Construction Partners, Inc. Announces Fiscal 2025 Second Quarter Results

Revenue Up 54% Compared to Q2 FY24 Net Income of $4.2 Million & EPS of $0.08 Adjusted EBITDA Up 135% Compared to Q2 FY24 Record Backlog of $2.84 Billion Company Raises FY25 Outlook , /PRNewswire/ -- Construction Partners, Inc. (NASDAQ: ROAD) ("CPI," the "Company," "we," "our" or "us"), a vertically integrated civil infrastructure company specializing in the construction and maintenance of roadways in local markets throughout the Sunbelt, today reported financial and operating results for the fiscal quarter ended March 31, 2025. Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "We are pleased to report a strong second quarter marked by significant year-over-year growth in revenues, net income and Adjusted EBITDA, leading to an Adjusted EBITDA margin of 12.1%, up more than 400 basis points from the same quarter last year. Continuing the substantial momentum established in the first quarter of our fiscal year, the operational performance of our family of companies was outstanding, especially during this winter quarter, when shorter days and colder weather typically limit construction activity. Throughout our Sunbelt footprint, our local teams continued to win more project work, growing our project backlog to a record $2.84 billion. We are well-positioned for continued success to build out this record backlog as we move into the busy construction work season in the second half of our fiscal year. We continue to experience healthy federal and state project funding across our geographies in addition to a steady workflow of commercial projects, with many of our local markets representing some of the fastest growing MSAs in the Sunbelt." Smith continued, "Last week, we announced our latest acquisition with the purchase of PRI, adding its nearly 300 employees to the CPI family of companies as our platform company in Tennessee. PRI now stretches our operations the length of the state, from Knoxville in the east to the greater Memphis metro area in the west, and will include our pre-existing Tennessee operations, consisting of three hot-mix asphalt plants and construction operations in the Nashville metro area. As with all of our platform acquisitions, a key strategic criterion is an established and deeply experienced leadership team that fits our culture, our focus on safety, and our relative market share growth strategy for further expansion. Under the leadership of Jon Hargett, Greg Ailshie and PRI's entire management team, our new platform company will benefit from decades of collective experience and technical expertise of seasoned industry veterans in Tennessee. Tennessee is a state ripe with organic and acquisitive growth opportunities, driven by strong economic growth, favorable demographic trends, and a healthy transportation funding program." Revenues were $571.7 million in the second quarter of fiscal 2025, an increase of 54% compared to $371.4 million in the same quarter last year. The $200.3 million revenue increase included $173.1 million of revenues attributable to acquisitions completed during or subsequent to the three months ended March 31, 2024, and an increase of approximately $27.2 million of revenues in the Company's existing markets. The mix of total revenue growth for the quarter was approximately 7% organic and approximately 47% from recent acquisitions. Gross profit was $71.4 million in the second quarter of fiscal 2025, compared to $38.8 million in the same quarter last year. General and administrative expenses were $46.7 million in the second quarter of fiscal 2025, compared to $36.0 million in the same quarter last year, and as a percentage of total revenues, decreased 150 basis points to 8.2% compared to 9.7% in the same quarter last year. Net income was $4.2 million in the second quarter of fiscal 2025 and $0.08 per diluted share, compared to a net loss of $1.1 million and diluted losses per share of $(0.02) in the same quarter last year. Adjusted EBITDA(1) in the second quarter of fiscal 2025 was $69.3 million, an increase of 135% compared to $29.5 million in the same quarter last year. Adjusted EBITDA margin(1) in the second quarter of fiscal 2025 was 12.1%, compared to 7.9% in the same quarter last year. Project backlog was a record $2.84 billion at March 31, 2025, compared to $1.79 billion at March 31, 2024 and $2.66 billion at December 31, 2024. Smith added, "Reflecting the expected contribution of the newly acquired PRI and our strong second quarter results, we are raising our fiscal 2025 outlook ranges. We continue to see customer demand for both publicly funded and commercial project