What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2025-02-07 · 241 added, 185 removed, 615 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share data)

December 31, September 30,

March 31, September 30,

ASSETS (unaudited)

Current assets:

29 unchanged sentences

Total liabilities 1,945,657 968,395

Commitments and contingencies

Stockholders’ equity:

Preferred stock, par value $ 0.001 ;

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

10,000,000 shares authorized and no shares issued and outstanding at March 31, 2025 and September 30, 2024

Class A common stock, par value $ 0.001 ;

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

400,000,000 shares authorized, 47,627,979 shares issued and 47,235,345 shares outstanding at March 31, 2025 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, 11,691,408 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

100,000,000 shares authorized, 11,739,408 shares issued and 8,813,803 shares outstanding at March 31, 2025 and 11,784,650 shares issued and 8,861,698 shares outstanding at September 30, 2024

Additional paid-in capital 531,279 278,065

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

Treasury stock, Class A common stock, par value $ 0.001 , at cost, 392,634 shares of Class A common stock at March 31, 2025 and 243,728 shares of Class A common stock at September 30, 2024

( 31,176 ) ( 11,490 )

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

Treasury stock, Class B common stock, par value $ 0.001 , at cost, 2,925,605 shares at March 31, 2025 and 2,922,952 shares at September 30, 2024

( 16,046 ) ( 15,603 )

5 unchanged sentences

CONSTRUCTION PARTNERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2025 2024 2025 2024

Revenues $ 571,650 $ 371,427 $ 1,133,230 $ 767,932

6 unchanged sentences

Interest expense, net ( 21,592 ) ( 4,568 ) ( 39,722 ) ( 8,314 )

Other (expense) income 421 ( 28 )

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

Other income (expense) ( 159 ) 46 262 18

Income (loss) before provision for income taxes and earnings from investment in joint venture 5,538 ( 1,442 ) 1,637 11,519

Provision (benefit) for income taxes 1,310 ( 321 ) 461 2,797

Earnings from investment in joint venture 1 —

Loss from investment in joint venture ( 13 ) ( 3 ) ( 12 ) ( 3 )

Net income (loss) 4,215 ( 1,124 ) 1,164 8,719

3 unchanged sentences

Other comprehensive income (loss) ( 2,659 ) 2,392 ( 123 ) ( 4,313 )

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

Comprehensive income $ 1,556 $ 1,268 $ 1,041 $ 4,406

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

8 unchanged sentences

(unaudited in thousands, except share data)

For the Three Months Ended December 31, 2024

For the six months ended March 31, 2025

Class A Common Stock Class B Common Stock Additional

12 unchanged sentences

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

Net income — — — — — — — 4,215 — 4,215

Share-based compensation expense — — — — 3,293 — — — — 3,293

Issuance of stock awards 77,202 — 48,000 — — — — — —

Purchase of treasury stock — — — — — ( 8,048 ) — — — ( 8,048 )

Other comprehensive (loss) — — — — — — — — ( 2,659 ) ( 2,659 )

March 31, 2025 47,627,979 $ 47 11,739,408 $ 12 $ 531,279 $ ( 31,176 ) $ ( 16,046 ) $ 316,374 $ 7,379 $ 807,869

For the six months ended March 31, 2024

Class A Common Stock Class B Common Stock Additional

Stock Class A Common Stock

Stock Class B Common Stock

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

Capital Treasury

Stock Class A Common Stock Treasury

Stock Class B Common Stock Retained

Earnings Accumulated Other Comprehensive Income (Loss), net Total

Stockholders’

Shares Amount Shares Amount

6 unchanged sentences

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 — — — — — — — ( 1,124 ) — ( 1,124 )

Share-based compensation expense — — — — 2,556 — — — — 2,556

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

See notes to consolidated financial statements (unaudited).

