Q1 Revenue up 16% Compared to Q1 FY23
Q1 Net Income of $9.8M & EPS of $0.19 Compared to $1.9M & $0.04
in Q1 FY23
Q1 Adjusted EBITDA Up 50% Compared to Q1
FY23
Company Reports Record Backlog of $1.62 Billion
DOTHAN,
Ala., Feb. 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 first quarter ended December
31, 2023.
Fred J. (Jule) Smith, III, the
Company's President and Chief Executive Officer, said, "We had a
strong start to our fiscal year with substantial first quarter
top-line and bottom-line growth, sustained by the robust demand
environment for our infrastructure services. We are pleased to
report significant first quarter period-over-period revenue and
profit growth, strong cash flow from operations, and a new record
backlog of $1.62 billion. Throughout
our geographic footprint in the Southeast, we continue to
experience a steady bidding environment supported by strong state
funding programs, activity funded by the Infrastructure Investment
and Jobs Act (IIJA), and a sustained commercial market. Our team's
hard work, operational proficiency, dedication to detail and focus
on safety continue to support CPI's strategic priorities outlined
in our ROAD-Map 2027."
Revenues were $396.5 million in
the first quarter of fiscal 2024, an increase of 16% compared to
$341.8 million in the same quarter
last year. The increase included $29.6
million of revenues attributable to acquisitions completed
during or subsequent to the three months ended December 31, 2022 and an increase of
approximately $25.1 million of
revenues in the Company's existing markets from contract work and
sales of HMA and aggregates to third parties. The mix of total
revenue growth for the quarter was approximately 7.3% organic
revenue and approximately 8.7% from these recent acquisitions.
Gross profit was $51.9 million in
the first quarter of fiscal 2024, compared to $30.5 million in the same quarter last year.
General and administrative expenses were $36.0 million in the first quarter of fiscal
2024, compared to $29.7 million in
the same quarter last year, and as a percentage of total revenue,
were 9.1% and 8.7% respectively.
Net income was $9.8 million and
diluted earnings per share were $0.19
in the first quarter of fiscal 2024, compared to net income of
$1.9 million and diluted earnings per
share of $0.04 in the same quarter
last year.
Adjusted EBITDA(1) in the first quarter of fiscal
2024 was $40.9 million, an increase
of 50% compared to $27.2 million in
the same quarter last year.
Project backlog was a record $1.62
billion at December 31, 2023,
compared to $1.47 billion at
December 31, 2022 and $1.60 billion at September
30, 2023.
Fiscal Year 2024 Outlook
The Company is maintaining its outlook for fiscal year 2024 with
regard to revenue, net income, Adjusted EBITDA and Adjusted EBITDA
Margin, as follows:
- Revenue in the range of $1.750
billion to $1.825 billion
- Net income in the range of $63
million to $70 million
- Adjusted EBITDA(1) in the range of $197 million to $219
million
- Adjusted EBITDA Margin(1) in the range of 11.3% to
12.0%
Ned N. Fleming, III, the
Company's Executive Chairman, stated, "Today's infrastructure
demand for public projects to repair, maintain and expand roads,
build new construction and expansion projects, and support
commercial growth due to the significant U.S. migration to the
Sunbelt is fueling top-line growth and margin expansion for
CPI. Our business model continues to demonstrate resilience
and scalability as we expand our relative market share and
capitalize on healthy funding programs at both the state and
federal level, as well as a vibrant commercial market throughout
the Southeast. The Board and I are pleased with the strength of the
organization, its leadership and the commitment of our team to
continue to grow the Company and 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 December 31, 2023. 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 February 16, 2024 by calling (201) 612-7415 and
using passcode ID: 13743799#. 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 December 31,
|
|
|
2023
|
|
2022
|
Revenues
|
|
$
396,505
|
|
$
341,779
|
Cost of
revenues
|
|
344,625
|
|
311,283
|
Gross
profit
|
|
51,880
|
|
30,496
|
General and
administrative expenses
|
|
(35,981)
|
|
(29,725)
|
Gain on sale of
property, plant and equipment, net
|
|
836
|
|
168
|
Gain on facility
exchange
|
|
—
|
|
5,389
|
Operating
income
|
|
16,735
|
|
6,328
|
Interest expense,
net
|
|
(3,746)
|
|
(3,960)
|
Other (expense)
income
|
|
(28)
|
|
34
|
Income before
provision for income taxes
|
|
12,961
|
|
2,402
|
Provision for income
taxes
|
|
3,118
|
|
510
|
Net
income
|
|
9,843
|
|
1,892
|
Other comprehensive
loss, net of tax
|
|
|
|
|
Unrealized loss on
interest rate swap contract, net
|
|
(7,105)
|
|
(1,292)
|
Unrealized gain on
restricted investments, net
|
|
400
|
|
36
|
Other comprehensive
loss
|
|
(6,705)
|
|
(1,256)
|
Comprehensive
income
|
|
$
3,138
|
|
$
636
|
|
|
|
|
|
Net income per share
attributable to common stockholders:
|
|
|
|
|
Basic
|
|
$
0.19
|
|
$
0.04
|
Diluted
|
|
$
0.19
|
|
$
0.04
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
Basic
|
|
51,892,426
|
|
51,824,948
|
Diluted
|
|
52,430,864
|
|
52,120,584
|
|
|
|
|
|
Construction
Partners, Inc.