work throughout our well-funded and growing Sunbelt states, representing some of the fasting growing areas in the country, and we remain focused on delivering long-term value to our investors and other stakeholders." Fiscal 2025 Outlook The Company is raising its outlook ranges for fiscal 2025 with regard to revenue, net income, Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin as follows: Revenue in the range of $2.77 billion to $2.83 billion Net income in the range of $106.0 million to $117.0 million Adjusted net income(1) in the range of $122.5 million to $133.5 million Adjusted EBITDA(1) in the range of $410.0 million to $430.0 million Adjusted EBITDA margin(1) in the range of 14.8% to 15.2% Ned N. Fleming, III, the Company's Executive Chairman, stated, "CPI's continued operational and financial strength are a testament to our organization's culture and leadership, executing a proven growth strategy to increase profitability, expand margins and successfully integrate newly acquired companies. Strategically positioned local market operations across the Sunbelt benefit from the support of our larger organization to bid, win and build critical infrastructure projects for recurring customers, both public and commercial. Our country's infrastructure repair and maintenance needs are considerable and growing with the expansion of new roadway capacity. CPI will continue to benefit from opportunities afforded by a generational investment in infrastructure and population growth into the Sunbelt. As we continue to expand our geographic footprint and increase the size and scale of operations in an extremely fragmented industry, we expect to generate strong returns to enhance shareholder value." 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 March 31, 2025. 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 May 16, 2025 by calling (201) 612-7415 and using passcode ID: 13753204#. 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 in local markets throughout the Sunbelt in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. 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: 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 inquiries, requirements and initiatives, including those related to funding for public infrastructure construction, land use, environmental, health and safety matters, and government contracting requirements and other laws and regulations; unfavorable economic conditions and restrictive financing markets; our ability to successfully identify, manage and integrate acquisitions; 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; climate change and related laws and regulations; our substantial indebtedness, costs associated therewith and the restrictions imposed on us by the terms thereof; our ability to manage our supply chain in a manner that ensures that we are able to obtain adequate raw materials, equipment and essential supplies; failure to implement growth strategies in a timely manner; our ability to retain key personnel and maintain satisfactory labor relations, and to manage or mitigate any labor shortages, turnover and labor cost increases; the impact of inflation on costs of labor, raw materials and other items that are critical to our business, including fuel, concrete and steel; unfavorable developments affecting the banking and financial services industry; property damage and other claims and insurance coverage issues; the outcome of litigation or disputes, including employment-related, workers' compensation and breach of contract claims; risks related to our information technology systems and infrastructure, including cybersecurity incidents; 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 DennardDennard Lascar Investor Relations[email protected](713) 529-6600 (1) Adjusted net income, 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 March 31, For the Six Months Ended March 31, 2025 2024 2025 2024 Revenues $ 571,650 $ 371,427 $ 1,133,230 $ 767,932 Cost of revenues 500,300 332,626 985,309 677,251 Gross profit 71,350 38,801 147,921 90,681 General and administrative expenses (46,662) (35,981) (90,928) (71,435) Acquisition-related expenses (806) (771) (20,358) (1,298) Gain on sale of property, plant and equipment, net 3,407 1,031 4,462 1,867 Operating income 27,289 3,080 41,097 19,815 Interest expense, net (21,592) (4,568) (39,722) (8,314) Other income (expense) (159) 46 262 18 Income (loss) before provision for income taxes and earnings from investment in joint venture 5,538 (1,442) 1,637 11,519 Provision (benefit) for income taxes 1,310 (321) 461 2,797 Loss from investment in joint venture (13) (3) (12) (3) Net income (loss) 