What changed in this filing

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Item 1. Financial Statements

2025-02-07 compared with 2024-08-09 · 314 added, 316 removed, 486 unchanged (56% of the section changed)

3 unchanged sentences

(in thousands, except share data)

June 30, September 30,

ASSETS (unaudited)

December 31, September 30,

Current assets:

29 unchanged sentences

Total liabilities 1,756,848 968,395

Commitments and contingencies

Stockholders’ equity:

Preferred stock, par value $ 0.001 ;

10,000,000 shares authorized and no shares issued and outstanding at June 30, 2024 and September 30, 2023

10,000,000 shares authorized and no shares issued and outstanding at December 31, 2024 and September 30, 2024

Class A common stock, par value $ 0.001 ;

400,000,000 shares authorized, 43,926,017 shares issued and 43,763,213 shares outstanding at June 30, 2024 and 43,760,546 shares issued and 43,727,680 shares outstanding at September 30, 2023

400,000,000 shares authorized, 47,550,777 shares issued and 47,158,599 shares outstanding at December 31, 2024, and 44,062,830 shares issued and 43,819,102 shares outstanding at September 30, 2024

Class B common stock, par value $ 0.001 ;

100,000,000 shares authorized, 11,921,463 shares issued and 8,998,511 shares outstanding at June 30, 2024 and September 30, 2023

100,000,000 shares authorized, 11,691,408 shares issued and 8,765,803 shares outstanding at December 31, 2024 and 11,784,650 shares issued and 8,861,698 shares outstanding at September 30, 2024

Additional paid-in capital 527,986 278,065

Treasury stock, Class A common stock, par value $ 0.001 , at cost, 162,804 shares at June 30, 2024 and 32,866 shares at September 30, 2023

Treasury stock, Class A common stock, par value $ 0.001 , at cost, 392,178 shares of Class A common stock at December 31, 2024 and 243,728 shares of Class A common stock at September 30, 2024

( 23,128 ) ( 11,490 )

Treasury stock, Class B common stock, par value $ 0.001 , at cost, 2,922,952 shares at June 30, 2024 and September 30, 2023

Treasury stock, Class B common stock, par value $ 0.001 , at cost, 2,925,605 shares at December 31, 2024 and 2,922,952 shares at September 30, 2024

( 16,046 ) ( 15,603 )

5 unchanged sentences

CONSTRUCTION PARTNERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited in thousands, except share and per share data)

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

For the Three Months Ended December 31,

Revenues $ 561,580 $ 396,505

2 unchanged sentences

General and administrative expenses ( 44,266 ) ( 35,454 )

Acquisition-related expenses ( 19,552 ) ( 527 )

Gain on sale of property, plant and equipment, net 1,055 836

Gain on facility exchange — — — 5,389

Operating income 13,808 16,735

Interest expense, net ( 18,130 ) ( 3,746 )

Other income 32 493 47 925

Income before provision for income taxes 41,016 28,794 52,532 24,241

Provision for income taxes 10,108 7,117 12,905 6,153

Net income 30,908 21,677 39,627 18,088

Other (expense) income 421 ( 28 )

Income (loss) before provision for income taxes ( 3,901 ) 12,961

Provision (benefit) for income taxes ( 849 ) 3,118

Earnings from investment in joint venture 1 —

Net income (loss) ( 3,051 ) 9,843

Other comprehensive income (loss), net of tax

2 unchanged sentences

Other comprehensive income (loss) 2,536 ( 6,705 )

Comprehensive income $ 30,334 $ 25,675 $ 34,739 $ 17,451

Net income per share attributable to common stockholders:

Comprehensive income (loss) $ ( 515 ) $ 3,138

Net income (loss) per share attributable to common stockholders:

Basic $ ( 0.06 ) $ 0.19

7 unchanged sentences

(unaudited in thousands, except share data)

For the Nine Months Ended June 30, 2024

For the Three Months Ended December 31, 2024

Class A Common Stock Class B Common Stock Additional

4 unchanged sentences

September 30, 2024 44,062,830 $ 44 11,784,650 $ 12 $ 278,065 $ ( 11,490 ) $ ( 15,603 ) $ 315,210 $ 7,502 $ 573,740

Net income — — — — — — — 9,843 — 9,843

Share-based compensation expense — — — — 2,783 — — — — 2,783

Issuance of stock grant awards 135,471 — — — — — — — — —

Purchase of treasury stock — — — — — ( 1,336 ) — — — ( 1,336 )

Other comprehensive (loss) — — — — — — — — ( 6,705 ) ( 6,705 )

December 31, 2023 43,896,017 $ 44 11,921,463 $ 12 $ 270,113 $ ( 1,514 ) $ ( 15,603 ) $ 256,118 $ 11,989 $ 521,159

Net loss — — — — — — — ( 3,051 ) — ( 3,051 )

Share-based compensation expense — — — — 13,674 — — — — 13,674

Other comprehensive income — — — — — — — — 2,392 2,392

March 31, 2024 43,896,017 $ 44 11,921,463 $ 12 $ 272,669 $ ( 1,514 ) $ ( 15,603 ) $ 254,994 $ 14,381 $ 524,983

Net income — — — — — — — 30,908 — 30,908

Issuance of stock grant awards 30,000 — — — — — — — — —

Share-based compensation expense — — — — 2,893 — — — — 2,893

Issuance of stock awards 333,705 — 61,000 — — — — — — —

Issuance of common stock 3,000,000 3 — — 236,247 — — — — 236,250

Purchase of treasury stock — — — — — ( 11,638 ) ( 443 ) — — ( 12,081 )

Other comprehensive (loss) — — — — — — — — ( 574 ) ( 574 )

June 30, 2024 43,926,017 $ 44 11,921,463 $ 12 $ 275,562 $ ( 6,783 ) $ ( 15,603 ) $ 285,902 $ 13,807 $ 552,941

For the Nine Months Ended June 30, 2023

Other comprehensive income — — — — — — — — 2,536 2,536

Conversion of Class B common stock to Class A common stock 154,242 — ( 154,242 ) — — — — — —

December 31, 2024 47,550,777 $ 47 11,691,408 $ 12 $ 527,986 $ ( 23,128 ) $ ( 16,046 ) $ 312,159 $ 10,038 $ 811,068

For the Three Months Ended December 31, 2023

Class A Common Stock Class B Common Stock Additional

Capital Treasury

Stock Class A Common Stock Treasury

Stock Class B Common Stock Retained

Earnings Accumulated Other Comprehensive Income (Loss), net Total

Stockholders’

Stock Class A Common Stock

Stock Class B Common Stock

Accumulated Other Comprehensive Income (Loss), net Total Stockholders’ Equity

Shares Amount Shares Amount

2 unchanged sentences

Share-based compensation expense — — — — 2,783 — — — — 2,783

Issuance of stock grant awards 180,798 — — — — — — — — —

Issuance of stock awards 135,471 — — — — — — — — —

Purchase of treasury stock — — — — — ( 1,336 ) — — — ( 1,336 )

1 unchanged sentence

December 31, 2023 43,896,017 $ 44 11,921,463 $ 12 $ 270,113 $ ( 1,514 ) $ ( 15,603 ) $ 256,118 $ 11,989 $ 521,159

Net loss — — — — — — — ( 5,481 ) — ( 5,481 )

Share-based compensation expense — — — — 2,692 — — — — 2,692

Other comprehensive (loss) — — — — — — — — ( 3,379 ) ( 3,379 )

March 31, 2023 41,376,528 $ 41 14,275,867 $ 15 $ 261,743 $ ( 178 ) $ ( 15,603 ) $ 193,685 $ 12,985 $ 452,688

Net income — — — — — — — 21,677 — 21,677

Share-based compensation expense — — — — 2,737 — — — — 2,737

Issuance of stock grant awards 29,614 — — — — — — — — —

Conversion of Class B common stock to Class A common stock 2,354,404 3 ( 2,354,404 ) ( 3 ) — — — — — —

Other comprehensive income — — — — — — — — 3,998 3,998

June 30, 2023 43,760,546 $ 44 11,921,463 $ 12 $ 264,480 $ ( 178 ) $ ( 15,603 ) $ 215,362 $ 16,983 $ 481,100

See notes to consolidated financial statements (unaudited).

2 unchanged sentences

(unaudited in thousands)

For the Nine Months Ended June 30,

For the Three Months Ended December 31,

Cash flows from operating activities:

Net income $ 39,627 $ 18,088

Net income (loss) $ ( 3,051 ) $ 9,843

Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities:

4 unchanged sentences

Gain on sale of property, plant and equipment ( 1,055 ) ( 836 )

Gain on facility exchange — ( 5,389 )

Realized loss on sales, calls and maturities of restricted investments 53 10

Realized loss on restricted investments 19 23

Share-based compensation expense 14,403 2,889

Loss from investment in joint venture 3 —

Earnings from investment in joint venture ( 1 ) —

Deferred income tax benefit ( 1,411 ) ( 404 )

Other non-cash adjustments ( 229 ) ( 86 )

Changes in operating assets and liabilities, net of business acquisitions:

Contracts receivable including retainage ( 11,310 ) 22,777

Changes in operating assets and liabilities:

Contracts receivable including retainage, net 62,560 63,507

Costs and estimated earnings in excess of billings on uncompleted contracts ( 5,767 ) ( 2,203 )

6 unchanged sentences

Other long-term liabilities 1,333 1,162

Net cash provided by operating activities, net of business acquisitions 113,181 94,542

Net cash provided by operating activities, net of acquisitions 40,663 60,378

Cash flows from investing activities:

1 unchanged sentence

Proceeds from sale of property, plant and equipment 1,843 2,460

Proceeds from facility exchange — 36,987

Proceeds from sales, calls and maturities of restricted investments 2,860 1,403

Proceeds from sale of restricted investments 2,417 1,013

Purchases of restricted investments ( 2,258 ) —

Business acquisitions, net of cash acquired ( 654,200 ) ( 81,351 )

Purchase of restricted investments ( 4,376 ) ( 7,882 )

Net cash used in investing activities ( 679,030 ) ( 104,661 )

Cash flows from financing activities:

Proceeds from issuance of long-term debt, net of debt issuance costs 149,385 53,000

Proceeds from revolving credit facility — 90,000

Proceeds from issuance of long-term debt, net of debt issuance costs and discount 834,995 —

Repayments of long-term debt ( 128,163 ) ( 23,750 )

7 unchanged sentences

Cash paid for interest $ 15,051 $ 4,692

Cash paid for income taxes $ 4,285 $ 1,021

Cash paid for operating lease liabilities $ 3,233 $ 884

2 unchanged sentences

Property, plant and equipment financed with accounts payable $ 3,694 $ 7,088

Issuance of stock for business acquisition $ 236,250 $ —

Amounts payable to sellers in business combination $ 86,000 $ —

See notes to consolidated financial statements (unaudited).

