Company Overview - Construction Partners Inc is an asphalt-centered infrastructure company focused on the Sunbelt region[4, 5] - The company has a proven strategy of focusing on asphalt-led infrastructure projects in local markets with recurring revenue sources[13] - CPI has completed and integrated 36 acquisitions since its IPO in May 2018, expanding operations into eight states[5] Financial Performance and Outlook - FY24 Revenue was $1.82 billion[32] - FY24 Adjusted EBITDA was $221 million, with an Adjusted EBITDA Margin of 12.1%[30, 32, 65] - Q2 FY25 Revenue increased by 54% to $572 million compared to $371 million in Q2 FY24[35] - Q2 FY25 Adjusted EBITDA increased by 130% to $69 million compared to $30 million in Q2 FY24[38] - The company projects FY25 Revenue to be between $2.77 billion and $2.83 billion, representing a 55% midpoint growth[43] - The company projects FY25 Adjusted EBITDA to be between $410 million and $430 million, representing a 96% midpoint growth, with an Adjusted EBITDA Margin between 14.8% and 15.2%[46]

Industry Overview - The Zacks Building Products - Heavy Construction industry is experiencing strong growth driven by favorable long-term trends, despite facing near-term challenges such as high interest rates and labor market pressures [1][8] - The industry includes mechanical and electrical construction, industrial and energy infrastructure, and building service providers, focusing on heavy civil construction projects like highways, bridges, and ports [3] Growth Drivers - A robust federal infrastructure agenda is unlocking significant investments in transportation, broadband, and energy networks, leading to increased demand in high-growth sectors [2] - The data center market's expansion is creating new opportunities for heavy construction companies, as demand for large-scale infrastructure solutions rises [5] - The ramp-up of 5G projects is benefiting industry players, with increased demand for wireline and wireless networks [6] Company Performance - EMCOR Group Inc. is benefiting from surging demand in data centers and healthcare, with a backlog of $11.8 billion reflecting strong long-term demand [32] - MasTec, with a backlog of $15.88 billion, has seen a 23.7% year-over-year increase, driven by growth across all segments [29] - Granite Construction has a record-high CAP of $5.7 billion, supported by federal and state infrastructure funding [21] Market Outlook - The industry's Zacks Industry Rank is 10, placing it in the top 4% of over 250 Zacks industries, indicating solid near-term prospects [10][11] - Aggregate earnings estimates for the industry have increased from $5.61 to $5.76 per share for 2025, reflecting growing analyst confidence [12] Recent Performance - The Zacks Building Products - Heavy Construction industry has outperformed the broader Zacks Construction sector and the S&P 500, gaining 12.3% over the past year compared to the sector's 7.9% decline [14] - The industry's current forward P/E ratio is 17.43, lower than the S&P 500's 20.43, suggesting potential value [17]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $132.8 million, down 9% year-over-year due to demand softness in vehicle and industrial markets, with an unfavorable FX impact of $1.8 million [11] - Sequentially, revenue decreased by $10.8 million or 9%, but adjusted EPS increased nearly 50% from Q4, reaching $0.46 per share [7][20] - Gross margin expanded 70 basis points sequentially to 32.2%, while operating margin rose 130 basis points to 6.6% [7][15] Business Line Data and Key Metrics Changes - Aerospace and defense revenue increased by 25%, driven by key program deliverables [12] - Vehicle revenue declined by 34%, reflecting softness in powersports demand and a shift from lower-margin programs [13] - Industrial markets showed mixed results, with power quality solutions for HVAC and data center infrastructure growing, but overall industrial market sales were down due to reduced demand in automation [14] Market Data and Key Metrics Changes - Sales to U.S. customers represented 52% of revenue, down from 58% in Q1 last year, with contributions from Europe, Canada, and Asia Pacific [11] - The industrial sector contributed 47% of trailing twelve-month sales, primarily driven by strong demand for power quality solutions [14] - The medical market was down 2% on a trailing twelve-month basis due to softness in pump-related products [14] Company Strategy and Development Direction - The company is focused on long-term growth themes such as electrification, energy efficiency, automation, and infrastructure investment [9] - The "Simplify to Accelerate Now" program is central to improving operational efficiency and aligning resources with demand [7][27] - The company is taking proactive steps to address global trade challenges, particularly regarding tariffs and rare earth magnet sourcing [28] Management's Comments on Operating Environment and Future Outlook - Management noted solid order momentum with total orders increasing 17% sequentially and 13% year-over-year, indicating a healthy book-to-bill ratio of 1.04 times [25] - The external environment remains fluid, but the company is built for resilience with a diverse customer base and global manufacturing footprint [26] - Management expressed confidence in achieving