Construction Partners, Inc. Announces Fiscal 2021 Fourth Quarter and Year-End Results
Company Reports Record Backlog of $966 Million
DOTHAN, Ala., Nov. 23, 2021 /PRNewswire/ -- Construction Partners, Inc. (NASDAQ: ROAD) ("CPI" or the "Company"), a vertically integrated civil infrastructure company specializing in the construction and maintenance of roadways across five southeastern states, today reported financial and operating results for the fiscal fourth quarter and year ended September 30, 2021.
Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "We are pleased to report strong revenue growth of 24% in the fourth quarter and 16% for the fiscal year, compared to last year. Our fiscal year-over-year revenue growth of 16% consisted of approximately one-third organic growth and two-thirds acquisitive growth. I'm proud of our team's hard work in the quarter, despite an increase in lost workdays due to abnormally wet weather in the Southeast, where precipitation was up 30% from July to September compared to typical rainfall levels for these months in all of our states. Fortunately, project delays based on inclement weather served to further bolster a record year-end project backlog of $966 million. We see this year's fourth quarter growth in backlog as evidence of strong demand for infrastructure services in our markets. In addition, we believe profit margins in our backlog can continue to grow with the expanded bidding opportunities in infrastructure.
"Our fiscal year 2022 outlook reflects confidence in the continuation of solid growth supported by strong customer demand, project funding and bidding activities across our markets. In addition, a robust acquisition pipeline and historically high backlog form the foundation of our growth expectations in fiscal 2022. Our optimism about the Company's core business model and long-term strategy, coupled with a 'once-in-a-generation' $1.2 trillion bipartisan infrastructure bill, has our team extremely excited about the opportunities that should allow our Company to directly contribute to the improvement of our nation's infrastructure for years to come."
Fiscal Year 2021 Results
Fiscal 2021 revenues were $910.7 million, compared to $785.7 million in fiscal 2020, representing 15.9% year-over-year revenue growth.
Gross profit was $119.9 million in fiscal 2021, compared to $122.2 million in fiscal 2020.
Net income was $20.2 million in fiscal 2021, compared to net income of $40.3 million in fiscal 2020. Adjusted net income(1) in fiscal 2021 was $24.0 million, compared to $40.6 million in fiscal 2020.
Adjusted EBITDA(1) in fiscal 2021 was $90.6 million, compared to $98.9 million in fiscal 2020.
Project backlog was $966.2 million at September 30, 2021, compared to $608.1 million at September 30, 2020 and $822.9 million at June 30, 2021.
Smith continued, "Our team has done an excellent job integrating recently acquired businesses that are expanding the company into new markets and enhancing our vertical integration for manufacturing and construction services. Last month, we completed a strategically important platform acquisition, with the purchase of King Asphalt in Liberty, South Carolina. King is a full-service hot-mix asphalt and paving company with three hot-mix asphalt plants in the Greenville metropolitan area. King provides asphalt contracting services for a variety of public, commercial and residential projects and is well-positioned to participate in the dynamic economy and rapid growth occurring in the Upstate region of South Carolina.
"Despite current economic headwinds impacting all construction and infrastructure businesses, such as wage and materials inflation, as well as disruptions felt up and down the supply chain, our team is demonstrating resiliency as we manage through challenges. We have carefully factored these risks into our 2022 outlook ranges and believe that we can achieve double-digit top-line revenue growth and Adjusted EBITDA margins," added Smith.
Fiscal Year 2022 Outlook
The Company's outlook for fiscal year 2022 with regard to revenue, net income and Adjusted EBITDA is as follows:
The Company's outlook does not assume an increase in federal funding from the recently passed Infrastructure Investment in Jobs Act or future acquisitions that the Company has not already completed.
Ned N. Fleming, III, the Company's Executive Chairman, stated, "CPI is a growth company that once again successfully demonstrated its ability to achieve strong operational and financial results across its expanding footprint in fiscal year 2021. We significantly grew revenue in new markets via acquisitions and further penetrated markets across existing geographies. In addition, our vertical integration strategy and enhanced construction services in 2021 provide a more scaled platform for greater 'rock to road' margins projected for 2022. As Jule explained, the Company's fiscal 2022 outlook indicates double-digit revenue growth on improving gross margins, with certain 2021 non-recurring costs eliminated for 2022. The Board and management believe strongly in the opportunities for CPI to continue to grow this year, and beyond, as we work hard to enhance value for all stakeholders."
The Company will conduct a conference call today at 9:00 a.m. Central Time to discuss financial and operating results for the quarter and year ended September 30, 2021. 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 November 30, 2021 by calling (201) 612-7415 and using passcode ID: 13723179#. 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 five southeastern states, with 56 hot-mix asphalt plants, 14 aggregate facilities and one liquid asphalt terminal. Publicly funded projects make up the majority of its business and include local and state roadways, interstate highways, airport runways and bridges. The majority of the Company's public projects are maintenance-related. Private sector projects 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; risks from the COVID-19 pandemic, 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.
Rick Black / Ken Dennard
(1) Adjusted net income and Adjusted EBITDA 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 –
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, (v) loss on the extinguishment of debt, (vi) certain management fees and expenses and (vii) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. Adjusted net income represents net income before nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA and Adjusted 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 these measures 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 Adjusted EBITDA and adjusted net income for the periods presented.
SOURCE Construction Partners, Inc.
Company Codes: NASDAQ-NMS:ROAD
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