Construction Partners, Inc. 10-Q

Item 1. Financial Statements CONSTRUCTION PARTNERS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, September 30, 2025 2024 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 114,336 $ 74,686 Restricted cash 1,969 1,998 Contracts receivable including retainage, net 464,529 350,811 Costs and estimated earnings in excess of billings on uncompleted contracts 54,564 25,966 Inventories 148,541 106,704 Prepaid expenses and other current assets 25,504 24,841 Total current assets 809,443 585,006 Property, plant and equipment, net 1,147,613 629,924 Operating lease right-of-use assets 70,323 38,932 Goodwill 775,756 231,656 Intangible assets, net 81,864 20,549 Investment in joint venture 72 84 Restricted investments 21,954 18,020 Other assets 18,816 17,964 Total assets $ 2,925,841 $ 1,542,135 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 244,123 $ 182,572 Billings in excess of costs and estimated earnings on uncompleted contracts 124,152 120,065 Current portion of operating lease liabilities 17,548 9,065 Current maturities of long-term debt 38,500 26,563 Accrued expenses and other current liabilities 127,875 42,189 Total current liabilities 552,198 380,454 Long-term liabilities: Long-term debt, net of current maturities and deferred debt issuance costs 1,392,639 486,961 Operating lease liabilities, net of current portion 53,225 30,661 Deferred income taxes, net 52,989 53,852 Other long-term liabilities 21,462 16,467 Total long-term liabilities 1,520,315 587,941 Total liabilities 2,072,513 968,395 Stockholders’ equity: Preferred stock, par value $ 0.001 ; 10,000,000 shares authorized and no shares issued and outstanding at June 30, 2025 and September 30, 2024 — — Class A common stock, par value $ 0.001 ; 400,000,000 shares authorized, 47,963,617 shares issued and 47,433,440 shares outstanding at June 30, 2025 and 44,062,830 shares issued and 43,819,102 shares outstanding at September 30, 2024 47 44 Class B common stock, par value $ 0.001 ; 100,000,000 shares authorized, 11,463,770 shares issued and 8,538,165 shares outstanding at June 30, 2025 and 11,784,650 shares issued and 8,861,698 shares outstanding at September 30, 2024 12 12 Additional paid-in capital 535,259 278,065 Treasury stock, Class A common stock, par value $ 0.001 , at cost, 530,177 shares at June 30, 2025 and 243,728 shares at September 30, 2024 ( 31,850 ) ( 11,490 ) Treasury stock, Class B common stock, par value $ 0.001 , at cost, 2,925,605 shares at June 30, 2025 and 2,922,952 shares at September 30, 2024 ( 16,046 ) ( 15,603 ) Accumulated other comprehensive income, net 5,485 7,502 Retained earnings 360,421 315,210 Total stockholders’ equity 853,328 573,740 Total liabilities and stockholders’ equity $ 2,925,841 $ 1,542,135 See notes to consolidated financial statements (unaudited). 2 Table of Contents CONSTRUCTION PARTNERS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited in thousands, except share and per share data) For the Three Months Ended June 30, For the Nine Months Ended June 30, 2025 2024 2025 2024 Revenues $ 779,277 $ 517,794 $ 1,912,507 $ 1,285,726 Cost of revenues 647,467 434,302 1,632,776 1,111,553 Gross profit 131,810 83,492 279,731 174,173 General and administrative expenses ( 51,026 ) ( 37,987 ) ( 141,954 ) ( 109,422 ) Acquisition-related expenses ( 1,816 ) ( 941 ) ( 22,174 ) ( 2,239 ) Gain on sale of property, plant and equipment, net 3,975 1,093 8,437 2,960 Operating income 82,943 45,657 124,040 65,472 Interest expense, net ( 25,239 ) ( 4,673 ) ( 64,961 ) ( 12,987 ) Other income 246 32 508 50 Income before provision for income taxes and earnings from investment in joint venture 57,950 41,016 59,587 52,535 Provision for income taxes 13,903 10,108 14,364 12,905 Loss from investment in joint venture — — ( 12 ) ( 3 ) Net income 44,047 30,908 45,211 39,627 Other comprehensive income (loss), net of tax Unrealized (loss) on interest rate swap contract, net ( 1,996 ) ( 540 ) ( 2,017 ) ( 5,167 ) Unrealized gain (loss) on restricted investments, net 102 ( 34 ) — 279 Other comprehensive (loss) ( 1,894 ) ( 574 ) ( 2,017 ) ( 4,888 ) Comprehensive income $ 42,153 $ 30,334 $ 43,194 $ 34,739 Net income per share attributable to common stockholders: Basic $ 0.80 $ 0.60 $ 0.82 $ 0.76 Diluted $ 0.79 $ 0.59 $ 0.82 $ 0.75 Weighted average number of common shares outstanding: Basic 55,164,260 51,913,124 54,853,715 51,914,508 Diluted 55,654,653 52,654,882 55,302,958 52,572,429 See notes to consolidated financial statements (unaudited). 3 Table of Contents CONSTRUCTION PARTNERS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited in thousands, except share data) For the Nine Months Ended June 30, 2025 Class A Common Stock Class B Common Stock Additional Paid-in Capital Treasury Stock Class A Common Stock Treasury Stock Class B Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss), net Total Stockholders’ Equity Shares Amount Shares Amount September 30, 2024 44,062,830 $ 44 11,784,650 $ 12 $ 278,065 $ ( 11,490 ) $ ( 15,603 ) $ 315,210 $ 7,502 $ 573,740 Net loss — — — — — — — ( 3,051 ) — ( 3,051 ) Share-based compensation expense — — — — 13,674 — — — — 13,674 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 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 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 Net income — — — — — — — 44,047 — 44,047 Share-based compensation expense — — — — 3,980 — — — — 3,980 Issuance of stock awards 60,000 — — — — — — — — — Purchase of treasury stock — — — — — ( 674 ) — — — ( 674 ) Other comprehensive (loss) — — — — — — — — ( 1,894 ) ( 1,894 ) Conversion of Class B common stock to Class A common stock 275,638 — ( 275,638 ) — — — — — — — June 30, 2025 47,963,617 $ 47 11,463,770 $ 12 $ 535,259 $ ( 31,850 ) $ ( 16,046 ) $ 360,421 $ 5,485 $ 853,328 4 Table of Contents For the Nine Months Ended June 30, 2024 Class A Common Stock Class B Common Stock Additional Paid-in Capital Treasury Stock Class A Common Stock Treasury Stock Class B Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss), net Total Stockholders’ Equity Shares Amount Shares Amount September 30, 2023 43,760,546 $ 44 11,921,463 $ 12 $ 267,330 $ ( 178 ) $ ( 15,603 ) $ 246,275 $ 18,694 $ 516,574 Net income — — — — — — — 9,843 — 9,843 Share-based compensation expense — — — — 2,783 — — — — 2,783 Issuance of stock 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 — — — — — — — ( 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 Net income — — — — — — — 30,908 — 30,908 Issuance of stock awards 30,000 — — — — — — — — — Share-based compensation expense — — — — 2,893 — — — — 2,893 Purchase of treasury stock — — — — — ( 5,269 ) — — — ( 5,269 ) 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 See notes to consolidated financial statements (unaudited). 