EX-99.1 2 exhibit991_earnings06302024.htm EX-99.1 Document

Exhibit 99.1
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NEWS RELEASE
Construction Partners, Inc. Announces Fiscal 2024 Third Quarter Results

Revenue Up 22.7% Compared to Q3 FY23
Net Income Up 42.4% Compared to Q3 FY23
Adjusted EBITDA Up 30.5% Compared to Q3 FY23
Record Backlog of $1.86 Billion
Company Raises FY24 Outlook

DOTHAN, AL, August 9, 2024 – Construction Partners, Inc. (NASDAQ: ROAD) (“CPI” or the “Company”), a vertically integrated civil infrastructure company specializing in the construction and maintenance of roadways across six southeastern states, today reported financial and operating results for its fiscal third quarter ended June 30, 2024.
Fred J. (Jule) Smith, III, the Company’s President and Chief Executive Officer, said, “We are pleased to report strong third quarter results representing substantial year-over-year growth in revenue, net income, Adjusted EBITDA and Adjusted EBITDA margin. The demand environment remains strong across our geographic footprint of more than 70 local markets in the Southeast. Once again, our robust bidding environment contributed to growth in our project backlog to $1.86 billion as of June 30, 2024. Based on the sustained industry demand and funding trends, the outstanding operational performance across our family of companies, and our visibility into the rest of our heavy work season, we are raising our fiscal 2024 outlook.”
Revenues were $517.8 million in the third quarter of fiscal 2024, an increase of 22.7% compared to $421.9 million in the same quarter last year.
Gross profit was $83.5 million in the third quarter of fiscal 2024, an increase of 30% compared to $64.1 million in the same quarter last year.
General and administrative expenses were $38.9 million, or 7.5% of total revenue, in the third quarter of fiscal 2024, compared to $32.2 million, or 7.6% of total revenue, in the same quarter last year.
Net income was $30.9 million in the third quarter of fiscal 2024, compared to net income of $21.7 million in the same quarter last year.
Adjusted EBITDA(1) was $73.2 million in the third quarter of fiscal 2024, an increase of 30.5% compared to $56.1 million in the same quarter last year.
Project backlog was $1.86 billion at June 30, 2024, compared to $1.59 billion at June 30, 2023 and $1.79 billion March 31, 2024.
Smith added, “As we enter the final quarter of our fiscal year, our team is dedicated to safely and efficiently building projects throughout our six southeastern states, while also integrating our three recent acquisitions. At CPI, we are also focused on organic growth, as evidenced by our 13% organic growth for the quarter. We continue to pursue the path to our ROAD-Map 2027 goals and create value for shareholders through improving returns on capital.”
(1) Adjusted EBITDA and Adjusted EBITDA Margin are financial measures not presented in accordance with generally accepted accounting principles (“GAAP”). Please see “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

Fiscal Year 2024 Outlook
The Company is increasing guidance for fiscal 2024 with regard to revenue, net income, Adjusted EBITDA and Adjusted EBITDA Margin, as follows:
•Revenue in the range of $1.835 billion to $1.860 billion
•Net income in the range of $73.5 million to $76.5 million
•Adjusted EBITDA(1) in the range of $219 million to $228 million
•Adjusted EBITDA Margin(1) in the range of 11.9% to 12.3%
Ned N. Fleming, III, the Company’s Executive Chairman, stated, “From a macro perspective, continued increasing funding for public projects at the federal, state and local levels coupled with a steady commercial project environment in the southeastern United States continue to drive growth at CPI. At the micro level of the business, the entire CPI team continues to effectively execute our strategic goals throughout our footprint. By expanding into new and adjacent markets through acquisitions while also growing organically, we are enhancing our relative markets share and achieving benefits of scale. We believe this stable and sustainable growth trajectory will continue to enhance value for all of our stakeholders.”
Conference Call
The Company will conduct a conference call today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss financial and operating results for the fiscal quarter ended June 30, 2024. To access the call live by phone, dial (412) 902-0003 and ask for the Construction Partners call at least 10 minutes prior to the start time. A telephonic replay will be available through August 16, 2024 by calling (201) 612-7415 and using passcode ID: 13746739#. A webcast of the call will also be available live and for later replay on the Company’s Investor Relations website at www.constructionpartners.net.
About Construction Partners, Inc.
Construction Partners, Inc. is a vertically integrated civil infrastructure company operating across six southeastern states. Supported by its hot-mix asphalt plants, aggregate facilities and liquid asphalt terminals, the company focuses on the construction, repair and maintenance of surface infrastructure. Publicly funded projects make up the majority of its business and include local and state roadways, interstate highways, airport runways and bridges. The company also performs private sector projects that include paving and sitework for office and industrial parks, shopping centers, local businesses and residential developments. To learn more, visit www.constructionpartners.net.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained herein that are not statements of historical or current fact constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words such as “may,” “will,” “expect,” “should,” “anticipate,” “intend,” “project,” “outlook,” “believe” and “plan.” The forward-looking statements contained in this press release include, without limitation, statements related to financial projections, future events, business strategy, future performance, future operations, backlog, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management. These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Important factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, among others: our ability to successfully manage and integrate acquisitions; failure to realize the expected economic benefits of acquisitions, including future levels of revenues being lower than expected and costs being higher than expected; failure or inability to implement growth strategies in a timely manner; declines in public infrastructure construction and reductions in government funding, including the funding by transportation authorities and other state and local agencies; risks related to our operating strategy; competition for projects in our local markets; risks associated with our capital-intensive business; government requirements and initiatives, including those related to funding for public or infrastructure construction, land usage and environmental, health and safety matters; unfavorable economic conditions and restrictive financing markets; our ability to obtain sufficient bonding capacity to undertake certain projects; our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; the cancellation of a significant number of contracts or our disqualification from bidding for new contracts; risks related to adverse weather conditions; our substantial indebtedness and the restrictions imposed on us by the terms thereof; our ability to maintain favorable relationships with third parties that supply us with equipment and essential supplies; our ability to retain key