sustainable, profitable growth while continuing to invest in capabilities [30] Other Important Information - Operating cash flow was $13.9 million, up 52% from last year, and net debt decreased by $13.6 million to $174.4 million [21][23] - Capital expenditures for the quarter were $1.1 million, with an anticipated full-year spend of $10 million to $12 million [24] Q&A Session Summary Question: Demand and Supply Environment - Management observed positive signs in demand at the start of the quarter, with expectations for incremental growth [36] - Tariff impacts are being managed through cost mitigation strategies and localization of supply chains [37] Question: Competitive Positioning - The company believes it is well-positioned to win business due to its existing footprint and localization efforts [39] Question: Vehicle Business Strategy - Management confirmed a strategic shift away from lower-margin automotive applications towards higher-margin opportunities [46][49] Question: Inventory Turn Targets - The company aims to improve inventory turns beyond 3.1, but acknowledges potential short-term challenges due to geopolitical factors [56] Question: Rare Earth Elements Impact - Management provided insights on the cost impact of rare earth elements, indicating a significant portion of costs could be affected [65] Question: Recreational Vehicle Market - The company is not exiting the recreational vehicle market and sees opportunities for competition, particularly in industrial applications [73][75]

Financial Data and Key Metrics Changes - The company reported a consolidated adjusted EBITDA growth of 26%, outpacing a 12% revenue growth in the first quarter of 2025, with a margin expansion of 190 basis points [6][21] - The net debt to adjusted EBITDA ratio was maintained at 2.9 times, with expectations to reduce leverage to a target of 2 to 2.5 times over the next twelve months [7][19] Business Line Data and Key Metrics Changes - **Construction Products**: Revenues increased by 5%, driven by the Stabola acquisition, but organic revenues declined by 6% due to lower freight revenues and divestitures [11][12] - **Engineered Structures**: Revenues increased by 23%, largely due to higher wind tower volumes and the inorganic impact from the Amaron acquisition, with adjusted segment EBITDA increasing by 90% [15][16] - **Transportation Products**: Revenues were up 6%, with adjusted segment EBITDA increasing by 13%, driven by higher tank barge volumes [17] Market Data and Key Metrics Changes - The aggregates business represented 69% of construction materials revenues, with average organic pricing up 7% year-over-year and total pricing up 10% due to the Stabola acquisition [10][12] - The company expects continued investment in U.S. infrastructure to benefit operations, with strong demand conditions in various end markets [8][9] Company Strategy and Development Direction - The company is focused on executing its strategic vision, with a commitment to reducing leverage and enhancing operational efficiency [5][7] - The integration of the Stabola acquisition is expected to contribute positively in the second quarter, with a strong outlook for construction products and engineered structures [20][23] - The company anticipates sustained demand growth in utility structures due to increased electrification and renewable energy needs [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving macroeconomic environment, citing strong demand in most end markets and solid visibility from backlogs [8][9] - The company expects a strong 2025, reiterating full-year guidance with anticipated revenue of $2.9 billion and adjusted EBITDA of $570 million, reflecting a 17% and 30% increase, respectively [21][22] Other Important Information - The company reaffirmed its capital expenditure guidance of $145 to $165 million for the full year, with a focus on maintenance CapEx [20] - Free cash flow for the quarter was negative $30 million, but management expects improvement in the second half of the year [20] Q&A Session Summary Question: Can you elaborate on the wind tower contribution to sales and profit dollars in the quarter? - Management highlighted strong demand and volume growth in utility structures, with the wind tower facility ramping up effectively, contributing positively to margins [36][38] Question: What are the expectations for the construction products business moving forward? - Management indicated no surprises in the Stabola operations, with good demand and orders expected to improve significantly in the second quarter [66][71] Question: How is the company managing pricing versus volume declines in aggregates? - The company is focusing on margin rather than volume, with local decision-making to balance cost absorption and pricing strategies [92][93] Question: What is the outlook for the housing market and its impact on the business? - Management expects stabilization and a potential recovery in the housing market in the second half of the year, although not a booming market [104][105]