5 Table of Contents CONSTRUCTION PARTNERS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited in thousands) For the Nine Months Ended June 30, 2025 2024 Cash flows from operating activities: Net income $ 45,211 $ 39,627 Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities: Depreciation, depletion, accretion and amortization 107,741 67,468 Amortization of deferred debt issuance costs 3,379 223 Unrealized loss on derivative instruments — 184 Provision for bad debt 260 370 Gain on sale of property, plant and equipment ( 8,437 ) ( 2,960 ) Realized loss on sales, calls and maturities of restricted investments 81 53 Share-based compensation expense 26,863 10,206 Loss from investment in joint venture 12 3 Deferred income tax benefit ( 300 ) ( 194 ) Other non-cash adjustments ( 665 ) ( 179 ) Changes in operating assets and liabilities, net of business acquisitions: Contracts receivable including retainage, net 6,159 ( 11,310 ) Costs and estimated earnings in excess of billings on uncompleted contracts ( 22,577 ) ( 4,273 ) Inventories ( 4,880 ) ( 16,959 ) Prepaid expenses and other current assets 5,422 ( 1,194 ) Other assets ( 3,119 ) ( 915 ) Accounts payable 15,975 635 Billings in excess of costs and estimated earnings on uncompleted contracts ( 9,481 ) 27,042 Accrued expenses and other current liabilities 18,641 5,370 Other long-term liabilities ( 967 ) ( 16 ) Net cash provided by operating activities, net of business acquisitions 179,318 113,181 Cash flows from investing activities: Purchases of property, plant and equipment ( 104,886 ) ( 70,410 ) Proceeds from sale of property, plant and equipment 11,250 8,047 Proceeds from sales, calls and maturities of restricted investments 8,351 2,860 Business acquisitions, net of cash acquired ( 935,663 ) ( 135,219 ) Purchase of restricted investments ( 12,182 ) ( 4,376 ) Net cash used in investing activities ( 1,033,130 ) ( 199,098 ) Cash flows from financing activities: Proceeds from revolving credit facility 218,438 149,385 Proceeds from issuance of long-term debt, net of debt issuance costs 833,524 — Repayments of long-term debt ( 137,726 ) ( 47,500 ) Purchase of treasury stock ( 20,803 ) ( 6,605 ) Net cash provided by financing activities 893,433 95,280 Net change in cash, cash equivalents and restricted cash 39,621 9,363 Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period 76,684 49,080 Cash, cash equivalents and restricted cash, end of period $ 116,305 $ 58,443 Supplemental cash flow information: Cash paid for interest $ 58,151 $ 15,201 Cash paid for income taxes $ 3,576 $ 4,285 Cash paid for operating lease liabilities $ 11,699 $ 4,306 Non-cash items: Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 17,620 $ 22,986 Property, plant and equipment financed with accounts payable $ 5,693 $ 2,490 Amounts payable to sellers in business combinations, net $ 64,938 $ — See notes to consolidated financial statements (unaudited). 6 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1 - General Business Description Construction Partners, Inc. (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 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. Seasonality The use and consumption of the Company’s products and services fluctuate due to seasonality. The Company’s products are used, and its construction operations and production facilities are located, outdoors. Therefore, seasonal changes and other weather-related conditions, such as snowy, rainy or cold weather in the winter, spring or fall and major weather events, such as hurricanes, tornadoes, tropical storms and heavy snows, can adversely affect the Company’s business and operations through a decline in both the use of the Company’s products and demand for the Company’s services. In addition, construction materials production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. The first and second quarters of the Company’s fiscal year typically have lower levels of activity due to less favorable weather conditions. Warmer and drier weather during the Company’s third and fourth fiscal quarters typically result in higher activity and revenues during those quarters. Note 2 - Significant Accounting Policies Basis of Presentation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. These interim consolidated statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The Company’s Consolidated Balance Sheets as of September 30, 2024 were derived from the Company’s audited financial statements for the fiscal year then ended, but do not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) with respect to annual financial statements. In the opinion of management, these unaudited consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto included in the 2024 Form 10-K. Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period. Management’s Estimates 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 equity-based compensation awards. Estimates are continually evaluated based on historical information and actual experience; however, actual results could differ from these estimates. A description of certain critical accounting policies of the Company is presented below. Additional critical accounting policies and the underlying judgments and uncertainties are described in the notes to the Company’s annual consolidated financial statements included in the 2024 Form 10-K. 7 Table of Contents Cash and Cash Equivalents Cash consists principally of currency on hand and demand deposits at commercial banks. Cash equivalents are short-term, highly liquid securities that are both readily convertible to known amounts of cash and are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents include securities with original maturities of three months or less. The Company maintains demand accounts, money market accounts and certificates of deposit at several banks. From time to time, account balances have exceeded the maximum available federal deposit insurance coverage limit. The Company has not experienced any losses in such accounts and regularly monitors its credit risk. Restricted Cash Construction Partners Risk Management, Inc. (the “Captive”), a captive insurance company and wholly-owned subsidiary of the Company, provides general liability, automobile liability and workers’ compensation insurance coverage to the Company and its subsidiaries. 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 $ 2.0 million at each of June 30, 2025 and September 30, 2024. 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, 2025 September 30, 2024 Cash and cash equivalents $ 114,336 $ 74,686 Restricted cash 1,969 1,998 Total cash, cash equivalents, and restricted cash $ 116,305 $ 76,684 Restricted Investments 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. The Company has classified securities held by the Captive as available-for-sale. As a result, these securities are carried at their fair value. Purchases and sales of debt securities are recorded on the trade date. 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, 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 $ 22.0 million and $ 18.0 million at June 30, 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. 