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Construction Partners (ROAD) Q1 Earnings Beat, Backlog Rises

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Construction Partners, Inc. (ROAD - Free Report) reported solid first-quarter fiscal 2024 (ended Dec 31, 2023) results, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.

The company’s quarterly result reflects a robust demand environment for its infrastructure services. It witnessed a steady bidding environment aided by strong state funding programs, activities funded by the Infrastructure Investment and Jobs Act, and a sustained commercial market across its entire geographic footprint in the southeast part of the country. This uptrend was reflected in the company’s new record quarter-end backlog.

Furthermore, Construction Partners’ strategic initiatives, outlined in its ROAD-Map 2027, along with operational proficiency are encouraging.

Following the results, shares of this vertically integrated civil infrastructure company declined 7% during the trading hours on Feb 9.

Inside the Headlines

In the fiscal first quarter of 2024, the company reported earnings of 19 cents per share, which topped the Zacks Consensus Estimate of 13 cents by 46.2%. The metric also grew by a whopping 375% year over year.

Construction Partners, Inc. Price, Consensus and EPS Surprise

Construction Partners, Inc. Price, Consensus and EPS Surprise

Construction Partners, Inc. price-consensus-eps-surprise-chart | Construction Partners, Inc. Quote

Quarterly revenues of $396.5 million surpassed the consensus mark of $387 million by 2.4% and grew 16% year over year. The acquisitions completed during or after the three months ended Dec 31, 2023, added $29.6 million to revenues, accounting for 8.7% of the total revenue growth.

Adjusted EBITDA surged 50% from the year-ago quarter’s figure to $40.9 million. Adjusted EBITDA margin rose 230 basis points (bps) from the year-ago quarter to 10.3%.

The project backlog at the end of the fiscal 2024 first quarter amounted to $1.62 billion, up 10.2% from the year-ago period and 1.3% sequentially.

Operating Highlights

During the first quarter, the company reported gross profit of $51.9 million, up from $30.5 million reported in the year-ago period. The gross margin expanded 420 bps year over year to 13.1%.

The quarter’s operating income of $16.7 million was up from the year-ago quarter’s level of $6.3 million. Operating margin expanded 240 bps to 4.2% from the year-ago quarter’s reported value of 1.8%.

General and administrative expenses were $36.0 million in the first quarter, up from $29.7 million reported in the year-ago quarter. General and administrative expenses (as a percentage of total revenue) were 9.1%, up 40 bps year over year.


As of Dec 31, 2023, ROAD had cash and cash equivalents of $68.7 million, up from $48.2 million reported at fiscal 2023 end. As of the first quarter of fiscal 2024 end, long-term debt (net of current maturities and deferred debt issuance costs) was $427.1 million, up from $360.7 million at fiscal 2023 end.
For the first three months of fiscal 2024, net cash provided by operating activities was $60.4 million compared with $28.9 million a year ago.

Retained Fiscal 2024 Guidance

For fiscal 2024, Construction Partners expects revenues to be in the range of $1.75 billion and $1.83 billion.

For the fiscal year, the company anticipates adjusted EBITDA to be in the range of $197-$219 million and the adjusted EBITDA margin to be between 11.3% and 12%.

Zacks Rank & Recent Construction Releases

Construction Partners currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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