CONSTRUCTION PARTNERS INVESTOR PRESENTATION WINTER 2022 FORWARD-LOOKING STATEMENTS 2 This presentation contains "forward‐looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Construction Partners, Inc. (the "Company"), its financial condition, its results of operations and the Company's current views based on information currently available. This information is, where applicable, based on estimates, assumptions and analysis that the Company believes, as of ...

PART I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Construction Partners, Inc. is a vertically integrated civil infrastructure company specializing in roadway construction and maintenance in the southeastern U.S., expanding through acquisitions and growing its backlog - The company operates as a civil infrastructure firm with a vertical integration strategy, focusing on manufacturing hot mix asphalt (HMA), paving, site development, aggregate mining, and liquid asphalt distribution across five southeastern states[16](index=16&type=chunk) - During fiscal year 2022, the company executed a significant growth strategy through multiple acquisitions, establishing a new platform in South Carolina and expanding its presence in Florida and North Carolina, also securing a new, larger credit facility to support its operations and growth[20](index=20&type=chunk) - As of September 30, 2022, the company employed **1,035** salaried and **2,755** hourly employees, with hourly employees averaging **2,444** during fiscal year 2022 due to seasonal fluctuations[50](index=50&type=chunk) FY 2022 Revenue Breakdown and Customer Concentration | Category | Percentage/Value | | :--- | :--- | | **Revenue by Funding Source** | | | Publicly Funded Projects | 60.9% | | Privately Funded Projects | 39.1% | | **Major Customers (% of Revenue)** | | | Alabama DOT | 10.0% | | North Carolina DOT | 11.2% | | All DOTs Combined | 36.8% | Contract Backlog Growth | Date | Backlog Amount (in millions) | % Change YoY | | :--- | :--- | :--- | | Sep 30, 2022 | $1,410.8 | 46.0% | | Sep 30, 2021 | $966.2 | N/A | [Item 1A. Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces business, financial, and stock ownership risks, including reliance on government spending, acquisition integration, substantial debt, and concentrated voting power - A significant portion of the company's revenue (**60.9%** in FY2022) is derived from publicly funded projects, making it vulnerable to reductions in federal, state, and local government spending[57](index=57&type=chunk) - The company has significant customer concentration, with the Alabama DOT and North Carolina DOT accounting for **10.0%** and **11.2%** of revenues, respectively, in fiscal 2022[60](index=60&type=chunk) - The company's acquisition strategy involves risks related to successful integration, potential for unknown liabilities, and the possibility that acquired businesses may not perform as expected[66](index=66&type=chunk)[67](index=67&type=chunk) - The dual-class stock structure concentrates voting control with SunTx and its affiliates, as Class B stock (10 votes per share) represented approximately **73.3%** of the total voting power as of November 21, 2022, limiting Class A stockholders' influence[113](index=113&type=chunk)[117](index=117&type=chunk) - The company's substantial indebtedness under its Credit Agreement requires significant cash flow for debt service and imposes restrictive covenants that limit its ability to engage in certain business and financial transactions[101](index=101&type=chunk)[103](index=103&type=chunk) [Item 1B. Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[127](index=127&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) As of September 30, 2022, the company operates 60 HMA plants, 14 aggregates facilities, and one liquid asphalt terminal across five southeastern states, with a mix of owned and leased properties HMA Plants and Aggregates Facilities by State (as of Sep 30, 2022) | Location | HMA Plants (Owned) | HMA Plants (Leased) | Aggregates Facilities (Owned) | Aggregates Facilities (Leased) | | :--- | :--- | :--- | :--- | :--- | | Alabama | 10 | 8 | 6 | 3 | | Florida | 10 | 1 | 1 | 0 | | Georgia | 5 | 1 | 1 | 2 | | North Carolina | 10 | 10 | 1 | 0 | | South Carolina | 3 | 2 | 0 | 0 | [Item 3. Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation and government inquiries, with no expected material adverse effect on its financial condition or operations - The company is subject to routine litigation and government inquiries but does not expect any pending matters to have a material adverse effect on its financial condition or results of operations[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures, as required by the Dodd-Frank Act, are provided in Exhibit 95.1 of this report - Required mine safety disclosures are included in Exhibit 95.1 to this Form 10-K[133](index=133&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Class A common stock trades on Nasdaq, Class B does not, and the company does not foresee paying cash dividends, preferring to retain earnings for growth - Class A common stock is listed on the Nasdaq Global Select Market (ROAD); there is no public trading market for Class B common stock[137](index=137&type=chunk) - The company does not intend to pay cash dividends in the foreseeable future and plans to retain earnings for business operation and expansion, with the Credit Agreement also restricting dividend payments[140](index=140&type=chunk) Stockholder Information (as of Nov 21, 2022) | Stock Class | Shares Outstanding | Record Holders | | :--- | :--- | :--- | | Class A | 41,338,192 | 143 | | Class B | 11,352,915 | 26 | [Item 6. [Reserved]](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is intentionally left blank - Item 6 is reserved and contains no information[146](index=146&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 revenues grew significantly from acquisitions and organic growth, but margins compressed due to cost inflation, impacting liquidity with increased debt [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Fiscal 2022 revenues increased significantly, but gross margin declined due to cost inflation, while net income and Adjusted EBITDA saw modest growth - The **$391.0 million** revenue increase was composed of **$170.4 million** from acquisitions and **$220.6 million** from organic growth in existing markets, reflecting strong demand for both public and private work[165](index=165&type=chunk) - Gross profit margin decreased due to rising costs of raw materials, fuel, labor, and trucking, as well as project delays from supply chain disruptions[166](index=166&type=chunk) Fiscal 2022 vs. 2021 Performance | Metric | FY 2022 | FY 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,301.7M | $910.7M | +$391.0M | +42.9% | | Gross Profit | $139.3M | $119.9M | +$19.4M | +16.1% | | Gross Margin | 10.7% | 13.2% | N/A | -2.5 p.p. | | Operating Income | $35.4M | $30.1M | +$5.3M | +17.6% | | Net Income | $21.4M | $20.2M | +$1.2M | +5.9% | | Adjusted EBITDA | $111.2M | $90.6M | +$20.6M | +22.7% | | Adjusted EBITDA Margin | 8.5% | 9.9% | N/A | -1.4 p.p. | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow decreased in FY2022, while significant debt was incurred to fund acquisitions, with the company maintaining compliance with covenants and projecting substantial capital expenditures for FY2023 - On June 30, 2022, the company entered into a new Credit Agreement providing a **$250.0 million** Term Loan, a **$325.0 million** Revolving Credit Facility, and a **$50.0 million** Delayed Draw Term Loan[152](index=152&type=chunk)[359](index=359&type=chunk) - As of September 30, 2022, the company was in compliance with its financial covenants, with a fixed charge coverage ratio of **2.56-to-1.00** (minimum 1.20) and a consolidated leverage ratio of **2.79-to-1.00** (maximum 3.50)[180](index=180&type=chunk)[362](index=362&type=chunk) - The company projects total capital expenditures for fiscal 2023 to be between **$75.0 million** and **$80.0 million**[183](index=183&type=chunk) Cash Flow Summary (in thousands) | Activity | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,498 | $48,500 | | Net cash used in investing activities | ($197,326) | ($263,412) | | Net cash provided by financing activities | $159,136 | $123,847 | | **Net change in cash** | **($21,692)** | **($91,065)** | [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for revenue recognition on long-term contracts, valuation of long-lived assets and goodwill, income taxes, and insurance accruals - Revenue from long-term construction contracts is recognized over time using the cost-to-cost input method, which requires significant management judgment in estimating total costs to complete a project[192](index=192&type=chunk) - Goodwill and other long-lived assets are tested for impairment annually or when triggering events occur, with the July 1, 2022 test indicating no impairment as the company's single reporting unit's fair value substantially exceeded its carrying value[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - The company accrues for insurance costs covering general liability, auto liability, and workers' compensation for probable losses, with its captive insurance subsidiary retaining the first **$1,000,000** per claim since October 1, 2021[206](index=206&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces commodity price, interest rate, and inflation risks, mitigating some through contract clauses and derivative instruments, but inflation remains a concern for fixed-price contracts - The company is exposed to commodity price risk for liquid asphalt and energy, mitigating this through price escalator provisions in most public contracts and by using fuel and natural gas swap contracts[209](index=209&type=chunk)[210](index=210&type=chunk) - The company has