Construction Partners, Inc.

Greetings. Welcome to Construction Partners' third quarter earnings conference call. At this time, all lines 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 store zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, with Investor Relations. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for the Construction Partners conference call to review third quarter results for fiscal 2024. 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, August 9th, 2024. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay listening or transcript reading. 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 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 our earnings press release for our disclosures 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 EBITDA. Reconciliations to the nearest gap 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. Joining me on the call today are Greg Hoffman, our Chief Financial Officer, and Ned Fleming, our Executive Chairman. I want to start by directly thanking the more than 4,800 men and women across the CPI family of companies for their hard work this quarter. The story of this quarter was operational excellence across the southeast on hundreds of projects under construction and many days and nights operating asphalt plants, quarries, and terminals. CPI success has always been driven by our talented, dedicated construction professionals And as our work season shifted this quarter into high gear and long hours, our team delivered. Q3 was a strong quarter for CPI. Compared to a year ago, we grew revenue 23%, adjusted EBITDA 31%, and our margins increased to 14.1% for the quarter. It's also important to note that of the 23% revenue growth in the quarter, 13% was organic growth. Year-to-date, organic growth represents 9.3% of our total 18% revenue growth. This is consistent with our outlook on organic growth for the year to account for approximately half of our total growth. On a daily basis, we focus on organic growth in our current and adjacent markets, which is a critical component of our strategy to achieve our Roadmap 2027 goals. During the quarter, the economic conditions were stable for our industry, and demand for the type of construction projects we perform remains high. Public project lettings continued to be strong, supported by the healthy funding programs at the state, local, and federal levels throughout our southeastern states. These public investments include a variety of infrastructure projects ranging from highways and bridges to airports, railroads, and military bases. We also continue to see steady demand for commercial projects, with many fast-growing economic centers within our local markets. In particular, we continue to see areas of strength in the private market for manufacturing, corporate site development, large economic development projects, and residential. This sustained demand continues to drive project backlog growth, which again increased during As of June 30th, our backlog was $1.86 billion. Turning now to our strategic growth model, we have acquired seven companies this fiscal year beginning in October. Two of these acquisitions were made since our last earnings call. In June, we acquired Hudson Paving in Rockingham, North Carolina. Hudson extends our reach into the Sandhills region of North Carolina. Now as part of our Fred Smith Company platform, this new plant and construction operation in Rockingham allows us to fully serve the rapidly growing Pinehurst and Southern Pines market area. And last week, we announced acquisition of Robinson Pavement Company in Columbus, Georgia. This expansion of three new hot mix asphalt plants and construction operations in Columbus and the surrounding area positioned CPI in a strategic location, adjacent to our existing operations in both Georgia and Alabama. As a growing economic market supported by Fort Moore and Columbus, this represents an important market for us and a natural next step for our growth in the state of Georgia. Robinson Pavin has long been a highly respected contractor in Georgia and will continue to operate as a branded division of our Georgia platform company, the Scruggs Company. We're excited to have added these high-quality companies with excellent reputations into our organization, and we want to welcome both the Hudson Paving and Robinson Paving employees as teammates within the CPI family of companies. Acquisitions have always been a part of our growth model as we enter new areas, expand market share, and add capacity, services, and talented new team members. Importantly, Our acquisition strategy also fuels our future organic growth, helping keep us on the path to achieve our roadmap 2027 goals, which are annual revenue growth of 15% to 20%, with approximately half of the growth being acquisitive and half organic, and expanding our EBITDA margins in the range of 13% to 14% by 2027. Currently, we continue to see a very active environment for acquisition opportunities as our industry is going through a generational transition. And we believe we're the leader in building a scalable business by acquiring great privately held construction companies. While we continue to have conversations with potential sellers, both inside and outside of our current states, it's important for us to remain patient and focused on finding the best strategic acquisitions that will bring operational excellence and add to the great culture of the CPI family of companies. In summary, we had a record third quarter and consequently are raising our fiscal 2024 outlook. Our record backlog provides visibility for the remainder of fiscal 2024 and allows us to enter fiscal 2025 with momentum and growth. Finally, we remain optimistic about the future based upon our healthy local markets across the southeast, the numerous opportunities available as we continue to execute on our growth strategy, and most importantly, the continued development of our talented workforce to lead and manage a larger and more profitable CPI into the future. I'd now like to turn the call over to Greg.