Consolidated Balance
Sheets
(in thousands,
except share and per share data)
|
|
|
December
31,
|
|
September
30,
|
|
2023
|
|
2023
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
68,738
|
|
$
48,243
|
Restricted
cash
|
973
|
|
837
|
Contracts receivable
including retainage, net
|
255,529
|
|
303,704
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
30,439
|
|
27,296
|
Inventories
|
96,662
|
|
84,038
|
Prepaid expenses and
other current assets
|
9,029
|
|
9,306
|
Total current
assets
|
461,370
|
|
473,424
|
Property, plant and
equipment, net
|
561,661
|
|
505,095
|
Operating lease
right-of-use assets
|
18,415
|
|
14,485
|
Goodwill
|
176,530
|
|
159,270
|
Intangible assets,
net
|
19,791
|
|
19,520
|
Investment in joint
venture
|
87
|
|
87
|
Restricted
investments
|
14,585
|
|
15,079
|
Other assets
|
23,711
|
|
32,705
|
Total assets
|
$
1,276,150
|
|
$
1,219,665
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
131,749
|
|
$
151,406
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
88,649
|
|
78,905
|
Current
portion of operating lease liabilities
|
3,479
|
|
2,338
|
Current maturities of
long-term debt
|
15,000
|
|
15,000
|
Accrued expenses and
other current liabilities
|
24,055
|
|
31,534
|
Total current
liabilities
|
262,932
|
|
279,183
|
Long-term
liabilities:
|
|
|
|
Long-term debt, net of
current maturities and deferred debt issuance costs
|
427,064
|
|
360,740
|
Operating
lease liabilities, net of current portion
|
15,493
|
|
12,649
|
Deferred income taxes,
net
|
34,509
|
|
37,121
|
Other long-term
liabilities
|
14,993
|
|
13,398
|
Total long-term
liabilities
|
492,059
|
|
423,908
|
Total
liabilities
|
754,991
|
|
703,091
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock, par
value $0.001; 10,000,000 shares authorized and no shares issued
and
outstanding at December
31, 2023 and September 30, 2023
|
—
|
|
—
|
Class A common stock,
par value $0.001; 400,000,000 shares authorized, 43,896,017 shares
issued
and 43,828,855 shares
outstanding at December 31, 2023, 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 December 31, 2023 and September 30, 2023
|
12
|
|
12
|
Additional paid-in
capital
|
270,113
|
|
267,330
|
Treasury stock, Class A
common stock, par value $0.001, at cost, 67,162 shares of Class A
common
stock at December 31,
2023 and 32,866 shares of Class A common stock at September 30,
2023
|
(1,514)
|
|
(178)
|
Treasury stock, Class B
common stock, par value $0.001, at cost, 2,922,952 shares at
December 31,
2023 and September 30,
2023
|
(15,603)
|
|
(15,603)
|
Accumulated other
comprehensive income, net
|
11,989
|
|
18,694
|
Retained
earnings
|
256,118
|
|
246,275
|
Total stockholders'
equity
|
521,159
|
|
516,574
|
Total liabilities and
stockholders' equity
|
$
1,276,150
|
|
$
1,219,665
|
|
|
|
|
Construction
Partners, Inc.