significant interest rate risk with **$377.0 million** of variable-rate debt outstanding at September 30, 2022, where a hypothetical **1%** change in borrowing rates would alter annual interest expense by **$3.8 million**, absent hedges[213](index=213&type=chunk) - Inflation poses a risk by increasing costs for wages, fuel, and materials, and while the company tries to pass these costs to customers in new bids, it has limited ability to do so for projects already in its backlog, potentially reducing profit margins[217](index=217&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=41&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes audited consolidated financial statements and the independent auditor's unqualified opinion, highlighting revenue recognition for long-term contracts as a critical audit matter - The independent registered public accounting firm, RSM US LLP, issued an unqualified opinion on the consolidated financial statements as of September 30, 2022 and 2021[221](index=221&type=chunk) - The auditor identified "Revenue Recognition – Revenue Recognized Over Time Under Uncompleted Long-Term Construction Contracts" as a critical audit matter due to the significant management judgment required in estimating total costs to complete projects[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - The auditor's report on internal control over financial reporting expressed an unqualified opinion on its effectiveness as of September 30, 2022, but excluded the recently acquired King Asphalt, Inc. and Southern Asphalt, Inc. from the scope of the audit[232](index=232&type=chunk)[234](index=234&type=chunk) [Notes to Consolidated Financial Statements](index=49&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, customer concentration, five FY2022 acquisitions totaling **$129.7 million**, a significant increase in debt to **$377.0 million**, and equity-based compensation expenses - During fiscal year 2022, the company completed five business acquisitions for a total cash consideration of **$129.7 million**, resulting in **$45.3 million** of goodwill[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[328](index=328&type=chunk)[331](index=331&type=chunk)[334](index=334&type=chunk) - As of September 30, 2022, total long-term debt was **$377.0 million**, a significant increase from **$217.5 million** at the end of fiscal 2021, primarily to fund acquisitions and operations[358](index=358&type=chunk) - The company had unsatisfied performance obligations (backlog) of approximately **$1,027.8 million** at September 30, 2022, with **$783.5 million** expected to be recognized as revenue in fiscal 2023[346](index=346&type=chunk) Revenue Concentration by Customer Type | Customer Type | % of Consolidated Revenues (FY 2022) | | :--- | :--- | | Public | 60.9% | | Private | 39.1% | Major DOT Customer Revenue Concentration | Customer | % of Consolidated Revenues (FY 2022) | | :--- | :--- | | Alabama DOT | 10.0% | | North Carolina DOT | 11.2% | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=84&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - None reported[432](index=432&type=chunk) [Item 9A. Controls and Procedures](index=84&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of September 30, 2022, excluding recent acquisitions from the internal control assessment - Management concluded that disclosure controls and procedures were effective as of September 30, 2022[433](index=433&type=chunk) - Management concluded that internal control over financial reporting was effective as of September 30, 2022, with the assessment excluding the acquisitions of King Asphalt, Inc. and Southern Asphalt, Inc., which together represented **7%** of total assets (excluding goodwill) and **6%** of revenue for fiscal 2022[435](index=435&type=chunk)[436](index=436&type=chunk) [Item 9B. Other Information](index=84&type=section&id=Item%209B.%20Other%20Information) No other information is reported for this item - None[439](index=439&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the 2023 Proxy Statement[442](index=442&type=chunk) [Item 11. Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the 2023 Proxy Statement[443](index=443&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=85&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the 2023 Proxy Statement[444](index=444&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=85&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the 2023 Proxy Statement[445](index=445&type=chunk) [Item 14. Principal Accountant Fees and Services](index=85&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the 2023 Proxy Statement[446](index=446&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including financial statements and an exhibit index of agreements and certifications - This section includes the consolidated financial statements, parent-only financial statements, and an index of all exhibits filed with the report[449](index=449&type=chunk)[450](index=450&type=chunk)

