Financial Data and Key Metrics Changes - Revenue for the third quarter was $779.3 million, representing a 51% increase compared to the same quarter last year, with 5% from organic growth and 46% from acquisitions [11][12] - Adjusted EBITDA was $131.7 million, an increase of 80% year-over-year, with an adjusted EBITDA margin of 16.9%, up 280 basis points from the previous year [12][14] - Net income for the quarter was $44 million, with adjusted net income at $45.2 million, or $0.81 per diluted share [12][14] - Cash provided by operating activities was $83 million, compared to $35 million in the same quarter last year [14] Business Line Data and Key Metrics Changes - The company reported a project backlog of $2.94 billion, covering approximately 80% to 85% of the next twelve months' revenue [13] - General and administrative expenses as a percentage of total revenue decreased to 6.6% from 7.3% in the same quarter last year [11][12] Market Data and Key Metrics Changes - Strong public contract bidding was observed across eight states and over 100 local markets, supported by healthy state infrastructure budgets and federal program funds [8][9] - Contract awards for public funding are expected to grow substantially in fiscal year 2026, with a forecasted increase of about 14% year-over-year [8][9][37] Company Strategy and Development Direction - The company continues to focus on organic growth and strategic acquisitions in growing markets, with a commitment to maintaining operational excellence and leveraging vertical integration opportunities [6][10] - The acquisition of Durwood Green Construction is expected to enhance operational capabilities and market presence in Houston, a rapidly growing metro area [4][6] - The company aims to reduce its leverage ratio to approximately 2.5 times by late fiscal 2026 to support sustained profitable growth [14][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining fiscal year 2025 guidance, citing strong public funding, a growing private economy, and a robust backlog [10][15] - The company anticipates continued economic growth driven by migration to Sunbelt states and significant investments in American manufacturing [9][10] - Management acknowledged the challenges posed by weather but highlighted the resilience and operational excellence of their teams [7][20] Other Important Information - The company amended its credit agreement, increasing the total facility size to $1.1 billion and extending the maturity date to June 2030 [13] - Capital expenditures for the quarter were $36.7 million, with expectations for total capital expenditures in fiscal year 2025 to be between $130 million and $140 million [14] Q&A Session Summary Question: How did the company navigate weather challenges this quarter? - Management noted that despite weather-related delays, the business performed well due to effective margin levers and operational excellence [20][21] Question: Will full utilization hinder organic growth next year? - Management clarified that full utilization does not indicate capacity constraints and that their CapEx program supports expected organic growth [22][23] Question: What is the expected M&A contribution for fiscal year 2025? - The Q4 acquisition revenue impact is projected to be between $270 million and $280 million, with a carryover into 2026 expected to be around $240 million to $250 million [24][25] Question: How is public spending for maintenance and lane expansion expected to trend? - Management indicated that contract awards for public funding are expected to increase significantly, based on state budgets and programs [36][37] Question: What is the outlook for labor availability? - Management reported that labor shortages have normalized, but there is a long-term concern regarding workforce demographics and the need to attract and retain talent [93][95]

Company Overview - Construction Partners, Inc. is a vertically integrated civil infrastructure company operating in local markets across the Sunbelt, including Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas [3] - The company specializes in the construction, repair, and maintenance of surface infrastructure, focusing primarily on publicly funded projects such as local and state roadways, interstate highways, airport runways, and bridges [3] Recent Acquisition - Construction Partners has acquired Durwood Greene Construction Co. and G&S Asphalt, Inc., enhancing its operations in the Houston metro area with three hot-mix asphalt plants and a rail-serviced aggregates terminal [1] - The acquisition adds nearly 200 employees from Durwood Greene, a well-respected family business known for its operational excellence in the Houston market [2] Strategic Benefits - The integration of Durwood Greene is expected to provide vertical integration opportunities, including the ability to purchase liquid asphalt cement from Lone Star Paving's terminal in Channelview, Texas [2] - The company is optimistic about growth in Texas, citing strong economic conditions, favorable demographics, and a well-funded transportation program as key factors for future expansion [2]