2 unchanged sentences

(unaudited in thousands)

For the Three Months Ended December 31,

For the Six Months Ended March 31,

Cash flows from operating activities:

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

Net income $ 1,164 $ 8,719

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 ( 4,462 ) ( 1,867 )

Realized loss on restricted investments 19 23

Realized loss on sales, calls and maturities of restricted investments 44 49

Share-based compensation expense 18,883 6,221

Earnings from investment in joint venture ( 1 ) —

Loss from investment in joint venture 12 3

Deferred income tax benefit ( 1,480 ) ( 306 )

Other non-cash adjustments ( 488 ) ( 224 )

Changes in operating assets and liabilities:

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

Contracts receivable including retainage, net 49,336 43,443

7 unchanged sentences

Other long-term liabilities ( 827 ) 2,161

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

Net cash provided by operating activities, net of business acquisitions 96,297 78,550

Cash flows from investing activities:

1 unchanged sentence

Proceeds from sale of property, plant and equipment 5,991 4,962

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

Purchases of restricted investments ( 2,258 ) —

Proceeds from sales, calls and maturities of restricted investments 3,940 1,918

Business acquisitions, net of cash acquired ( 828,736 ) ( 87,850 )

Purchase of restricted investments ( 6,202 ) ( 1,870 )

Net cash used in investing activities ( 893,233 ) ( 138,358 )

1 unchanged sentence

Proceeds from revolving credit facility 145,000 90,000

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

Proceeds from issuance of long-term debt, net of debt issuance costs 834,566 —

Repayments of long-term debt ( 135,601 ) ( 27,500 )

7 unchanged sentences

Cash paid for interest $ 35,788 $ 9,569

Cash paid for income taxes $ 1,888 $ 3,155

Cash paid for operating lease liabilities $ 7,191 $ 1,435

2 unchanged sentences

Property, plant and equipment financed with accounts payable $ 6,783 $ 2,554

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

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

Amounts payable to sellers in business combinations, net $ 84,119 $ —

See notes to consolidated financial statements (unaudited).

40 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 $ 0.6 million and $ 2.0 million at December 31, 2024 and September 30, 2024, respectively.

The Company had restricted cash of $ 1.7 million and $ 2.0 million at March 31, 2025 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):

December 31, 2024 September 30, 2024

March 31, 2025 September 30, 2024

Cash and cash equivalents $ 101,855 $ 74,686

8 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.

Unrealized gains and losses are reported as components of accumulated other comprehensive income, 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 $ 17.5 million and $ 18.0 million at December 31, 2024 and September 30, 2024, respectively.

The Company had restricted investments of $ 20.2 million and $ 18.0 million at March 31, 2025 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 (Loss).

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

For the six months ended March 31, 2025 and 2024, the Company had no intent impairments or credit losses.

Contracts Receivable Including Retainage, Net

27 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 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,

No single customer accounted for more than 10% of the Company’s contracts receivable including retainage, net balance at March 31, 2025 or September 30, 2024.

Projects performed for various departments of transportation accounted for 40.9 % and 36.0 % of consolidated revenues for the three months ended March 31, 2025 and 2024, respectively, and for 37.2 % and 36.9 % of consolidated revenues for the six months ended March 31, 2025 and 2024, respectively.

Customers that accounted for more than 10% of consolidated revenues during the three and six months ended March 31, 2025 and 2024 are presented below:

% of Consolidated Revenues

For the Three Months Ended March 31, For the Six Months Ended March 31,

2025 2024 2025 2024

Florida Department of Transportation 11.4 % 15.8 % * 14.2 %

5 unchanged sentences

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 %

% of Consolidated Revenues

For the Three Months Ended March 31, For the Six Months Ended March 31,

2025 2024 2025 2024

Private 37.9 % 42.3 % 40.1 % 41.7 %

Public 62.1 % 57.7 % 59.9 % 58.3 %

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.

53 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 December 31, 2024 and September 30, 2024.

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 December 31, 2024 and September 30, 2024.

The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at March 31, 2025 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, as 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 December 31, 2024 and September 30, 2024.

The Company also has term loans and a Revolving Credit Facility, as defined and 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.

9 unchanged sentences

Comprehensive Income (Loss)

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

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

Comprehensive income comprises two subsets:

1 unchanged sentence

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).

For additional information about comprehensive income, see Note 19 - Other Comprehensive Income.

Reclassifications

5 unchanged sentences

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

Note 4 - Business Acquisitions

Texas Acquisition - Provisional

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.