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, 2025 and 2024, 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. 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 8 Table of Contents 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. Contract Assets and Contract Liabilities Billing practices for the Company’s contracts are governed by the contract terms of each project based on (i) progress toward completion approved by the owner, (ii) achievement of milestones or (iii) pre-agreed schedules. Billings do not necessarily correlate with revenues recognized under the cost-to-cost input method. The Company records contract assets and contract liabilities to account for these differences in timing. 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). Such amounts are recorded to the extent that the amount can be reasonably estimated and recovery is probable. Claims and unapproved change orders made by the Company may involve negotiation and, in rare cases, litigation. Unapproved change orders and claims also involve the use of estimates, and revenues associated with unapproved change orders and claims are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company did not recognize any material amounts associated with claims and unapproved change orders during the periods presented. The contract liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents the Company’s obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered significant financing components. Concentration of Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of contracts receivable including retainage. In the normal course of business, the Company provides credit to its customers and does not generally require collateral. The Company monitors concentrations of credit risk associated with these receivables on an ongoing basis. The Company has not historically experienced significant credit losses, due primarily to management’s assessment of customers’ credit ratings. The Company principally deals with recurring customers, state and local governments and well-known local companies whose reputations are known to management. The Company performs credit checks for significant new customers and generally requires progress payments for significant projects. 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, 2025 or September 30, 2024. Projects performed for various departments of transportation accounted for 46.1 % and 42.3 % of consolidated revenues for the three months ended June 30, 2025 and 2024, respectively, and for 40.8 % and 39.7 % of consolidated revenues for the nine months ended June 30, 2025 and 2024, respectively. Customers that accounted for more than 10% of consolidated revenues during the three and nine months ended June 30, 2025 and 2024 are presented below: % of Consolidated Revenues For the Three Months Ended June 30, For the Nine Months Ended June 30, 2025 2024 2025 2024 North Carolina Department of Transportation * 12.5 % * 10.3 % Florida Department of Transportation * 13.4 % * 13.9 % * Less than 10% 9 Table of Contents Revenues from Contracts with Customers 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, (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, 2025 2024 2025 2024 Private 35.1 % 35.6 % 39.0 % 39.2 % Public 64.9 % 64.4 % 61.0 % 60.8 % 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 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; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs. A reduction to costs related to back charges is recognized when estimated recovery is probable and the amount can be reasonably estimated. Contract costs consist of (i) direct costs on contracts, including labor, materials, and amounts payable to subcontractors and (ii) indirect costs related to contract performance, such as insurance, employee benefits, and equipment (primarily depreciation, fuel, maintenance and repairs). Progress toward completion is estimated using the input method, measured by the relationship of total cost incurred through the measurement date to total estimated costs required to complete the project (cost-to-cost method). The Company believes this method best depicts the transfer of goods and services to the customer because it represents satisfaction of the Company’s performance obligation under the contract, which occurs as the Company incurs costs. The Company measures percentage of completion based on the performance of a single performance obligation under its construction projects. Each of the Company’s construction contracts represents a single performance obligation to complete a defined construction project. This is because goods and services promised for delivery to a customer are not distinct, as the customer cannot benefit from any individual portion of the services on its own. 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. 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. The Company includes variable consideration in the estimated transaction price at the most likely amount to which the Company expects to be entitled or the most likely amount the Company expects to incur, in the case of liquidated damages or penalties. Such amounts are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company accounts for changes to the estimated transaction price using a cumulative catch-up adjustment. The majority of the Company’s public construction contracts are fixed unit price contracts. 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 10 Table of Contents 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. This is because goods and services promised under change orders are generally not distinct from the remaining goods and services under the existing contract, due to the significant integration of services performed in the context of the contract. Accordingly, change orders are generally accounted for as a modification of the existing contract and single performance obligation. The Company accounts for the modification using a cumulative catch-up adjustment. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. 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, 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. The Company generally offers payment terms customary in the industry, which typically require payment ranging from point-of-sale to 30 days following purchase. Income Taxes The provision for income taxes includes federal and state income taxes. Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases. 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 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. Deferred tax assets and deferred tax liabilities are presented on a net basis by taxing authority and classified as non-current on the Consolidated Balance Sheets. 