Company Introduces Fiscal 2024 Outlook
Hosts Analyst Day in New York City
DOTHAN,
Ala., Oct. 4, 2023 /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 six
southeastern states, today announced preliminary financial results
for fiscal year 2023 and has introduced fiscal year 2024 outlook
ranges that will be discussed during today's Analyst Day event in
New York City.
Fred J. (Jule) Smith, III, the
Company's President and Chief Executive Officer, said, "We finished
our fiscal year last week with strong operational performance
across our footprint, representing a productive work season with
high project demand and healthy project margins. Today we are
announcing our preliminary fiscal 2023 financial results, which
represent significant growth compared to fiscal 2022 on both the
top and bottom lines of our business. We look forward to reviewing
our strategic initiatives, growth priorities and business outlook
with those participating in our Analyst Day event either in person
or through the webcast link on our website."
Preliminary Fiscal 2023 Financial Results
Revenue in fiscal 2023 is expected to be in the range of
$1.547 billion to 1.557 billion,
compared to $1.30 billion in fiscal
2022.
Net income in fiscal 2023 is expected to be in the range of
$44.8 million to $47.0 million, compared to $21.4 million in fiscal 2022.
Adjusted EBITDA(1) in fiscal 2023 is expected to be
in the range of $168.0 million to
$172.0 million, compared to
$111.2 million in fiscal 2022.
Adjusted EBITDA Margin(1) in fiscal 2023 is expected
to be in the range of 10.9% to 11.0%, compared to 8.5% in fiscal
2022.
Cash flow from operations in fiscal 2023 is expected to be in
the range of $155.0 million to
$160.0 million, compared to
$16.5 million in fiscal 2022.
Cash at fiscal year-end 2023 is expected to be approximately
$55 million, compared to $35.5 million at fiscal year-end 2022.
Net Debt(1) to Adjusted EBITDA(1) at
fiscal year-end 2023 is expected to be in the range of 1.87x to
1.92x, compared to 3.06x at fiscal year-end 2022.
(1) Adjusted EBITDA, Adjusted EBITDA Margin and Net Debt
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.
The Company's independent registered public accounting firm has
not audited, reviewed, compiled or performed any procedures with
respect to the above preliminary financial information or its audit
of the Company's financial statements for the year ended
September 30, 2023. The Company's
actual results may differ from these estimates as a result of the
Company's year-end closing procedures, review adjustments and other
developments that may arise between now and the time the Company's
financial results for the year ended September 30, 2023 are finalized.
Introducing Fiscal Year 2024 Outlook
The Company's outlook for fiscal year 2024 with regard to
revenue, net income, Adjusted EBITDA and Adjusted EBITDA Margin is
as follows:
- Revenue in the range of $1.750
billion to $1.825 billion
- Net income in the range of $63
million to $70 million
- Adjusted EBITDA(1) in the range of $197 million to $219
million
- Adjusted EBITDA Margin(1) in the range of 11.3% to
12.0%
Smith commented, "As our Company continues its growth
trajectory, we remain focused on expanding margins though enhanced
local market performance, further vertical integration of
construction materials and services, and scaling corporate costs
across the organization. We continue to benefit from opportunities
afforded by a generational investment in infrastructure, the
fast-growing economy in the Southeast, and numerous organic and
acquisitive growth opportunities."
Analyst Day Webcast Information
Today's Analyst Day event will be made available online at
approximately 9:00 a.m. Eastern Time
via a live audio webcast with accompanying slides. Interested
parties who would like to participate virtually are invited to join
the Construction Partners Analyst Day 2023 webcast by visiting the
"Events & Presentations" section of the Company's Investors
website at https://ir.constructionpartners.net/. A replay of the
webcast and the accompanying presentation will be made available on
the Investors website following the conclusion of the live
event.
