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, 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.
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 |
For the Nine Months |
|||||||
|
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 |
— |
— |
|
|
Class A common stock, par value $0.001; 400,000,000 shares authorized, 43,926,017 shares |
44 |
44 |
|
|
Class B common stock, par value $0.001; 100,000,000 shares authorized, 11,921,463 shares |
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 |
(6,783) |
(178) |
|
|
Treasury stock, Class B common stock, par value $0.001, at cost, 2,922,952 shares at June 30, |
(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 |
|||
|
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 |
|||
|
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 |
|||
|
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 |
|||
|
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.