3 unchanged sentences

Construction Partners, Inc.

(the “Company”) is a civil infrastructure company that specializes in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee.

The Company was formed in 2007 as a holding company to facilitate an acquisition growth strategy in the hot mix asphalt (“HMA”) paving and construction industry.

(the “Company”) is a civil infrastructure company that specializes in the construction and maintenance of roadways across the Sunbelt in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

Through its wholly-owned subsidiaries, the Company provides a variety of products and services to both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments.

The Company’s primary operations consist of (i) manufacturing and distributing HMA for both internal use and sales to third parties in connection with construction projects, (ii) paving activities, including the construction of roadway base layers and application of asphalt pavement, (iii) site development, including the installation of utility and drainage systems, (iv) mining aggregates, such as sand, gravel and construction stone, that are used as raw materials in the production of HMA and for sales to third parties, and (v) distributing liquid asphalt cement for both internal use and sales to third parties in connection with HMA production.

The Company’s primary operations consist of (i) manufacturing and distributing hot mix asphalt (“HMA”) for both internal use and sales to third parties in connection with construction projects, (ii) paving activities, including the construction of roadway base layers and application of asphalt pavement, (iii) site development, including the installation of utility and drainage systems, (iv) mining aggregates, such as sand, gravel and construction stone, that are used as raw materials in the production of HMA and for sales to third parties, and (v) distributing liquid asphalt cement for both internal use and sales to third parties in connection with HMA production.

The Company was formed in 2007 by SunTx Capital Partners (“SunTx”), a private equity firm based in Dallas, Texas, as a holding company to facilitate an acquisition growth strategy in the HMA paving and construction industry.

The use and consumption of the Company’s products and services fluctuate due to seasonality.

15 unchanged sentences

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the recorded amounts of assets, liabilities, stockholders’ equity, revenues and expenses during the reporting period, and the disclosure of contingent liabilities at the date of the consolidated financial statements.

Estimates are used in accounting for items such as recognition of revenues and cost of revenues, investments, mineral reserves, goodwill and other intangible assets, business acquisitions, valuation of operating lease right-of-use assets, allowance for credit losses, valuation allowances related to income taxes, accruals for potential liabilities related to lawsuits or insurance claims, asset retirement obligations, valuation of derivative instruments and valuation of share-based compensation awards.

Estimates are continually evaluated based on historical information and actual experience;

13 unchanged sentences

Restricted cash represents cash held in a fiduciary capacity by the Captive for the payment of casualty insurance claims.

The Company had restricted cash of $ 2.1 million and $ 0.8 million at June 30, 2024 and September 30, 2023, respectively.

The Company had restricted cash of $ 0.6 million and $ 2.0 million at December 31, 2024 and September 30, 2024, respectively.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (unaudited, in thousands):

June 30, 2024 June 30, 2023

December 31, 2024 September 30, 2024

Cash and cash equivalents $ 132,504 $ 74,686

2 unchanged sentences

Restricted Investments

The Company’s restricted investments consist of debt securities held in a fiduciary capacity by the Captive for the payment of casualty insurance claims.

The Company’s restricted investments consist of debt securities, which are held in a fiduciary capacity by the Captive for the payment of casualty insurance claims.

The Company determines the classification of its securities at the time of purchase and re-evaluates the determination at each balance sheet date.

3 unchanged sentences

Interest income on debt securities is recorded when earned using an effective yield method.

Unrealized gains and losses are reported as components of “Accumulated other comprehensive income (loss), net” on the Consolidated Balance Sheets.

Unrealized gains and losses are reported as components of accumulated other comprehensive income (loss), net.

These securities have been classified as non-current assets based on their respective maturity dates and the Company’s intent to reinvest sales proceeds into new restricted investments.

The Company had restricted investments of $ 17.0 million and $ 15.1 million at June 30, 2024 and September 30, 2023, respectively.

The Company had restricted investments of $ 17.5 million and $ 18.0 million at December 31, 2024 and September 30, 2024, respectively.

The Company evaluates its available-for-sale debt securities quarterly to determine whether there has been a decline in the fair value below the amortized cost due to credit losses or other factors.

This evaluation process entails judgement by the Company, and considers factors including the issuer’s financial condition and near-term prospects, future economic conditions, interest rate changes and changes in the rating of the security.

When the Company has determined that it intends to sell, or that it is more likely than not that the Company will be required to sell a security before it recovers its amortized cost basis above fair value, the individual security is written down to fair value, with a corresponding charge to “Other income” within the Consolidated Statements of Comprehensive Income.

For available-for-sale debt securities that do not meet the intent impairment criteria but for which the Company has determined that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss allowance is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis.

For the nine months ended June 30, 2024 and 2023, the Company had no intent impairments or credit losses.

For the three months ended December 31, 2024 and 2023, the Company had no intent impairments or credit losses.

Contracts Receivable Including Retainage, Net

Contracts receivable are generally based on amounts billed and currently due from customers, amounts currently due but unbilled, and amounts retained by customers pending satisfactory completion of a project.

It is common in the Company’s industry for a small portion of either progress billings or the contract price, typically 10%, to be withheld by the customer until the Company completes a project to the satisfaction of the customer in accordance with the applicable contract terms.

Such amounts, defined as retainage, are included on the Consolidated Balance Sheets as “Contracts receivable including retainage, net”.

Based on the Company’s experience with similar contracts in recent years, billings for such retainage balances are generally collected within one year of the completion of the project.

Contracts receivable are generally based on amounts billed and currently due from customers, amounts currently due but unbilled, and amounts retained by customers.

It is common in the Company’s industry for a small portion of either progress billings or the contract price, typically 10%, to be withheld by the customer until contracts are near completion or fully completed.

Such amounts, defined as retainage, are included on the Consolidated Balance Sheets as “Contracts receivable including retainage, net.” Based on the Company’s experience with similar contracts in recent years, billings for such retainage balances are generally collected within one year of the completion of the project.

Contracts receivable including retainage, net is stated at the amount management expects to collect from outstanding balances.

Management provides for uncollectible accounts through a charge to earnings and a credit to the allowance for credit losses based on

its assessment of the current status of individual accounts, type of service performed, current economic conditions, historical losses and other information available to management.

Management provides for uncollectible accounts through a charge to earnings and a credit to the allowance for credit losses based on its assessment of the current status of individual accounts, type of service performed, current economic conditions, historical losses and

other information available to management.

Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for credit losses and an adjustment to the contract receivable.

4 unchanged sentences

The contract asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, arises when the Company recognizes revenues for services performed under its construction projects, but the Company is not yet entitled to bill the customer under the terms of the contract.

Amounts billed to customers are excluded from this asset and reflected on the Consolidated Balance Sheets as “Contracts receivable including retainage, net”.

Included in costs and estimated earnings on uncompleted contracts are amounts the Company seeks or will seek to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims).

Amounts billed to customers are excluded from this asset and reflected on the Consolidated Balance Sheets as “Contracts receivable including retainage, net.” Included in costs and estimated earnings on uncompleted contracts are amounts the Company seeks or will seek to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims).

Such amounts are recorded to the extent that the amount can be reasonably estimated and recovery is probable.

13 unchanged sentences

The Company generally has the ability to file liens against the property if payments are not made on a timely basis.

No single customer accounted for more than 10% of the Company’s contracts receivable including retainage, net balance at June 30, 2024 or September 30, 2023.

Projects performed for various departments of transportation accounted for 42.3 % and 38.6 % of consolidated revenues for the three months ended June 30, 2024 and 2023, respectively, and for 39.7 % and 32.0 % of consolidated revenues for the nine months ended June 30, 2024 and 2023, respectively.

Customers that accounted for more than 10% of consolidated revenues during the three and nine months ended June 30, 2024 and 2023 are presented below:

% of Consolidated Revenues

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

North Carolina Department of Transportation 12.5 % 11.2 % 10.3 % *

No single customer accounted for more than 10% of the Company’s contracts receivable including retainage, net balance at December 31, 2024 or September 30, 2024.

Projects performed for various departments of transportation accounted for 33.5 % and 37.7 % of consolidated revenues for the three months ended December 31, 2024 and 2023, respectively.

Customers that accounted for more than 10% of consolidated revenues during either the three months ended December 31, 2024 or the three months ended December 31, 2023 are presented below:

% of Consolidated Revenues for the Three Months Ended December 31,

Florida Department of Transportation * 12.6 %

1 unchanged sentence

Revenues from Contracts with Customers

The Company derives revenues from contracts with its customers, predominantly by performing construction services for both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments.

The Company derives a significant portion of revenues from contracts with its customers, predominantly by performing construction services for both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments.

These projects are performed for a mix of federal, state, municipal and private customers.

In addition, the Company generates revenues from the sale of construction materials, including HMA, aggregates, liquid asphalt and ready-mix concrete, to third-party public and private customers pursuant to contracts with those customers.

The following table reflects, for the periods presented, the percentage of (i) revenues generated from public infrastructure construction projects and the sale of construction materials to public customers and (ii) revenues generated from private infrastructure construction projects and the sale of construction materials to private customers.

% of Consolidated Revenues

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

Private 35.6 % 36.8 % 39.2 % 39.0 %

The following table reflects, for the periods presented, (i) revenues generated from public infrastructure construction projects and the sale of construction materials to public customers and (ii) revenues generated from private infrastructure construction projects and the sale of construction materials to private customers.

% of Consolidated Revenues for the Three Months Ended December 31,

Public 57.7 % 59.8 %

Private 42.3 % 40.2 %

Revenues derived from construction projects are recognized over time as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer.

Recognition of revenues and cost of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion.

Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and measurement of progress toward completion.

Recognition of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion.

Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and for measurement of progress toward completion.