At March 31, 2025, $ 84.4 million was reflected on the Company’s Consolidated Balance Sheets within accrued expenses and other current liabilities, representing the estimated working capital payable.

Oklahoma Acquisition - Provisional

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 on hand 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.

Alabama Acquisition - Provisional

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 $ 55.1 million, which was paid from available cash on hand 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.

Combined Acquisitions During the Six Months Ended March 31, 2025

The foregoing acquisitions were accounted for as business combinations in accordance with ASC Topic 805, Business Combinations ("Topic 805").

As of March 31, 2025, the purchase price allocations 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.

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 the date of the Lone Star Acquisition.

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

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

under “Fair Value Measurements” in Note 2 - Significant Accounting Policies.

The amount of the purchase price exceeding the net fair

value of identifiable assets acquired and liabilities assumed was recorded as provisional goodwill in the amount of approximately

$ 410.8 million, which is deductible for income tax purposes.

Goodwill primarily represents the assembled work force and

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):

The aggregate amount of the purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed was recorded as provisional goodwill in the amount of approximately $ 511.8 million, which is deductible for income tax purposes.

Goodwill primarily represents the assembled work force and synergies expected to result from the acquisitions, which may change as estimates are finalized.

The following table summarizes the consideration for the acquisitions and the provisional amounts of identified assets acquired and liabilities assumed as of March 31, 2025 (unaudited, in thousands):

Lone Star Paving Overland Corporation Mobile Asphalt Company, LLC Total

Cash and cash equivalents $ 9,901 $ 2,426 $ — $ 12,327

15 unchanged sentences

Fair value of Class A common stock transferred 236,250 — — 236,250

Total consideration payable 86,000

Total consideration payable (receivable) 84,437 324 ( 642 ) 84,119

Total purchase price $ 974,887 $ 121,381 $ 54,484 $ 1,150,752

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

The Consolidated Statements of Comprehensive Income include $ 130.1 million of revenue and $ 3.9 million of net loss attributable to the operations of these acquisitions for the three months ended March 31, 2025 and $ 191.1 million of revenue and $ 7.6 million of net loss attributable to the operations of these acquisitions for the six months ended March 31, 2025.

The Company recorded certain costs related to 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 $ 0.8 million for the three months ended March 31, 2025 and $ 19.7 million for the six months ended March 31, 2025.

The following tables present pro forma revenues and net income as though the acquisitions had occurred on October 1, 2023 (unaudited, in thousands):

For the Three Months Ended March 31,

Pro forma revenues $ 576,559 $ 528,138

Pro forma net income (loss) $ 5,059 $ ( 2,164 )

For the Six Months Ended March 31,

Pro forma revenues $ 1,241,903 $ 1,142,876

Pro forma net income $ 24,016 $ 10,240

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.

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, 2023 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 six months ended March 31, 2025 and 2024;

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

(c) include interest expense under the Term Loan B (as defined below) and Revolving Credit Facility as if the funds borrowed to finance the purchase prices were borrowed on October 1, 2023 (interest expense calculations further assume that no principal payments were made during the period from October 1, 2023 through March 31, 2025, and that the interest rate in effect on the date the Company completed the acquisitions was in effect for the period from October 1, 2023 through March 31, 2025);

(d) exclude $ 19.7 million of acquisition-related expenses from the six months ended March 31, 2025, 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 and may not be indicative of revenue or net income that would have been achieved if these acquisitions had occurred on October 1, 2023.

Provisional Accounting

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.

During the six months ended March 31, 2025, there were 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 December 31, 2024 and September 30, 2024 (in thousands):

December 31, 2024 September 30, 2024

Contracts receivable including retainage, net consisted of the following at March 31, 2025 and September 30, 2024 (in thousands):

March 31, 2025 September 30, 2024

Contracts receivable $ 345,800 $ 299,156

1 unchanged sentence

410,197 351,884

Allowance for credit losses ( 1,164 ) ( 1,073 )

Allowance for doubtful accounts ( 988 ) ( 1,073 )

Contracts receivable including retainage, net $ 409,209 $ 350,811

1 unchanged sentence

Note 6 - Contract Assets and Liabilities

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 and estimated earnings compared to billings on uncompleted contracts at March 31, 2025 and September 30, 2024 consisted of the following (in thousands):