4,215 (1,124) 1,164 8,719 Other comprehensive income (loss), net of tax Unrealized gain (loss) on interest rate swap contract, net (2,890) 2,478 (21) (4,627) Unrealized gain (loss) on restricted investments, net 231 (87) (102) 313 Other comprehensive income (loss) (2,659) 2,392 (123) (4,313) Comprehensive income $ 1,556 $ 1,268 $ 1,041 $ 4,406 Net income (loss) per share attributable to common stockholders: Basic $ 0.08 $ (0.02) $ 0.02 $ 0.17 Diluted $ 0.08 $ (0.02) $ 0.02 $ 0.17 Weighted average number of common shares outstanding: Basic 55,248,526 51,938,216 54,698,442 51,915,069 Diluted 55,669,646 51,938,216 55,141,358 52,523,100 Construction Partners, Inc.Consolidated Balance Sheets(in thousands, except share and per share data) March 31, September 30, 2025 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 101,855 $ 74,686 Restricted cash 1,729 1,998 Contracts receivable including retainage, net 409,209 350,811 Costs and estimated earnings in excess of billings on uncompleted contracts 46,488 25,966 Inventories 146,901 106,704 Prepaid expenses and other current assets 23,330 24,841 Total current assets 729,512 585,006 Property, plant and equipment, net 1,103,392 629,924 Operating lease right-of-use assets 56,336 38,932 Goodwill 745,040 231,656 Intangible assets, net 79,916 20,549 Investment in joint venture 72 84 Restricted investments 20,220 18,020 Other assets 19,038 17,964 Total assets $ 2,753,526 $ 1,542,135 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 199,210 $ 182,572 Billings in excess of costs and estimated earnings on uncompleted contracts 136,303 120,065 Current portion of operating lease liabilities 14,234 9,065 Current maturities of long-term debt 40,375 26,563 Accrued expenses and other current liabilities 123,488 42,189 Total current liabilities 513,610 380,454 Long-term liabilities: Long-term debt, net of current maturities and deferred debt issuance costs 1,319,325 486,961 Operating lease liabilities, net of current portion 42,728 30,661 Deferred income taxes, net 52,407 53,852 Other long-term liabilities 17,587 16,467 Total long-term liabilities 1,432,047 587,941 Total liabilities 1,945,657 968,395 Stockholders' equity: Preferred stock, par value $0.001; 10,000,000 shares authorized and no shares issued andoutstanding at March 31, 2025 and September 30, 2024 — — Class A common stock, par value $0.001; 400,000,000 shares authorized, 47,627,979 sharesissued and 47,235,345 shares outstanding at March 31, 2025 and 44,062,830 shares issued and 43,819,102 shares outstanding at September 30, 2024 47 44 Class B common stock, par value $0.001; 100,000,000 shares authorized, 11,739,408 shares issued and 8,813,803 shares outstanding at March 31, 2025 and 11,784,650 shares issued and 8,861,698 shares outstanding at September 30, 2024 12 12 Additional paid-in capital 531,279 278,065 Treasury stock, Class A common stock, par value $0.001, at cost, 392,634 shares of Class A common stock at March 31, 2025 and 243,728 shares of Class A common stock at September 30, 2024 (31,176) (11,490) Treasury stock, Class B common stock, par value $0.001, at cost, 2,925,605 shares at March 31, 2025 and 2,922,952 shares at September 30, 2024 (16,046) (15,603) Accumulated other comprehensive income, net 7,379 7,502 Retained earnings 316,374 315,210 Total stockholders' equity 807,869 573,740 Total liabilities and stockholders' equity $ 2,753,526 $ 1,542,135 Construction Partners, Inc.Consolidated Statements of Cash Flows(unaudited, in thousands) For the Six Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 1,164 $ 8,719 Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided byoperating activities: Depreciation, depletion, accretion and amortization 68,447 43,961 Amortization of deferred debt issuance costs 2,211 148 Unrealized loss on derivative instruments — 194 Provision for bad debt 172 335 Gain on sale of property, plant and equipment (4,462) (1,867) Realized loss on sales, calls and maturities of restricted investments 44 49 Share-based compensation expense 18,883 6,221 Loss from investment in joint venture 12 3 Deferred income tax benefit (1,480) (306) Other non-cash adjustments (488) (224) Changes in operating assets and liabilities, net of business acquisitions: Contracts receivable including retainage, net 49,336 43,443 Costs and estimated earnings in excess of billings on uncompleted contracts (15,007) (7,799) Inventories (4,387) (15,968) Prepaid expenses and other current assets 5,248 2,165 Other assets (824) (585) Accounts payable (27,606) (12,536) Billings in excess of costs and estimated earnings on uncompleted contracts 5,294 22,412 Accrued expenses and other current