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,
Ala., Aug. 9, 2024 /PRNewswire/ -- 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."
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
(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.
- 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,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues
|
|
$
517,794
|
|
$
421,893
|
|
$
1,285,726
|
|
$
1,088,522
|
|
Cost of
revenues
|
|
434,302
|
|
357,821
|
|
1,111,553
|
|
967,674
|
|
Gross
profit
|
|
83,492
|
|
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, net
|
|
1,093
|
|
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 income
|
|
32
|
|
493
|
|
47
|
|
925
|
|
Income before
provision for income taxes
|
|
41,016
|
|
28,794
|
|
52,532
|
|
24,241
|
|
Provision for income
taxes
|
|
10,108
|
|
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:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
51,913,124
|
|
51,827,448
|
|
51,914,508
|
|
51,826,578
|
|
Diluted
|
|
52,654,882
|
|
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,
|
|
2024
|
|
2023
|
|
ASSETS
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
56,327
|
|
$
48,243
|
|
Restricted
cash
|
2,116
|
|
837
|
|
Contracts receivable
including retainage, net
|
340,684
|
|
303,704
|
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
32,550
|
|
27,296
|
|
Inventories
|
104,554
|
|
84,038
|
|
Prepaid expenses and
other current assets
|
17,955
|
|
9,306
|
|
Total current
assets
|
554,186
|
|
473,424
|
|
Property, plant and
equipment, net
|
579,106
|
|
505,095
|
|
Operating lease
right-of-use assets
|
33,329
|
|
14,485
|
|
Goodwill
|
200,333
|
|
159,270
|
|
Intangible assets,
net
|
20,879
|
|
19,520
|
|
Investment in joint
venture
|
84
|
|
87
|
|
Restricted
investments
|
17,016
|
|
15,079
|
|
Other assets
|
27,163
|
|
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 contracts
|
113,195
|
|
78,905
|
|
Current portion
of operating lease liabilities
|
7,324
|
|
2,338
|
|
Current maturities of
long-term debt
|
23,906
|
|
15,000
|
|
Accrued expenses and
other current liabilities
|
42,975
|
|
31,534
|
|
Total current
liabilities
|
346,017
|
|
279,183
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term debt, net of
current maturities and deferred debt issuance costs
|
453,942
|
|
360,740
|
|
Operating lease
liabilities, net of current portion
|
26,762
|
|
12,649
|
|
Deferred income taxes,
net
|
34,895
|
|
37,121
|
|
Other long-term
liabilities
|
17,539
|
|
13,398
|
|
Total long-term
liabilities
|
533,138
|
|
423,908
|
|
Total
liabilities
|
879,155
|
|
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, 2023
|
44
|
|
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
capital
|
275,562
|
|
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, net
|
13,807
|
|
18,694
|
|
Retained
earnings
|
285,902
|
|
246,275
|
|
Total stockholders'
equity
|
552,941
|
|
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,
|
|
2024
|
|
2023
|
|
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 amortization
|
67,468
|
|
57,769
|
|
Amortization of
deferred debt issuance costs
|
223
|
|
225
|
|
Unrealized loss on
derivative instruments
|
184
|
|
1,408
|
|
Provision for bad
debt
|
370
|
|
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 investments
|
53
|
|
10
|
|
Share-based
compensation expense
|
10,206
|
|
7,909
|
|
Loss from investment
in joint venture
|
3
|
|
—
|
|
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
payable
|
635
|
|
(7,441)
|
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
27,042
|
|
14,159
|
|
Accrued expenses and
other current liabilities
|
5,370
|
|
(1,741)
|
|
Other long-term
liabilities
|
(16)
|
|
4,053
|
|
Net cash provided by
operating activities, net of business acquisitions
|
113,181
|
|
94,542
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
(70,410)
|
|
(79,046)
|
|
Proceeds from sale of
property, plant and equipment
|
8,047
|
|
12,640
|
|
Proceeds from facility
exchange
|
—
|
|
36,987
|
|
Proceeds from sales,
calls and maturities of restricted investments
|
2,860
|
|
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 costs
|
149,385
|
|
53,000
|
|
Repayments of
long-term debt
|
(47,500)
|
|
(9,375)
|
|
Purchase of treasury
stock
|
(6,605)
|
|
(139)
|
|
Net cash provided by
financing activities
|
95,280
|
|
43,486
|
|
Net change in cash,
cash equivalents and restricted cash
|
9,363
|
|
19,390
|
|
Cash, cash
equivalents and restricted cash:
|
|
|
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
49,080
|
|
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,
net
|
4,673
|
|
5,039
|
|
Provision for income
taxes
|
10,108
|
|
7,117
|
|
Depreciation,
depletion, accretion and amortization
|
23,507
|
|
19,536
|
|
Share-based
compensation expense
|
4,039
|
|
2,737
|
|
Adjusted
EBITDA
|
$
73,235
|
|
$
56,106
|
|
Revenues
|
$ 517,794
|
|
$ 421,893
|
|
Adjusted EBITDA
Margin
|
14.1 %
|
|
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
|
|
Low
|
|
High
|
|
Net income
|
$
73,500
|
|
$
76,500
|
|
Interest expense,
net
|
17,500
|
|
19,500
|
|
Provision for income
taxes
|
24,000
|
|
25,000
|
|
Depreciation,
depletion, accretion and amortization
|
90,000
|
|
92,000
|
|
Share-based
compensation expense
|
14,000
|
|
15,000
|
|
Adjusted
EBITDA
|
$ 219,000
|
|
$ 228,000
|
|
Revenues
|
$
1,835,000
|
|
$
1,860,000
|
|
Adjusted EBITDA
Margin
|
11.9 %
|
|
12.3 %
|
View original
content:https://www.prnewswire.com/news-releases/construction-partners-inc-announces-fiscal-2024-third-quarter-results-302218559.html
SOURCE Construction Partners, Inc.