March 31, 2025 September 30, 2024

Costs on uncompleted contracts $ 2,912,732 $ 2,224,511

3 unchanged sentences

Net billings in excess of costs and estimated earnings on uncompleted contracts $ ( 89,815 ) $ ( 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, 2023 to December 31, 2023 and September 30, 2024 to December 31, 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 March 31, 2024 and September 30, 2024 to March 31, 2025 are presented below (in thousands):

Costs and Estimated Earnings in Excess of Billings on

3 unchanged sentences

Changes in revenue billed, contract price or cost estimates 8,825 ( 24,547 ) ( 15,722 )

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

March 31, 2024 (unaudited) $ 36,120 $ ( 103,453 ) $ ( 67,332 )

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

Changes in revenue billed, contract price or cost estimates 20,522 ( 16,238 ) 4,284

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.

March 31, 2025 (unaudited) $ 46,488 $ ( 136,303 ) $ ( 89,815 )

At March 31, 2025, the Company had unsatisfied or partially unsatisfied performance obligations under construction project contracts representing approximately $ 2.2 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 $ 1.2 billion during the remainder of the fiscal year ending September 30, 2025 and $ 1.0 billion thereafter.

Note 7 - Property, Plant and Equipment

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

December 31, 2024 September 30, 2024

Property, plant and equipment at March 31, 2025 and September 30, 2024 consisted of the following (in thousands):

March 31, 2025 September 30, 2024

Construction equipment $ 707,351 $ 570,044

Plants 378,462 255,214

Land and improvements 175,427 94,182

Mineral reserves 220,915 69,334

Land and improvements 181,416 94,182

Buildings 46,822 39,838

5 unchanged sentences

Total property, plant and equipment, net $ 1,103,392 $ 629,924

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.

Depreciation, depletion and amortization expense related to property, plant and equipment was $ 36.2 million and $ 23.1 million for the three months ended March 31, 2025 and 2024, respectively, and $ 66.5 million and $ 44.1 million for the six months ended March 31, 2025 and 2024, 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 December 31, 2024 and September 30, 2024 consisted of the following (in thousands):

December 31, 2024 September 30, 2024

Debt at March 31, 2025 and September 30, 2024 consisted of the following (in thousands):

March 31, 2025 September 30, 2024

Long-term debt:

8 unchanged sentences

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 “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”).

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 $ 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”).

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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 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 obligations of the Company and its subsidiaries under the Term Loan A / Revolver Credit Agreement are secured by a security interest in substantially all of the assets of the Company and each of its subsidiaries that ranks in pari passu with the security interest of the lenders under the Term Loan B (defined below).

At March 31, 2025 and September 30, 2024, there was $ 381.6 million and $ 392.2 million, respectively, of principal outstanding under the Term Loan A, $ 145.0 million and $ 122.9 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $ 248.4 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;

(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.

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

At March 31, 2025 and September 30, 2024, the Company’s fixed charge coverage ratio was 3.29 -to-1.00 and 3.18 -to-1.00, respectively, and the Company’s consolidated leverage ratio was 3.23 -to-1.00 and 1.80 -to-1.00, respectively.

At both March 31, 2025 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.

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.

both March 31, 2025 and September 30, 2024, the aggregate notional value of these interest rate swap agreements was $ 300.0 million, and the fair value was $ 11.9 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”).

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 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 obligations of the Company and its subsidiaries under the Term Loan B Credit Agreement are secured by a security interest in substantially all of the assets of the Company and each of its subsidiaries that ranks in pari passu with the security interest of the lenders under the Term Loan A / Revolver 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.

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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.

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.

At March 31, 2025 and September 30, 2024, there was $ 847.9 million and $ 0.0 million , respectively, of principal outstanding under the Term Loan B.

Bridge Facility

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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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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.

During the six months ended March 31, 2025, 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 March 31, 2025, there were 47,235,345 shares of Class A common stock and 8,813,803 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.

During the six months ended March 31, 2025, 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 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.

During the six months ended March 31, 2025, 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 2,145 shares of Class A common stock through forfeitures of unvested restricted stock awards by terminated employees.

Restricted Stock Awards

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 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.

