Construction Partners, Inc. Announces Fiscal 2026 Third Quarter Results
Revenue Up 28% Compared to Q3 FY25
Adjusted Net Income Up 34% Compared to Q3 FY25
Adjusted EBITDA Up 24% Compared to Q3 FY25
Record Backlog of $3.36 Billion
Company Raises FY26 Outlook
DOTHAN, Ala., Aug. 7, 2026 /PRNewswire/ -- Construction Partners, Inc. (NASDAQ: ROAD) ("CPI" or the "Company"), 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 third quarter ended June 30, 2026.
Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "Our strong third quarter results reflect the continued execution of our operating strategy and the dedication of our teams throughout the CPI family of companies. During the quarter, we delivered revenue growth of 28% and Adjusted EBITDA growth of 24%, despite the impact of energy cost inflation and extremely wet weather in May across many of our markets. These results underscore the resilience of our decentralized operating model, the strength of our local market strategy, and our ability to consistently execute across diverse market conditions. Demand for both public infrastructure and commercial construction projects remained healthy throughout our markets, driving backlog to a record $3.36 billion and providing continued visibility into future growth."
Revenues were $999.4 million in the third quarter of fiscal 2026, an increase of 28.2% compared to $779.3 million in the same quarter last year.
Gross profit was $168.4 million in the third quarter of fiscal 2026, compared to $131.8 million in the same quarter last year.
General and administrative expenses were $63.1 million in the third quarter of fiscal 2026, compared to $51.0 million in the same quarter last year, and as a percentage of total revenues, decreased 20 basis points to 6.3%, compared to 6.5% in the same quarter last year.
Net income was $59.6 million in the third quarter of fiscal 2026, compared to net income of $44.0 million in the same quarter last year.
Adjusted net income(1) was $60.6 million in the third quarter of fiscal 2026, compared to Adjusted net income of $45.2 million in the same quarter last year. Using Adjusted net income, diluted earnings per share would have been $1.08 for the third quarter of fiscal 2026, compared to $0.81 in the same quarter last year.
Adjusted EBITDA(1) in the third quarter of fiscal 2026 was $163.0 million, an increase of 23.8% compared to $131.7 million in the same quarter last year.
Project backlog was a record $3.36 billion at June 30, 2026, compared to $2.94 billion at June 30, 2025 and $3.14 billion at March 31, 2026.
Smith added, "Earlier this month, we were pleased to expand our Oklahoma footprint through the acquisition of Ellsworth Construction, which further strengthens our presence into two of the fastest-growing markets in the Sunbelt. Ellsworth adds experienced employees, strategically located facilities, and a strong reputation for execution, enhancing our ability to serve the rapidly growing Tulsa and Oklahoma City metropolitan areas. The acquisition also expands our capabilities in the fast-growing data center construction market, where Ellsworth has established a strong presence that complements Overland's extensive data center portfolio in North Texas. Based on our strong third quarter performance and the expected contribution from Ellsworth, we are raising our fiscal 2026 guidance. We remain on track to deliver sustained revenue growth, expanding profitability, and continued progress toward achieving our ROAD 2030 objectives."
Fiscal 2026 Outlook
The Company is raising its outlook for fiscal year 2026 with regard to revenue, net income, Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin as follows:
- Revenue in the range of $3.640 billion to $3.680 billion
- Net income in the range of $165.0 million to $168.0 million
- Adjusted net income(1) in the range $177.6 million to $181.4 million
- Adjusted EBITDA(1) in the range of $559.0 million to $569.0 million
- Adjusted EBITDA margin(1) in the range of 15.36% to 15.46%
Ned N. Fleming, III, the Company's Executive Chairman, stated, "CPI continues to create long-term shareholder value through the disciplined execution of our proven growth strategy, combining strong organic growth with strategic acquisitions that expand our platforms across the Sunbelt, increase scale, and enhance operating efficiencies. Supported by a strong balance sheet, experienced leadership team, and healthy customer funding for both public and private construction projects, we believe CPI is well positioned to continue growing and compounding value. The Board and I remain highly confident in CPI's long-term strategy, competitive position, and our ability to capitalize on the significant opportunities ahead."
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, 2026. 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 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: 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.
