Construction Partners Inc (ROAD) Reports Strong Fiscal 2024 Q1 Results with Revenue and Net ...
Revenue: Increased by 16% to $396.5 million in Q1 FY24 compared to $341.8 million in Q1 FY23.
Net Income: Grew substantially to $9.8 million in Q1 FY24, up from $1.9 million in Q1 FY23.
Earnings Per Share (EPS): Rose to $0.19 in Q1 FY24 from $0.04 in Q1 FY23.
Adjusted EBITDA: Jumped by 50% to $40.9 million in Q1 FY24 from $27.2 million in Q1 FY23.
Backlog: Reached a record $1.62 billion, indicating strong future revenue potential.
On February 9, 2024, Construction Partners Inc (NASDAQ:ROAD) released its 8-K filing, announcing its financial results for the first quarter of fiscal year 2024, which ended on December 31, 2023. The company, a leading infrastructure and road construction firm in the Southeastern United States, reported significant growth in revenue, net income, and adjusted EBITDA.
Construction Partners Inc operates as an infrastructure and road construction company, providing construction products and services to public and private sectors, including highways, roads, bridges, airports, and commercial and residential sites. The company's services extend to site development, paving, utility and drainage systems, and the supply of hot mix asphalt and aggregates.
Financial Highlights and Operational Performance
The company's revenue for the quarter was bolstered by both organic growth and recent acquisitions, with organic revenue contributing approximately 7.3% and acquisitions approximately 8.7% to the total revenue increase. Gross profit saw a significant rise to $51.9 million in Q1 FY24 from $30.5 million in the same quarter of the previous year. However, general and administrative expenses also increased to $36.0 million from $29.7 million year-over-year, representing 9.1% of total revenue compared to 8.7% in the prior year.
Construction Partners Inc's net income for the quarter was a notable $9.8 million, with diluted earnings per share at $0.19, compared to a net income of $1.9 million and diluted earnings per share of $0.04 in the same quarter last year. The adjusted EBITDA of $40.9 million, a 50% increase from the previous year's quarter, reflects the company's ability to grow its margins and manage costs effectively.
Strategic Growth and Market Position
President and CEO Fred J. (Jule) Smith, III, highlighted the company's strong start to the fiscal year, attributing the success to robust demand for infrastructure services and a steady bidding environment supported by strong state funding programs and the Infrastructure Investment and Jobs Act (IIJA). The company's record backlog of $1.62 billion underscores its strong market position and future revenue potential.
"Our teams hard work, operational proficiency, dedication to detail and focus on safety continue to support CPIs strategic priorities outlined in our ROAD-Map 2027," said Smith.
Executive Chairman Ned N. Fleming, III, also expressed confidence in the company's business model, resilience, and scalability, which are driving top-line growth and margin expansion.
Outlook and Analyst Commentary
Looking ahead, Construction Partners Inc maintains its fiscal year 2024 outlook, expecting revenue in the range of $1.750 billion to $1.825 billion, net income between $63 million to $70 million, and adjusted EBITDA in the range of $197 million to $219 million. The adjusted EBITDA margin is projected to be between 11.3% to 12.0%.
The company's strong performance in the first quarter, coupled with a robust backlog and positive outlook for the fiscal year, positions Construction Partners Inc as a compelling story for investors, particularly those interested in the infrastructure sector. The company's strategic focus on operational efficiency and market expansion through both organic growth and acquisitions is expected to continue driving value for stakeholders.
For more detailed financial information and to listen to the conference call discussing these results, investors and analysts can visit the company's Investor Relations website at www.constructionpartners.net.
Value investors and potential GuruFocus.com members interested in following Construction Partners Inc's financial journey can find comprehensive analysis and updates on GuruFocus.com.
Explore the complete 8-K earnings release (here) from Construction Partners Inc for further details.
This article first appeared on GuruFocus.