During the six months ended March 31, 2025, the Company awarded to certain directors, officers, and employees and consultants a total of 273,995 restricted shares of Class A common stock under the Construction Partners, Inc.

2018 Equity Incentive Plan (the “Equity Incentive Plan”) and 48,000 restricted 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.

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

Performance Stock Units and Market-Based Awards

During the six months ended March 31, 2025, the Company issued a total of 210,520 shares of Class A common stock in settlement of vested performance stock units (“PSUs”) and market-based awards under the Equity Incentive Plan and 61,000 shares of Class B common stock under the Restricted Stock Plan.

The total includes a transaction bonus related to the Lone Star Acquisition 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 December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2025 2024 2025 2024

Net income (loss) attributable to common stockholders $ 4,215 $ ( 1,124 ) $ 1,164 $ 8,719

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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 December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2025 2024 2025 2024

Net income (loss) attributable to common stockholders $ 4,215 $ ( 1,124 ) $ 1,164 $ 8,719

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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 December 31, 2024 and 2023 was 21.8 % and 24.1 %, respectively.

The Company’s effective income tax rate for the three months ended March 31, 2025 and 2024 was 23.7 % and 22.2 %, respectively.

The Company’s effective tax rate for the six months ended March 31, 2025 and 2024 was 28.4 % and 24.3 %, respectively.

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

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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 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.

At March 31, 2025, $ 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 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.

At March 31, 2025, $ 0.1 million was reflected on the Company’s Consolidated Balance Sheets within other current assets, representing the remaining balance 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.

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• The Company is party to a management services agreement with SunTx, under which the Company pays SunTx $ 0.3 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):

The following table presents revenues earned and expenses incurred by the Company during the three months ended March 31, 2025 and 2024, and accounts receivable and payable balances at March 31, 2025 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 December 31, December 31, September 30,

For the Three Months Ended March 31, For the Six Months Ended March 31, March 31, September 30,

2025 2024 2025 2024 2025 2024

(unaudited) (unaudited) (unaudited)

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

Purchaser of Subsidiary $ — $ — $ — $ — $ 207 $ 207

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Subcontracting Services ( 1,193 ) (1) ( 705 ) (1) ( 3,118 ) (1) ( 2,618 ) (1) ( 297 ) ( 239 )

( 1,913 ) (1)

( 187 ) ( 239 )

Island Pond ( 100 ) (2) ( 100 ) (2) ( 200 ) (2) ( 200 ) (2) — —

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(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).

(2) Cost of $ 0.5 million is reflected as general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025.

Cost of $ 1.2 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 for the six months ended March 31, 2025.

Note 13 - Share-Based Compensation

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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.

At March 31, 2025, there were 961,350 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,

At March 31, 2025, there were 1,891,000 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 during the three and six months ended March 31, 2025 and 2024 (unaudited, in thousands):

For the Three Months Ended March 31,

Equity classified awards $ 3,369 $ 2,556

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Total share-based compensation expense $ 4,672 $ 3,553

For the Six Months Ended March 31,

Equity classified awards $ 17,043 $ 5,339

Liability classified awards 1,840 882

Employee stock purchase plan 514 378

Total share-based compensation expense $ 19,397 $ 6,599

Restricted Stock - Equity Classified Awards

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,

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

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

For the Six Months Ended March 31,

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

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Total 769,780

Market-Based Awards - Equity Classified Awards

During the six months ended March 31, 2025, the Company issued and awarded market-based restricted stock awards representing a target of 79,000 Class A shares and 61,000 Class B shares to certain members of Company management, directors and employees under the Equity Incentive Plan and the Restricted Stock Plan, respectively, as transaction bonuses in connection with the Lone Star Acquisition.

These grants are classified as equity awards.

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

During the six months ended March 31, 2025, the Company recorded compensation expense of $ 9.8 million which is recorded in acquisition-related expenses in the Company’s Consolidated Statements of Comprehensive Income.

Performance Stock Units - Equity Classified Awards

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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 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.

During the six months ended March 31, 2025, the Company awarded PSUs representing a target of 73,603 Class A shares and forecasted vesting of 55,202 of Class A shares to certain members of management.

These grants are classified as equity awards.