Contact:
Rick Black
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 June 30,
For the Nine Months
Ended June 30,
2026
2025
2026
2025
Revenues
$ 999,418
$ 779,277
$ 2,578,083
$ 1,912,507
Cost of revenues
831,030
647,467
2,189,342
1,632,776
Gross profit
168,388
131,810
388,741
279,731
General and administrative expenses
(63,145)
(51,026)
(188,242)
(141,954)
Acquisition-related expenses
(1,771)
(1,816)
(15,880)
(22,174)
Gain on sale of property, plant and equipment, net
5,912
3,975
12,557
8,437
Operating income
109,384
82,943
197,176
124,040
Interest expense, net
(30,292)
(25,239)
(83,252)
(64,961)
Other income
44
246
67
508
Income before provision for income taxes and earnings from
investment in joint venture
79,136
57,950
113,991
59,587
Provision for income taxes
19,581
13,903
28,050
14,364
Loss from investment in joint venture
—
—
(1)
(12)
Net income
59,555
44,047
85,940
45,211
Other comprehensive income (loss), net of tax
Unrealized (loss) on interest rate swap contract, net
(431)
(1,996)
(1,583)
(2,017)
Unrealized gain (loss) on restricted investments, net
(22)
102
(144)
—
Other comprehensive loss
(453)
(1,894)
(1,727)
(2,017)
Comprehensive income
$ 59,102
$ 42,153
$ 84,213
$ 43,194
Net income per share attributable to common stockholders:
Basic
$ 1.07
$ 0.80
$ 1.54
$ 0.82
Diluted
$ 1.06
$ 0.79
$ 1.53
$ 0.82
Weighted average number of common shares outstanding:
Basic
55,906,306
55,164,260
55,876,027
54,853,715
Diluted
56,269,949
55,654,653
56,187,735
55,302,958
Construction Partners, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
June 30,
September 30,
2026
2025
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$ 94,547
$ 156,062
Restricted cash
112
2,953
Contracts receivable including retainage, net
593,468
549,884
Costs and estimated earnings in excess of billings on uncompleted contracts
60,849
45,340
Inventories
185,273
155,133
Prepaid expenses and other current assets
27,024
25,459
Total current assets
961,273
934,831
Property, plant and equipment, net
1,295,692
1,153,070
Operating lease right-of-use assets
104,845
76,355
Goodwill
1,139,332
943,309
Intangible assets, net
74,368
79,230
Investment in joint venture
—
72
Restricted investments
10,870
23,176
Other assets
25,628
28,813
Total assets
$ 3,612,008
$ 3,238,856
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 319,886
$ 284,218
Billings in excess of costs and estimated earnings on uncompleted contracts
149,337
129,300
Current portion of operating lease liabilities
30,340
19,867
Current maturities of long-term debt
41,500
38,500
Accrued expenses and other current liabilities
72,950
110,163
Total current liabilities
614,013
582,048
Long-term liabilities:
Long-term debt, net of current maturities and deferred debt issuance costs
1,744,666
1,573,614
Operating lease liabilities, net of current portion
75,078
57,201
Deferred income taxes, net
102,279
80,079
Other long-term liabilities
35,236
33,951
Total long-term liabilities
1,957,259
1,744,845
Total liabilities
2,571,272
2,326,893
Stockholders' equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized and no shares issued and
outstanding at June 30, 2026 and September 30, 2025
—
—
Class A common stock, par value $0.001; 400,000,000 shares authorized, 48,732,839 shares
issued and 47,924,747 shares outstanding at June 30, 2026 and 47,963,617 shares issued
and 47,406,498 shares outstanding at September 30, 2025
48
47
Class B common stock, par value $0.001; 100,000,000 shares authorized, 11,481,568 shares
issued and 8,549,118 shares outstanding at June 30, 2026 and 11,463,770 shares issued
and 8,538,165 shares outstanding at September 30, 2025
12
12
Additional paid-in capital
615,510
541,179
Treasury stock, Class A common stock, par value $0.001, at cost, 808,092 shares at June 30,
2026 and 557,119 shares at September 30, 2025
(63,574)
(34,589)
Treasury stock, Class B common stock, par value $0.001, at cost, 2,932,450 shares at June
30, 2026 and 2,925,605 shares at September 30, 2025
(16,833)
(16,046)
Accumulated other comprehensive income, net
2,642
4,369
Retained earnings
502,931
416,991
Total stockholders' equity
1,040,736
911,963
Total liabilities and stockholders' equity
$ 3,612,008
$ 3,238,856
Construction Partners, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
For the Nine Months Ended
June 30,
2026
2025
Cash flows from operating activities:
Net income
