Construction Partners, Inc.

Greetings and welcome to the Construction Partners, Inc. first 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's now my pleasure to introduce your host, Rick Black. Thank you, Mr. Black. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for the Construction Partners Conference call to review first quarter fiscal 2022 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 today, February 4, 2022, so please be advised that any time-sensitive information may no longer be accurate at the time of any replay. I would like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations for future events or future financial performance, are forward-looking statements made pursuant to the Safe Harbor's 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 discussions 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 the adjusted EBITDA. Reconciliation to the nearest GAAP measures can be found at the end of our earnings press 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, as well as other members of our senior team. I'll start by stating that all of our teams across five states did a great job this quarter. Last year, we acquired several companies and made several important additions to our organization to prepare construction partners for continued growth. We now have over 3,000 employees who are focused on both the safety and operational excellence every day. I would like to personally thank each of them for their hard work managing our business through unprecedented challenges in the economy and our industry that have persisted over the past nine months. Once I've given an overview of the first quarter, I will hand the call over to Alan to review the financial results in more detail. Then before taking questions, Ned will provide additional strategic and organizational commentary about the company and our recent history. In the first quarter, construction partners achieved a record quarterly revenue of $285 million, a 49% increase compared to the same quarter last year. We have been focused on growing our services and relative market share in our current markets, so I'm pleased that approximately 30% of this increase was from organic growth, while 19% was acquisitive growth. Adjusted EBITDA in the first quarter was $26.4 million, of 12% compared to the same quarter last year. The positive first quarter results were driven mainly by three factors. First, we had strong operational performance at our asphalt plants, aggregate operations, and asphalt terminal. Second, we experienced favorable weather conditions during the quarter throughout our markets. And finally, the acquisitions we have completed over the last 15 months are adding value, and making positive contributions as expected. CPI's record project backlog of $1.09 billion demonstrates the strong demand for infrastructure services throughout our southeastern footprint. Also, we are pleased to see our backlog margins continue to grow. We anticipate that backlog margin growth will help future profit margins as this backlog is converted. We believe Construction Partners is well positioned to capitalize on future infrastructure demands that the $1.2 trillion bipartisan infrastructure bill passed in November will create over the next six to eight years. Construction Partners will participate in many types of projects being funded, including roads, bridges, airports, ports, and railroad infrastructure investments. We are monitoring the planning of how these funds will begin to be allocated from both federal and state governments, and we anticipate meaningful project demand beginning in late 2022 and beyond. As a reminder, expected increases related to the new infrastructure bill are not reflected in our FY22 outlook. As we mentioned on our last call, we have been dealing with atypical inflation in the overall economy's supply chain and labor market, that continues to affect gross margins. While normal and typical inflation is largely a pass-through item for CPI, the rapid and sharp rise of inflation has led us to adjust our pass-through mechanisms in an effort to lessen the impact on our newer backlog. For example, we've been adding contingencies in our bids to deal with the uncertainty of labor materials currently. Ultimately, once these economic realities smooth out in the future, we are confident that inflation will continue to be a pass-through cost for us. We do believe that our current adjustments for these increased costs are represented in our FY22 outlook. Pertaining to labor, there continues to be a definite challenge throughout the economy in the short term and for the construction industry in the long term. In the current environment, I believe CPI's workforce model is faring better than most, meaning our local market strategy allows our people to spend every night at home with their families. Also, the reoccurring and steady nature of our project work offers stability to our employees. In the long run, CPI will maintain our longtime culture of teamwork while leveraging our skill and footprint to create a distinct competitive advantage and offering great benefits and career opportunities to a younger generation. To be one of the winners in the construction industry moving forward, CPI has taken the necessary steps now to attract and retain a talented workforce that can capitalize on the investments being made in our nation's infrastructure. Turning now to acquisitions. We are pleased with the acquisitions completed over the past year that have further expanded our footprint into new and growing markets and will continue to drive future organic growth and margin expansion over time. The pipeline continues to expand for new opportunities to make acquisitions that strategically fit the CPI business model. As a consolidator in a fragmented industry segment, we will continue to strategically acquire businesses that expand our footprint and increase both our manufacturing and construction services vertical integration. This strategy leads to the growth of our relative market share while also allowing us to capture more margin along the value chain of services. We remain focused both on our growth strategy and operational excellence as we directly contribute to the investment in our nation's infrastructure. With a record first quarter behind us and a historically high backlog moving forward, we remain bullish on both the organic and acquisitive growth in the years ahead. I'd now like to turn the call over to Alan to discuss our financial results in greater detail.