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 27A of the Securities Act of 1933 and
21E of the Securities Exchange Act of 1934. These statements may be
identified by the use of words such as "seek" "continue,"
"estimate," "predict," "potential," "targeting," "could," "might,"
"may," "will," "expect," "should," "anticipate," "intend,"
"project," "outlook," "believe," "plan" and similar expressions or
their negative. These forward-looking statements include, among
others, statements regarding the Company's expected revenue, net
income, Adjusted EBITDA, Adjusted EBITDA Margin, Cash Flow from
Operations, Total long-term debt to Net Income and Net Debt to
Adjusted EBITDA for the fiscal year ended September 30, 2023, the Company's fiscal year
2024 outlook and the Company's business strategy. 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: the
preliminary financial information remaining subject to changes and
finalization based upon management's ongoing review of results for
the fiscal year ended September 30,
2023 and the completion of all year-end closing procedures;
the Company's 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 the Company's
operating strategy; competition for projects in the Company's local
markets; risks associated with the Company's 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; the
Company's ability to obtain sufficient bonding capacity to
undertake certain projects; the Company's ability to accurately
estimate the overall risks, requirements or costs when it bids on
or negotiate contracts that are ultimately awarded to the Company;
the cancellation of a significant number of contracts or the
Company's disqualification from bidding for new contracts; risks
related to adverse weather conditions; the Company's substantial
indebtedness and the restrictions imposed on the Company by the
terms thereof; the Company's ability to maintain favorable
relationships with third parties that supply the Company with
equipment and essential supplies; the Company's 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 the Company's information
technology systems and infrastructure; the Company's ability to
maintain effective internal control over financial reporting; and
the other risks, uncertainties and factors set forth in the
Company's most recent Annual Report on Form 10-K, its subsequent
Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K and
other reports the Company files with the Securities and Exchange
Commission. 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
Dennard Lascar Investor
Relations
ROAD@DennardLascar.com
(713) 529-6600
- 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 and (vi) certain management fees and
expenses. Periods commencing subsequent to September 30, 2023 do not include an adjustment
for management fees and expenses, which have historically related
to the Company's management services agreement with an affiliate of
SunTx Capital Partners. Effective October 1,
2023, the term of the management services agreement has been
extended to October 28, 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. Adjusted EBITDA Margin
represents Adjusted EBITDA as a percentage of revenues for each
period. Net Debt represents total long-term debt less cash.
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 these metrics because management
uses these measures as key performance indicators and believes that
securities analysts, investors and others use these measures to
evaluate companies in the Company's industry. The Company's
calculation of these metrics 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 for the periods presented:
Construction
Partners, Inc.
Net Income to
Adjusted EBITDA Reconciliation
Preliminary Fiscal Year 2023 Financial
Results
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year
Ended
September 30, 2023
|
|
Low
|
|
High
|
Net income
|
$
|
44,800
|
|
|
$
|
47,000
|
|
Interest expense,
net
|
18,400
|
|
|
18,600
|
|
Provision (benefit) for
income taxes
|
15,000
|
|
|
15,800
|
|
Depreciation,
depletion, and amortization
|
78,200
|
|
|
78,600
|
|
Equity-based
compensation expense
|
10,100
|
|
|
10,400
|
|
Management fees and
expenses
|
1,500
|
|
|
1,600
|
|
Adjusted
EBITDA
|
$
|
168,000
|
|
|
$
|
172,000
|
|
|
|
|
|
Construction
Partners, Inc.
Net Income to
Adjusted EBITDA Reconciliation
Fiscal Year 2024
Outlook
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year
Ending
September 30, 2024
|
|
Low
|
|
High
|
Net income
|
$
|
63,000
|
|
|
$
|
70,000
|
|
Interest expense,
net
|
18,000
|
|
|
20,500
|
|
Provision for income
taxes
|
21,200
|
|
|
23,600
|
|
Depreciation,
depletion, and amortization
|
83,600
|
|
|
93,100
|
|
Equity-based
compensation expense
|
11,200
|
|
|
11,800
|
|
Adjusted
EBITDA
|
$
|
197,000
|
|
|
$
|
219,000
|
|
|
|
|
|
The following table presents a reconciliation of total long-term
debt, the most directly comparable measure calculated in accordance
with GAAP, to Net Debt for the periods presented:
Construction
Partners, Inc.
Total Long-Term Debt
to Net Debt Reconciliation
Preliminary Fiscal
Year 2023 Financial Results
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30,
2023
|
|
Low
|
|
High
|
Total long-term
debt
|
$
|
|
376,850
|
|
$
|
|
376,850
|
Less: Cash
|
|
55,000
|
|
|
55,000
|
Net Debt
|
|
321,850
|
|
|
321,850
|
Adjusted
EBITDA
|
$
|
|
168,000
|
|
$
|
|
172,000
|
Leverage
Ratio
|
|
|
1.92x
|
|
|
|
1.87x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Construction Partners, Inc.