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. Fair Value Measurements 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. Inputs used to measure fair value are classified using the following hierarchy: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3. Inputs are unobservable for the asset or liability and include situations in which there is little, if any, market activity for the asset or liability. The inputs used in the determination of fair value are based on the best information available under the circumstances and may require significant management judgment or estimation. 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, 2025 and September 30, 2024. Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value. 11 Table of Contents The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at June 30, 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 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, 2025 and September 30, 2024. Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has derivative instruments. The fair value of commodity and interest rate swaps are based on forward and spot prices, as described in Note 16 - Fair Value Measurements. Level 3 fair values are used to value acquired mineral reserves and leased mineral interests. The fair values of mineral reserves and leased mineral interests are determined using an excess earnings approach, which requires management to estimate future cash flows. The estimate of future cash flows is based on available historical information and forecasts determined by management, but is inherently uncertain. Key assumptions in estimating future cash flows include sales price, volumes and expected profit margins, net of capital requirements. The present value of the projected net cash flows represents the fair value assigned to mineral reserves and mineral interests. The discount rate is a significant assumption used in the valuation model and is based on the required rate of return that a hypothetical market participant would assume if purchasing the acquired business. 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 comprises two subsets: net income 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, see Note 19 - Other Comprehensive Income. 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 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 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) $ 659.0 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 been received as of June 30, 2025. 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 June 30, 2025, $ 66.8 million was reflected on the Company’s Consolidated Balance Sheets within accrued expenses and other current liabilities, representing the estimated working capital payable. 12 Table of Contents Oklahoma Acquisition - Provisional On January 2, 2025, the Company acquired all the outstanding capital stock of Overland Corporation (“Overland”), 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 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. Tennessee Acquisition - Provisional 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 $ 96.1 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 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. Combined Acquisitions During the Nine Months Ended June 30, 2025 The foregoing acquisitions were accounted for as business combinations in accordance with ASC Topic 805, Business Combinations ("Topic 805"). As of June 30, 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 each respective acquisition date. 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 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 $ 542.4 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. 13 Table of Contents The following table summarizes the consideration for the acquisitions and the provisional amounts of identified assets acquired and liabilities assumed as of June 30, 2025 (unaudited, in thousands): Lone Star Paving Overland Mobile Asphalt Company, LLC PRI Total Cash and cash equivalents $ 15,168 $ 2,426 $ — $ 1,634 $ 19,228 Contracts receivable including retainage 96,740 5,658 6,071 12,244 120,713 Cost and estimated earnings in excess of billings on uncompleted contracts 3,972 501 74 1,473 6,020 Inventories 26,604 6,414 2,975 964 36,957 Prepaid expenses and other current assets 493 1,757 538 250 3,038 Property, plant and equipment 408,190 34,791 29,219 49,921 522,121 Operating lease right-of-use assets 2,006 33 2,924 176 5,139 Intangible assets 53,800 7,900 — 3,200 64,900 Total assets 606,973 59,480 41,801 69,862 778,116 Accounts payable 36,810 5,287 2,586 2,427 47,110 Billings in excess of costs and estimated earnings on uncompleted contracts 10,293 2,089 168 1,018 13,568 Accrued expenses and other current liabilities 4,573 1,597 — 1,566 7,736 Operating lease liabilities 1,949 33 2,924 — 4,906 Total liabilities 53,625 9,006 5,678 5,011 73,320 Goodwill 423,859 68,422 18,535 31,549 542,365 Total cash consideration transferred 674,201 121,057 54,658 96,057 945,973 Fair value of Class A common stock transferred 236,250 — — — 236,250 Total consideration payable (receivable) 66,756 ( 2,161 ) — 343 64,938 Total purchase price $ 977,207 $ 118,896 $ 54,658 $ 96,400 $ 1,247,161 The Consolidated Statements of Comprehensive Income include $ 193.9 million of revenue and $ 11.0 million of net income attributable to the operations of these acquisitions for the three months ended June 30, 2025 and $ 385.0 million of revenue and $ 3.4 million of net income attributable to the operations of these acquisitions for the nine months ended June 30, 2025. The Company recorded certain costs related to the acquisitions as they were incurred, which are reflected in acquisition-related expenses on the Company’s Consolidated Statements of Comprehensive Income in the amount of $ 1.3 million for the three months ended June 30, 2025 and $ 21.0 million for the nine months ended June 30, 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 June 30, 2025 2024 Pro forma revenues $ 785,665 $ 764,679 Pro forma net income $ 45,101 $ 48,745 For the Nine Months Ended June 30, 2025 2024 Pro forma revenues $ 2,061,082 $ 1,942,147 Pro forma net income $ 70,196 $ 59,291 14 Table of Contents 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 nine months ended June 30, 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, depletion and amortization 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 June 30, 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 June 30, 2025); and (d) exclude $ 21.0 million of acquisition-related expenses from the nine months ended June 30, 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 nine months ended June 30, 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 June 30, 2025 and September 30, 2024 (in thousands): June 30, 2025 September 30, 2024 (unaudited) Contracts receivable $ 404,325 $ 299,156 Retainage receivable 62,414 52,728 466,739 351,884 Allowance for credit losses ( 2,210 ) ( 1,073 ) Contracts receivable including retainage, net $ 464,529 $ 350,811 Retainage receivables are amounts earned by the Company but held by customers until contracts are near completion or fully completed. 