Construction Partners, Inc. (NASDAQ:ROAD) Q3 2022 Earnings Conference Call August 5, 2022 10:00 AM ET Company Participants Rick Black - Investor Relations Jule Smith - President and Chief Executive Officer Alan Palmer - Executive Vice President and Chief Financial Officer and Ned Fleming - Executive Chairman Conference Call Participants Michael Feniger - Bank of America Andy Whitman - Baird Stanley Elliott - Stifel Adam Thalhimer - Thompson Davis Brian Russo - Sidoti Operator Greetings and welcome to the C ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements reflect significant growth in assets and liabilities driven by acquisitions [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $1.02 billion, driven by acquisitions that also increased total liabilities to $589.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 (unaudited) | September 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,020,339** | **$806,620** | | Cash and cash equivalents | $26,079 | $57,251 | | Property, plant and equipment, net | $453,973 | $404,832 | | Goodwill | $124,987 | $85,422 | | **Total Liabilities** | **$589,646** | **$397,721** | | Long-term debt, net | $341,173 | $206,175 | | **Total Stockholders' Equity** | **$430,693** | **$408,899** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Quarterly and nine-month revenues grew significantly, though nine-month net income declined due to rising costs Financial Performance Highlights (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$380,272** | **$261,656** | **$908,621** | **$631,697** | | Gross Profit | $44,250 | $36,617 | $89,711 | $85,283 | | Operating Income | $17,999 | $14,257 | $14,969 | $18,706 | | **Net Income** | **$12,168** | **$9,340** | **$8,261** | **$12,276** | | Diluted EPS | $0.23 | $0.18 | $0.16 | $0.24 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased to $430.7 million, influenced by net income and Class B stock conversions - Total stockholders' equity grew to **$430.7 million** at June 30, 2022, up from **$408.9 million** at the fiscal year-end 2021[15](index=15&type=chunk) - During the nine months ended June 30, 2022, **4,338,924 shares of Class B common stock** were converted into Class A common stock on a one-for-one basis[15](index=15&type=chunk)[76](index=76&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned negative while investing and financing activities increased due to acquisitions Cash Flow Summary (in thousands) | Activity | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash (used by) provided by operating activities | $(9,721) | $9,334 | | Net cash used in investing activities | $(158,607) | $(129,530) | | Net cash provided by financing activities | $137,261 | $106,348 | | **Net change in cash and cash equivalents** | **$(31,067)** | **$(13,848)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail seasonality, acquisition impacts, a new credit agreement, and the use of derivative instruments - The company's business is seasonal, with warmer and drier weather in the third and fourth fiscal quarters typically resulting in higher activity and revenues[22](index=22&type=chunk) - During the nine months ended June 30, 2022, the company completed four acquisitions for a total consideration of **$104.7 million**, funded by its Revolving Credit Facility[62](index=62&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) - On June 30, 2022, the company entered into a new Credit Agreement, providing a **$250.0 million Term Loan**, a **$325.0 million Revolving Credit Facility**, and a **$50.0 million** delayed draw term loan facility[73](index=73&type=chunk) - Subsequent to the quarter end, on August 1, 2022, the company acquired Southern Asphalt, Inc in South Carolina for **$25.2 million**, funded by the delayed draw term loan[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue growth from acquisitions was offset by margin compression from inflation and supply chain issues [Recent Developments and Inflationary Trends](index=36&type=section&id=Recent%20Developments%20and%20Inflationary%20Trends) The company faces significant cost inflation and supply chain disruptions while securing a new credit facility - The company is experiencing upward trends in inflation-sensitive costs, including wages, raw materials, fuel, concrete, and steel, along with supply chain disruptions[122](index=122&type=chunk) - On June 30, 2022, the company entered into a new credit agreement providing a **$250M Term Loan**, a **$325M Revolving Credit Facility**, and a **$50M** delayed draw term loan[123](index=123&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Strong revenue growth was tempered by declining gross margins due to cost inflation and acquisition mix Q3 2022 vs Q3 2021 Performance (in thousands) | Metric | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $380,272 | $261,656 | 45.3% | | Gross Profit | $44,250 | $36,617 | 20.8% | | Gross Margin | 11.6% | 14.0% | -2.4 p.p. | | Net Income | $12,168 | $9,340 | 30.3% | | Adjusted EBITDA | $37,639 | $29,027 | 29.7% | Nine Months 2022 vs 2021 Performance (in thousands) | Metric | Nine Months 2022 | Nine Months 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $908,621 | $631,697 | 43.8% | | Gross Profit | $89,711 | $85,283 | 5.2% | | Gross Margin | 9.9% | 13.5% | -3.6 p.p. | | Net Income | $8,261 | $12,276 | (32.7)% | | Adjusted EBITDA | $71,820 | $63,506 | 13.1% | - The decrease in gross profit margin was attributed to lower margins on projects from recent acquisitions, increased costs of raw materials, fuel, labor, and trucking, and supply chain issues[135](index=135&type=chunk)[144](index=144&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow decreased due to working capital needs, while a new credit facility supports liquidity - Net cash used by operating activities was **$9.7 million** for the nine months ended June 30, 2022, compared to **$9.3 million provided** by operating activities in the prior-year period[153](index=153&type=chunk)[154](index=154&type=chunk) - As of June 30, 2022, the company had **$208.6 million available** under its Revolving Credit Facility and **$50.0 million** under its delayed draw term loan facility[160](index=160&type=chunk) - Fiscal 2022 capital expenditures are projected to be between **$60.0 million and $65.0 million**[164](index=164&type=chunk) Contractual Obligations as of June 30, 2022 (in thousands) | Obligation Type | Total | Remainder of 2022 | 2023 | 2024-Thereafter | | :--- | :--- | :--- | :--- | :--- | | Debt obligations | $355,100 | $3,125 | $12,500 | $339,475 | | Operating leases | $13,154 | $627 | $2,395 | $10,132 | | Purchase commitments | $8,402 | $2,795 | $4,827 | $780 | | Royalty payments | $2,688 | $12 | $255 | $2,421 | [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity, interest rate, and inflation risks through contracts and derivative instruments - The company uses commodity swaps for diesel fuel and natural gas to fix prices for a portion of its estimated usage through fiscal 2024[171](index=171&type=chunk) - The company is exposed to interest rate risk on **$355.1 million of variable rate debt** as of June 30, 2022, with a hypothetical 1% rate change impacting annual interest expense by **$3.6 million**, before considering hedges[176](index=176&type=chunk) - Subsequent to the quarter, on July 1, 2022, the company entered into a new **$300.0 million notional interest rate swap** agreement with a fixed rate of 1.85% through June 2027[115](index=115&type=chunk)[175](index=175&type=chunk) - Inflation risk is managed by adjusting prices on new bids, but the company has limited ability to pass through increased costs for projects already in its backlog[179](index=179&type=chunk)[180](index=180&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were **effective**[181](index=181&type=chunk) - **No material changes** were made to the internal control over financial reporting during the quarter ended June 30, 2022[181](index=181&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation that is not expected to have a material adverse effect - The company is involved in routine litigation and disputes related to workers' compensation, employment, and contract performance, which management does not consider to be **materially adverse**[184](index=184&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the last Annual Report on Form 10-K - **No material changes** have occurred in the company's risk factors since the filing of the 2021 Form 10-K[185](index=185&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or repurchases of its equity securities during the period - The company did not sell any unregistered equity securities during the quarter[186](index=186&type=chunk) - The company did not purchase any of its equity securities during the quarter[187](index=187&type=chunk) [Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the reporting period - None[188](index=188&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation information is provided as an exhibit to this quarterly report - Mine safety disclosures are provided in **Exhibit 95.1**[189](index=189&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) The company did not report any other material information for the period - None[190](index=190&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements and certifications

CONSTRUCTION PARTNERS INVESTOR PRESENTATION SPRING 2022 FORWARD-LOOKING STATEMENTS 2 This presentation contains "forward‐looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Construction Partners, Inc. (the "Company"), its financial condition, its results of operations and the Company's current views based on information currently available. This information is, where applicable, based on estimates, assumptions and analysis that the Company believes, as of ...