$ 85,940
$ 45,211
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by
operating activities:
Depreciation, depletion, accretion and amortization
135,278
107,741
Amortization of deferred debt issuance costs
2,004
3,379
Provision for bad debt
556
260
Gain on sale of property, plant and equipment
(12,557)
(8,437)
Realized loss on sales, calls and maturities of restricted investments
18
81
Share-based compensation expense
31,195
27,961
Distribution of earnings from investment in joint venture
71
—
Loss from investment in joint venture
1
12
Deferred income tax expense (benefit)
22,658
(300)
Other non-cash adjustments
(617)
(665)
Changes in operating assets and liabilities, net of business acquisitions:
Contracts receivable including retainage
(13,859)
6,159
Costs and estimated earnings in excess of billings on uncompleted contracts
(11,298)
(22,577)
Inventories
(18,279)
(4,880)
Prepaid expenses and other current assets
(1,905)
5,422
Other assets
1,496
(3,119)
Accounts payable
16,028
15,975
Billings in excess of costs and estimated earnings on uncompleted contracts
8,510
(9,481)
Accrued expenses and other current liabilities
(578)
17,543
Other long-term liabilities
(3,803)
(967)
Net cash provided by operating activities, net of business acquisitions
240,859
179,318
Cash flows from investing activities:
Purchases of property, plant and equipment
(144,239)
(104,886)
Proceeds from sale of property, plant and equipment
24,398
11,250
Proceeds from sales, calls and maturities of restricted investments
16,022
8,351
Business acquisitions, net of cash acquired
(337,429)
(935,663)
Purchase of restricted investments
(3,753)
(12,182)
Net cash used in investing activities
(445,001)
(1,033,130)
Cash flows from financing activities:
Proceeds from revolving credit facility
263,500
218,438
Proceeds from issuance of long-term debt, net of debt issuance costs
294,923
833,524
Settlement of stock awards
(2,490)
—
Repayments of long-term debt
(386,375)
(137,726)
Purchase of treasury stock
(29,772)
(20,803)
Net cash provided by financing activities
139,786
893,433
Net change in cash, cash equivalents and restricted cash
(64,356)
39,621
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, beginning of period
159,015
76,684
Cash, cash equivalents and restricted cash, end of period
$ 94,659
$ 116,305
Supplemental cash flow information:
Cash paid for interest
$ 80,230
$ 58,151
Cash paid for income taxes
$ 5,204
$ 3,576
Cash paid for operating lease liabilities
$ 23,315
$ 11,699
Non-cash items:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
$ 47,180
$ 17,620
Property, plant and equipment financed with accounts payable
$ 9,849
$ 5,693
Amounts payable to sellers in business combinations, net
$ 673
$ 64,938
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 transactions of a size that would require clearance under federal antitrust laws. 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 transactions of a size that would require clearance under federal antitrust laws, and (ii) nonrecurring fees associated with financing arrangements incurred in connection with transformative acquisitions. 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 present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to (i) Adjusted net income and (ii) Adjusted EBITDA (with the resulting calculation of Adjusted EBITDA margin) for the applicable periods.
Construction Partners, Inc.
Net Income to Adjusted EBITDA Reconciliation
Three Months Ended June 30, 2026 and 2025
(in thousands, except percentages)
For the Three Months Ended
June 30,
2026
2025
Net income
$ 59,555
$ 44,047
Interest expense, net
30,292
25,239
Provision for income taxes
19,581
13,903
Depreciation, depletion, accretion and amortization
43,979
39,294
Share-based compensation expense
8,242
8,564
Transformative acquisition expenses
1,373
663
Adjusted EBITDA
$ 163,022
$ 131,710
Revenues
$ 999,418
$ 779,277
Adjusted EBITDA margin
16.3 %
16.9 %
Construction Partners, Inc.
Net Income to Adjusted Net Income Reconciliation
Three Months Ended June 30, 2026 and 2025
(in thousands)
For the Three Months Ended
June 30,
2026
2025
Net income
$ 59,555
$ 44,047
Transformative acquisition expenses
1,373
663
Financing fees related to transformative acquisition
—
920
Tax impact due to above reconciling items
(336)
(382)
Adjusted net income
$ 60,592
$ 45,248
Construction Partners, Inc.