Core Viewpoint - The Zacks Building Products – Wood industry is facing challenges due to increased construction costs, high mortgage rates, and potential trade tariffs, which are straining consumer affordability and demand conditions [1][4][5]. Industry Overview - The industry encompasses forest product companies and manufacturers of lumber and wood products used in home construction, repair, and remodeling, including flooring products and timberland REITs [3]. Current Trends - High interest rates and trade policies are significantly impacting the U.S. housing and remodeling market, leading to low buyer urgency and limited residential remodeling activity [4]. - The reimplementation of tariffs on Canadian softwood lumber is expected to increase material costs, with estimates suggesting an additional $10,900 to the cost of constructing a new home due to these tariffs [5]. - The industry has historically experienced volatility in lumber prices, affecting inventory costs and profit margins [6]. Positive Developments - There is a strong need for investments in home performance improvements and modernization of aging housing stock, alongside increased funding for infrastructure and ESG-related projects [2][7]. - Companies are focusing on acquisitions, product innovation, and cost-reduction strategies to enhance operational efficiency and support growth [9]. Industry Performance - The Zacks Building Products – Wood industry has outperformed the broader Zacks Construction sector but has lagged behind the S&P 500 Composite over the past year, gaining 4.2% compared to the sector's 5.5% decline and the S&P 500's 9.8% increase [14]. - The industry's current forward 12-month price-to-earnings ratio stands at 22.76, higher than the S&P 500's 20.97 and the sector's 17.33 [17]. Company Highlights - Worthington Enterprises, Inc. has been benefiting from operational excellence, strategic innovation, and disciplined growth execution, with an upward estimate revision for 2025 earnings to $2.75 from $2.67 per share [22][23]. - PotlatchDeltic Corporation is experiencing growth driven by its broad-based strength across timberlands and wood products, with an upward estimate revision for 2025 earnings to 83 cents from 81 cents per share [27][28].

Financial Data and Key Metrics Changes - The second quarter saw record net service revenue (NSR), margins, and earnings per share (EPS) [11][29] - Adjusted EBITDA increased by 8% to $290 million, and adjusted EPS rose by 20% to $1.25, both setting new second-quarter highs [13][29] - Free cash flow increased by 141% to $178 million, with $110 million returned to shareholders through share repurchases and dividends during the quarter [13][29] Business Line Data and Key Metrics Changes - NSR in The Americas increased by 6%, with adjusted operating margin rising by 130 basis points to 19.4%, a new second-quarter high [31][32] - In the international segment, NSR increased by 1%, with adjusted operating margin increasing by 10 basis points to 11.1% [33] - Contracted backlog in the design business increased by 5%, supporting confidence in future growth [30] Market Data and Key Metrics Changes - The US market remains robust, accounting for over 50% of NSR, with a record backlog driven by a 1.2 book to burn ratio [20][21] - Canada experienced double-digit growth in revenue and backlog, supported by a $150 billion investment plan [23] - The UK saw increases in NSR and backlog, although larger transportation projects faced delays due to budgetary challenges [24] Company Strategy and Development Direction - The company aims to deliver 50% of revenue from advisory and program management over time, with ongoing investments to accelerate organic growth [16][20] - The competitive edge platform is delivering record high win rates, with an 80% success rate on large enterprise critical pursuits year to date [14] - Investments in innovation, technical excellence, and business development are expected to accelerate in the second half of the year [12][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, supported by a record backlog and a growing pipeline of opportunities [14][19] - The company noted that delays in project decisions are common during changes in administration, but the impact on backlog was minimal [12][48] - Management highlighted that the work is highly technical and critical, with a versatile workforce that can adapt to growth opportunities [18] Other Important Information - The company is maintaining its capital allocation strategy, focusing on share repurchases consistent with free cash flow generation [61] - The backlog remains near all-time highs, with a strong pipeline of opportunities across various markets [19][30] Q&A Session Summary Question: Guidance for second half EBITDA growth - Management indicated balanced growth expectations, with both top-line growth and margin improvement anticipated [38][39][44] Question: Is the company through the worst of the isolated delays? - Management expressed confidence in managing delays, noting that disruptions are typical during transitions in administration [45][48] Question: Free cash flow expectations for 2025 - Management aims to maintain a 10% free cash flow conversion rate, with expectations for continued strong performance [50][52] Question: Private sector exposure and customer confidence - Private sector accounts for approximately 30% of business, with growth expected to continue, particularly in water and environment sectors [56][57] Question: Capital allocation and share buybacks - No changes to capital allocation strategy, with share repurchases aligned with free cash flow generation [60][61] Question: Margin performance in The Americas - Management highlighted significant organic investments and improvements in pricing and efficiency as key drivers of margin expansion [78][80] Question: Expectations for international margins - Management expects international margins to continue improving, although not at the same rate as The Americas [101][103] Question: Update on AECOM Capital wind down - Management confirmed that AECOM Capital should not be modeled for 2026 [111][112]

Financial Data and Key Metrics Changes - The second quarter results showed record net service revenue (NSR), margins, and earnings per share (EPS) [9][27] - Adjusted EBITDA increased by 8% to $290 million, and adjusted EPS rose by 20% to $1.25, both setting new second quarter highs [11][27] - Free cash flow increased by 141% to $178 million in the quarter, with $110 million returned to shareholders through share repurchases and dividends [11][27] Business Line Data and Key Metrics Changes - NSR growth was highest in The Americas, with a 6% increase, reflecting strong demand across all end markets [30] - The adjusted operating margin in The Americas rose by 130 basis points to 19.4%, a new second quarter high [30] - In the international segment, NSR increased by 1%, with mixed trends across markets, but backlog and pipeline are at record highs [31][32] Market Data and Key Metrics Changes - The backlog increased quarter over quarter to a new record, driven by a 1.1 times book to burn ratio [12] - The U.S. market remains robust, accounting for over 50% of NSR, with significant funding appropriated for infrastructure projects [18][19] - Canada experienced double-digit growth in revenue and backlog, supported by a $150 billion investment plan [21] Company Strategy and Development Direction - The company aims to deliver 50% of revenue from advisory and program management over time, investing in these areas to meet growing demand [14] - The competitive edge platform is delivering record high win rates, with an 80% success rate on large enterprise critical pursuits year to date [12][13] - Investments are being made to accelerate organic growth and expand competitive advantages, particularly in advisory and program management [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, supported by a strong backlog and pipeline of opportunities [12][41] - The company is navigating macroeconomic volatility and expects continued growth despite isolated delays in project decisions [9][44] - Management noted that the work is highly technical and critical, with ongoing demand driven by aging infrastructure and sustainability requirements [14][15] Other Important Information - The company has maintained a strong balance sheet with net leverage of 0.7x and a focus on capital allocation strategies [32] - The company is committed to returning capital to shareholders while continuing to invest in high-return opportunities [11][32] Q&A Session Summary Question: Guidance for second half EBITDA growth - Management indicated that growth will be balanced between top line and bottom line, with confidence in contracted backlog and pipeline [35][41] Question: Is the company through the worst of isolated delays? - Management expressed confidence in managing delays, noting that disruptions are typical during changes in administration [42][44] Question: Free cash flow expectations for 2025 - Management aims to maintain over 10% free cash flow conversion of adjusted net income, with strong performance in the first half [47][50] Question: Private sector exposure and customer confidence - Private sector represents approximately 30% of the business, with growth expected to continue, particularly in water and environment sectors [52][54] Question: Capital allocation strategy and share buybacks - The capital allocation strategy remains unchanged, with share repurchases aligned with free cash flow generation [58][59] Question: Expectations for international margins - Management expects international margins to improve in the second half, with continued investments in people and capabilities [95][96] Question: Gross revenue versus net revenue and construction management - Management is repositioning the construction management business, which may lead to a decline in gross revenue in the short term [101][102] Question: Update on AECOM Capital wind down - Management confirmed that AECOM Capital should not be modeled for 2026 [104]

LA28 OLYMPIC AND PARALYMPIC GAMES United States AECOM has been named the Official Venue Infrastructure Partner for the LA28 Games, with an unprecedented scope that includes architecture, engineering, planning, program management, and construction management. Disclosures Forward-Looking Statements All statements in this communication other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements of the plans, strategies an ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 was $35.2 million, an increase of $16.3 million or 86.2% compared to Q1 2024 [6][19] - Adjusted EBITDA margin improved to 10.7%, up 460 basis points year-over-year [7][19] - Adjusted earnings per share were reported at $0.88, significantly higher than $0.34 in Q1 2024 [7][20] - Free cash flow for the quarter was $16.6 million, representing 116% of net income [8][23] Business Line Data and Key Metrics Changes - In the Infrastructure Solutions segment, net sales were driven by strong capital equipment and aftermarket parts sales, despite a slight decline in backlog by 4.1% [7][21] - The Materials Solutions segment faced challenges due to high interest rates and dealer inventory destocking, but aftermarket parts sales remained stable [7][22] - Backlog in the Materials Solutions segment grew by $12.1 million or 10.6% due to increased order activity [17] Market Data and Key Metrics Changes - The overall backlog declined slightly but remained healthy, supported by growth in implied orders [16] - Infrastructure Solutions segment backlog was influenced by strong invoicing for asphalt and concrete plants [16] - Implied orders rose on a quarter-over-quarter basis, with a book-to-bill ratio of 113% for Q1 [18] Company Strategy and Development Direction - The company announced a definitive agreement to acquire TerraSource, a market leader in materials processing equipment, which is expected to enhance the Material Solutions segment [5][25] - The acquisition is anticipated to provide significant synergies and expand the product portfolio, with a focus on aftermarket parts [26][30] - The company is taking proactive measures to mitigate risks associated with tariffs, including price adjustments and supply chain management [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding customer sentiment and infrastructure investment needs, highlighting the importance of ongoing infrastructure improvements [9][12] - The company is maintaining its expectations for adjusted EBITDA for the full year 2025 in the range of $105 million to $125 million, excluding tariff impacts [8][20] - Management noted that while there is uncertainty regarding tariffs, proactive measures have been implemented to manage costs and protect margins [40][41] Other Important Information - The company highlighted the need for continued infrastructure investment, as indicated by the American Society of Civil Engineers' report card [9][10] - The acquisition of TerraSource is expected to close in early Q3 2025, subject to regulatory considerations [33] Q&A Session Summary Question: Why not raise guidance despite strong performance? - Management indicated that while there is upside potential, uncertainty around tariffs and customer behavior influenced the decision not to raise guidance at this time [39][40] Question: How is the company positioned regarding current tariffs? - Management stated that they have been proactive in managing the impact of tariffs and have implemented price increases to mitigate costs [42][43] Question: How has TerraSource performed compared to legacy Material Solutions? - Management noted that TerraSource has a smaller exposure to mobile markets and a significant portion of its business comes from aftermarket parts, which contributes to higher gross margins [46][48] Question: What is the expected impact of tariffs on costs? - Management estimated a potential impact of 4% to 10% on costs if no actions are taken, but emphasized their proactive measures to manage this risk [54][58] Question: Will the acquisition of TerraSource be accretive to EBITDA? - Management confirmed that the acquisition is expected to be accretive from day one, with significant synergy opportunities anticipated [33][34]

Core Viewpoint - Xcel Energy Inc. reported a decline in first-quarter 2025 operating earnings, missing consensus estimates due to increased operational costs and expenses [1][5]. Financial Performance - Operating earnings for Q1 2025 were 84 cents per share, down 4.5% from 88 cents in the same quarter last year [1][2]. - Total revenues reached $3.9 billion, slightly missing the consensus estimate of $3.92 billion but showing a 7.1% increase from $3.65 billion year-over-year [3]. - Operating income decreased by 2.9% year-over-year to $677 million [5]. Segment Performance - Electric segment revenues were $2.83 billion, up 5.6% from $2.68 billion in the prior year [4]. - Natural gas segment revenues increased by 12.1% to $1.05 billion from $0.94 billion year-over-year [4]. - Other revenues fell to $16 million from $23 million in the previous year [4]. Expense Analysis - Total operating expenses rose by 8.7% year-over-year to $3.23 billion, driven by higher electric fuel and purchased power costs, as well as increased operating and maintenance expenses [5]. - Interest charges and financing costs increased by 11.6% from $277 million to $309 million [6]. Customer Volume and Sales - Electric customer volume grew by 1.1%, while natural gas customer volume increased by 0.9% [6]. - Natural gas sales rose by 0.5%, and electric sales volume increased by 1.9% compared to the previous year [6]. Guidance and Future Outlook - Xcel Energy reaffirmed its 2025 earnings per share guidance in the range of $3.75-$3.85, with the consensus estimate at $3.81 [7]. - Retail electric sales are expected to increase by 3% in 2025, while natural gas sales volumes are anticipated to rise by 1% [7]. - The company plans to invest $45 billion from 2025 to 2029 to enhance its infrastructure [7]. Zacks Rank - Xcel Energy currently holds a Zacks Rank of 4 (Sell) [8].