15 Table of Contents Note 6 - Contract Assets and Liabilities Costs and estimated earnings compared to billings on uncompleted contracts at June 30, 2025 and September 30, 2024 consisted of the following (in thousands): June 30, 2025 September 30, 2024 (unaudited) Costs on uncompleted contracts $ 3,405,243 $ 2,224,511 Estimated earnings to date on uncompleted contracts 412,813 271,719 3,818,056 2,496,230 Billings to date on uncompleted contracts ( 3,887,644 ) ( 2,590,329 ) Net billings in excess of costs and estimated earnings on uncompleted contracts $ ( 69,588 ) $ ( 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 June 30, 2024 and September 30, 2024 to June 30, 2025 are presented below (in thousands): Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts September 30, 2023 $ 27,296 $ ( 78,905 ) $ ( 51,609 ) Changes in revenue billed, contract price or cost estimates 5,254 ( 34,290 ) ( 29,036 ) June 30, 2024 (unaudited) $ 32,550 $ ( 113,195 ) $ ( 80,645 ) September 30, 2024 $ 25,966 $ ( 120,065 ) $ ( 94,099 ) Changes in revenue billed, contract price or cost estimates 28,598 ( 4,087 ) 24,511 June 30, 2025 (unaudited) $ 54,564 $ ( 124,152 ) $ ( 69,588 ) At June 30, 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 $ 0.7 billion during the remainder of the fiscal year ending September 30, 2025 and $ 1.5 billion thereafter. 16 Table of Contents Note 7 - Property, Plant and Equipment Property, plant and equipment at June 30, 2025 and September 30, 2024 consisted of the following (in thousands): June 30, 2025 September 30, 2024 (unaudited) Construction equipment $ 755,626 $ 570,044 Plants 394,522 255,214 Mineral reserves 221,095 69,334 Land and improvements 188,149 94,182 Buildings 53,984 39,838 Furniture and fixtures 9,314 8,616 Leasehold improvements 1,431 1,268 Total property, plant and equipment, gross 1,624,121 1,038,496 Accumulated depreciation, depletion and amortization ( 502,329 ) ( 426,842 ) Construction in progress 25,821 18,270 Total property, plant and equipment, net $ 1,147,613 $ 629,924 Depreciation, depletion and amortization expense related to property, plant and equipment was $ 38.2 million and $ 23.5 million for the three months ended June 30, 2025 and 2024, respectively, and $ 104.7 million and $ 67.6 million for the nine months ended June 30, 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 June 30, 2025 and September 30, 2024 consisted of the following (in thousands): June 30, 2025 September 30, 2024 (unaudited) Long-term debt: Term Loan A $ 600,000 $ 392,188 Term Loan B 845,750 — Revolving Credit Facility — 122,850 Total long-term debt 1,445,750 515,038 Deferred debt issuance costs, net ( 14,611 ) ( 1,514 ) Current maturities of long-term debt ( 38,500 ) ( 26,563 ) Long-term debt, net of current maturities and deferred debt issuance costs $ 1,392,639 $ 486,961 Term Loan A / Revolver Credit Agreement 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 a term loan in the principal amount of $ 600.0 million (the “Term Loan A”) and a revolving credit facility in an aggregate principal amount of $ 500.0 million (the “Revolving Credit Facility”). All outstanding advances under the Term Loan A and Revolving Credit Facility are due and payable in full on June 28, 2030 (the “Term Loan A Maturity Date”). The Term Loan A amortizes 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 quarter-end payment dates; and (b) all remaining principal on the Maturity Date. The annual interest rates applicable to advances are calculated, at the Company’s option, by using either a base rate, Term SOFR, or (solely with respect to the Revolving Credit Facility) Daily Simple SOFR, in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net 17 Table of Contents 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 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 June 30, 2025 and September 30, 2024, there was $ 600.0 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 $ 493.5 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 consolidated interest coverage ratio of 3.00 -to-1.00 and a maximum consolidated net leverage ratio determined as follows: (i) for each fiscal quarter ending on or prior to December 31, 2025, 4.50 -to-1.00; (ii) for each fiscal quarter ending March 31, 2026 through and including September 30, 2026, 4.25 -to-1.00; (iii) for each fiscal quarter ending December 31, 2026 through and including June 30, 2027, 4.00 -to-1.00; and (iv) for each fiscal quarter ending September 30, 2027 and thereafter, 3.75 -to-1.00, subject to certain adjustments. At June 30, 2025 and September 30, 2024, the Company’s consolidated interest coverage ratio was 6.45 -to-1.00 and 11.32 -to-1.00, respectively, and the Company’s consolidated net leverage ratio was 3.17 -to-1.00 and 1.80 -to-1.00, respectively. At both June 30, 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. At both June 30, 2025 and September 30, 2024, the aggregate notional value of the interest rate swap agreement was $ 300.0 million, and the fair value was $ 9.4 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 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. 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. 18 Table of Contents At June 30, 2025 and September 30, 2024, there was $ 845.8 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 for the nine months ended June 30, 2025. Note 9 - Equity Shares of Class A common stock and Class B common stock are identical, except with respect to voting rights, conversion rights and transfer restrictions applicable to shares of Class B common stock. The holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share. The holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders, including the election of directors, unless otherwise required by applicable law or the Company’s certificate of incorporation or bylaws. Shares of Class B common stock are convertible into shares of Class A common stock at any time at the option of the holder or upon any transfer, subject to certain limited exceptions. In addition, upon the election of the holders of a majority of the then-outstanding shares of Class B common stock, all outstanding shares of Class B common stock will be converted into shares of Class A common stock. Once converted into shares of Class A common stock, shares of Class B common stock will not be reissued. 