Q3 2025 Construction Partners Inc Earnings Call
Greetings and welcome to the construction Partners third quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Rick black investor relations. Please go ahead
Thank you, operator, and good morning everyone. We appreciate you joining us for the construction Partners conference call to review third quarter results, for fiscal 2025. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section of construction partners.net.
Information recorded on this call. Speaks only as of today, August 7th 2025, please be advised. At any time-sensitive. Information May no longer be accurate as of the date of any replay, listening or transcript or reading.
I would also like to remind you that statements made in today's discussion that are in historical facts including statements of expectation, expectations, or future events or future. Financial performance are forward-looking statements made pursuant to the safe harbor provision of the private Securities. Litigation Reform, Act of 1995. We will be making forward-looking statements as part of today's call to buy their nature or uncertain and outside of the company's control actual results May differ materially, please refer to our earnings press release for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.
Including the adjusted net income, adjusted Ava and adjusted Eva margin. Reconciliations to the nearest Gap measures. Can be found at the end of our earnings release construction Partners assumes. No, obligation to publicly update, or revise any forward-looking statements. And with that, I would now like to turn the call over to construction partner CEO, Joel Smith, juwel
Thank you, Rick. And good morning, everyone.
We appreciate you all being on the call today.
with me this morning, are Greg Hoffman, our Chief Financial Officer and Ned Fleming, our executive chairman
I'd like to begin today by welcoming the 200 employees of durwood Greene Construction in the Houston area that joined our family of companies earlier this week.
As a third generation family, business that will continue to be led by Brad Jonathan and Danielle Green.
The company has earned its reputation as a well-respected market, leader in Houston, the fifth largest in 1 of the fastest growing Metro areas in the nation.
Led by an entire team of knowledgeable and experienced industry veterans.
The company operates 3, hot mix asphalt plants and a rail serviced Aggregates terminal.
Durwood Greene provides construction and Paving services for variety of public and private projects throughout the Houston Metro area.
We expect durwood Greene to continue its Legacy of operational excellence and to benefit from vertical integration opportunities.
As a subsidiary to our Texas platform company. Longstar Paving.
In Texas, our first year has been exactly as we had hoped, and I want to thank the Lone Star team for their outstanding leadership and dedication.
as we begin expanding to New Markets,
we continue to see strong economic growth.
Favorable demographic Trends and a well-funded transportation program as well as additional opportunities for inquisitive and organic growth.
The durwood Greene acquisition is a great example of our continued execution of the CPI strategy.
Of seeking out growing markets and partnering with an experienced and talented local management team.
Turning. Now, to the third quarter, our results demonstrate the strength of our people.
Where despite persistent weather related delays in the quarter.
Our team's executed with discipline and delivered. Robust, operational results, driving a record, adjusted IBA, do margin of 16.9%.
In the Southeast alone, May mark the second wet month on record.
Leading to project delays and impacting fixed asset cost. Recoveries.
While we can't control the weather, our team's resilience and operational excellence enabled us to still gain margin on. Many of our projects generate, strong operational, cash flow and build backlog to 2.94 billion dollars.
Now, let's take a closer. Look at the current market conditions that are driving our ability to build backlog, even during our busy construction work season,
On the public side of our business. We see strong public contract bidding throughout our 8 States and over 100, local markets.
Supporting this strong environment are healthy State infrastructure. Budgets, including many supplementary State programs as well as local city and county infrastructure programs and the iija federal program funds at all. Add up to significant year-over-year increases and contract Awards
As we begin look to fiscal year 2026 beginning, October 1st.
Public spending on roads and bridges, particularly for maintenance and Lane expansions.
Is forecasted to once again, grow substantially as state and local governments strive to build and maintain the infrastructure necessary.
To keep up with the migration of both residents and businesses to our Sun Belt footprint.
On Capitol Hill, both houses of Congress continue to work with secretary Duffy
On the 5-year, reauthorization of the ija and surface Transportation program.
And this Administration continues to prioritize hard infrastructure Investments and decrease permitting delays necessary to support a growing economy.
In the commercial markets, we continue to have a steady amount.
Of bidding opportunities with developers and general contractors in our local markets.
The makeup of our backlog and percentage of public at work.
Continues to stay remarkably steady over the last several quarters.
The private economic growth and activity.
Our bidding activity remains focused on the non-residential type projects, such as warehouses industrial parks schools and Manufacturing facilities.