The aggregate grant date fair value of these PSU awards was $ 3.7 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.

During the six months ended March 31, 2025 and 2024, the Company recorded compensation expense in connection with PSUs in the amount of $ 1.7 million and $ 0.6 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income.

At March 31, 2025, the Company forecasted 226,102 shares of Class A common stock underlying PSUs as unvested and approximately $ 6.5 million of unrecognized compensation expense related to PSU awards, which will be recognized over a remaining weighted-average period of 2.2 years.

During the six months ended March 31, 2025, 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 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.

During the six months ended March 31, 2025, the Company granted 77,634 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.

Compensation expense associated with all liability classified awards for the three and six months ended March 31, 2025 was $ 1.1 million and $ 1.8 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income.

As of both March 31, 2025 and September 30, 2024 the liability for cash-settled RSUs was $ 3.7 million and is included in accrued expenses and other current liabilities and other long-term liabilities.

At March 31, 2025, there was approximately $ 7.8 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 3.2 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.

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Since that date, participants have purchased 71,022 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).

Compensation expense associated with the ESPP was $ 0.2 million for the three months ended March 31, 2025 and 2024, and $ 0.5 million and $ 0.4 million for the six months ended March 31, 2025 and 2024, respectively.

Compensation expense is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income.

Note 14 - Leases

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

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.

As of March 31, 2025, 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 $ 56.3 million, $ 14.2 million and $ 42.7 million, respectively.

As of March 31, 2025, 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 December 31,

Operating lease expense $ 3,192 $ 903

Short-term lease expense 7,436 5,376

For the Three Months Ended March 31,

Operating lease cost $ 3,847 $ 1,471

Short-term lease cost 6,596 5,906

Total lease expense $ 10,443 $ 7,377

For the Six Months Ended March 31,

Operating lease cost $ 7,039 $ 2,374

Short-term lease cost 14,032 11,282

Total lease expense $ 21,071 $ 13,656

Short-term leases (those with terms of 12 months or less) are not capitalized but are expensed on a straight-line basis over the lease term.

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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 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):

As of March 31, 2025, the weighted-average remaining term of the Company’s leases was 4.5 years, and the weighted-average discount rate was 5.86 %.

As of March 31, 2025, 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 March 31, 2025 (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 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,

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 six months ended March 31, 2025 and 2024 and the fair value of these derivatives as of March 31, 2025 and September 30, 2024 (in thousands):

For the Three Months Ended March 31,

(unaudited) (unaudited)

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Total $ 1,861 $ — $ 1,861 $ 2,604 $ 32 $ 2,636

December 31, 2024 September 30, 2024

For the Six Months Ended March 31,

(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 $ — $ — $ — $ ( 61 ) $ ( 194 ) $ ( 255 )

Interest expense, net 4,046 — 4,046 5,284 — 5,284

Total $ 4,046 $ — $ 4,046 $ 5,223 $ ( 194 ) $ 5,029

March 31, 2025 September 30, 2024

Balance Sheet Classification (unaudited)

2 unchanged sentences

Net unrealized gain position $ 11,896 $ 11,646

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

(1) Includes designated cash flow hedge of $ 11.9 million and $ 11.6 million as of March 31, 2025 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 December 31, 2024 and September 30, 2024 under ASC 820, Fair Value Measurements (in thousands):

December 31, 2024 September 30, 2024

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and September 30, 2024 under Topic 820 (in thousands):

March 31, 2025 September 30, 2024

Level 2 Level 2

Interest rate swap $ 15,603 $ 11,646

Interest rate swaps $ 11,896 $ 11,646

government securities 9,597 8,338

6 unchanged sentences

The calculations are adjusted for credit risk.

Therefore, the Company’s derivative assets and liabilities are classified within Level 2 of the fair value hierarchy.

Derivative assets are included within “Prepaid expenses and other current assets” and “Other assets” on the Company’s Consolidated Balance Sheets.

Derivative liabilities are included within “Accrued expense and other current liabilities” and “Other long-term liabilities” on the Company’s Consolidated Balance Sheets.

Therefore, the Company’s derivative assets are classified within Level 2 of the fair value hierarchy.

Derivative assets are included within “Other assets” on the Company’s Consolidated Balance Sheets.