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 nine months ended June 30, 2025, certain stockholders of the Company converted a total of 429,880 shares of Class B common stock into shares of Class A common stock on a one -for-one basis. As of June 30, 2025, there were 47,433,440 shares of Class A common stock and 8,538,165 shares of Class B common stock outstanding. Issuance of Class A Common Stock During the nine months ended June 30, 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 Acquisitions. Treasury Stock During the nine months ended June 30, 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 20,318 shares of Class A common stock through forfeitures of unvested restricted stock awards by terminated employees. During the nine months ended June 30, 2025, pursuant to its stock repurchase plan, the Company repurchased 119,370 shares of Class A common stock for aggregate consideration of approximately $ 8.7 million through open market transactions. Restricted Stock Awards During the nine months ended June 30, 2025, the Company awarded to certain directors, officers, and employees and consultants a total of 333,995 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 240,000 restricted shares of Class A common stock awarded to certain key employees of Lone Star Paving, Overland and PRI. Performance Stock Units and Market-Based Awards During the nine months ended June 30, 2025, the Company issued a total of 215,917 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. 19 Table of Contents Note 10 - Earnings Per Share As discussed in Note 9 - Equity, the Company has Class A common stock and Class B common stock. Because the only differences between the two classes of common stock are related to voting rights, conversion rights and transfer restrictions applicable to shares of Class B common stock, the Company has not presented earnings per share under the two-class method, as the earnings per share are the same for both Class A common stock and Class B common stock. 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, 2025 2024 2025 2024 Numerator Net income attributable to common stockholders $ 44,047 $ 30,908 $ 45,211 $ 39,627 Denominator Weighted average number of common shares outstanding, basic 55,164,260 51,913,124 54,853,715 51,914,508 Net income per common share attributable to common stockholders, basic $ 0.80 $ 0.60 $ 0.82 $ 0.76 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, 2025 2024 2025 2024 Numerator Net income attributable to common stockholders $ 44,047 $ 30,908 $ 45,211 $ 39,627 Denominator Weighted average number of basic common shares outstanding, basic 55,164,260 51,913,124 54,853,715 51,914,508 Effect of dilutive securities: Restricted stock grants 490,393 741,758 449,243 657,921 Weighted average number of diluted common shares outstanding: 55,654,653 52,654,882 55,302,958 52,572,429 Net income per diluted common share attributable to common stockholders $ 0.79 $ 0.59 $ 0.82 $ 0.75 Note 11 - Provision for Income Taxes 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, 2025 and 2024 was 24.0 % and 24.6 %, respectively. The Company’s effective tax rate for the nine months ended June 30, 2025 and 2024 was 24.1 % and 24.6 %, respectively. The changes in the Company’s effective rates are due to differences in state tax rates at its operating subsidiaries. 20 Table of Contents 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, 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 June 30, 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 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. 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. Amounts outstanding under the advances did not bear interest and matured in full in March 2021. In March 2021, the subsidiary of the Company amended and restated the terms of the repayment obligation, as a result of which the officer personally assumed the remaining balance of the obligation. No new amounts were advanced to the officer by the Company or any subsidiary or affiliate thereof in connection with the transaction. Under the amended and restated terms, the officer executed a promissory note in favor of the Company’s subsidiary in the principal amount of $ 0.8 million. 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 (“Land Development Project”). From time to time, the Company conducts or has conducted business with the following related parties: • Entities owned by immediate family members of an executive officer of the Company perform subcontract work for a subsidiary of the Company, including trucking and grading services (“Subcontracting Services”). • 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, 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. 21 Table of Contents The following table presents revenues earned and expenses incurred by the Company during the three months ended June 30, 2025 and 2024, and accounts receivable and payable balances at June 30, 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 June 30, For the Nine Months Ended June 30, June 30, September 30, 2025 2024 2025 2024 2025 2024 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Purchaser of Subsidiary $ — $ — $ — $ — $ 207 $ 207 Disposed Entity — — — — 132 132 Land Development Project — — — — 548 548 Subcontracting Services ( 4,466 ) (1) ( 2,596 ) (1) ( 7,584 ) (1) ( 5,214 ) (1) ( 730 ) ( 239 ) Island Pond ( 100 ) (2) ( 100 ) (2) ( 300 ) (2) ( 300 ) (2) — — SunTx ( 453 ) (2) ( 523 ) (2) ( 2,291 ) (2) ( 1,405 ) (2) — — (1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Comprehensive Income. (2) Cost of $ 0.6 million is reflected as general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income for the three months ended June 30, 2025. Cost of $ 1.8 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 nine months ended June 30, 2025. Note 13 - Share-Based Compensation 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 and January 2025. 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 June 30, 2025, there were 901,350 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 and was amended in January 2025. At the time of adoption, the Company reserved 2,000,000 shares of Class B common stock for issuance pursuant to awards granted thereunder. At June 30, 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 nine months ended June 30, 2025 and 2024 (unaudited, in thousands): For the Three Months Ended June 30, 2025 2024 Equity classified awards $ 3,904 $ 2,893 Liability classified awards 4,076 1,092 Employee stock purchase plan 584 54 Total share-based compensation expense $ 8,564 $ 4,039 22 Table of Contents For the Nine Months Ended June 30, 2025 2024 Equity classified awards $ 20,947 $ 8,232 Liability classified awards 5,916 1,974 Employee stock purchase plan 1,098 380 Total share-based compensation expense $ 27,961 $ 10,586 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. A summary of the changes in the Company’s restricted stock units is as follows (in thousands, except share data): For the Nine Months Ended June 30, 2025 2024 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 28.08 Shares awarded 381,995 78.61 97,811 45.73 Shares vested ( 59,295 ) 47.82 ( 2,500 ) 27.72 Shares forfeited ( 20,263 ) 30.50 ( 2,758 ) 30.49 Unvested shares, ending balance 811,608 52.58 916,833 30.26 Aggregate grant date fair value of shares awarded $ 30,027 $ 4,493 Compensation expense recorded upon vesting of awards $ 8,236 $ 5,821 Unrecognized compensation expense at fiscal year-end $ 27,638 $ 8,388 Weighted average recognition period remaining, in years 3.96 2.41 The restricted shares granted under the Equity Incentive Plan will vest, as applicable, as