Construction Partners ((ROAD)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The latest earnings call for Construction Partners (CPI) conveyed a positive sentiment, emphasizing record-breaking revenue and strong growth despite challenges related to acquisition expenses impacting net income. The strategic acquisitions and favorable market conditions are expected to support CPI’s robust growth trajectory.
Record Revenue and Growth
CPI reported an impressive quarter with record revenue, showcasing a year-over-year growth of 42%. The company also achieved a record backlog of $2.66 billion, underscoring its strong market positioning and increasing demand for its services.
Strong EBITDA Performance
The company’s adjusted EBITDA saw a significant increase of 68% compared to the first quarter of fiscal 2024, with margins expanding by nearly 200 basis points. This growth highlights CPI’s efficient operational management and ability to drive profitability.
Successful Acquisitions
CPI made strategic acquisitions, including Oberlin Corporation and Mobile Asphalt Company, bolstering its market presence in Oklahoma and Alabama. These acquisitions are expected to enhance CPI’s service offerings and market reach.
Positive Market Conditions
The earnings call emphasized strong demand for infrastructure services in the Sunbelt region, with public infrastructure funding experiencing a year-over-year increase of approximately 16%. This demand is a key driver of CPI’s growth strategy.
11% Organic Growth
CPI achieved an 11% organic growth rate this quarter, reflecting the company’s focus on expanding its existing market operations and optimizing its current assets.
Net Loss Due to Acquisition Expenses
The company reported a net loss of $3.1 million for the quarter, attributed to non-recurring expenses associated with a transformative acquisition. Despite this, CPI remains optimistic about the long-term benefits of its acquisitions.
Decreased Cash Provided by Operating Activities
CPI experienced a decrease in cash provided by operating activities, totaling $40.7 million compared to $60 million in the same quarter a year ago. This decrease was primarily due to weather-related changes impacting cash collections.
Forward-Looking Guidance
Looking ahead, Construction Partners provided a robust outlook for fiscal 2025. The company anticipates revenue between $2.66 billion and $2.74 billion, with adjusted EBITDA projected at approximately $335 million. Strategic acquisitions are expected to contribute an additional $120 million to $130 million in revenue. Overall, CPI remains optimistic about its growth prospects, supported by a healthy acquisition pipeline and strong market conditions in the Sunbelt region.
In conclusion, the earnings call for Construction Partners highlighted a positive outlook with record revenues and strong growth metrics. Despite some challenges related to acquisition expenses, the company is strategically positioned for continued expansion, supported by favorable market conditions and successful acquisitions.