Note 17 - Commitments

Letters of Credit

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.

Under the Revolving Credit Facility, the Company had a total capacity of $ 400.0 million at March 31, 2025 that may be used for a combination of cash borrowings and letter of credit issuances.

At March 31, 2025, 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 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.

As of March 31, 2025, the Company had unconditional purchase commitments for diesel fuel and natural gas in the normal course of business in the aggregate amount of $ 3.1 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 December 31, 2024, the Company’s purchase commitments for the remainder of fiscal 2025 and in 2026 were as follows (unaudited, in thousands):

As of March 31, 2025 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 December 31, 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 March 31, 2025 in the amount of $ 3.4 million, due as follows (unaudited, in thousands):

Fiscal Year Amount

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Total $ 3,361

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.

Royalty expense recorded in cost of revenue was $ 0.8 million and $ 0.4 million for the three months ended March 31, 2025 and 2024, respectively, and $ 1.4 million and $ 0.8 million for the six months ended March 31, 2025 and 2024, respectively.

Note 18 - Restricted Investments

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

The following is a summary of the Company’s debt securities as of March 31, 2025 and September 30, 2024 (in thousands):

March 31, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

2 unchanged sentences

Municipal government securities 1,234 7 33 1,208

Other debt securities 795 — 54 741

Agency backed securities 611 — 22 589

Total $ 20,315 $ 142 $ 237 $ 20,220

1 unchanged sentence

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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

U.S government securities $ 8,332 $ 76 $ 70 $ 8,338

Corporate debt securities 6,781 162 71 6,872

2 unchanged sentences

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 December 31, 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 March 31, 2025, are as follows (unaudited, in thousands):

Amortized Cost Fair Value

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

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

Amounts in accumulated other comprehensive income (“AOCI”), net of tax, at March 31, 2025 and September 30, 2024, were as follows (in thousands):

AOCI March 31, 2025 (unaudited) September 30, 2024

Interest rate swap contract, net of blend and extend arrangement $ 9,894 $ 9,852

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

Unrealized loss on available-for-sale securities ( 95 ) 34

Less tax effect of other comprehensive income (loss) items ( 2,420 ) ( 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 ( 123 )

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

Balance at March 31, 2025 (unaudited) $ 7,379

AOCI Interest Rate Hedge

Balance at September 30, 2023 $ 18,694

Net OCI changes ( 4,313 )

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

Balance at March 31, 2024 (unaudited) $ 14,381

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

For the Three Months Ended December 31,

For the Three Months Ended March 31,

Interest expense (benefit) $ ( 1,861 ) $ ( 2,646 )

Realized loss on restricted investments 25 26

Expense (benefit) from income taxes 524 649

Benefit from income taxes 444 651

Total reclassifications from AOCI to earnings $ ( 1,392 ) $ ( 1,969 )

For the Six Months Ended March 31,

Interest expense (benefit) $ ( 4,046 ) $ ( 5,284 )

Realized loss on restricted investments 44 49

Benefit from income taxes 968 1,299

Total reclassifications from AOCI to earnings $ ( 3,034 ) $ ( 3,936 )

Note 20 - Subsequent Events

Oklahoma Acquisition

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.

Tennessee Acquisition

On May 1, 2025, the Company acquired all the outstanding capital stock of PRI of East Tennessee, Inc, an asphalt manufacturing and construction business headquartered in Knoxville, Tennessee, and Pavement Restorations, Inc., a pavement preservation business headquartered in Milan, Tennessee (collectively, “PRI”) for $ 96.5 million, which was paid from available cash on hand and a draw from the Revolving Credit Facility.

The transaction established the Company’s platform company in Tennessee, with operations including an HMA plant and related crews and equipment serving northeastern Tennessee and a specialized pavement preservation and sitework business serving multiple southeastern states.

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

Issuance of Equity Awards

In connection with the PRI acquisition, the Company issued awards under the Equity Incentive Plan to certain key former employees of PRI of East Tennessee, Inc.

and Pavement Restorations, Inc.

who became employees of the Company consisting of 60,000 shares of restricted Class A common stock having an aggregate grant date fair value of $ 5.2 million.

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