We expect economic growth to continue in our current markets.
Driven by migration to the Sunbelt states by both families and businesses.
Finally, we expect the benefit from significant new investments in American manufacturing and our business-friendly states as new tariffs, begin to incentivize and accelerate, the reassuring Trend to begin after the pandemic, several years ago,
Fiscal year, 2025 has been a dynamic year of growth for CPI. As we have increased the size of our business, over 50% through both organic growth and acquisitions.
We understand the benefits of and remain laser focused on organic growth.
We also continue to focus on the best strategic acquisitions in growing markets.
And we are having numerous conversations with potential sellers.
who would like for their employees to experience the culture and opportunities provided by joining the CPI family of companies,
In closing, we are now in the heart of our busy work season and all of our local markets are at full capacity and utilization.
Having a record backlog to build, adding the Durwood Greene Organization.
and now, knowing that our July volume for strong,
Gives us a confident confidence to maintain our FY. 25 guidelines.
as we head toward a new fiscal year in the next 60 days,
We're excited about the Tailwinds that our back.
Including strong Public Funding, a growing private economy and a long strategic growth. Runway ahead.
I'd now like to turn the call over to Greg.
Greg.
Thank you, Jill. Good morning everyone. I'll begin with a review of our key performance metrics for the third quarter of fiscal 2025 compared to the third quarter a year ago.
Revenue was 779.3 million and increase of 51% compared to the same quarter a year ago.
The mix of our total revenue growth. For the quarter was 5%, organic revenue and 46% from recent acquisitions.
GNA expenses as a percentage of total revenue in the quarter, were 6.6%.
Compared to 7.3% in the third quarter last year.
As we continue to build scale, we are targeting GNA expenses for the fiscal year to be approximately 7.2 to 7.3% of Revenue.
As a reminder, fy24, GNA GNA expenses. Were 8.3% of Revenue,
Net income for the quarter was 44 million and adjusted. Net income was 45.2 million and 81 cents per diluted, share in Q3
Adjusted EBITDA was $131.7 million, an increase of 80% compared to Q3 last year.
Our adjusted EBA margin was 16.9% for the quarter up 280 basis points, over the same quarter last year.
In addition, as juwel mentioned, we are reporting a project backlog of 2.94 billion dollars at June 30th 2025.
We have approximately 80 to 85% of the next 12 months Revenue. Covered in backlog.
Turning now to the balance sheet, we had 1, 1 4. 3 1 4,
On June 30th. We amended our credit agreement by providing for a total facility size of 1.1 billion. Consisting of a Term Loan in the amount of $600 million and a revolving credit facility in the amount of $500 million.
We utilize the proceeds from The increased Term Loan to pay down the outstanding balance on the revolving credit facility. Realizing the full availability on the facility. Net of a reduction for outstanding letters of credit.
In addition, the amendment extends the facility maturity date to June 2030.
As of the end of the quarter.
Our debt to trailing 12 months, EBA ratio was 3.17 times.
2 approximately 2.5 times by late fiscal 2026 to support sustained profitable growth.
Provided by operating activities was 83 million compared to 35 million in the same quarter a year ago.
We remain on Pace to convert, 80 to 85% of vivaa, to cash flow from operations in FY. 25,
Capital expenditures for the quarter were 36.7 million.
We continue to expect total Capital expenditures for fiscal 2025 to be in the range of 130 to 140 million.
This includes maintenance capex of approximately 3.25% of Revenue with the remaining amount invested in New Growth initiatives.
And finally, we are maintaining our prior Outlook.
With revenue and the range of 2.77 to 2.83 billion.
In regard to our overall Revenue. Mix for the year, we continue to expect organic Revenue to be in the range of 8 to 10%.
Net income in the range of 106 to 117 million.
Adjusted net income and the range of 124 to 135 million.
Adjusted ibida in the range of 410 to 430 million.
And adjusted ibido margin and the range of 14.8 to 15.2%.
And with that, we will open the call to questions, operator.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press star 2 to remove yourself from the queue per participant using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Your first question comes from, Tyler Brown with Raymond James, please go ahead. Hey, good morning, guys.
Morning. Good morning, caller.
Hey jewlz. So obviously you know, very solid quarter in the face of what was very challenging. Whether I think you talked a little bit about the fixed costs, you leveraging, but it doesn't really seem that you guys missed the beat. I mean, gross. Margins were maybe the best they've been in 20 Quarters on my math. Can you just kind of talk about how you navigated weather so? Well, I mean, how do you Flex costs when you have that lack of Paving days?