Consolidated
Statements of Cash Flows
(unaudited, in
thousands)
|
|
|
For the Three Months
Ended
December 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
9,843
|
|
$
1,892
|
Adjustments to
reconcile net income to net cash, cash equivalents and restricted
cash provided by operating activities:
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
21,121
|
|
18,375
|
Amortization of
deferred debt issuance costs
|
74
|
|
77
|
Unrealized loss
on derivative instruments
|
226
|
|
1,007
|
Provision for
bad debt
|
281
|
|
40
|
Gain on sale of
property, plant and equipment
|
(836)
|
|
(168)
|
Gain on
facility exchange
|
—
|
|
(5,389)
|
Realized loss
on sales, calls and maturities of restricted investments
|
23
|
|
1
|
Share-based
compensation expense
|
2,889
|
|
2,480
|
Deferred income
tax benefit
|
(404)
|
|
(302)
|
Other non-cash
adjustments
|
(86)
|
|
(55)
|
Changes in operating
assets and liabilities, net of business acquisitions:
|
|
|
|
Contracts
receivable including retainage, net
|
63,507
|
|
47,072
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts
|
(2,203)
|
|
(2,498)
|
Inventories
|
(9,880)
|
|
(3,467)
|
Prepaid
expenses and other current assets
|
1,079
|
|
(315)
|
Other
assets
|
(320)
|
|
(343)
|
Accounts
payable
|
(26,330)
|
|
(23,580)
|
Billings in
excess of costs and estimated earnings on uncompleted
contracts
|
8,554
|
|
2,314
|
Accrued
expenses and other current liabilities
|
(8,322)
|
|
(9,661)
|
Other long-term
liabilities
|
1,162
|
|
1,404
|
Net cash provided by
operating activities, net of business acquisitions
|
60,378
|
|
28,884
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property,
plant and equipment
|
(26,783)
|
|
(31,663)
|
Proceeds from sale of
property, plant and equipment
|
2,460
|
|
1,607
|
Proceeds from facility
exchange
|
—
|
|
36,422
|
Proceeds from sales,
calls and maturities of restricted investments
|
1,013
|
|
170
|
Business acquisitions,
net of cash acquired
|
(81,351)
|
|
(77,206)
|
Net cash used in
investing activities
|
(104,661)
|
|
(70,670)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
revolving credit facility
|
90,000
|
|
53,000
|
Repayments of
long-term debt
|
(23,750)
|
|
(3,125)
|
Purchase of treasury
stock
|
(1,336)
|
|
(139)
|
Net cash provided by
financing activities
|
64,914
|
|
49,736
|
Net change in cash,
cash equivalents and restricted cash
|
20,631
|
|
7,950
|
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
|
$
69,711
|
|
$
43,509
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
Cash paid for
interest
|
$
4,692
|
|
$
4,064
|
Cash paid for
operating lease liabilities
|
$
884
|
|
$
734
|
Non-cash
items:
|
|
|
|
Operating lease
right-of-use assets obtained in exchange for operating lease
liabilities
|
$
4,698
|
|
$
4,361
|
Property, plant
and equipment financed with accounts payable
|
$
7,088
|
|
$
4,953
|
|
|
|
|
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) equity-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 the Company's
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 the Company's operating
performance. The Company presents Adjusted EBITDA and Adjusted
EBITDA Margin because management uses these measures as key
performance indicators, and the Company believes that securities
analysts, investors and others use these measures to evaluate
companies in the Company's industry. The Company's 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 December 31, 2023 and 2022
(unaudited, in
thousands)
|
|
|
For the Three Months
Ended
December 31,
|
|
2023
|
|
2022
(1)
|
Net income
|
$
9,843
|
|
$
1,892
|
Interest expense,
net
|
3,746
|
|
3,960
|
Provision for income
taxes
|
3,118
|
|
510
|
Depreciation,
depletion, accretion and amortization
|
21,121
|
|
18,375
|
Share-based
compensation expense
|
3,046
|
|
2,480
|
Adjusted
EBITDA
|
$
40,874
|
|
$
27,217
|
|
|
|
|
|
|
(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 months ended
December 31, 2022 to conform to the current definition.
|
Construction
Partners, Inc.
Net Income to
Adjusted EBITDA Reconciliation
Fiscal Year 2024
Outlook
(unaudited, in
thousands, except percentages)
|
|
|
For the Fiscal Year
Ending
September 30, 2024
|
|
Low
|
|
High
|
Net income
|
$
63,000
|
|
$
70,000
|
Interest expense,
net
|
18,000
|
|
20,500
|
Provision for income
taxes
|
21,200
|
|
23,600
|
Depreciation,
depletion, accretion and amortization
|
83,600
|
|
93,100
|
Share-based
compensation expense
|
11,200
|
|
11,800
|
Adjusted
EBITDA
|
$ 197,000
|
|
$ 219,000
|
Revenues
|
$
1,750,000
|
|
$
1,825,000
|
Adjusted EBITDA
Margin
|
11.3 %
|
|
12.0 %
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/construction-partners-inc-announces-fiscal-2024-first-quarter-results-302058169.html
SOURCE Construction Partners, Inc.