Management believes the Company maintains reasonable estimates based on prior experience;

12 unchanged sentences

All deliverables under a contract are part of a project defined by a customer and represent a series of integrated goods and services that have the same pattern of delivery to the customer and use the same measure of progress toward satisfaction of the performance obligation as the customer’s asset is created or enhanced by the Company.

The Company’s obligation is not satisfied until the entire project is complete.

Revenue recognized during a reporting period is based on the cost-to-cost input method applied to the total transaction price, including adjustments for variable consideration, such as liquidated damages, penalties or bonuses, related to the timeliness or quality of project performance.

3 unchanged sentences

The majority of the Company’s public construction contracts are fixed unit price contracts.

Under fixed unit price contracts, the Company is committed to providing materials or services required by a contract at fixed unit prices (for example, dollars per ton of asphalt placed).

Under fixed unit price contracts, the Company commits to providing materials or services required by a contract at fixed unit prices (for example, dollars per ton of asphalt placed).

The Company’s private customer contracts are primarily fixed total price contracts, also known as lump sum contracts, which require that the total amount of work be performed for a single price.

Contract cost is recorded as incurred, and revisions in

contract revenue and cost estimates are reflected in the accounting period when known.

Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements, may result in revisions to estimated revenues and costs and are recognized in the period in which the revisions are determined.

Contract cost is recorded as incurred, and revisions in contract revenue and cost estimates are reflected in the accounting period when known.

Changes in job performance, job conditions and

estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements, may result in revisions to estimated revenues and costs and are recognized in the period in which the revisions are determined.

Change orders are modifications of an original contract that effectively change the existing provisions of the contract and become part of the single performance obligation that is partially satisfied at the date of the contract modification.

4 unchanged sentences

Revenues derived from the sale of HMA, aggregates, ready-mix concrete, and liquid asphalt are recognized at a point in time, which is when control of the product is transferred to the customer.

Generally, control of a product is deemed to be transferred to the customer when the customer accepts delivery at its facility or receives product in its own transport vehicles from one of the Company’s HMA plants or aggregates facilities.

Generally, that point in time is when the customer accepts delivery at its facility or receives product in its own transport vehicles from one of the Company’s HMA plants or aggregates facilities.

Upon purchase, the Company generally provides an invoice or similar document detailing the goods transferred to the customer.

4 unchanged sentences

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which the temporary differences are expected to be reversed or settled.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Management evaluates the realization of deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.

1 unchanged sentence

Earnings per Share

Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted net income per common share attributable to common stockholders is the same as basic net income per share attributable to common stockholders, but includes dilutive unvested stock awards using the treasury stock method.

Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per common share attributable to common stockholders is the same as basic net income (loss) per share attributable to common stockholders, but includes dilutive unvested stock awards using the treasury stock method.

Fair Value Measurements

The Company measures and discloses certain financial assets and liabilities at fair value.

The Company measures and discloses certain financial assets and liabilities at fair value under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements (“Topic 820”).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

5 unchanged sentences

The Company endeavors to utilize the best available information in measuring fair value.

The Company’s financial instruments include cash and cash equivalents, restricted cash, contracts receivable including retainage, accounts payable and accrued expenses reflected as current assets and current liabilities on its Consolidated Balance Sheets at June 30, 2024 and September 30, 2023.

Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value.

The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at June 30, 2024 and September 30, 2023.

The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at December 31, 2024 and September 30, 2024.

These investments are adjusted to fair value at each balance sheet date and are considered Level 2 fair value measurements.

The Company also has Term Loans and a Revolving Credit Facility, each as defined and further described in Note 8 - Debt.

The carrying value of amounts outstanding under these credit facilities is reflected as long-term debt, net of current maturities and deferred debt issuance cost and current maturities of long-term debt on the Company’s Consolidated Balance Sheets at June 30, 2024 and September 30, 2023.

The Company also has term loans and a revolving credit facility, as further described in Note 8 - Debt.

Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value.

8 unchanged sentences

Management applies fair value measurement guidance to its impairment analysis for tangible and intangible assets, including goodwill.

Comprehensive Income

The Company reports comprehensive income in its Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity.

Comprehensive Income (Loss)

The Company reports comprehensive income (loss) in its Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Stockholders’ Equity.

Comprehensive income comprises two subsets:

net income and other comprehensive income (loss) (“OCI”).

net income (loss) and other comprehensive income (loss) (“OCI”).

OCI includes adjustments for changes in fair value of an interest rate swap contract derivative and available-for-sale restricted investments.

For additional information about comprehensive income (loss), see Note 19 - Other Comprehensive Income (Loss).

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

These reclassifications had no effect on previously reported net income.

Note 3 - Accounting Standards

The Company did not adopt any new accounting standards or updates during the nine months ended June 30, 2024.

Note 4 - Business Acquisitions

Acquisitions - Provisional

On October 2, 2023, the Company acquired substantially all of the assets of Hubbard Paving & Grading, Inc., an asphalt and paving company headquartered in Walhalla, South Carolina, for $ 3.0 million.

This transaction added an HMA plant and expanded the Company’s service market in the Upstate region of South Carolina.

On November 1, 2023, the Company acquired three HMA plants and certain related assets from Reeves Construction Company for $ 18.3 million.

This transaction added three HMA plants in Concord, North Carolina and Rock Hill and McConnells, South Carolina.

On December 29, 2023, the Company acquired all issued and outstanding membership interests of SJ&L General Contractor, LLC, an asphalt and sitework company headquartered in Huntsville, Alabama, for $ 54.3 million.

This transaction expanded the Company’s service capabilities in the Huntsville, Alabama metro area.

On January 2, 2024, the Company acquired substantially all of the assets of Littlefield Construction Company, a soil base, surface treatment and sitework company headquartered in Waycross, Georgia, for $ 6.5 million.

This transaction expanded the Company’s service capabilities in the Waycross, Georgia area.

On May 1, 2024, the Company acquired certain assets of Sunbelt Asphalt Surfaces, Inc., an asphalt and paving company headquartered in Auburn, Georgia, for $ 28.7 million.

This transaction added an HMA plant and a greenfield plant site in northeastern Georgia.

On June 3, 2024, the Company acquired substantially all of the assets of Hudson Paving, Inc., an asphalt and paving company company headquartered in Rockingham, North Carolina, for $ 18.7 million.

This transaction added an HMA plant and related crews and equipment serving the Sandhills region of North Carolina.

The total amount of consideration for these transactions remains subject to post-closing adjustments with respect to inventory quantities, settlement of working capital and other matters.

Combined Acquisitions During the Nine Months Ended June 30, 2024

The foregoing acquisitions were accounted for as business combinations in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”).

As of June 30, 2024, the purchase price allocation had not yet been finalized due to the recent timing of these acquisitions, as certain information was pending on such date to finalize estimates of fair value of certain assets acquired and liabilities assumed.

Recently Adopted Accounting Pronouncements

The Company monitors all Accounting Standards Updates issued by the Financial Accounting Standards Board and other authoritative guidance.

There are no recently issued accounting pronouncements that are expected to have a material impact on the Company’s financial statements.

Note 4 - Business Acquisition

Lone Star Paving

On November 1, 2024, the Company acquired all of the outstanding membership units of Asphalt Inc., LLC (doing business as Lone Star Paving) (“Lone Star Paving” and such acquisition, the “Lone Star Acquisition”), a vertically integrated asphalt manufacturing and paving company headquartered in Austin, Texas, with 10 HMA plants, four aggregate facilities, and one liquid asphalt terminal supporting its operations.

The aggregate consideration delivered at the closing of the Lone Star Acquisition consisted of (i) $ 654.2 million in cash (as adjusted pursuant to the purchase agreement) and (ii) 3,000,000 shares of Class A common stock having an aggregate fair market value of approximately $ 236.3 million at closing.

In addition, the Company agreed to (i) pay cash to the selling unit holders in an amount equal to the working capital remaining in Lone Star Paving at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unit holders for $ 30.0 million in cash an entity that owns certain real property following receipt of specified operational entitlements, which had not occurred as of December 31, 2024.

The total amount of consideration for the Lone Star Acquisition remains subject to post-closing adjustments with respect to settlement of working capital and other matters.

At December 31, 2024, $ 86.0 million was reflected on the Company’s Consolidated Balance Sheets within accrued expenses and other current liabilities, representing the estimated working capital payable.

The Lone Star Acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations (“Topic 805”).

As of December 31, 2024, the purchase price allocation had not yet been finalized due to the recent timing of the Lone Star Acquisition, as certain information was pending on such date to finalize estimates of fair value of certain assets acquired and liabilities assumed.

The Company consulted with independent third parties to assist in the valuation process.

The Company expects to finalize the estimate of fair values as soon as practicable and no later than one year from their respective acquisition dates.

The Company expects to finalize the estimate of fair values as soon as practicable and no later than one year from the date of the Lone Star Acquisition.

Identifiable assets acquired and liabilities assumed were recorded at their estimated fair values based on the methodology described

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Goodwill primarily represents the assembled work force and

synergies expected to result from the acquisitions.

Upon finalizing the accounting for these transactions, management

expects to ascribe value to other identifiable intangible assets, including customer relationships and customer backlog, which will

reduce the provisional amount allocated to goodwill.

Total consideration transferred for these acquisitions was $ 129.5 million, which is composed of $ 135.3 million paid from available cash and draws from the Revolving Credit Facility (as defined in Note 8 - Debt) and $ 5.8 million due from sellers related to settlement of working capital provisions.

The combined total consideration has been provisionally allocated as follows:

$ 13.0 million of net working capital, $ 76.2 million of property, plant and equipment and $ 40.3 million of goodwill and intangibles.

The Consolidated Statements of Comprehensive Income include $ 38.5 million of revenue and $ 2.5 million of net income attributable to the operations of these acquisitions for the three months ended June 30, 2024 and $ 60.6 million of revenue and $ 1.3 million of net income attributable to the operations of these acquisitions for the nine months ended June 30, 2024.

The Company recorded certain costs to effect the acquisitions as they were incurred, which are reflected in general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income in the amount of $ 0.7 million for the three months ended June 30, 2024 and $ 1.5 million for the nine months ended June 30, 2024.

The following tables present pro forma revenues and net income as though the acquisitions had occurred on October 1, 2022 (unaudited, in thousands):

For the Three Months Ended June 30,

Pro forma revenues $ 526,414 $ 469,029

Pro forma net income $ 32,698 $ 23,065

For the Nine Months Ended June 30,

Pro forma revenues $ 1,341,442 $ 1,187,469

synergies expected to result from the Lone Star Acquisition, which may change as estimates are finalized.

