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

DOTHAN, Ala., May 9, 2025 /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 Dennard
Dennard Lascar Investor Relations
ROAD@DennardLascar.com
(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 and
outstanding at March 31, 2025 and September 30, 2024


Class A common stock, par value $0.001; 400,000,000 shares authorized, 47,627,979 shares
issued 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 by
operating 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 Reconciliation
Fiscal Quarters Ended March 31, 2025 and 2024
(unaudited, in thousands, except percentages)


For the Three Months Ended
March 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 Reconciliation
Fiscal 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 Reconciliation
Fiscal 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





 

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SOURCE Construction Partners, Inc.

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