follows: Fiscal Year Number of Shares 2025 334,363 2026 81,389 2027 66,722 2028 179,134 2029 150,000 Total 811,608 23 Table of Contents Market-Based Awards - Equity Classified Awards During the nine months ended June 30, 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. The awards were issued upon the execution of the definitive agreement for the Lone Star Acquisition in October 2024 and vested upon the later to occur of (i) the closing of the Lone Star Acquisition and (ii) the achievement of certain market-based criteria. Such awards vested on November 6, 2024. These grants are classified as equity awards. The aggregate grant date fair value of these restricted stock awards was $ 9.8 million. During the three and nine months ended June 30, 2025, the Company recorded compensation expense in connection with the market-based restricted stock awards in the amount of $ 0.0 million and $ 9.8 million, respectively, which is recorded in acquisition-related expenses in the Company’s Consolidated Statements of Comprehensive Income. Performance Stock Units - Equity Classified Awards 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, 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 $ 4.1 million. During the three and nine months ended June 30, 2025, the Company recorded compensation expense in connection with PSUs in the amount of $ 1.1 million and $ 2.8 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income. At June 30, 2025, the Company forecasted 366,793 shares of Class A common stock underlying PSUs as unvested and approximately $ 5.8 million of unrecognized compensation expense related to PSU awards, which will be recognized over a remaining weighted-average period of 2.3 years. During the nine months ended June 30, 2025, 136,917 shares of Class A common stock 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, 2025, the Company granted 80,614 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 all liability classified awards for the three and nine months ended June 30, 2025 was $ 4.1 million and $ 5.9 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income. At June 30, 2025 and September 30, 2024, the liability for cash-settled RSUs was $ 7.7 million and $ 3.7 million, respectively, and is included in accrued expenses and other current liabilities and other long-term liabilities. At June 30, 2025, there was approximately $ 9.5 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. 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. The requisite service period is based on the vesting provisions of the awards, which generally occurs in four equal annual installments beginning on the date of the first fiscal year-end after the grant date. Employee Stock Purchase Plan The Construction Partners, Inc. 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, participants have purchased 84,601 shares under the ESPP. Compensation expense associated with the ESPP was $ 0.6 million and $ 0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.1 million and $ 0.4 million for the nine months ended June 30, 2025 and 2024, respectively. Compensation expense is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income. 24 Table of Contents Note 14 - Leases The Company leases certain facilities, office space, vehicles and equipment. As of June 30, 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 $ 70.3 million, $ 17.5 million and $ 53.2 million, respectively. As of June 30, 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 June 30, 2025 2024 Operating lease cost $ 5,052 $ 2,080 Short-term lease cost 6,972 6,189 Total lease expense $ 12,024 $ 8,269 For the Nine Months Ended June 30, 2025 2024 Operating lease cost $ 12,091 $ 4,454 Short-term lease cost 21,004 17,471 Total lease expense $ 33,095 $ 21,925 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. The majority of the Company’s short-term leases relate to equipment used on construction projects. 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, 2025, the weighted-average remaining term of the Company’s leases was 4.4 years, and the weighted-average discount rate was 6.01 %. As of June 30, 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 June 30, 2025 (unaudited, in thousands): Fiscal Year Amount Remainder of 2025 $ 5,579 2026 21,367 2027 20,470 2028 15,808 2029 9,479 2030 and thereafter 8,136 Total future minimum lease payments $ 80,839 Less: imputed interest 10,066 Total $ 70,773 Note 15 - Investment in Derivative Instruments Interest Rate Swap Contracts The Company uses derivative instruments as part of its overall strategy to manage its exposure to market risks associated with fluctuations in interest rates. The Company regularly monitors the financial stability and credit standing of the counterparties to its derivative instruments. The Company does not enter into derivative financial instruments for speculative purposes. 25 Table of Contents The Company records all derivatives at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as one of the following: (i) a hedge of a forecasted transaction or the variability of cash flows to be paid (“cash flow hedge”) or (ii) a hedge of the fair value of a recognized asset or liability (“fair value hedge”). Changes in the fair value of a derivative that is qualified and designated as a cash flow hedge or net investment hedge are recorded in other comprehensive income (loss) in the Company’s Consolidated Statements of Comprehensive Income until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified and designated as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. If the Company does not specifically designate a derivative as one of the above, changes in the fair value of the undesignated derivative instrument are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged in the Consolidated Statements of Cash Flows, while cash flows from undesignated derivative financial instruments are included as an investing activity. If the Company determines that it qualifies for and will designate a derivative as a hedging instrument, the Company formally documents all relationships between hedging activities, including the risk management objective and strategy for undertaking various hedge transactions. This process includes matching all derivatives that are designated as cash flow hedges to specific forecasted transactions and linking all derivatives designated as fair value hedges to specific assets and liabilities in the Consolidated Balance Sheets. The Company performs an initial prospective assessment of hedge effectiveness on a quantitative basis between the inception date and the earlier of the first quarterly hedge effectiveness date or the issuance of the financial statements that include the hedged transaction. On a quarterly basis, the Company assesses the effectiveness of designated hedges in offsetting the variability in the cash flows or fair values of the hedged assets or obligations using a qualitative assessment. The Company would discontinue hedge accounting prospectively when the derivative is no longer highly effective as a hedge, the underlying hedged transaction is no longer probable or the hedging instrument expires, is sold, terminated or exercised. Commodity Swap Contracts The Company’s operations expose it to a variety of market risks, including the effects of changes in commodity prices. As part of its risk management process, the Company has entered into commodity swap transactions through regulated commodity exchanges. The Company does not enter into derivative financial instruments for speculative purposes. 