include their recommendations would be positive. TZL: As the owner of approximately 20 percent of the firm’s stock, you have a great amount of influence on the direction of the firm. What’s your leadership style? DW: I must convey to every employee that we are in this together. We are all shareholders and partners. I must be approachable. I find my No. 1 responsibility is to convey a message of inclusion to every employee of NV5. TZL: NV5 went public in 2013. How has being a publicly- traded company affected the firm’s access to capital and growth trajectory? Privately held firms have to play by a different set of rules than those with publicly traded stock. Would you recommend going public to other in- dustry titans that are generating more than $100 million in revenue? DW: A publicly traded company has much easier access to capital than a private company. We continually strive to uti- lize this capital to grow in a non-dilutive way. Publicly traded firms have many shareholders that are uni- formly interested in growth and profitability, both of which are good for all companies. Revenue of $100 million, though large for a private com- pany, is considered relatively small for a public company. A company must want to grow if they wish to be publicly trad- ed. Going public must be viewed as an entrance for a com- pany, not a means for an exit.

THE ZWEIG LETTER August 20, 2018, ISSUE 1261

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