The following table summarizes the consideration for the Lone Star Acquisition and the provisional amounts of identified assets acquired and liabilities assumed as of December 31, 2024 (unaudited, in thousands):

Cash and cash equivalents $ 9,984

Contracts receivable including retainage 96,491

Cost and estimated earnings in excess of billings on uncompleted contracts 3,972

Inventories 28,070

Prepaid expenses and other current assets 94

Property, plant and equipment 409,021

Operating lease right-of-use assets 2,006

Intangible assets 68,700

Total assets 618,338

Accounts payable 40,059

Billings in excess of costs and estimated earnings on uncompleted contracts 10,293

Accrued expenses and other current liabilities 342

Operating lease liabilities 2,006

Total liabilities 52,700

Goodwill 410,812

Total cash consideration transferred 654,200

Fair value of Class A common stock transferred 236,250

Total consideration payable 86,000

Total purchase price $ 976,450

The Consolidated Statements of Comprehensive Income (Loss) includes $ 61.0 million of revenue and $ 3.7 million of net loss, excluding acquisition-related expenses, attributable to the operations of Lone Star Paving for the period from the acquisition date through December 31, 2024.

The Company recorded certain costs related to the Lone Star Acquisition as they were incurred, which are reflected in acquisition-related expenses on the Company’s Consolidated Statements of Comprehensive Income (Loss) in the amount of $ 18.5 million for the three months ended December 31, 2024.

The following table presents pro forma revenue and net income as though the Lone Star Acquisition had occurred on October 1, 2023 (unaudited, in thousands):

For the Three Months Ended December 31,

Pro forma revenue $ 624,273 $ 571,104

Pro forma net income $ 17,856 $ 12,151

Pro forma financial information is presented as if the operations of the acquisitions had been included in the consolidated results of the Company since October 1, 2022, and gives effect to transactions that are directly attributable to the acquisitions, including adjustments to:

(a) include the pro forma results of operations of the acquisitions for the three and nine months ended June 30, 2024 and 2023;

(b) include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and reserves at aggregates facilities, as applicable, as if such assets were acquired on October 1, 2022 and consistently applied to the Company’s depreciation and depletion methodologies;

(c) include interest expense under the Revolving Credit Facility as if the funds borrowed to finance the purchase prices were borrowed on October 1, 2022 (interest expense calculations further assume that no principal payments were made during the period from October 1, 2022 through June 30, 2024, and that the interest rate in effect on the date the Company made the acquisitions was in effect for the period from October 1, 2022 through June 30, 2024);

(d) exclude $ 1.5 million of acquisition-related expenses from the nine months ended June 30, 2024, as though such expenses were incurred prior to the pro forma acquisition date of October 1, 2022.

Pro forma information is presented for informational purposes and may not be indicative of revenue or net income that would have been achieved if these acquisitions had occurred on October 1, 2022.

Pro forma financial information is presented as if the operations of Lone Star Paving had been included in the consolidated results of the Company since October 1, 2023, and gives effect to transactions that are directly attributable to the Lone Star Acquisition, including adjustments to:

(a) include the pro forma results of operations of Lone Star Paving for the three months ended December 31, 2024 and 2023;

(b) include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and reserves at aggregates facilities, as applicable, as if such assets were acquired on October 1, 2023 and subject to the Company’s depreciation and depletion methodologies as of that date;

(c) include interest expense under the Term Loan B (as defined below) credit facilities as if the funds borrowed to finance the purchase price were borrowed on October 1, 2023, and assuming that (i) no principal payments were made from October 1, 2023 through December 31, 2024 and (ii) the interest rate in effect on the date of the Lone Star Acquisition was in effect from October 1, 2023 through December 31, 2024;

(d) exclude $ 19.1 million of acquisition-related expenses from the three months ended December 31, 2024, as though such expenses were incurred prior to the pro forma acquisition date of October 1, 2023.

Pro forma information is presented for informational purposes only and may not be indicative of revenue or net income that would have been achieved if the Lone Star Acquisition had occurred on October 1, 2023.

Provisional Accounting

In April 2023, the Company acquired an HMA paving company headquartered in Anderson, South Carolina.

In May 2023, the Company acquired an excavation, grading and utility company headquartered in Huntsville, Alabama.

As of June 30, 2024, there had been no material adjustments to the September 30, 2023 provisional accounting for either acquisition as reported in the 2023 Form 10-K.

During the three months ended December 31, 2024, there has been no material measurement period adjustments to provisional acquisitions as reported in the 2024 Form 10-K.

Note 5 - Contracts Receivable Including Retainage, Net

Contracts receivable including retainage, net consisted of the following at June 30, 2024 and September 30, 2023 (in thousands):

June 30, 2024 September 30, 2023

Contracts receivable including retainage, net consisted of the following at December 31, 2024 and September 30, 2024 (in thousands):

December 31, 2024 September 30, 2024

Contracts receivable $ 313,590 $ 299,156

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Contracts receivable including retainage, net $ 384,076 $ 350,811

Retainage receivable has been billed and the Company has an unconditional right to payment, but such payment is not due until satisfactory contract completion and acceptance by the customer.

Retainage receivables are amounts earned by the Company but held by customers until contracts are near completion or fully completed.

Note 6 - Contract Assets and Liabilities

Costs and estimated earnings compared to billings on uncompleted contracts at June 30, 2024 and September 30, 2023 consisted of the following (in thousands):

June 30, 2024 September 30, 2023

Costs and estimated earnings compared to billings on uncompleted contracts at December 31, 2024 and September 30, 2024 consisted of the following (in thousands):

December 31, 2024 September 30, 2024

Costs on uncompleted contracts $ 2,472,373 $ 2,224,511

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Net billings in excess of costs and estimated earnings on uncompleted contracts $ ( 100,955 ) $ ( 94,099 )

Significant changes to balances of costs and estimated earnings in excess of billings (contract asset) and billings in excess of costs and estimated earnings (contract liability) on uncompleted contracts from September 30, 2022 to June 30, 2023 and September 30, 2023 to June 30, 2024 are presented below (in thousands):

Significant changes to balances of costs and estimated earnings in excess of billings (contract asset) and billings in excess of costs and estimated earnings (contract liability) on uncompleted contracts from September 30, 2023 to December 31, 2023 and September 30, 2024 to December 31, 2024 are presented below (in thousands):

Costs and Estimated Earnings in Excess of Billings on

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Changes in revenue billed, contract price or cost estimates 3,143 ( 9,744 ) ( 6,601 )

June 30, 2023 (unaudited) $ 33,449 $ ( 68,748 ) $ ( 35,299 )

December 31, 2023 (unaudited) $ 30,439 $ ( 88,649 ) $ ( 58,210 )

September 30, 2024 $ 25,966 $ ( 120,065 ) $ ( 94,099 )

Changes in revenue billed, contract price or cost estimates 9,739 ( 16,595 ) ( 6,856 )

June 30, 2024 (unaudited) $ 32,550 $ ( 113,195 ) $ ( 80,645 )

At June 30, 2024, the Company had unsatisfied or partially unsatisfied performance obligations under construction project contracts representing approximately $ 1.45 billion in aggregate transaction price.

December 31, 2024 (unaudited) $ 35,705 $ ( 136,660 ) $ ( 100,955 )

At December 31, 2024, the Company had unsatisfied or partially unsatisfied performance obligations under construction project contracts representing approximately $ 2.1 billion in aggregate transaction price.

The Company expects to earn revenue as it satisfies its performance obligations under such contracts in the amount of approximately $ 1.4 billion during the remainder of the fiscal year ending September 30, 2025 and $ 0.7 billion thereafter.

Note 7 - Property, Plant and Equipment

Property, plant and equipment at June 30, 2024 and September 30, 2023 consisted of the following (in thousands):

June 30, 2024 September 30, 2023

Property, plant and equipment at December 31, 2024 and September 30, 2024 consisted of the following (in thousands):

December 31, 2024 September 30, 2024

Construction equipment $ 660,113 $ 570,044

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Total property, plant and equipment, net $ 1,030,892 $ 629,924

Depreciation, depletion and amortization expense related to property, plant and equipment was $ 23.5 million and $ 20.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 67.6 million and $ 59.9 million for the nine months ended June 30, 2024 and 2023, respectively.

Depreciation, depletion, and amortization expense related to property, plant and equipment for the three months ended December 31, 2024 and 2023 was $ 30.3 million and $ 21.0 million, respectively.

Note 8 - Debt

The Company maintains credit facilities to finance acquisitions, to fund the purchase of real estate, construction equipment, plants and other fixed assets, and for general working capital purposes.

Debt at June 30, 2024 and September 30, 2023 consisted of the following (in thousands):

June 30, 2024 September 30, 2023

Debt at December 31, 2024 and September 30, 2024 consisted of the following (in thousands):

December 31, 2024 September 30, 2024

Long-term debt:

Term Loans $ 397,500 $ 283,750

Term Loan A $ 386,875 $ 392,188

Term Loan B 850,000 —

Revolving Credit Facility — 122,850

Total long-term debt 1,236,875 515,038

Deferred debt issuance costs ( 1,502 ) ( 1,110 )

Deferred debt issuance costs, net ( 16,024 ) ( 1,514 )

Current maturities of long-term debt ( 37,719 ) ( 26,563 )

Long-term debt, net of current maturities and deferred debt issuance costs $ 1,183,132 $ 486,961

The Company and each of its subsidiaries are parties to a Third Amended and Restated Credit Agreement, dated June 30, 2022, with PNC Bank, National Association, as administrative agent and lender, PNC Capital Markets LLC, as joint lead arranger and sole bookrunner, Regions Bank and BofA Securities, Inc., each as a joint arranger, and certain other lenders (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”).

The Credit Agreement provides for (i) term loans in the aggregate principal amount of $ 375.0 million (consisting of an initial aggregate principal amount of $ 250.0 million (the “Initial Term Loan”) and a subsequent term loan in the principal amount of $ 125.0 million (the “Incremental Term Loan,” and collectively, the “Term Loans”)), (ii) a revolving credit facility in an aggregate principal amount of up to $ 400.0 million (the “Revolving Credit Facility”) and (iii) a delayed draw term loan facility, the availability under which facility terminated as of December 31, 2023, in the aggregate principal amount of up to $ 50.0 million (the “Delayed Draw Term Loan”).