liabilities 567 (11,976) Other long-term liabilities (827) 2,161 Net cash provided by operating activities, net of business acquisitions 96,297 78,550 Cash flows from investing activities: Purchases of property, plant and equipment (68,226) (55,518) Proceeds from sale of property, plant and equipment 5,991 4,962 Proceeds from sales, calls and maturities of restricted investments 3,940 1,918 Business acquisitions, net of cash acquired (828,736) (87,850) Purchase of restricted investments (6,202) (1,870) Net cash used in investing activities (893,233) (138,358) Cash flows from financing activities: Proceeds from revolving credit facility 145,000 90,000 Proceeds from issuance of long-term debt, net of debt issuance costs 834,566 — Repayments of long-term debt (135,601) (27,500) Purchase of treasury stock (20,129) (1,336) Net cash provided by financing activities 823,836 61,164 Net change in cash, cash equivalents and restricted cash 26,900 1,356 Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period 76,684 49,080 Cash, cash equivalents and restricted cash, end of period $ 103,584 $ 50,436 Supplemental cash flow information: Cash paid for interest $ 35,788 $ 9,569 Cash paid for income taxes $ 1,888 $ 3,155 Cash paid for operating lease liabilities $ 7,191 $ 1,435 Non-cash items: Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 20,613 $ 9,999 Property, plant and equipment financed with accounts payable $ 6,783 $ 2,554 Amounts payable to sellers in business combinations, net $ 84,119 $ — 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, (v) loss on the extinguishment of debt and (vi) nonrecurring expenses related to transformative acquisitions, which management considers to include acquisitions requiring clearance under federal antitrust laws, such as our acquisition of Lone Star Paving (the "Lone Star Acquisition"). Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenues for each period. Adjusted net income represents net income before (i) nonrecurring expenses related to transformative acquisitions, which management considers to include acquisitions requiring clearance under federal antitrust laws, such as the Lone Star Acquisition, and (ii) nonrecurring fees associated with financing arrangements incurred in connection with transformative acquisitions, such as a bridge loan associated with the Lone Star Acquisition. 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, Adjusted EBITDA margin and Adjusted net income 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, Adjusted EBITDA margin and Adjusted net income 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 tables presents a reconciliation of net income (loss), 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 (Loss) to Adjusted EBITDA ReconciliationFiscal Quarters Ended March 31, 2025 and 2024(unaudited, in thousands, except percentages) For the Three Months EndedMarch 31, 2025 2024 Net income (loss) $ 4,215 $ (1,124) Interest expense, net 21,592 4,568 Provision (benefit) for income taxes 1,310 (321) Depreciation, depletion, accretion and amortization 37,263 22,840 Share-based compensation expense 4,672 3,553 Transformative acquisition expenses 221 — Adjusted EBITDA $ 69,273 $ 29,516 Revenues $ 571,650 $ 371,427 Adjusted EBITDA Margin 12.1 % 7.9 % Construction Partners, Inc.Net Income to Adjusted EBITDA ReconciliationFiscal Year 2025 Updated Outlook(unaudited, in thousands, except percentages) For the Fiscal Year Ending September 30, 2025 Low High Net income $ 106,000 $ 117,000 Interest expense, net 83,700 82,300 Provision for income taxes 36,400 40,200 Depreciation, depletion, accretion and amortization 143,650 150,250 Share-based compensation expense 21,500 21,500 Transformative acquisition expenses 18,750 18,750 Adjusted EBITDA $ 410,000 $ 430,000 Revenues $ 2,770,000 $ 2,830,000 Adjusted EBITDA Margin 14.8 % 15.2 % The following table presents a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted net income for the period presented: Construction Partners, Inc.Net Income to Adjusted Net Income ReconciliationFiscal Year 2025 Updated Outlook(unaudited, in thousands) For the Fiscal Year Ending September 30, 2025 Low High Net income $ 106,000 $ 117,000 Transformative acquisition expenses 18,750 18,750 Financing fees related to transformative acquisitions 3,100 3,100 Tax impact due to above reconciling items (5,350) (5,350) Adjusted net income $ 122,500 $ 133,500 SOURCE Construction Partners, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Construction Partners, Inc. Announces Fiscal 2025 Second Quarter Results

FAQ

Why Very Bullish?

How important is it?

Why Long Term?

Related Companies

Related News