0001718227FALSE290 Healthwest Drive, Suite 2DothanAlabama3630300017182272024-05-102024-05-10

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 10, 2024 
CONSTRUCTION PARTNERS, INC.
(Exact name of registrant as specified in its charter) 
 
Delaware 001-38479 26-0758017
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (I.R.S. Employer
Identification Number)
 
290 Healthwest Drive, Suite 2
Dothan, Alabama 36303
(Address of principal executive offices) (ZIP Code)
(334) 673-9763
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange
on which registered
Class A common stock, $0.001 par value ROAD The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).        Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                  ☐





Item 2.02.     Results of Operations and Financial Condition.
On May 10, 2024, Construction Partners, Inc. issued a press release announcing its financial results for the fiscal quarter ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto, and the information contained in Exhibit 99.1 is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01.    Financial Statements and Exhibits.
(d)    Exhibits.
Exhibit No.Description
99.1**
104*Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.
** Furnished herewith.



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CONSTRUCTION PARTNERS, INC.
Date: May 10, 2024By:/s/ Gregory A. Hoffman
Gregory A. Hoffman
Senior Vice President and Chief Financial Officer




Exhibit 99.1
capturea03a.jpg
NEWS RELEASE
Construction Partners, Inc. Announces Fiscal 2024 Second Quarter Results

Q2 Revenue Up 14% Compared to Q2 FY23
Q2 Adjusted EBITDA Up 45% Compared to Q2 FY23
Record Backlog of $1.79 Billion
Company Raises FY24 Outlook

DOTHAN, AL, May 10, 2024 – 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 second quarter ended March 31, 2024.
Fred J. (Jule) Smith, III, the Company’s President and Chief Executive Officer, said, “We are pleased to report a strong second quarter in the slowest winter quarter of our seasonal business, achieving year-over-year growth in revenue, gross profit and gross profit margin, Adjusted EBITDA and Adjusted EBITDA margin. In addition, we grew our project backlog to $1.79 billion as of March 31, 2024. Our continued revenue and backlog growth reflects the strong ongoing demand and funding environment for both public and private infrastructure projects across our geographic footprint. Because of our confidence in these sustained industry trends, strong operational performance across our 70 markets in the Southeast, and continued infrastructure tailwinds, we are raising our outlook for fiscal 2024.”
Revenues were $371.4 million in the second quarter of fiscal 2024, an increase of 14% compared to $324.8 million in the same quarter last year. The increase included $25.1 million of revenues attributable to acquisitions completed during or subsequent to the three months ended March 31, 2023 and an increase of approximately $21.4 million of revenues in the Company’s existing markets from contract work and sales of HMA and aggregates to third parties. The mix of total revenue growth for the quarter was approximately 6.6% organic revenue and approximately 7.7% from these recent acquisitions.
Gross profit was $38.8 million in the second quarter of fiscal 2024, an increase of 48% compared to $26.3 million in the same quarter last year. Gross profit as a percentage of total revenue was 10.4% and 8.1% for the quarters ended March 31, 2024 and 2023, respectively, an increase of 220 basis points year over year.
General and administrative expenses were $36.7 million in the second quarter of fiscal 2024, compared to $32.0 million in the same quarter last year, and as a percentage of total revenue, were 9.9% in each quarter.
Net loss was $1.1 million in the second quarter of fiscal 2024, compared to net loss of $5.5 million in the same quarter last year.
Adjusted EBITDA(1) in the second quarter of fiscal 2024 was $29.5 million, an increase of 45% compared to $20.4 million in the same quarter last year.
Project backlog was $1.79 billion at March 31, 2024, compared to $1.52 billion at March 31, 2023 and $1.62 billion at December 31, 2023.
Smith added, “Across our six southeastern states, which represent many of the fastest-growing markets in the country, the project bidding and pricing environment remains positive. We remain focused on organic growth and gaining market share, which, in conjunction with our acquisition activity, grow our top line and expand our margins. Our team’s hard work, operational efficiency, dedication to detail and focus on safety continue to support our strategy, and we progress toward our ROAD-Map 2027 goals and create value for our shareholders through improving returns on capital.”
(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.