The Company incurred debt issuance costs of $ 0.6 million related to an amendment to the Credit Agreement entered into on May 29, 2024, which are included as part of “Long-term debt, net of current maturities and deferred issuance costs” on the June 30, 2024 Consolidated Balance Sheet.

All outstanding advances under the Term Loans and Revolving Credit Facility are due and payable in full on June 30, 2027 (the “Maturity Date”).

The Initial Term Loan (commencing on September 30, 2022) and the Incremental Term Loan (commencing on May 29, 2024) amortize in quarterly installments in an amount (subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal) equal to:

(a) 1.25 % of the original principal amount on each of the following eleven quarter-end payment dates;

Term Loan A / Revolver Credit Agreement

The Term Loan A / Revolver Credit Agreement provides for (i) term loans in the aggregate principal amount of $ 375.0 million (consisting of an initial aggregate principal amount of $ 250.0 million (the “Initial Term Loan A”) and a subsequent term loan in the principal amount of $ 125.0 million (the “Incremental Term Loan A,” and collectively, the “Term Loan A”)), (ii) a revolving credit facility in an aggregate principal amount of up to $ 400.0 million (the “Revolving Credit Facility”) and (iii) a delayed draw term loan facility, the availability under which facility terminated as of December 31, 2023, in the aggregate principal amount of up to $ 50.0 million (the “Delayed Draw Term Loan”).

All outstanding advances under the Term Loan A and Revolving Credit Facility are due and payable in full on June 30, 2027 (the “Maturity Date”).

The Initial Term Loan A (commencing on September 30, 2022) and the Incremental Term Loan A (commencing on May 29, 2024) amortize in quarterly installments in an amount (subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal) equal to:

(a) 1.25 % of the original principal amount on each of the following 11 quarter-end payment dates;

(b) 1.875 % of the original principal amount on each of the next eight quarter-end payment dates;

and (c) all remaining principal on the Maturity Date.

The annual interest rates applicable to advances will be calculated, at the Company’s option, by using either a base rate, Term SOFR plus 0.10 % or (solely with respect to the Revolving Credit Facility) Daily Simple SOFR plus 0.10 %, in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio.

The annual interest rates applicable to advances are calculated, at the Company’s option, by using either a base rate, Term SOFR plus 0.10 % or (solely with respect to the Revolving Credit Facility) Daily Simple SOFR plus 0.10 %, in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio.

Subject to various requirements, the Company generally may (and, under certain circumstances, must), prepay all or a portion of the outstanding balance of the advances, together with accrued interest thereon, prior to their contractual maturity.

The obligations of the Company and its subsidiaries under the Credit Agreement are secured by a first priority security interest in substantially all of the assets of the Company and each of its subsidiaries.

At June 30, 2024 and September 30, 2023, there was $ 397.5 million and $ 283.8 million, respectively, of principal outstanding under the Term Loans, $ 81.9 million and $ 93.1 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $ 309.7 million and $ 222.1 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit.

The Credit Agreement contains customary negative covenants for agreements of this type, including, but not limited to, restrictions on the Company’s ability to make acquisitions, make loans or advances, make capital expenditures and investments, pay dividends, create or incur indebtedness, create liens, wind up or dissolve, consolidate, merge or liquidate, or sell, transfer or dispose of assets.

The Credit Agreement also requires the Company to satisfy certain financial covenants, including a minimum fixed charge coverage ratio of 1.20 - to-1.00 and a maximum consolidated leverage ratio of 3.50 -to-1.00, subject to certain adjustments.

At June 30, 2024 and September 30, 2023, the Company’s fixed charge coverage ratio was 3.15 -to-1.00 and 2.56 -to-1.00, respectively, and the Company’s consolidated leverage ratio was 1.81 -to-1.00 and 1.72 -to-1.00, respectively.

At both June 30, 2024 and September 30, 2023, the Company was in compliance with all covenants under the Credit Agreement.

The obligations of the Company and its subsidiaries under the Term Loan A / Revolver Credit Agreement are secured by a first priority security interest in substantially all of the assets of the Company and each of its subsidiaries.

At December 31, 2024 and September 30, 2024, there was $ 386.9 million and $ 392.2 million, respectively, of principal outstanding under the Term Loan A, $ 0.0 million and $ 122.9 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $ 393.4 million and $ 268.8 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit.

The Term Loan A / Revolver Credit Agreement contains customary negative covenants for agreements of this type, including, but not limited to, restrictions on the Company’s ability to make acquisitions, make loans or advances, make capital expenditures and investments, pay dividends, create or incur indebtedness, create liens, wind up or dissolve, consolidate, merge or liquidate, or sell, transfer or dispose of assets.

The Term Loan A / Revolver Credit Agreement also requires the Company to satisfy certain financial covenants, including a minimum fixed charge coverage ratio of 1.20 -to-1.00 and a maximum consolidated leverage ratio determined as follows:

(i) for each fiscal quarter ending on or prior to September 30, 2024, 3.50 to 1.00;

(ii) for each fiscal quarter ending December 31, 2024 through and including September 30, 2025, 4.50 to 1.00;

(iii) for each fiscal quarter ending December 31, 2025 through and including September 30, 2026, 4.00 to 1.00;

and (iv) for each fiscal quarter ending December 31, 2026 and thereafter, 3.50 to 1.00.

At December 31, 2024 and September 30, 2024, the Company’s fixed charge coverage ratio was 4.02 -to-1.00 and 3.15 -to-1.00, respectively, and the Company’s consolidated leverage ratio was 2.96 -to-1.00 and 1.81 -to-1.00, respectively.

At both December 31, 2024 and September 30, 2024, the Company was in compliance with all covenants under the Term Loan A / Revolver Credit Agreement.

From time to time, the Company has entered into interest rate swap agreements to hedge against the risk of changes in interest rates.

At June 30, 2024 and September 30, 2023, the aggregate notional value of these interest rate swap agreements was $ 300.0 million, and the fair value was $ 20.5 million and $ 26.9 million, respectively, which is included within “Other assets” on the Company’s Consolidated Balance Sheets.

both December 31, 2024 and September 30, 2024, the aggregate notional value of these interest rate swap agreements was $ 300.0 million, and the fair value was $ 15.6 million and $ 11.6 million, respectively, which is included within other assets on the Company’s Consolidated Balance Sheets.

Term Loan B Credit Agreement

On November 1, 2024, the Company entered into a Term Loan Credit Agreement with Bank of America, N.A., as administrative agent, BofA Securities, Inc., PNC Capital Markets LLC, Regions Capital Markets, a division of Regions Bank, and TD Securities (USA) LLC, each as joint lead arranger and joint bookrunner, and certain other lenders party thereto (the “Term Loan B Credit Agreement”), which provided for a senior secured first lien term loan facility in the aggregate principal amount of $ 850.0 million, the full amount of which was drawn on November 1, 2024 (the “Term Loan B”).

A portion of the proceeds of the Term Loan B was used to finance the cash portion of the consideration for the Lone Star Acquisition, including the repayment of certain outstanding indebtedness of Lone Star Paving and its subsidiaries at the closing.

The remaining loan proceeds were or will be used to (i) repay the Company’s outstanding borrowings under other credit facilities, (ii) pay fees and expenses incurred in connection with the debt financing transaction and the Lone Star Acquisition, and (iii) for working capital and other corporate purposes as permitted by the Term Loan B Credit Agreement.

The Term Loan B matures on November 1, 2031 (the “Term Loan B Maturity Date”), and all outstanding principal amounts and accrued and unpaid interest thereon shall be due and payable on such date.

The Company must repay the term loan in equal quarterly installments, commencing with the first full fiscal quarter ending after the date of the Term Loan B Credit Agreement, in an aggregate principal amount equal to 0.25 % of the principal amount of the term loan, subject to adjustment for, among other things, any incremental term loans, with the balance payable on the Term Loan B Maturity Date.

Borrowings under the Term Loan B Credit Agreement bear interest, at the Company’s option, at a rate per annum equal to (i) a forward-looking term rate based on the Secured Overnight Financing Rate for the applicable interest period (“Term SOFR”) plus an applicable margin (the “Term SOFR Loans”) or (ii) the Base Rate (as defined below) plus the applicable margin (the “Base Rate Loans”).

The Base Rate means, for any day, a fluctuating rate per annum equal to the highest of (w) the federal funds rate plus 0.50 %, (x) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”, (y) Term SOFR plus 1.00 % and (z) 1.00 %.

The applicable margin is (A) 2.50 % in the case of Term SOFR Loans and (B) 1.50 % in the case of Base Rate Loans.

With respect to any Term SOFR Loans, the Company is required to pay interest on the last day of each one-, three-

or six-month interest period, as elected by the Company, and, if such interest period is longer than three months, also at the end of each three-month period during such interest period.

With respect to any Base Rate Loans, the Company is required to pay interest quarterly in arrears.

At December 31, 2024 and September 30, 2024, there was $ 850.0 million and $ 0.0 million , respectively, of principal outstanding under the Term Loan B.

Bridge Facility

In connection with the Lone Star Acquisition, the Company secured a bridge financing facility (the “Bridge Facility”).

No amounts were drawn under the Bridge Facility, which was terminated on November 1, 2024 upon securing permanent debt financing and closing the Lone Star Acquisition.

The Company incurred $ 3.1 million of fees associated with the Bridge Facility during the three months ended December 31, 2024, which is included in interest expense, net on the accompanying Consolidated Statements of Comprehensive Income (Loss).

Note 9 - Equity

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Class A common stock is not convertible into any other class of the Company’s capital stock.

Conversion of Class B Common Stock to Class A Common Stock

During the three months ended December 31, 2024, certain stockholders of the Company converted a total of 154,242 shares of Class B common stock into shares of Class A common stock on a one -for-one basis.

As of December 31, 2024, there were 47,158,599 shares of Class A common stock and 8,765,803 shares of Class B common stock outstanding.

Issuance of Class A Common Stock

During the three months ended December 31, 2024, the Company issued 3,000,000 shares of Class A common stock in connection with the Lone Star Acquisition.

Additional information about the Lone Star Acquisition is set forth in Note 4 - Business Acquisition.

