Construction Partners, Inc.

Greetings and welcome to the Construction Partners Incorporated's third quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad as a reminder this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, Investor Relations.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for the construction partners conference call to review third quarter fiscal year 2021 results. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section of constructionpartners.net. Information recorded on this call speaks only as of the day, August 6th, 2021. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are forward-looking statements made pursuant to the Safe Harbors Provision of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call that by their nature are uncertain and outside of the company's control. Actual results may differ materially. Please refer to the earnings press release that was issued today for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management will also refer to non-GAAP measures, including adjusted net income, loss, and adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. Construction Partners assumes no obligation to publicly update or revise any forward-looking statements. And now I would like to turn the call over to Construction Partners CEO, Jewel Smith. Jewel?

Thank you, Rick, and good morning, everyone. With me on the call today are Alan Palmer, our Chief Financial Officer, and Ned Fleming, our Executive Chairman. I'll begin today by talking about the third quarter, followed by commentary about our recently announced acquisitions in Alabama and North Carolina. We'll then have Alan walk us through the financial results before Ned provides some closing comments prior to us opening up the call for your questions. I'm pleased with our performance in the quarter, which generated top line revenue of growth of more than 20% year over year. Across our footprint in the southeast, we continued to win new project work and grew backlog to a record high $823 million. This growth of backlog combined with a bright outlook for infrastructure funding over multiple years at both the state and federal levels, has compelled us to invest this year in our people and technology to prepare for and support future growth. While this investment for future growth creates profitability headwinds in the short term, we see these investments as vital for the organization being prepared and ready. Customer demand, project funding, and bidding activity remain strong throughout the quarter. However, similar to many construction and infrastructure businesses, we experience project delays due to supply chain and labor constraints affecting CPI operations, as well as our subcontractors and vendors. While CPI has a stable and experienced local workforce in our markets and strong purchasing power across our company, We are not immune to these current industry constraints. We believe supply chain disruptions will subside in the coming quarters as we move through fiscal 2022. Today, we have revised our fiscal 2021 financial outlook to reflect these transitory issues. However, our long-term growth strategy remains firmly intact. Let me say we are very bullish on fiscal 2022 and beyond. Turning now to acquisitions, we announced two significant transactions earlier this week, expanding our geographic footprint in the southeast and further enhancing CPI's vertical integration in Alabama and North Carolina. Not only did we acquire critical assets in growing markets, we also added significant talent to our teams. These acquisitions totaled approximately $113 million and added four hot mix asphalt plants and five aggregate facilities. In Alabama, we acquired Good Hope Contracting and its related entities, all headquartered in Coleman, Alabama. In addition to the four hot mix asphalt plants and four aggregate facilities, the transaction also included a diverse fleet of trucks and construction equipment. These assets will help to support and grow our operations in central and northern Alabama under the leadership of Senior Vice President John Harper, the president of our Alabama platform company, Wiregrass Construction. The Good Hope acquisition substantially strengthens our capabilities, including project acquisition and execution, aggregate sourcing, and transportation logistics with these added resources. We are excited to welcome more than 180 talented, hardworking employees to the CPI team. In North Carolina, we acquired Doherty Springs Quarry, a crushed stone and aggregates facility located near Goldston, North Carolina. This transaction enhances our vertical integration strategy of construction materials to support our asphalt manufacturing operations. This aggregate facility is uniquely and strategically located in the rapidly growing Sandhills region of North Carolina. and we expect to use the aggregates mined from this facility to supply multiple asphalt plants we acquired last fall. The facility's proximity to our current operations enhances our project bidding opportunities, and we believe this will contribute to future growth in these markets. In the past nine months, we have acquired a total of 17 hot mix asphalt plants and added nearly 700 employees. Looking forward, the acquisition opportunities and the increased pipeline activity, especially in new markets, is considerable. This is the reason we've revised our capital structure, providing more financial flexibility, which Alan will discuss further in a few moments. We see the opportunities, we have the capital structure, and we have been investing in our organization for the future growth ahead. Our senior leadership team continues actively working to identify and engage companies that may fit well into our future growth plans, as well as prepare the organization for growth in advance. As a consolidator in a fragmented industry, we continue to gain momentum through acquiring quality companies, assets, and people to broaden CPI's relative market share and depth of service. Turning now Now to what we are seeing at the federal funding level in our industry. Like most of you, we are following the process closely in Washington, D.C., and we remain optimistic about the prospect for a significant infrastructure bill, including bipartisan support for infrastructure legislation. We are confident that our nation's infrastructure investing will continue to be a primary focus for our country, both as an economic driver and is a critical component for public safety. Regardless of the pathway to increase federal funding, all proposals provide for sizable increases in federal surface transportation funding over the FAST Act. In addition, we expect that the FAST Act reauthorization will be passed before its expiration in September. As a reminder, this surface transportation reauthorization, along with the Bipartisan Infrastructure Bill proposal, totals to a greater than 50% increase over the current funding for the next five years. Such legislation would immediately stimulate economic growth and job creation while also driving meaningful project demand in late 2022 and beyond. Lastly, as we stated before, the most critical component of our success is our people. We are deeply committed to our more than 2,900 employees that are the key driver of our organization, and they are crucial for meeting our near and long-term goals. I'd like to personally thank our entire CPI team for their hard work, dedication, and commitment to maintaining safe work sites for themselves and teammates. As we head toward our fiscal 2022 that begins in October, it's an exciting time for CPI. We currently expect in the next 12 months for a potential upside of 20% overall, year-over-year increase in infrastructure spending by our states, substantial federal funding increases for our industry, and entry into new markets. I'd like now to turn the call over to Alan to discuss our financial results.