personnel and maintain satisfactory labor relations; property damage, results of litigation and other claims and insurance coverage issues; risks related to our information technology systems and infrastructure; our ability to maintain effective internal control over financial reporting; and the risks, uncertainties and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.
Contacts:
Rick Black / Ken Dennard
Dennard Lascar Investor Relations
ROAD@DennardLascar.com
(713) 529-6600
- Financial Statements Follow -


Construction Partners, Inc.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands, except share and per share data)

For the Three Months Ended June 30,For the Nine Months Ended June 30,
2024202320242023
Revenues$517,794 $421,893 $1,285,726 $1,088,522 
Cost of revenues434,302 357,821 1,111,553 967,674 
Gross profit83,492 64,072 174,173 120,848 
General and administrative expenses(38,928)(32,231)(111,661)(93,945)
Gain on sale of property, plant and equipment, net1,093 1,499 2,960 4,825 
Gain on facility exchange— — — 5,389 
Operating income 45,657 33,340 65,472 37,117 
Interest expense, net(4,673)(5,039)(12,987)(13,801)
Other income32 493 47 925 
Income before provision for income taxes41,016 28,794 52,532 24,241 
Provision for income taxes10,108 7,117 12,905 6,153 
Net income 30,908 21,677 39,627 18,088 
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on interest rate swap contract, net(540)4,127 (5,167)(625)
Unrealized gain (loss) on restricted investments, net(34)(129)279 (12)
Other comprehensive income (loss)(574)3,998 (4,888)(637)
Comprehensive income $30,334 $25,675 $34,739 $17,451 
Net income per share attributable to common stockholders:
Basic$0.60 $0.42 $0.76 $0.35 
  Diluted$0.59 $0.41 $0.75 $0.35 
Weighted average number of common shares outstanding:
Basic51,913,124 51,827,448 51,914,508 51,826,578 
  Diluted52,654,882 52,293,846 52,572,429 52,114,438 




Construction Partners, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)

June 30,September 30,
20242023
ASSETS(unaudited)
Current assets:
Cash and cash equivalents$56,327 $48,243 
Restricted cash2,116 837 
Contracts receivable including retainage, net340,684 303,704 
Costs and estimated earnings in excess of billings on uncompleted contracts32,550 27,296 
Inventories104,554 84,038 
Prepaid expenses and other current assets17,955 9,306 
Total current assets554,186 473,424 
Property, plant and equipment, net579,106 505,095 
Operating lease right-of-use assets33,329 14,485 
Goodwill200,333 159,270 
Intangible assets, net20,879 19,520 
Investment in joint venture84 87 
Restricted investments17,016 15,079 
Other assets27,163 32,705 
Total assets$1,432,096 $1,219,665 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$158,617 $151,406 
Billings in excess of costs and estimated earnings on uncompleted contracts113,195 78,905 
   Current portion of operating lease liabilities7,324 2,338 
Current maturities of long-term debt23,906 15,000 
Accrued expenses and other current liabilities42,975 31,534 
Total current liabilities346,017 279,183 
Long-term liabilities:
Long-term debt, net of current maturities and deferred debt issuance costs453,942 360,740 
   Operating lease liabilities, net of current portion26,762 12,649 
Deferred income taxes, net34,895 37,121 
Other long-term liabilities17,539 13,398 
Total long-term liabilities533,138 423,908 
Total liabilities879,155 703,091 
Stockholders’ equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized and no shares issued and outstanding at June 30, 2024 and September 30, 2023
— — 
Class A common stock, par value $0.001; 400,000,000 shares authorized, 43,926,017 shares issued and 43,763,213 shares outstanding at June 30, 2024 and 43,760,546 shares issued and 43,727,680 shares outstanding at September 30, 202344 44 
Class B common stock, par value $0.001; 100,000,000 shares authorized, 11,921,463 shares issued and 8,998,511 shares outstanding at June 30, 2024 and September 30, 2023
12 12 
Additional paid-in capital275,562 267,330 
Treasury stock, Class A common stock, par value $0.001, at cost, 162,804 shares at June 30, 2024 and 32,866 shares at September 30, 2023
(6,783)(178)
Treasury stock, Class B common stock, par value $0.001, at cost, 2,922,952 shares at June 30, 2024 and September 30, 2023(15,603)(15,603)
Accumulated other comprehensive income, net13,807 18,694 
Retained earnings285,902 246,275 
Total stockholders’ equity552,941 516,574 
Total liabilities and stockholders’ equity$1,432,096 $1,219,665 