Net Income to Adjusted EBITDA Reconciliation
Fiscal Year 2026 Updated Outlook
(unaudited, in thousands, except percentages)
For the Fiscal Year Ending
September 30, 2026
Low
High
Net income
$ 165,000
$ 168,000
Interest expense, net
112,500
113,500
Provision for income taxes
53,500
54,500
Depreciation, depletion, accretion and amortization
181,000
184,000
Share-based compensation expense
31,500
32,500
Transformative acquisition expenses
15,500
16,500
Adjusted EBITDA
$ 559,000
$ 569,000
Revenues
$ 3,640,000
$ 3,680,000
Adjusted EBITDA margin
15.36 %
15.46 %
Construction Partners, Inc.
Net Income to Adjusted Net Income Reconciliation
Fiscal Year 2026 Updated Outlook
(unaudited, in thousands)
For the Fiscal Year Ending
September 30, 2026
Low
High
Net income
$ 165,000
$ 168,000
Transformative acquisition expenses
15,500
16,500
Financing fees related to transformative acquisition
1,200
1,200
Tax impact due to above reconciling items
(4,100)
(4,300)
Adjusted net income
$ 177,600
$ 181,400
View original content:https://www.prnewswire.com/news-releases/construction-partners-inc-announces-fiscal-2026-third-quarter-results-302845513.html
SOURCE Construction Partners, Inc.
Revenue Up 28% Compared to Q3 FY25
Adjusted Net Income Up 34% Compared to Q3 FY25
Adjusted EBITDA Up 24% Compared to Q3 FY25
Record Backlog of $3.36 Billion
Company Raises FY26 Outlook
DOTHAN, Ala., Aug. 7, 2026 /PRNewswire/ -- Construction Partners, Inc. (NASDAQ: ROAD) ("CPI" or the "Company"), 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 third quarter ended June 30, 2026.
Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "Our strong third quarter results reflect the continued execution of our operating strategy and the dedication of our teams throughout the CPI family of companies. During the quarter, we delivered revenue growth of 28% and Adjusted EBITDA growth of 24%, despite the impact of energy cost inflation and extremely wet weather in May across many of our markets. These results underscore the resilience of our decentralized operating model, the strength of our local market strategy, and our ability to consistently execute across diverse market conditions. Demand for both public infrastructure and commercial construction projects remained healthy throughout our markets, driving backlog to a record $3.36 billion and providing continued visibility into future growth."
Revenues were $999.4 million in the third quarter of fiscal 2026, an increase of 28.2% compared to $779.3 million in the same quarter last year.
Gross profit was $168.4 million in the third quarter of fiscal 2026, compared to $131.8 million in the same quarter last year.
General and administrative expenses were $63.1 million in the third quarter of fiscal 2026, compared to $51.0 million in the same quarter last year, and as a percentage of total revenues, decreased 20 basis points to 6.3%, compared to 6.5% in the same quarter last year.
Net income was $59.6 million in the third quarter of fiscal 2026, compared to net income of $44.0 million in the same quarter last year.
Adjusted net income(1) was $60.6 million in the third quarter of fiscal 2026, compared to Adjusted net income of $45.2 million in the same quarter last year. Using Adjusted net income, diluted earnings per share would have been $1.08 for the third quarter of fiscal 2026, compared to $0.81 in the same quarter last year.
Adjusted EBITDA(1) in the third quarter of fiscal 2026 was $163.0 million, an increase of 23.8% compared to $131.7 million in the same quarter last year.
Project backlog was a record $3.36 billion at June 30, 2026, compared to $2.94 billion at June 30, 2025 and $3.14 billion at March 31, 2026.
Smith added, "Earlier this month, we were pleased to expand our Oklahoma footprint through the acquisition of Ellsworth Construction, which further strengthens our presence into two of the fastest-growing markets in the Sunbelt. Ellsworth adds experienced employees, strategically located facilities, and a strong reputation for execution, enhancing our ability to serve the rapidly growing Tulsa and Oklahoma City metropolitan areas. The acquisition also expands our capabilities in the fast-growing data center construction market, where Ellsworth has established a strong presence that complements Overland's extensive data center portfolio in North Texas. Based on our strong third quarter performance and the expected contribution from Ellsworth, we are raising our fiscal 2026 guidance. We remain on track to deliver sustained revenue growth, expanding profitability, and continued progress toward achieving our ROAD 2030 objectives."