Treasury Stock

During the nine months ended June 30, 2024, the Company received a total of 33,772 shares of Class A common stock from employees for reimbursement of income taxes paid by the Company on behalf of these employees related to the vesting of restricted stock awards and 2,758 shares of Class A common stock through forfeitures of restricted stock awards by terminated employees.

On April 12, 2024, the Company's Board of Directors authorized a stock repurchase program under which up to $ 40.0 million is available to purchase shares of the Company's outstanding Class A common stock through September 30, 2025.

Shares of the Company’s Class A common stock may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 plans.

The stock repurchase program does not obligate the Company to repurchase any shares of Class A common stock, and the stock repurchase program may be modified, suspended, extended or terminated at any time by the Company’s Board of Directors.

The actual timing, number and value of shares of Class A common stock repurchased will be determined by a committee of the Board of Directors at its discretion and will depend on a number of factors, including the market price of the Company’s Class A common stock, capital allocation alternatives, general market and economic conditions and other corporate considerations.

During the three and nine months

ended June 30, 2024, the Company purchased 93,408 shares of Class A common stock for aggregate consideration of approximately $ 5.3 million through open market transactions.

During the three months ended December 31, 2024, the Company received a total of 146,761 shares of Class A common stock and 2,653 shares of Class B common stock from employees for reimbursement of income taxes paid by the Company on behalf of these employees related to the vesting of restricted stock awards and 1,635 shares of Class A common stock through forfeitures of unvested restricted stock awards by terminated employees.

Restricted Stock Awards

During the nine months ended June 30, 2024, the Company awarded a total of 110,113 restricted shares of Class A common stock to certain directors, officers and employees of the Company under the Construction Partners, Inc.

2018 Equity Incentive Plan, as amended (the “Equity Incentive Plan”).

During the three months ended December 31, 2024, the Company awarded to certain directors, officers, employees and consultants of the Company a total of 196,793 restricted shares of Class A common stock under the Construction Partners, Inc.

2018 Equity Incentive Plan (the “Equity Incentive Plan”).

The total includes 180,000 restricted shares of Class A common stock awarded to certain key employees of Lone Star Paving.

Performance Stock Units

During the nine months ended June 30, 2024, the Company issued a total of 55,358 shares of Class A common stock in settlement of vested performance stock units (“PSUs”) under the Equity Incentive Plan.

During the three months ended December 31, 2024, the Company issued a total of 136,917 shares of Class A common stock in settlement of vested performance stock units (“PSUs”) under the Equity Incentive Plan and 61,000 shares of Class B common stock under the Construction Partners, Inc.

2024 Restricted Stock Plan (the “Restricted Stock Plan”).

The total includes a transaction bonus for Lone Star Paving of 79,000 shares of Class A common stock and 61,000 shares of Class B common stock awarded to certain officers, directors, key contractors and employees of the Company.

Additional information about these transactions is set forth in Note 13 - Share-Based Compensation.

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The following table summarizes the weighted-average number of basic common shares outstanding and the calculation of basic earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

Net income attributable to common stockholders $ 30,908 $ 21,677 $ 39,627 $ 18,088

For the Three Months Ended December 31,

Net income (loss) attributable to common stockholders $ ( 3,051 ) $ 9,843

Weighted average number of common shares outstanding, basic 54,160,317 51,892,426

Net income per common share attributable to common stockholders, basic $ 0.60 $ 0.42 $ 0.76 $ 0.35

Net income (loss) per common share attributable to common stockholders, basic $ ( 0.06 ) $ 0.19

The following table summarizes the calculation of the weighted-average number of diluted common shares outstanding and the calculation of diluted earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

Net income attributable to common stockholders $ 30,908 $ 21,677 $ 39,627 $ 18,088

For the Three Months Ended December 31,

Net income (loss) attributable to common stockholders $ ( 3,051 ) $ 9,843

Weighted average number of basic common shares outstanding, basic 54,160,317 51,892,426

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Weighted average number of diluted common shares outstanding:

Net income per diluted common share attributable to common stockholders $ 0.59 $ 0.41 $ 0.75 $ 0.35

54,160,317 52,430,864

Net income (loss) per diluted common share attributable to common stockholders $ ( 0.06 ) $ 0.19

Note 11 - Provision for Income Taxes

The Company files a consolidated U.S.

federal income tax return and income tax returns in various states.

The Company files a consolidated United States federal income tax return and income tax returns in various states.

Management evaluated the Company’s tax positions based on appropriate provisions of applicable tax laws and regulations and believes that they are supportable based on their specific technical merits and the facts and circumstances of the respective transactions.

The Company’s effective income tax rate for the three months ended June 30, 2024 and 2023 was 24.6 % and 24.7 %, respectively.

The Company’s effective tax rate for the nine months ended June 30, 2024 and 2023 was 24.6 % and 25.4 %, respectively.

The changes in the Company’s effective rates were due to differences in state tax rates at its operating subsidiaries.

The Company’s effective income tax rate for the three months ended December 31, 2024 and 2023 was 21.8 % and 24.1 %, respectively.

The changes in the Company’s effective rates are due to differences in state tax rates at its operating subsidiaries.

Note 12 - Related Parties

On December 31, 2017, the Company sold an indirect wholly owned subsidiary to an immediate family member of an executive officer of the Company (“Purchaser of Subsidiary”) in consideration for a note receivable in the amount of $ 1.0 million, which approximated the net book value of the disposed entity.

At June 30, 2024, $ 0.1 million and $ 0.2 million was reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets, respectively, representing the remaining balances on this note receivable.

At December 31, 2024, $ 0.1 million and $ 0.1 million was reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets, respectively, representing the remaining balances on this note receivable.

In connection with this transaction, the Company also received a note receivable from the disposed entity (“Disposed Entity”) on December 31, 2017 in the amount of $ 1.0 million representing certain accounts payable of the Disposed Entity that were paid by the Company.

At June 30, 2024, $ 0.1 million and $ 0.1 million was reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets, respectively, representing the remaining balances on this note receivable.

At December 31, 2024, $ 0.1 million was reflected on the Company’s Consolidated Balance Sheets within other current assets, representing the remaining balances on this note receivable.

Remaining principal and interest payments are scheduled to be made in periodic installments during fiscal year 2025 through fiscal year 2026.

Prior to its acquisition by the Company, a current subsidiary of the Company advanced funds to an entity owned by an immediate family member of an officer of the Company in connection with a land development project (“Land Development Project”).

The obligations of the borrower entity to repay the advances were guaranteed by a separate entity owned by the same family member of the officer.

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The note bears simple interest at a rate of 4.0 % and requires annual minimum payments of $ 0.1 million inclusive of principal and accrued interest, with any remaining principal and accrued interest due and payable in full on December 31, 2027.

Amounts outstanding under the note are reflected on the Company’s Consolidated Balance Sheets within “Other current assets” and “Other assets.”

Amounts outstanding under the note are reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets (“Land Development Project”).

From time to time, the Company conducts or has conducted business with the following related parties:

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• Since June 1, 2014, the Company has been a party to an access agreement with Island Pond Corporate Services, LLC, which provides a location for the Company to conduct business development activities from time to time on a property owned by the Executive Chairman of the Company’s Board of Directors (“Island Pond”).

• The Company is party to a management services agreement with SunTx Capital Partners, a private equity firm based in Dallas, Texas and a member of the Company’s controlling group (“SunTx”), under which the Company pays SunTx $ 0.30 million per fiscal quarter and reimburses certain travel and other out-of-pocket expenses associated with services rendered under the management services agreement.

The following table presents revenues earned and expenses incurred by the Company during the three and nine months ended June 30, 2024 and 2023, and accounts receivable and payable balances at June 30, 2024 and September 30, 2023, related to transactions with the related parties described above (in thousands):

• The Company is party to a management services agreement with SunTx, under which the Company pays SunTx $ 0.30 million per fiscal quarter and reimburses certain travel and other out-of-pocket expenses associated with services rendered under the management services agreement.

The following table presents revenues earned and expenses incurred by the Company during the three months ended December 31, 2024 and 2023, and accounts receivable and payable balances at December 31, 2024 and September 30, 2024, related to transactions with the related parties described above (in thousands):

Revenue Earned (Expense Incurred) Accounts Receivable (Payable)

For the Three Months Ended June 30, For the Nine Months Ended June 30, June 30, September 30,

For the Three Months Ended December 31, December 31, September 30,

2024 2023 2024 2024

(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

(unaudited) (unaudited) (unaudited)

Purchaser of Subsidiary $ — $ — $ 207 $ 207

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Subcontracting Services ( 1,925 ) (1)

( 1,913 ) (1)

( 187 ) ( 239 )

Island Pond ( 100 ) (2)

SunTx ( 1,391 ) (2)

(1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Comprehensive Income.

(2) Cost is reflected as general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income.

(1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Comprehensive Income (Loss).

(2) Cost of $ 0.6 million is reflected as general and administrative expenses and $ 0.8 million is reflected as acquisition-related expenses on the Company’s Consolidated Statements of Comprehensive Income (Loss).

Note 13 - Share-Based Compensation

The following table summarizes the components of share-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income during the three and nine months ended June 30, 2024 and 2023 (unaudited, in thousands):

For the Three Months Ended June 30,

Equity classified awards $ 2,893 $ 2,737

Liability classified awards 1,092 —

Employee stock purchase plan 54 —

Total share-based compensation expense $ 4,039 $ 2,737

For the Nine Months Ended June 30,

The Equity Incentive Plan was initially approved by the Company’s stockholders in 2016, was amended and restated in April 2018, and was further amended in May 2019.

In connection with the 2018 amendment and restatement, the Company reserved 2,000,000 shares of Class A common stock for issuance pursuant to awards granted thereunder.

In March 2024, the Company’s stockholders approved an increase in such share reserve by an additional 1,000,000 shares.

At December 31, 2024, there were 1,038,726 shares of Class A common stock remaining available for issuance under the Equity Incentive Plan.

The Restricted Stock Plan was approved by the Company’s stockholders and adopted by the Company in March 2024.

At that time, the Company reserved 2,000,000 shares of Class B common stock for issuance pursuant to awards granted thereunder.

At December 31, 2024, there were 1,939,000 shares of Class B common stock remaining available for issuance under the Restricted Stock Plan.