Construction Partners, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
For the Nine Months Ended June 30,
20242023
Cash flows from operating activities:
Net income $39,627 $18,088 
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities:
Depreciation, depletion, accretion and amortization67,468 57,769 
Amortization of deferred debt issuance costs223 225 
Unrealized loss on derivative instruments184 1,408 
Provision for bad debt370 450 
Gain on sale of property, plant and equipment(2,960)(4,825)
Gain on facility exchange— (5,389)
Realized loss on sales, calls and maturities of restricted investments53 10 
Share-based compensation expense10,206 7,909 
Loss from investment in joint venture3 — 
Deferred income tax benefit(194)(145)
  Other non-cash adjustments(179)(117)
Changes in operating assets and liabilities, net of business acquisitions:
Contracts receivable including retainage(11,310)22,777 
Costs and estimated earnings in excess of billings on uncompleted contracts(4,273)(3,580)
Inventories(16,959)(11,999)
Prepaid expenses and other current assets(1,194)3,214 
Other assets(915)(283)
Accounts payable635 (7,441)
Billings in excess of costs and estimated earnings on uncompleted contracts27,042 14,159 
Accrued expenses and other current liabilities5,370 (1,741)
Other long-term liabilities(16)4,053 
Net cash provided by operating activities, net of business acquisitions113,181 94,542 
Cash flows from investing activities:
Purchases of property, plant and equipment(70,410)(79,046)
Proceeds from sale of property, plant and equipment8,047 12,640 
Proceeds from facility exchange— 36,987 
Proceeds from sales, calls and maturities of restricted investments2,860 1,403 
Business acquisitions, net of cash acquired(135,219)(82,740)
Purchase of restricted investments(4,376)(7,882)
Net cash used in investing activities(199,098)(118,638)
Cash flows from financing activities:
Proceeds from issuance of long-term debt, net of debt issuance costs149,385 53,000 
Repayments of long-term debt(47,500)(9,375)
Purchase of treasury stock(6,605)(139)
Net cash provided by financing activities95,280 43,486 
Net change in cash, cash equivalents and restricted cash9,363 19,390 
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, beginning of period49,080 35,559 
Cash, cash equivalents and restricted cash, end of period$58,443 $54,949 
Supplemental cash flow information:
Cash paid for interest$15,201 $14,319 
Cash paid for income taxes$4,285 $1,021 
Cash paid for operating lease liabilities$4,306 $1,802 
Non-cash items:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$22,986 $5,417 
Property, plant and equipment financed with accounts payable$2,490 $2,078 



Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation, depletion, accretion and amortization, (iv) share-based compensation expense, and (v) loss on the extinguishment of debt. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues for each period. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA and Adjusted EBITDA Margin because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly named measures reported by other companies. Potential differences may include differences in capital structures, tax positions and the age and book depreciation of intangible and tangible assets.
The following table presents a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA and the calculation of Adjusted EBITDA Margin for the periods presented:
Construction Partners, Inc.
Net Income to Adjusted EBITDA Reconciliation
Fiscal Quarters Ended June 30, 2024 and 2023
(unaudited, in thousands)
For the Three Months Ended June 30,
2024
2023 (1)
Net income$30,908 $21,677 
Interest expense, net4,673 5,039 
Provision for income taxes10,108 7,117 
Depreciation, depletion, accretion and amortization 23,507 19,536 
Share-based compensation expense4,039 2,737 
Adjusted EBITDA$73,235 $56,106 
Revenues$517,794 $421,893 
Adjusted EBITDA Margin14.1 %13.3 %
(1)The Company has historically included within the definition of Adjusted EBITDA an adjustment for management fees and expenses related to the Company’s management services agreement with an affiliate of SunTx Capital Partners, a member of the Company’s control group. Effective October 1, 2023, the term of the management services agreement was extended to October 1, 2028. As a result of the term extension, the Company no longer views the management fees and expenses paid under the management services agreement as a non-recurring expense. Accordingly, periods commencing subsequent to September 30, 2023 do not include an adjustment for management fees and expenses, and the Company has recast comparative Adjusted EBITDA and Adjusted EBITDA Margin for the three and nine months ended June 30, 2023 to conform to the current definition.




Construction Partners, Inc.
Net Income to Adjusted EBITDA Reconciliation
Fiscal Year 2024 Updated Outlook
(unaudited, in thousands, except percentages)

For the Fiscal Year Ending September 30, 2024
LowHigh
Net income$73,500 $76,500 
Interest expense, net17,500 19,500 
Provision for income taxes24,000 25,000 
Depreciation, depletion, accretion and amortization90,000 92,000 
Share-based compensation expense14,000 15,000 
Adjusted EBITDA$219,000 $228,000 
Revenues$1,835,000 $1,860,000 
Adjusted EBITDA Margin11.9 %12.3 %