Fiscal Year 2024 Outlook
The Company is raising its outlook ranges for fiscal year 2024 with regard to revenue, net income, Adjusted EBITDA and Adjusted EBITDA Margin, as follows:
•Revenue in the range of $1.81 billion to $1.85 billion
•Net income in the range of $71 million to $75 million
•Adjusted EBITDA(1) in the range of $211 million to $225 million
•Adjusted EBITDA Margin(1) in the range of 11.7% to 12.2%
Ned N. Fleming, III, the Company’s Executive Chairman, stated, “Construction Partners continues to benefit from strong public and private project demand. This demand is supported by elevated funding for public projects at the federal, state and local levels, in addition to a steady commercial project environment led by the continued migration to the southeastern United States. The overall backdrop of our strategy also remains constant in support of the nation’s need to invest in deferred infrastructure maintenance and additional capacity. CPI is well positioned for growth as we steadily execute on our strategy and perform this work. The Board and I are pleased with the strength of the organization, its leadership and the commitment of our team to continue to grow the Company and enhance value for all of our stakeholders.”
Conference Call
The Company will conduct a conference call today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss financial and operating results for the fiscal quarter ended March 31, 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 May 17, 2024 by calling (201) 612-7415 and using passcode ID: 13743799#. A webcast of the call will also be available live and for later replay on the Company’s Investor Relations website at www.constructionpartners.net.
About Construction Partners, Inc.
Construction Partners, Inc. is a vertically integrated civil infrastructure company operating across six southeastern states. Supported by its hot-mix asphalt plants, aggregate facilities and liquid asphalt terminals, the company focuses on the construction, repair and maintenance of surface infrastructure. Publicly funded projects make up the majority of its business and include local and state roadways, interstate highways, airport runways and bridges. The company also performs private sector projects that include paving and sitework for office and industrial parks, shopping centers, local businesses and residential developments. To learn more, visit www.constructionpartners.net.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained herein that are not statements of historical or current fact constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words such as “may,” “will,” “expect,” “should,” “anticipate,” “intend,” “project,” “outlook,” “believe” and “plan.” The forward-looking statements contained in this press release include, without limitation, statements related to financial projections, future events, business strategy, future performance, future operations, backlog, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management. These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Important factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, among others: our ability to successfully manage and integrate acquisitions; failure to realize the expected economic benefits of acquisitions, including future levels of revenues being lower than expected and costs being higher than expected; failure or inability to implement growth strategies in a timely manner; declines in public infrastructure construction and reductions in government funding, including the funding by transportation authorities and other state and local agencies; risks related to our operating strategy; competition for projects in our local markets; risks associated with our capital-intensive business; government requirements and initiatives, including those related to funding for public or infrastructure construction, land usage and environmental, health and safety matters; unfavorable economic conditions and restrictive financing markets; our ability to obtain sufficient bonding capacity to undertake certain projects; our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; the cancellation of a significant number of contracts or our disqualification from bidding for new contracts; risks related to adverse weather conditions; our substantial indebtedness and the restrictions imposed on us by the terms thereof; our ability to


maintain favorable relationships with third parties that supply us with equipment and essential supplies; our ability to retain key personnel and maintain satisfactory labor relations; property damage, results of litigation and other claims and insurance coverage issues; risks related to our information technology systems and infrastructure; our ability to maintain effective internal control over financial reporting; and the risks, uncertainties and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.
Contacts:
Rick Black / Ken Dennard
Dennard Lascar Investor Relations
ROAD@DennardLascar.com
(713) 529-6600
- Financial Statements Follow -


Construction Partners, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(unaudited, in thousands, except share and per share data)

For the Three Months Ended March 31,For the Six Months Ended March 31,
2024202320242023
Revenues$371,427 $324,850 $767,932 $666,629 
Cost of revenues332,626 298,570 677,251 609,853 
Gross profit38,801 26,280 90,681 56,776 
General and administrative expenses(36,752)(31,989)(72,733)(61,714)
Gain on sale of property, plant and equipment, net1,031 3,158 1,867 3,326 
Gain on facility exchange— — — 5,389 
Operating income (loss)3,080 (2,551)19,815 3,777 
Interest expense, net(4,568)(4,802)(8,314)(8,762)
Other income43 398 15 432 
Income (loss) before provision for income taxes(1,445)(6,955)11,516 (4,553)
Provision for income taxes(321)(1,474)2,797 (964)
Net income (loss)(1,124)(5,481)8,719 (3,589)
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on interest rate swap contract, net2,478 (3,460)(4,627)(4,752)
Unrealized gain (loss) on restricted investments, net(87)81 313 117 
Other comprehensive income (loss)2,392 (3,379)(4,313)(4,635)
Comprehensive income (loss)$1,268 $(8,860)$4,406 $(8,224)
Net income (loss) per share attributable to common stockholders:
Basic$(0.02)$(0.11)$0.17 $(0.07)
  Diluted$(0.02)$(0.11)$0.17 $(0.07)
Weighted average number of common shares outstanding:
Basic51,938,216 51,827,365 51,915,069 51,826,143 
  Diluted51,938,216 51,827,365 52,523,100 51,826,143 




Construction Partners, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)

March 31,September 30,
20242023
ASSETS(unaudited)
Current assets:
Cash and cash equivalents$47,957 $48,243 
Restricted cash2,479 837 
Contracts receivable including retainage, net275,570 303,704 
Costs and estimated earnings in excess of billings on uncompleted contracts36,120 27,296 
Inventories102,750 84,038 
Prepaid expenses and other current assets10,586 9,306 
Total current assets475,462 473,424 
Property, plant and equipment, net565,351 505,095 
Operating lease right-of-use assets26,721 14,485 
Goodwill181,467 159,270 
Intangible assets, net21,451 19,520 
Investment in joint venture84 87 
Restricted investments15,452 15,079 
Other assets27,412 32,705 
Total assets$1,313,400 $1,219,665 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$141,522 $151,406 
Billings in excess of costs and estimated earnings on uncompleted contracts103,453 78,905 
   Current portion of operating lease liabilities5,564 2,338 
Current maturities of long-term debt15,000 15,000 
Accrued expenses and other current liabilities24,608 31,534 
Total current liabilities290,147 279,183 
Long-term liabilities:
Long-term debt, net of current maturities and deferred debt issuance costs423,388 360,740 
   Operating lease liabilities, net of current portion21,717 12,649 
Deferred income taxes, net35,438 37,121 
Other long-term liabilities17,727 13,398 
Total long-term liabilities498,270 423,908 
Total liabilities788,417 703,091 
Stockholders’ equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized and no shares issued and outstanding at March 31, 2024 and September 30, 2023
— — 
Class A common stock, par value $0.001; 400,000,000 shares authorized, 43,896,017 shares issued and 43,828,855 shares outstanding at March 31, 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 March 31, 2024 and September 30, 2023
12 12 
Additional paid-in capital272,669 267,330 
Treasury stock, Class A common stock, par value $0.001, at cost, 67,162 shares at March 31, 2024 and 32,866 shares at September 30, 2023
(1,514)(178)
Treasury stock, Class B common stock, par value $0.001, at cost, 2,922,952 shares at March 31, 2024 and September 30, 2023
(15,603)(15,603)
Accumulated other comprehensive income, net14,381 18,694 
Retained earnings254,994 246,275 
Total stockholders’ equity524,983 516,574 
Total liabilities and stockholders’ equity$1,313,400 $1,219,665 