The following table summarizes the components of share-based compensation expense included in general and administrative expenses and acquisition-related expenses in the Consolidated Statements of Comprehensive Income (Loss) during the three months ended December 31, 2024 and 2023 (unaudited, in thousands):

For the Three Months Ended December 31,

Equity classified awards $ 13,674 $ 2,783

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Restricted Stock - Equity Classified Awards

During the nine months ended June 30, 2024, the Company awarded a total of 110,113 restricted shares of Class A common stock to certain members of Company management and consultants under the Equity Incentive Plan.

The grants are classified as equity awards.

The aggregate grant date fair value of these restricted stock awards was $ 5.0 million.

During the three and nine months ended June 30, 2024, the Company recorded compensation expense in connection with these and prior restricted stock grants in the amount of $ 2.2 million and $ 6.4 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income.

At June 30, 2024, there was approximately $ 8.2 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.4 years.

The Company measures and recognizes stock-based compensation expense, net of forfeitures, over the requisite vesting periods for all stock-based payment awards made, and recognizes forfeitures as they occur.

Stock-based compensation is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss).

A summary of the changes in the Company’s restricted stock is as follows (in thousands, except share data):

For the Three Months Ended December 31,

RSUs Weighted Average Grant Date Fair Value Per RSU RSUs Weighted Average Grant Date Fair Value Per RSU

Unvested shares, beginning balance 509,171 31.59 824,280 28.41

Shares awarded 196,793 80.21 80,113 43.68

Shares vested ( 16,793 ) 95.90 ( 12,302 ) 43.75

Shares forfeited ( 1,635 ) 30.78 ( 524 ) 30.49

Unvested shares, ending balance 687,536 43.95 891,567 29.55

Aggregate grant date fair value of shares awarded $ 15,785 $ 3,500

Compensation expense recorded upon vesting of awards $ 3,256 $ 2,406

Unrecognized compensation expense at fiscal year-end $ 19,146 $ 10,859

Weighted average recognition period remaining, in years 4.0 2.8

The restricted shares granted under the Equity Incentive Plan will vest, as applicable, as follows:

Fiscal Year Number of Shares

Total 687,536

Performance Stock Units - Equity Classified Awards

PSUs provide for the issuance of shares of Class A common stock upon vesting, which occurs following the end of the performance period based on achievement of certain Company performance metrics established by the Compensation Committee of the Company’s Board of Directors.

The final number of shares of Class A common stock issuable upon vesting of PSUs can range from 0 % to 150 % of the number of PSUs initially granted, depending on the level of achievement, as determined by the Compensation Committee of the Company’s Board of Directors.

The achievement of performance goals is modified by the total shareholder return ranking of the Company against the Russell 2000 Index over the performance period and can increase or decrease the achieved award by up to 15 %.

PSUs provide for the issuance of shares of Class A common stock upon vesting, which occurs at the end of the performance period based on achievement of certain Company performance metrics established by the Compensation Committee of the Company’s Board of Directors.

The final number of shares of common stock issuable upon vesting of PSUs can range from 0 % to 150 % of the number of PSUs initially granted, depending on the level of achievement, as determined by the Compensation Committee of the Company’s Board of Directors.

The achievement of performance goals is modified by the total stockholder return ranking of the Company against the Russell 2000 Index over the performance period and can increase or decrease the achieved award by up to 15 %.

The Company recognizes expense, net of estimated forfeitures, for PSUs based on the forecasted achievement of Company performance metrics, multiplied by the fair value of the total number of shares of common stock that the Company anticipates will be issued based on such achievement.

During the nine months ended June 30, 2024, the Company issued 55,358 shares of Class A common stock as a result of the vesting of PSUs granted to certain members of Company management on December 29, 2021.

During the nine months ended June 30, 2024, the Company awarded PSUs representing a target of 113,044 shares and forecasted vesting of 84,783 shares of Class A common stock to certain members of Company management.

The grants are classified as equity awards.

The aggregate grant date fair value of these awards was $ 3.8 million.

During the three and nine months ended June 30, 2024, the Company recorded compensation expense in connection with this type of award in the amount of $ 0.7 million and $ 1.7 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income.

At June 30, 2024, there was approximately $ 4.5 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.4 years.

During the three months ended December 31, 2024, the Company awarded PSUs representing a target of 79,000 Class A shares and 61,000 Class B shares to certain members of Company management under the Equity Incentive Plan.

These grants are classified as equity awards.

The aggregate grant date fair value of these PSU awards was $ 9.8 million.

During the three months ended December 31, 2024 and 2023, the Company recorded compensation expense in connection with PSUs in the amount of $ 10.4 million and $ 0.4 million, respectively, which is reflected as general and administrative expenses and acquisition-related expenses in the Company’s Consolidated Statements of Comprehensive Income (Loss).

At December 31, 2024, the Company forecasted 170,900 shares of Class A common stock underlying PSUs as unvested and approximately $ 3.5 million of unrecognized compensation expense related to PSU awards, which will be recognized over a remaining weighted-average period of 1.9 years.

During the three months ended December 31, 2024, 136,917 shares of Class A and 61,000 shares of Class B common stock underlying PSUs were vested and issued.

Cash-Settled Restricted Stock Units - Liability Classified Awards

During the nine months ended June 30, 2024, the Company granted 114,264 of cash-settled restricted stock units (“RSUs”) to employees of the Company under the Equity Incentive Plan.

The aggregate grant date fair value of these awards was $ 6.0 million.

Compensation expense associated with these awards for the three and nine months ended June 30, 2024 was $ 1.1 million and $ 2.0 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income.

As of June 30, 2024 and September 30, 2023, the liability for cash-settled RSUs was $ 2.0 million and $ 0.0 million , respectively, and is included in other long-term liabilities.

At June 30, 2024, there was approximately $ 4.0 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 3.3 years.

The grant date fair value of these awards is based on the price of the Company’s Class A common stock and the number of RSUs awarded on the date of grant.

The awards must be settled in cash and are accounted for as liability-type awards.

During the three months ended December 31, 2024, the Company did not grant any cash-settled restricted stock units (“RSUs”) to employees of the Company under the Equity Incentive Plan.

The Company elects to account for forfeitures as they occur.

Compensation expense associated with prior awards for the three months ended December 31, 2024 and 2023 was $ 0.7 million and $ 0.1 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss).

As of December 31, 2024 and 2023, the liability for cash-settled RSUs was $ 2.5 million and $ 0.1 million, respectively, and is included in accrued expenses and other current liabilities and other long-term liabilities.

At December 31, 2024, there was approximately $ 4.3 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.8 years.

The grant date fair value of cash-settled RSU awards is based on the price of the Company’s Class A common stock and the number of RSUs awarded on the date of grant.

The awards are settled in cash and are accounted for as liability-type awards.

The expense is recognized over the requisite service period with remeasurement at the end of each reporting period at fair value until settlement.

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The Construction Partners, Inc.

Employee Stock Purchase Plan (“ESPP”) became effective on May 13, 2021.

The ESPP is intended to provide eligible employees of the Company an opportunity to purchase shares of the Company’s Class A common stock at a discounted rate using funds withheld through payroll deductions.

The total number of shares offered under the ESPP is 1,000,000 .

Employee Stock Purchase Plan (the “ESPP”) became effective on May 13, 2021.

The ESPP provides eligible employees of the Company an opportunity to purchase shares of the Company’s Class A common stock at a discounted rate using funds withheld through payroll deductions.

The maximum number of shares of Class A common stock offered under the ESPP is 1,000,000 .

The first offering period under the ESPP commenced on July 1, 2023.

Since that date, the Company has purchased 37,809 shares under the ESPP.

Compensation expense associated with the ESPP for the three and nine months ended June 30, 2024 was $ 0.1 million and $ 0.4 million, respectively, and is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income.

Since that date, participants have purchased 58,117 shares under the ESPP.

Compensation expense associated with the ESPP for the three months ended December 31, 2024 and 2023 was $ 0.3 million and $ 0.2 million, respectively, and is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss).

Note 14 - Leases

The Company leases certain facilities, office space, vehicles and equipment.

As of June 30, 2024, operating leases under ASC Topic 842, Leases (“Topic 842”) were included in (i) “Operating lease right-of use assets,” (ii) “Current portion of operating lease liabilities” and (iii) “Operating lease liabilities, net of current portion” on the Company’s Consolidated Balance Sheets in the amounts of $ 33.3 million, $ 7.3 million and $ 26.8 million, respectively.

As of June 30, 2024, the Company did not have any lease contracts that had not yet commenced but had created significant rights and obligations.

As of December 31, 2024, operating leases under ASC Topic 842, Leases (“Topic 842”) were included in (i) operating lease right-of use assets, (ii) current portion of operating lease liabilities and (iii) operating lease liabilities, net of current portion on the Company’s Consolidated Balance Sheets in the amounts of $ 42.5 million, $ 10.6 million and $ 32.7 million, respectively.

As of December 31, 2024, the Company did not have any lease contracts that had not yet commenced but had created significant rights and obligations.

The components of lease expense were as follows (unaudited, in thousands):

For the Three Months Ended June 30,

Operating lease cost $ 2,080 $ 817

Short-term lease cost 6,189 5,551

Total lease expense $ 8,269 $ 6,368

For the Nine Months Ended June 30,

Operating lease cost $ 4,454 $ 2,331

Short-term lease cost 17,471 16,319

For the Three Months Ended December 31,

Operating lease expense $ 3,192 $ 903

Short-term lease expense 7,436 5,376

Total lease expense $ 10,628 $ 6,279

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These leases are entered into at periodic rental rates for an unspecified duration and typically have a termination for convenience provision.

As of June 30, 2024, the weighted-average remaining term of the Company’s leases was 5.3 years, and the weighted-average discount rate was 5.92 %.

As of June 30, 2024, the lease liability was equal to the present value of the remaining lease payments, discounted using the incremental borrowing rate on the Company’s secured debt using a single maturity discount rate, as such rate is not materially different from the discount rate applied to each of the leases in the portfolio.

The following table summarizes the Company’s undiscounted lease liabilities outstanding as of June 30, 2024 (unaudited, in thousands):

As of December 31, 2024, the weighted-average remaining term of the Company’s leases was 4.7 years, and the weighted-average discount rate was 5.67 %.