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 interest rate swap and commodity derivative contracts for the three and nine months ended June 30, 2025 and 2024 and the fair value of these derivatives as of June 30, 2025 and September 30, 2024 (in thousands): For the Three Months Ended June 30, 2025 2024 (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 - Commodity Swap Contracts $ — $ — $ — $ — $ 10 $ 10 Interest expense, net - Interest Rate Swap Contracts 1,876 — 1,876 2,635 — 2,635 Total $ 1,876 $ — $ 1,876 $ 2,635 $ 10 $ 2,645 26 Table of Contents For the Nine Months Ended June 30, 2025 2024 (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 ) $ ( 184 ) $ ( 245 ) Interest expense, net 5,922 — 5,922 7,919 — 7,919 Total $ 5,922 $ — $ 5,922 $ 7,858 $ ( 184 ) $ 7,674 June 30, 2025 September 30, 2024 Balance Sheet Classification (unaudited) Other assets - interest rate swaps (1) $ 9,379 $ 11,646 Net unrealized gain position $ 9,379 $ 11,646 (1) Includes designated cash flow hedge of $ 9.4 million and $ 11.6 million as of June 30, 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 June 30, 2025 and September 30, 2024 under Topic 820 (in thousands): June 30, 2025 September 30, 2024 (unaudited) Level 2 Level 2 Assets: Interest rate swaps $ 9,379 $ 11,646 U.S. government securities 14,182 8,338 Corporate debt securities 5,355 6,872 Municipal government securities 1,303 1,598 Other debt securities 1,114 1,212 Total assets $ 31,333 $ 29,666 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. The fair value of the Company’s commodity swap contracts is based on an analysis of the expected cash flow of the contract in combination with observable forward price inputs obtained from a third-party pricing source. The calculations are adjusted for credit risk. 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 had a total capacity of $ 500.0 million at June 30, 2025 that may be used for a combination of cash borrowings and letter of credit issuances. At June 30, 2025, the Company had aggregate letters of credit outstanding in the amount of $ 6.5 million, primarily related to certain insurance policies as described in Note 2 - Significant Accounting Policies. Purchase Commitments 27 Table of Contents As of June 30, 2025, the Company had unconditional purchase commitments for diesel fuel and natural gas in the normal course of business in the aggregate amount of $ 2.2 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 or cash flows of the Company. As of June 30, 2025, the Company’s purchase commitments for the remainder of fiscal 2025 and for fiscal 2026 were as follows (unaudited, in thousands): Fiscal Year Amount Remainder of 2025 $ 952 2026 1,264 Total $ 2,216 Minimum Royalties The Company has lease agreements associated with aggregates facilities under which the Company makes royalty payments. These agreements are outside the scope of Topic 842. The payments are generally based on tons sold in a particular period; however, certain agreements have minimum annual payments. The Company had commitments in the form of minimum royalties as of June 30, 2025 in the amount of $ 3.5 million, due as follows (unaudited, in thousands): Fiscal Year Amount Remainder of 2025 $ 11 2026 396 2027 384 2028 359 2029 347 Thereafter 1,977 Total $ 3,474 Royalty expense recorded in cost of revenue was $ 0.8 million and $ 0.5 million for the three months ended June 30, 2025 and 2024, respectively, and $ 2.2 million and $ 1.3 million for the nine months ended June 30, 2025 and 2024, respectively. Note 18 - Restricted Investments The following is a summary of the Company’s debt securities as of June 30, 2025 and September 30, 2024 (in thousands): June 30, 2025 (unaudited) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 14,192 $ 75 $ 85 $ 14,182 Corporate debt securities 5,282 98 25 5,355 Municipal government securities 1,322 9 28 1,303 Agency backed securities 1,123 12 21 1,114 Total $ 21,919 $ 194 $ 159 $ 21,954 28 Table of Contents September 30, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S 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 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, 2025, are as follows (unaudited, in thousands): Amortized Cost Fair Value Due within one year $ 2,798 $ 2,794 Due after one year through three years 6,176 6,165 Due after three years 12,945 12,995 Total $ 21,919 $ 21,954 Note 19 - Other Comprehensive Income (Loss) 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. 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, 2025 and September 30, 2024, were as follows (in thousands): AOCI June 30, 2025 (unaudited) September 30, 2024 Interest rate swap contract, net of blend and extend arrangement $ 7,272 $ 9,852 Unrealized loss on available-for-sale securities 35 34 Less tax effect of other comprehensive income (loss) items ( 1,822 ) ( 2,384 ) Total $ 5,485 $ 7,502 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 ( 2,017 ) Balance at June 30, 2025 (unaudited) $ 5,485 AOCI Interest Rate Hedge Balance at September 30, 2023 $ 18,694 Net OCI changes ( 4,887 ) Balance at June 30, 2024 (unaudited) $ 13,807 29 Table of Contents Amounts reclassified from AOCI to earnings are as follows (unaudited, in thousands): For the Three Months Ended June 30, 2025 2024 Interest expense (benefit) $ ( 1,876 ) $ ( 2,635 ) Realized loss on restricted investments 37 4 Benefit from income taxes 446 654 Total reclassifications from AOCI to earnings $ ( 1,393 ) $ ( 1,977 ) For the Nine Months Ended June 30, 2025 2024 Interest expense (benefit) $ ( 5,922 ) $ ( 7,919 ) Realized loss on restricted investments 81 53 Benefit from income taxes 1,414 1,953 Total reclassifications from AOCI to earnings $ ( 4,427 ) $ ( 5,913 ) Note 20 - Subsequent Events Texas Acquisition On August 1, 2025, the Company acquired all the outstanding capital stock of Durwood Greene Construction Co. and G&S Asphalt, Inc. d/b/a American Materials, Inc. (collectively, "Durwood Greene"), an asphalt manufacturing and construction business headquartered in Stafford, Texas, for $ 200.0 million, which was paid from available cash on hand and a draw from the Revolving Credit Facility. The transaction expanded the Company’s operations in Texas, adding three HMA plants and related crews and equipment serving the Houston, Texas metropolitan area. 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. 30 Table of Contents