Construction Partners, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
For the Six Months Ended March 31,
20242023
Cash flows from operating activities:
Net income (loss)$8,719 $(3,589)
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash provided by operating activities:
Depreciation, depletion, accretion and amortization43,961 38,233 
Amortization of deferred debt issuance costs148 151 
Unrealized loss on derivative instruments194 2,286 
Provision for bad debt335 70 
Gain on sale of property, plant and equipment(1,867)(3,326)
Gain on facility exchange— (5,389)
Realized loss on sales, calls and maturities of restricted investments49 4 
Share-based compensation expense6,221 5,172 
Loss from investment in joint venture3 — 
Deferred income tax benefit(306)(224)
  Other non-cash adjustments(224)(69)
Changes in operating assets and liabilities, net of business acquisitions:
Contracts receivable including retainage, net43,443 34,092 
Costs and estimated earnings in excess of billings on uncompleted contracts(7,799)743 
Inventories(15,968)(10,152)
Prepaid expenses and other current assets2,165 (3,246)
Other assets(585)(206)
Accounts payable(12,536)(12,764)
Billings in excess of costs and estimated earnings on uncompleted contracts22,412 7,415 
Accrued expenses and other current liabilities(11,976)(6,289)
Other long-term liabilities2,161 2,784 
Net cash provided by operating activities, net of business acquisitions78,550 45,696 
Cash flows from investing activities:
Purchases of property, plant and equipment(55,518)(60,399)
Proceeds from sale of property, plant and equipment4,962 8,301 
Proceeds from facility exchange— 36,987 
Proceeds from sales, calls and maturities of restricted investments1,918 866 
Business acquisitions, net of cash acquired(87,850)(77,842)
Purchase of restricted investments(1,870)(5,148)
Net cash used in investing activities(138,358)(97,235)
Cash flows from financing activities:
Proceeds from revolving credit facility90,000 38,000 
Proceeds from issuance of long-term debt, net of debt issuance costs— 15,000 
Repayments of long-term debt(27,500)(6,250)
Purchase of treasury stock(1,336)(139)
Net cash provided by financing activities61,164 46,611 
Net change in cash, cash equivalents and restricted cash1,356 (4,928)
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, beginning of period49,080 35,559 
Cash, cash equivalents and restricted cash, end of period$50,436 $30,631 
Supplemental cash flow information:
Cash paid for interest$9,569 $9,047 
Cash paid for income taxes$3,155 $626 
Cash paid for operating lease liabilities$1,435 $1,204 
Non-cash items:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$9,999 $4,062 
Property, plant and equipment financed with accounts payable$2,554 $3,448 



Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation, depletion, accretion and amortization, (iv) equity-based compensation expense, and (v) loss on the extinguishment of debt. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues for each period. These metrics are supplemental measures of the Company’s operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of the Company’s operating performance. The Company presents Adjusted EBITDA and Adjusted EBITDA Margin because management uses these measures as key performance indicators, and the Company believes that securities analysts, investors and others use these measures to evaluate companies in the Company’s industry. The Company’s calculation of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly named measures reported by other companies. Potential differences may include differences in capital structures, tax positions and the age and book depreciation of intangible and tangible assets.
The following table presents a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA and the calculation of Adjusted EBITDA Margin for the periods presented:
Construction Partners, Inc.
Net Income to Adjusted EBITDA Reconciliation
Fiscal Quarters Ended March 31, 2024 and 2023
(unaudited, in thousands)
For the Three Months Ended March 31,
2024
2023 (1)
Net income (loss)$(1,124)$(5,481)
Interest expense, net4,568 4,802 
Provision for income taxes(321)(1,474)
Depreciation, depletion, accretion and amortization 22,840 19,858 
Share-based compensation expense3,553 2,692 
Adjusted EBITDA$29,516 $20,397 
Revenues$371,427 $324,850 
Adjusted EBITDA Margin7.9 %6.3 %
(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 months ended March 31, 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
LowHigh
Net income$71,000 $75,000 
Interest expense, net19,000 20,000 
Provision for income taxes23,793 25,134 
Depreciation, depletion, accretion and amortization84,507 91,766 
Share-based compensation expense12,700 13,100 
Adjusted EBITDA$211,000 $225,000 
Revenues$1,810,000 $1,850,000 
Adjusted EBITDA Margin11.7 %12.2 %






v3.24.1.1.u2
Cover Page
May 10, 2024
Cover [Abstract]  
Entity Tax Identification Number 26-0758017
Entity File Number 001-38479
Entity Incorporation, State or Country Code DE
Entity Registrant Name CONSTRUCTION PARTNERS, INC.
Document Period End Date May 10, 2024
Document Type 8-K
Amendment Flag false
Entity Central Index Key 0001718227
Entity Emerging Growth Company false
Security Exchange Name NASDAQ
Trading Symbol ROAD
Title of 12(b) Security Class A common stock, $0.001 par value
Pre-commencement Issuer Tender Offer false
Pre-commencement Tender Offer false
Soliciting Material false
Local Phone Number (334) 673-9763(Registrant’s telephone number, including area code)
City Area Code (334) 673-9763(Registrant’s telephone number, including area code)
Written Communications false
Entity Address, Postal Zip Code 36303
Entity Address, State or Province AL
Entity Address, City or Town Dothan
Entity Address, Address Line One 290 Healthwest Drive, Suite 2
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