As of December 31, 2024, the lease liability was equal to the present value of the remaining lease payments, discounted using the incremental borrowing rate on the Company’s secured debt using a single maturity discount rate, as such rate is not materially different from the discount rate applied to each of the leases in the portfolio.

The following table summarizes the Company’s undiscounted lease liabilities outstanding as of December 31, 2024 (unaudited, in thousands):

Fiscal Year Amount

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Changes in fair value of commodity swaps are recognized in earnings.

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity derivative contracts for the three and nine months ended June 30, 2024 and 2023 and the fair value of these derivatives as of June 30, 2024 and September 30, 2023 (in thousands):

For the Three Months Ended June 30,

(unaudited) (unaudited)

Change in Change in

Income Statement Classification Realized Gain (Loss) Unrealized Gain (Loss) Total Gain (Loss) Realized Gain (Loss) Unrealized Gain (Loss) Total Gain (Loss)

Cost of revenues $ — $ 10 $ 10 $ ( 970 ) $ 878 $ ( 92 )

Interest expense, net 2,635 — 2,635 2,377 — 2,377

Total $ 2,635 $ 10 $ 2,645 $ 1,407 $ 878 $ 2,285

For the Nine Months Ended June 30,

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity derivative contracts for the three months ended December 31, 2024 and 2023 and the fair value of these derivatives as of December 31, 2024 and September 30, 2024 (in thousands):

For the Three Months Ended December 31,

(unaudited) (unaudited)

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Total $ 2,185 $ — $ 2,185 $ 2,619 $ ( 226 ) $ 2,393

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Balance Sheet Classification (unaudited)

Prepaid expenses and other current assets - commodity swaps $ — $ 204

Other assets - interest rate swaps (1)

$ 15,603 $ 11,646

Accrued expense and other current liabilities - commodity swaps — ( 20 )

Net unrealized gain position $ 15,603 $ 11,646

(1) Includes designated cash flow hedge of $ 20.5 million and $ 26.9 million as of June 30, 2024 and September 30, 2023, respectively.

(1) Includes designated cash flow hedge of $ 15.6 million and $ 11.6 million as of December 31, 2024 and September 30, 2024, respectively.

Note 16 - Fair Value Measurements

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and September 30, 2023 under ASC 820, Fair Value Measurements (in thousands):

June 30, 2024 September 30, 2023

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and September 30, 2024 under ASC 820, Fair Value Measurements (in thousands):

December 31, 2024 September 30, 2024

Level 2 Level 2

Commodity swap contracts $ — $ 204

Interest rate swaps 20,452 26,909

Interest rate swap $ 15,603 $ 11,646

government securities 8,406 8,338

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Municipal government securities 1,387 1,598

Agency backed securities 1,181 1,177

Other debt securities 741 1,212

Total assets $ 33,076 $ 29,666

Commodity swap contracts $ — $ 20

Total liabilities $ — $ 20

The fair value of the interest rate swap contract is based on a model-driven valuation using the observable components (e.g., interest rates), which are observable at commonly quoted intervals for the full term of the contracts.

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Letters of Credit

Under the Revolving Credit Facility, the Company had a total capacity of $ 400.0 million at June 30, 2024 that may be used for a combination of cash borrowings and letter of credit issuances.

At June 30, 2024, the Company had aggregate letters of credit outstanding in the amount of $ 8.5 million, primarily related to certain insurance policies as described in Note 2 - Significant Accounting Policies.

Under the Revolving Credit Facility, the Company has a total capacity of $ 400.0 million that may be used for a combination of cash borrowings and letter of credit issuances.

At December 31, 2024, the Company had aggregate letters of credit outstanding in the amount of $ 6.6 million, primarily related to certain insurance policies as described in Note 2 - Significant Accounting Policies.

Purchase Commitments

As of June 30, 2024, the Company had unconditional purchase commitments for diesel fuel and natural gas in the normal course of business in the aggregate amount of $ 2.9 million.

As of December 31, 2024, the Company had unconditional purchase commitments for diesel fuel and natural gas in the normal course of business in the aggregate amount of $ 3.7 million.

Management does not expect any significant changes in the market value of these goods during the commitment period that would have a material adverse effect on the financial condition, results of operations and cash flows of the Company.

As of June 30, 2024, the Company’s purchase commitments for the remainder of fiscal 2024 and for 2025 and 2026 were as follows (unaudited, in thousands):

As of December 31, 2024, the Company’s purchase commitments for the remainder of fiscal 2025 and in 2026 were as follows (unaudited, in thousands):

Fiscal Year Amount

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however, certain agreements have minimum annual payments.

The Company had commitments in the form of minimum royalties as of June 30, 2024 in the amount of $ 2.4 million, due as follows (unaudited, in thousands):

The Company had commitments in the form of minimum royalties as of December 31, 2024 in the amount of $ 2.4 million, due as follows (unaudited, in thousands):

Fiscal Year Amount

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Total $ 2,429

Royalty expense recorded in cost of revenue was $ 0.5 million and $ 0.4 million for the three months ended June 30, 2024 and 2023, and $ 1.3 million and $ 1.2 million for the nine months ended June 30, 2024 and 2023.

Royalty expense recorded in cost of revenue during the three months ended December 31, 2024 and 2023 was $ 0.6 million and $ 0.4 million, respectively.

Note 18 - Restricted Investments

The following is a summary of the Company’s debt securities as of June 30, 2024 and September 30, 2023 (in thousands):

June 30, 2024

The following is a summary of the Company’s debt securities as of December 31, 2024 and September 30, 2024 (in thousands):

December 31, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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Municipal government securities 1,426 4 43 1,387

Agency backed securities 1,257 — 76 1,181

Other debt securities 795 — 54 741

Total $ 17,860 $ 36 $ 423 $ 17,473

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Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

U.S government securities $ 6,869 $ — $ 320 $ 6,549

government securities $ 8,332 $ 76 $ 70 $ 8,338

Corporate debt securities 6,781 162 71 6,872

Municipal government securities 1,618 16 36 1,598

Agency backed securities 1,273 — 96 1,177

Other debt securities 1,255 2 45 1,212

Total $ 17,986 $ 256 $ 222 $ 18,020

The amortized cost and fair value of debt securities classified as available for sale by contractual maturity, as of June 30, 2024, are as follows (unaudited, in thousands):

The amortized cost and fair value of debt securities classified as available for sale by contractual maturity, as of December 31, 2024, are as follows (unaudited, in thousands):

Amortized Cost Fair Value

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Comprehensive income comprises two subsets:

net income and OCI.

The components of OCI are presented in the accompanying Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity, net of applicable taxes.

net income (loss) and OCI.

The components of OCI are presented in the accompanying Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Stockholders’ Equity, net of applicable taxes.

The Company’s interest rate swap contract hedge included in other comprehensive income (loss) was entered into on July 1, 2022 with an original notional value of $ 300.0 million.

The maturity date of this swap is June 30, 2027.

Amounts in accumulated other comprehensive income (“AOCI”), net of tax, at June 30, 2024 and September 30, 2023, were as follows (in thousands):

AOCI June 30, 2024 (unaudited) September 30, 2023

Amounts in accumulated other comprehensive income (loss) (“AOCI”), net of tax, at December 31, 2024 and September 30, 2024, were as follows (in thousands):

AOCI December 31, 2024 (unaudited) September 30, 2024

Interest rate swap contract, net of blend and extend arrangement $ 13,704 $ 9,852

Unrealized loss on available-for-sale securities ( 495 ) ( 847 )

Unrealized gain (loss) on available-for-sale securities ( 387 ) 34

Less tax effect of other comprehensive income (loss) items ( 3,279 ) ( 2,384 )

1 unchanged sentence

Changes in AOCI, net of tax, are as follows (in thousands):

AOCI Interest Rate Hedge

Balance at September 30, 2024 $ 7,502

Net OCI changes 2,536

Balance at June 30, 2024 (unaudited) $ 13,807

AOCI Interest Rate Hedge

Balance at December 31, 2024 (unaudited) $ 10,038

Balance at September 30, 2023 $ 18,694

Net OCI changes ( 6,705 )

Balance at June 30, 2023 (unaudited) $ 16,983

Balance at December 31, 2023 (unaudited) $ 11,989

Amounts reclassified from AOCI to earnings are as follows (unaudited, in thousands):

For the Three Months Ended June 30,

Interest expense (benefit) $ ( 2,635 ) $ ( 2,377 )

Realized loss on restricted investments 4 6

Benefit from income taxes 654 612

Total reclassifications from AOCI to earnings $ ( 1,977 ) $ ( 1,759 )

For the Nine Months Ended June 30,

For the Three Months Ended December 31,

Interest expense (benefit) $ ( 2,185 ) $ ( 2,638 )

Realized loss on restricted investments 19 23

Benefit from income taxes 1,953 1,473

Expense (benefit) from income taxes 524 649

Total reclassifications from AOCI to earnings $ ( 1,642 ) $ ( 1,966 )

Note 20 - Subsequent Event

Georgia Acquisition

On August 1, 2024, a subsidiary of the Company acquired substantially all of the assets of Robinson Paving Company, an asphalt paving company headquartered in Columbus, Georgia, for approximately $ 60.3 million.

The transaction added three HMA plants and related crews and equipment located in Columbus, Georgia and the surrounding area.

Note 20 - Subsequent Events

Oklahoma Acquisition

On January 2, 2025, the Company acquired all the outstanding capital stock of Overland Corporation, an asphalt manufacturing and paving company headquartered in Ardmore, Oklahoma, for $ 121.1 million, which was paid from available cash and a draw from the Revolving Credit Facility.

The transaction established the Company’s first platform company in Oklahoma and added eight HMA plants across southern and western Oklahoma.

Overland Corporation also provides paving services in northern Texas.

The total amount of consideration for this transaction remains subject to post-closing adjustments with respect to working capital and other matters as of the date of this report.

Alabama Acquisition

On February 3, 2025, the Company acquired substantially all of the assets of Mobile Asphalt Company LLC, an asphalt manufacturing and paving company headquartered in Theodore, Alabama, for $ 55.8 million, which was paid from available cash and a draw from the Revolving Credit Facility.

The transaction added five HMA plants and expanded the Company’s operations in the greater Mobile and southwestern Alabama market areas.

The total amount of consideration for this transaction remains subject to post-closing adjustments with respect to working capital and other matters as of the date of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements