struction Partners(US:ROAD)2021-08-06 19:46Financial Data and Key Metrics Changes - The company reported revenue of $261.7 million for the third fiscal quarter of 2021, representing a year-over-year increase of 20.6% [21] - Net income decreased to $9.3 million compared to $15.7 million in the same quarter last year [23] - Adjusted EBITDA for the third fiscal quarter was $29 million, down from $32 million in the previous year [23] - The company revised its fiscal year 2021 outlook, expecting revenue in the range of $940 million to $960 million, adjusted net income between $36.9 million to $38.4 million, and adjusted EBITDA between $105 million to $108.3 million [26] Business Line Data and Key Metrics Changes - The company experienced a gross profit of $36.6 million, slightly down from $36.9 million in the same quarter last year [21] - General and administrative expenses increased to $23.2 million from $16.9 million, primarily due to personnel costs and acquisition-related expenses [22] Market Data and Key Metrics Changes - The company reported a record project backlog of $823 million, up from $650 million a year ago and $773.3 million at the end of the previous quarter [25] - The backlog growth was attributed to strong demand across all markets, particularly in North Carolina due to recovering DOT budgets [94][95] Company Strategy and Development Direction - The company announced two significant acquisitions totaling approximately $113 million, aimed at expanding its geographic footprint and enhancing vertical integration [11][20] - The acquisitions included four hot-mix asphalt plants and five aggregate facilities, which are expected to support operations in Alabama and North Carolina [12][14] - The company is focused on investing in people and technology to prepare for future growth, despite short-term profitability headwinds [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth strategy, despite facing supply chain and labor constraints [9][10] - The company anticipates a potential upside of 20% year-over-year increase in infrastructure spending and substantial federal funding increases for the industry [18] - Management believes that supply chain disruptions will normalize in the coming quarters [10] Other Important Information - The company has a stable cash position with $134.5 million in cash and $214 million available under its revolving credit facility [24] - The company is investing in a new ERP system to enhance operational efficiency [79] Q&A Session Summary Question: How is the company addressing inflationary factors and labor market challenges? - Management indicated that inflation is primarily a pass-through cost, with revised input costs being incorporated into bids [33] Question: What is the impact of project delays on backlog and revenue generation? - Management estimated that project delays could represent a 5% revenue headwind, but the backlog remains strong [90] Question: How do recent acquisitions compare to legacy operations in managing labor relations? - Management noted that both legacy and newly acquired operations face similar labor market challenges, but the company is well-positioned to integrate new markets [38] Question: What is the confidence level for achieving revenue growth in the upcoming quarter? - Management expressed confidence in achieving revenue growth due to improvements in backlog and operational performance [46] Question: How will the company manage its M&A strategy moving forward? - Management stated that while they are cautious, they continue to see opportunities for acquisitions and are preparing for future growth [51]