Fiscal 2026 Outlook
The Company is raising its outlook for fiscal year 2026 with regard to revenue, net income, Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin as follows:
- Revenue in the range of $3.640 billion to $3.680 billion
- Net income in the range of $165.0 million to $168.0 million
- Adjusted net income(1) in the range $177.6 million to $181.4 million
- Adjusted EBITDA(1) in the range of $559.0 million to $569.0 million
- Adjusted EBITDA margin(1) in the range of 15.36% to 15.46%
Ned N. Fleming, III, the Company's Executive Chairman, stated, "CPI continues to create long-term shareholder value through the disciplined execution of our proven growth strategy, combining strong organic growth with strategic acquisitions that expand our platforms across the Sunbelt, increase scale, and enhance operating efficiencies. Supported by a strong balance sheet, experienced leadership team, and healthy customer funding for both public and private construction projects, we believe CPI is well positioned to continue growing and compounding value. The Board and I remain highly confident in CPI's long-term strategy, competitive position, and our ability to capitalize on the significant opportunities ahead."
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, 2026. 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 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: 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.
Contact:
Rick Black
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 |
For the Nine Months |
|||||||
2026 |
2025 |
2026 |
2025 |
|||||
Revenues |
$ 999,418 |
$ 779,277 |
$ 2,578,083 |
$ 1,912,507 |
||||
Cost of revenues |
831,030 |
647,467 |
2,189,342 |
1,632,776 |
||||
Gross profit |
168,388 |
131,810 |
388,741 |
279,731 |
||||
General and administrative expenses |
(63,145) |
(51,026) |
(188,242) |
(141,954) |
||||
Acquisition-related expenses |
(1,771) |
(1,816) |
(15,880) |
(22,174) |
||||
Gain on sale of property, plant and equipment, net |
5,912 |
3,975 |
12,557 |
8,437 |
||||
Operating income |
109,384 |
82,943 |
197,176 |
124,040 |
||||
Interest expense, net |
(30,292) |
(25,239) |
(83,252) |
(64,961) |
||||
Other income |
44 |
246 |
67 |
508 |
||||
Income before provision for income taxes and earnings from |
79,136 |
57,950 |
113,991 |
59,587 |
||||
Provision for income taxes |
19,581 |
13,903 |
28,050 |
14,364 |
||||
Loss from investment in joint venture |
— |
— |
(1) |
(12) |
||||
Net income |
59,555 |
44,047 |
85,940 |
45,211 |
||||
Other comprehensive income (loss), net of tax |
||||||||
Unrealized (loss) on interest rate swap contract, net |
(431) |
(1,996) |
(1,583) |
(2,017) |
||||
Unrealized gain (loss) on restricted investments, net |
(22) |
102 |
(144) |
— |
||||
Other comprehensive loss |
(453) |
(1,894) |
(1,727) |
(2,017) |
||||
Comprehensive income |
$ 59,102 |
$ 42,153 |
$ 84,213 |
$ 43,194 |
||||
Net income per share attributable to common stockholders: |
||||||||
Basic |
$ 1.07 |
$ 0.80 |
$ 1.54 |
$ 0.82 |
||||
Diluted |
$ 1.06 |
$ 0.79 |
$ 1.53 |
$ 0.82 |
||||
Weighted average number of common shares outstanding: |
||||||||
Basic |
55,906,306 |
55,164,260 |
55,876,027 |
54,853,715 |
||||
Diluted |
56,269,949 |
55,654,653 |
56,187,735 |
55,302,958 |
||||
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Construction Partners, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) | |||
June 30, |
September 30, |
||
2026 |
2025 |
||
ASSETS |
(unaudited) |
||
Current assets: |
|||
Cash and cash equivalents |
$ 94,547 |
$ 156,062 |
|
Restricted cash |
112 |
2,953 |
|
Contracts receivable including retainage, net |
593,468 |
549,884 |
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
60,849 |
45,340 |
|
Inventories |
185,273 |
155,133 |
|
Prepaid expenses and other current assets |
27,024 |
25,459 |
|
Total current assets |
961,273 |
934,831 |
|
Property, plant and equipment, net |
1,295,692 |
1,153,070 |
|
Operating lease right-of-use assets |
104,845 |
76,355 |
|
Goodwill |
1,139,332 |
943,309 |
|
Intangible assets, net |
74,368 |
79,230 |
|
Investment in joint venture |
— |
72 |
|
Restricted investments |
10,870 |
23,176 |
|
Other assets |
25,628 |
28,813 |
|
Total assets |
$ 3,612,008 |
$ 3,238,856 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 319,886 |
$ 284,218 |
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
149,337 |
129,300 |
|
Current portion of operating lease liabilities |
30,340 |
19,867 |
|
Current maturities of long-term debt |
41,500 |
38,500 |
|
Accrued expenses and other current liabilities |
72,950 |
110,163 |
|
Total current liabilities |
614,013 |
582,048 |
|
Long-term liabilities: |
|||
Long-term debt, net of current maturities and deferred debt issuance costs |
1,744,666 |
1,573,614 |
|
Operating lease liabilities, net of current portion |
75,078 |
57,201 |
|
Deferred income taxes, net |
102,279 |
80,079 |
|
Other long-term liabilities |
35,236 |
33,951 |
|
Total long-term liabilities |
1,957,259 |
1,744,845 |
|
Total liabilities |
2,571,272 |
2,326,893 |
|
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, 48,732,839 shares |
48 |
47 |
|
Class B common stock, par value $0.001; 100,000,000 shares authorized, 11,481,568 shares |
12 |
12 |
|
Additional paid-in capital |
615,510 |
541,179 |
|
Treasury stock, Class A common stock, par value $0.001, at cost, 808,092 shares at June 30, |
(63,574) |
(34,589) |
|
Treasury stock, Class B common stock, par value $0.001, at cost, 2,932,450 shares at June |
(16,833) |
(16,046) |
|
Accumulated other comprehensive income, net |
2,642 |
4,369 |
|
Retained earnings |
502,931 |
416,991 |
|
Total stockholders' equity |
1,040,736 |
911,963 |
|
Total liabilities and stockholders' equity |
$ 3,612,008 |
$ 3,238,856 |
|
|
Construction Partners, Inc. Consolidated Statements of Cash Flows (unaudited, in thousands) | |||
For the Nine Months Ended |
|||
2026 |
2025 |
||
Cash flows from operating activities: |
|||
Net income |
$ 85,940 |
$ 45,211 |
|
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by |
|||
Depreciation, depletion, accretion and amortization |
135,278 |
107,741 |
|
Amortization of deferred debt issuance costs |
2,004 |
3,379 |
|
Provision for bad debt |
556 |
260 |
|
Gain on sale of property, plant and equipment |
(12,557) |
(8,437) |
|
Realized loss on sales, calls and maturities of restricted investments |
18 |
81 |
|
Share-based compensation expense |
31,195 |
27,961 |
|
Distribution of earnings from investment in joint venture |
71 |
— |
|
Loss from investment in joint venture |
1 |
12 |
|
Deferred income tax expense (benefit) |
22,658 |
(300) |
|
Other non-cash adjustments |
(617) |
(665) |
|
Changes in operating assets and liabilities, net of business acquisitions: |
|||
Contracts receivable including retainage |
(13,859) |
6,159 |
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
(11,298) |
(22,577) |
|
Inventories |
(18,279) |
(4,880) |
|
Prepaid expenses and other current assets |
(1,905) |
5,422 |
|
Other assets |
1,496 |
(3,119) |
|
Accounts payable |
16,028 |
15,975 |
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
8,510 |
(9,481) |
|
Accrued expenses and other current liabilities |
(578) |
17,543 |
|
Other long-term liabilities |
(3,803) |
(967) |
|
Net cash provided by operating activities, net of business acquisitions |
240,859 |
179,318 |
|
Cash flows from investing activities: |
|||
Purchases of property, plant and equipment |
(144,239) |
(104,886) |
|
Proceeds from sale of property, plant and equipment |
24,398 |
11,250 |
|
Proceeds from sales, calls and maturities of restricted investments |
16,022 |
8,351 |
|
Business acquisitions, net of cash acquired |
(337,429) |
(935,663) |
|
Purchase of restricted investments |
(3,753) |
(12,182) |
|
Net cash used in investing activities |
(445,001) |
(1,033,130) |
|
Cash flows from financing activities: |
|||
Proceeds from revolving credit facility |
263,500 |
218,438 |
|
Proceeds from issuance of long-term debt, net of debt issuance costs |
294,923 |
833,524 |
|
Settlement of stock awards |
(2,490) |
— |
|
Repayments of long-term debt |
(386,375) |
(137,726) |
|
Purchase of treasury stock |
(29,772) |
(20,803) |
|
Net cash provided by financing activities |
139,786 |
893,433 |
|
Net change in cash, cash equivalents and restricted cash |
(64,356) |
39,621 |
|
Cash, cash equivalents and restricted cash: |
|||
Cash, cash equivalents and restricted cash, beginning of period |
159,015 |
76,684 |
|
Cash, cash equivalents and restricted cash, end of period |
$ 94,659 |
$ 116,305 |
|
Supplemental cash flow information: |
|||
Cash paid for interest |
$ 80,230 |
$ 58,151 |
|
Cash paid for income taxes |
$ 5,204 |
$ 3,576 |
|
Cash paid for operating lease liabilities |
$ 23,315 |
$ 11,699 |
|
Non-cash items: |
|||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities |
$ 47,180 |
$ 17,620 |
|
Property, plant and equipment financed with accounts payable |
$ 9,849 |
$ 5,693 |
|
Amounts payable to sellers in business combinations, net |
$ 673 |
$ 64,938 |
|
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 transactions of a size that would require clearance under federal antitrust laws. 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 transactions of a size that would require clearance under federal antitrust laws, and (ii) nonrecurring fees associated with financing arrangements incurred in connection with transformative acquisitions. 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 present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to (i) Adjusted net income and (ii) Adjusted EBITDA (with the resulting calculation of Adjusted EBITDA margin) for the applicable periods.