Construction Partners, Inc. (NASDAQ:ROAD) Q2 2022 Earnings Conference Call May 6, 2022 10:30 AM ET Company Participants Rick Black - Investor Relations Jule Smith - Chief Executive Officer Alan Palmer - Chief Financial Officer Ned Fleming - Executive Chairman Conference Call Participants Andy Wittmann - Baird Stanley Elliott - Stifel Josh Wilson - Raymond James Adam Thalhimer - Thompson Davis Brent Thielman - D.A. Davidson Operator Greetings and welcome to the Construction Partners, Inc. Second Quarter Earn ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38479 Construction Partners, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 26-0758017 (S ...

Financial Data and Key Metrics Changes - Construction Partners achieved record quarterly revenue of $285 million, a 49% increase compared to the same quarter last year [12] - Adjusted EBITDA in the first quarter was $26.4 million, up 12% compared to the same quarter last year [13][29] - Net income was $5.5 million for the first quarter, compared to net income of $7.9 million for the same quarter last year [28] Business Line Data and Key Metrics Changes - Approximately 30% of the revenue increase was from organic growth, while 19% was from acquisitions [12] - Gross profit was $33 million, an increase of 7.7% compared to the same quarter last year [28] Market Data and Key Metrics Changes - The company reported a record project backlog of $1.09 billion, compared to $966.2 million at September 30, 2021 [31] - The backlog margins are continuing to grow, which is expected to help future profit margins as the backlog is converted [15] Company Strategy and Development Direction - The company is focused on growing services and market share in current markets, with a strategy of both organic and acquisitive growth [12][25] - Construction Partners plans to capitalize on future infrastructure demand created by the $1.2 trillion bipartisan infrastructure bill passed in November [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from inflation, supply chain disruptions, and labor market issues but expressed confidence in managing through these challenges [18][20] - The leadership team is committed to investing in the right people, processes, and technology to support disciplined growth [37][38] Other Important Information - Capital expenditures for the first quarter were $15.1 million, with expectations for the fiscal year to be in the range of $60 million to $65 million [31] - The company is monitoring the allocation of federal and state funds from the infrastructure bill, anticipating meaningful project demand beginning in late 2022 [17] Q&A Session Summary Question: Year-on-year decline in gross margin - Management noted that the decline was due to supply disruptions, labor market issues, and rising energy prices [44] Question: Labor environment risks to full-year guidance - Management acknowledged the labor market as a challenge but indicated that they have factored this uncertainty into their outlook [55] Question: Drivers of strong organic growth - Organic growth was driven by vertical integration of services, expansion into more markets, and strong demand from both private and public sectors [58][60] Question: Anticipated Q2 cash flow - Management expects a much more positive cash flow in Q2 due to revenue growth and collection of receivables [66] Question: Comfort level on leverage and acquisitions - Management is mindful of using leverage smartly and sees it as a tool for growth, with bank covenants allowing up to 3x cash flow [75] Question: North Carolina DOT business recovery - Management reported a healthy recovery in North Carolina, benefiting from a strong program of lettings and recent acquisitions [95] Question: Trajectory of margins - Management expects margins to improve in the second half of the year as higher margin jobs are completed [100]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38479 Construction Partners, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 26-0758017 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-38479 CONSTRUCTION PARTNERS, INC. (Exact name of registrant as specified in its charter) Delaware (State or Oth ...