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Construction Partners, Inc. Net Income to Adjusted EBITDA Reconciliation Three Months Ended June 30, 2026 and 2025 (in thousands, except percentages) | |||
For the Three Months Ended |
|||
2026 |
2025 |
||
Net income |
$ 59,555 |
$ 44,047 |
|
Interest expense, net |
30,292 |
25,239 |
|
Provision for income taxes |
19,581 |
13,903 |
|
Depreciation, depletion, accretion and amortization |
43,979 |
39,294 |
|
Share-based compensation expense |
8,242 |
8,564 |
|
Transformative acquisition expenses |
1,373 |
663 |
|
Adjusted EBITDA |
$ 163,022 |
$ 131,710 |
|
Revenues |
$ 999,418 |
$ 779,277 |
|
Adjusted EBITDA margin |
16.3 % |
16.9 % |
|
|
Construction Partners, Inc. Net Income to Adjusted Net Income Reconciliation Three Months Ended June 30, 2026 and 2025 (in thousands) | |||
For the Three Months Ended |
|||
2026 |
2025 |
||
Net income |
$ 59,555 |
$ 44,047 |
|
Transformative acquisition expenses |
1,373 |
663 |
|
Financing fees related to transformative acquisition |
— |
920 |
|
Tax impact due to above reconciling items |
(336) |
(382) |
|
Adjusted net income |
$ 60,592 |
$ 45,248 |
|
|
Construction Partners, Inc. Net Income to Adjusted EBITDA Reconciliation Fiscal Year 2026 Updated Outlook (unaudited, in thousands, except percentages) | |||
|
For the Fiscal Year Ending September 30, 2026 |
|||
Low |
High |
||
Net income |
$ 165,000 |
$ 168,000 |
|
Interest expense, net |
112,500 |
113,500 |
|
Provision for income taxes |
53,500 |
54,500 |
|
Depreciation, depletion, accretion and amortization |
181,000 |
184,000 |
|
Share-based compensation expense |
31,500 |
32,500 |
|
Transformative acquisition expenses |
15,500 |
16,500 |
|
Adjusted EBITDA |
$ 559,000 |
$ 569,000 |
|
Revenues |
$ 3,640,000 |
$ 3,680,000 |
|
Adjusted EBITDA margin |
15.36 % |
15.46 % |
|
|
Construction Partners, Inc. Net Income to Adjusted Net Income Reconciliation Fiscal Year 2026 Updated Outlook (unaudited, in thousands) | |||
|
For the Fiscal Year Ending September 30, 2026 |
|||
Low |
High |
||
Net income |
$ 165,000 |
$ 168,000 |
|
Transformative acquisition expenses |
15,500 |
16,500 |
|
Financing fees related to transformative acquisition |
1,200 |
1,200 |
|
Tax impact due to above reconciling items |
(4,100) |
(4,300) |
|
Adjusted net income |
$ 177,600 |
$ 181,400 |
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View original content:https://www.prnewswire.com/news-releases/construction-partners-inc-announces-fiscal-2026-third-quarter-results-302845513.html
SOURCE Construction Partners, Inc.