Yeah, Tyler. We were uh, we were very pleased with how the quarter how the margins came through this quarter. I mean, there's no question when you have a quarter with that whether it's an impact,
and we play an outdoor game and whether can impact us negatively, or if it's really dry can impact its positively, but
I would say we just really our business is clicking on all cylinders. You know, we talk about the 3 Marine, levers of building better markets.
Verto vertical integration and scale.
And all of those really are kicking in, um, at the same time which we expected. So even though we had a wet quarter, it didn't really stop those from coming through it. Affected the Top Line it affected
Some fixed asset recovery. But those 3 margin, levers are starting to work uh really well together and
you know, we're expecting that to continue in the fourth quarter.
That's great. Um,
curious about
Prepared remarks right? At the end you mentioned that you were quote unquote, roughly at full utilization. So how do we read that? Will that be a bit of a hindrance to organic growth next year? Or are you going to need to step up capex? To support that growth? Just any color there?
Yeah no I wasn't trying to Signal any any uh capacity constraints. I just was basically saying we have a full backlog and we're we're on full cylinders and um, our capex program supports our organic growth that we expect, as, you know, Greg runs a pretty robust program to look for the best. Organic growth opportunities and that's where the capex dollars flow. So, I wasn't trying to communicate any capacity, constraints, just that as normal, we are, uh, at full utilization, uh, in building that record backlog.
Make sure I had that and then just a quick modeling question. Greg. Just
Just on the m&a contribution. What will the contribution be here in 25 to expected in the guidance?
Already.
Yeah, so uh, Tyler the Q4 uh, acquisition Revenue impact is going to be somewhere in the 27280 million range.
And then carrying over into 2026, we should see somewhere in the neighborhood of 20 uh, 240 to 250 million.
Okay, so a good. A good Kickstart into 26, okay? My last 1.
Yeah, so I think you guys are going to do something. Call it like 2.8 billion and revenue, 420 million, or so vivaa. Those numbers are actually right at or above the targets that you set out less than 2 years ago and you're achieving them, 2 years early. So, just, I know the complexion of the business has obviously changed a lot, but, does it make sense to maybe reset those targets maybe here in the next couple of months? Appreciate it.
Yeah. To, to all I do. I do think that
You know, the Lone Star acquisition was a transformative acquisition. As we said last October. PRI that joined us in May
Um, is dough has had a great 2 months, the durwood Greene acquisition um you know is going to be very additive so yes. I mean we're we we need to update and communicate what our business looks like moving forward. Now after those transformative acquisitions,
Uh I'm going to, I'm going to throw it. The Ned who's got some big picture thoughts. I think that's a good time to let him weigh in on this.
You're in great straight man. I appreciate it. Thank you sir. But the honest truth is we we we're trying to make great long-term decisions, we don't run this business on a 90-day increments. We're trying to make great decisions that continue to compound wealth. A good example of that is Houston and we probably see every transaction that you can see in this space and we made a decision to invest in Houston. Houston has 7.2 million people. It is the fastest more people move their last year than any metropolitan area in the country except for Dallas and Dallas Beat It by 16,000 people. I believe and it looks like it's going to continue to grow. That's more people than a lot of states in the country with that kind of growth. And so the first step is we've got great people there, we've got great growth, you're going to see more things happen in growing areas. So we're trying and we'll continue as we have from the very start to make great long-term decisions that continue to compound wealth. Not just for 1 or 2.
Orders. But for the next 5 to 10 years,
So the answer is yes, you will just I would say stay tuned. We will have a, a little bit of a reset here over the next few months as to what we think we're going to do since we hit the projection so quickly, but make no mistake about it. The board is paying attention to where we invest it.
Uh, the several members of the Board met the team in Houston. We're paying attention to who we're in business with; that's our first step. We're placing capital, and we're going to continue to allocate capital that can compound wealth over the next 5 to 10 years.
Yep. Perfect. Excellent. Thank you guys so very much.
Thank you, Tyler.
Next question, Michael senger, with Bank of America, please go ahead.
Great. Um thanks guys, thanks for taking my my questions. Just, I'm curious. Joe. You made a comment earlier about public spending for maintenance and Landing expansion is forecasted to grow substantially and in 2026. Is this is this based on, uh, conversations with customers or is this based on your understanding of of where budgets are looking as we fast forward to next year? Um, just love to get a sense of you. Kind of flesh out your confidence around that, around that comment.
Yeah. Michael, you know, and you and I discussed, um, when we're talking about Public Funding, there's several different ways to measure it, and it can get a little confusing. So, we're talking about contract Awards, when you add the state programs, which include Federal money,
Local and County, uh, programs. Because that that's all part of our, uh, backlog and our bidding.
we feel like even though nationally uh, the numbers uh, move around our states, this year in fy2 contract awards are up about 14%
And so, when we look at those, those programs, the the budgets that they have, the, where they're going in FY 26, we think it's going to be up a similar amount.
And so, that's what I was speaking to; it's really the contract awards as we look at the budgets and programs in place on the public funding side.
2026. I I know you're not guiding jewels and Greg um just kind of following up on on on Tyler's question about the m&a just any other puts and takes we should think about for next year. I mean obviously if if whether normalizes um, you know, a positive there, anything on cost that you're seeing on, on the liquid side, pricing in the backlog, just kind of thinking the puts and takes us as we kind of start looking at the building blocks for 2026.
Yeah well Mike it's getting about that time so you know um I'll talk to the backlog and then let Greg speak to the coughs that he's seeing um as we look forward into 2026.
Obviously, is Greg just said, we've got a lot of acquisitive Revenue rolling over into 26.
Um, we expect organically to be up, you know, high single digits like we are. We expect to be this year. We don't really see any change in that. So
um from a growth standpoint, 20 26 is looking like a typical CPI year, you know, being up 15 to 20% if not a little more. So, um,
you know, that's
That's good on the top line side. Greg, you want to speak to the what you see on the margin and call side. Sure. Um, you know, I I said in the remarks that our backlog covers the next 80 to 85% of our 12-month revenue, and you know, the cost is built in there for the the appropriate margin um as we think about, you know, 40 to 50 basis point Improvement in margin. Um, so those costs are are, are set and built in. Certainly there's some energy pricing that um, you know, could impact that we do. Talk about, you know, a slight headwind. If if if Energy prices go up and the reverse is true if they go down. Um, and so currently right now where we see is liquid, AC being very stable, um the diesel has been very stable natural gas is up a little bit, but we do do enough hedging uh to make that uh, a minimal impact on us. So feel pretty good about cost in the future.
Great. And I'll just sneak 1 more in there. Just the the free Castle was really strong in the quarter, just when we look at that and we think about your leverage at any update on the timeline where you when you do you get inside your your range and jewels do you feel okay, still doing some Acquisitions while also trying to deleverage or are they mutually kind of exclusive as as we kind of Turn the Page and go through uh a lot more quarter.
I'm going to 2026.
Yeah, Michael good question. It's something we think about a lot. You know, we're committed to, uh, getting back into the target range on our leverage, but at the same time, we want to continue to run our business. As Ned said, we're making decisions for 5, 10 15 years. And so, as we look at, uh, the acquisitive opportunities, uh, we're passing on some, um, we're working with sellers, uh, to accommodate our timing as much as we can.
But at the same time, there are several. As we've made this year, there's several key strategic Acquisitions that we think are crucial and important.
To the long-term health of our business. And so we're going to deliver and at the same time, we're going to continue to make good strategic decisions for the business.
Oh and so in terms of our what I mentioned in my remarks Mike we're you know, and leverage ratios 3.17. Um we're expecting based on normal cash generation uh through to the end of uh fiscal 2026 to be near that 2.5 uh times leverage ratio. So yeah, to your point we're going to generate um 80 to 85%
Uh cash flow from operations uh 80 to 85%. I'm sorry, 80 to 85% of our ibida into cash flow for operations.
And the trailing 12 months right now is almost there. It's 79%. So, you know, we'll continue to do what we've done. De-lever over time
Next question.
Scarce and they might have some pricing power. Obviously juel this has been a really important part of your strategy to build these better markets. And I was just wondering if you could assess for us what you're seeing in your markets, to the extent that you've been able to or see the building of those markets being better and what you're seeing in the marketplace today,
Yeah, Andy um, you're right 1 of our 3 margin, levers is building better markets and we see that the demand side is helping us with that. Um, when there's a good bidding environment uh as you would expect margins, stay healthy. And I think you saw that rolling through this quarter is even though our crews and our teams really did a great job growing margin on projects which we expect and they had a great quarter doing that. Um it's really nice to start off with healthy margins uh at the beginning and so the demand environment on the public side and the private side gives us the opportunity to be patient at the bid table to add projects, you know, in our backlog at good margins. And so I think we continue to see that it's been a, it's been something that's uh, you know, been pretty steady for several years now. And
we're busy and able to stay patient at the bid table and our competitors are also
And and a strategically jewel. In the team have done a great job of picking markets that are healthy
And that's an important part of it. Growing healthy Markets. Houston is a great example.
Yeah, and you just heard that in jules's response previously, there are some key markets that you guys want to be in. Sounds like you've identified the next ones that are the the good markets that you want to be in as well. Alright, Joel
Yes. Uh Andy you know, as Ned said, Houston was is a great example. You know, we you say metro area and you think they're all pretty much the same Houston.
I mean, it's just incredible. The amount of people there and the rate of growth when you look at how fast that metro area is growing on an annual basis,
So not all states are equal, not all Metro areas are equal and so for us to generate organic growth, um, which is a big part of our story. We need to be in place that are growing and so as we look to allocate Capital, uh, you know, Ned and I talk a lot about where do we want to be, uh, in the United States? Where do we want to, um, direct our growth? We've got a lot of opportunities. We can't do them all, and so we just try to make the best, uh, decisions on where we can be. That allows our business to grow and have healthy margins.
Yep. Okay uh Greg a follow up 1 for you. Uh the 1, big beautiful allows, 100% bonus depreciation. And so, we're seeing a lot of companies that buy things equipment. Like you do um, increasing their cash flow guidance as a result of that.
I was wondering if you could help us understand what the benefit is to your cash flow from this year, or maybe on an ongoing basis at least while this law is in effect from that bonus depreciation and I maybe refresh my memory but I don't know that you updated your cash flow guidance for this. So, uh, maybe you did maybe you didn't. But could you just clarify if there's any change to your cash flow guidance, as the results of the obba?
Yeah, I think the guide we've been saying is, you know, like I said earlier, 80 to 85% converting that uh EBA cash flow. Um, so I think we still fall within that range Andy, um, how it specifically impacts us. Yes, we do take bonus depreciation, you know, this year, it is down to 60%. So that was certainly reflected in what we originally talked about, in our guide. And we, when when asked about what that, you know what our cash taxes would be, I've said in the 1500 range, um, uh, now that this bill has passed, uh, interestingly it's, uh, uh, Acquisitions for us and or equipment, uh, purchases that have occurred after
January 15th 25. So, unfortunately, we don't get to pull Lone Star, uh, in that. So it's still at 60% but other Acquisitions post 11525, as well as those equipment, uh, uh, purchases will be at 100% bonus depreciation, so that 15 goes down dramatically. Probably.
You know, 10 or 12 or 13. I mean, obviously we're still going to pay state; it doesn't impact the state. So, yeah, a nice lift.
Yeah, so you're you're down from 15 down 12 so you'll be paying just a few million dollars in federal taxes, which is that's right.
Yep.
Okay, great.
Thanks.
Yeah, thank you, Andy.
Next question, Brian zeros with Thompson research group.
Hey, good morning. This is Brian offer. Katherine Thompson. Thank you for taking my questions today. Uh, good morning, obviously, I can morning you Javis. You have some tough, whether uh, you guys put up a great result though, but curious to hear about Trends in July so far. Um, we've heard that July was a great quarter for many in the industry, some seeing volumes up, double digits. So just curious, if you could touch on how July printed for you,
Yeah, Brian. Um so as as I said, in my prepared remarks, you know July had really good volumes and and it started uh, out the first week especially in North Carolina and Texas. It was wet. Um, but the last 3 weeks, uh, and especially the last 2 weeks were really good volume uh month. So, you know, as we looked at how to guide for the fourth quarter, we obviously don't know. The weather in August and September our guide normally just we assume normal weather, right? But we know July, we had really good volumes and so we felt like it was important to communicate that. So we saw what, as you said, some of the other folks in our industry have seen is that after a very wet uh,
Spring quarter. It was nice to for July to be, um, to to have some whether that we could get out and work.
Got it and then so Q2 record margins I think up 280 basis points again. In a tough weather quarter. Um I mean is there a way to frame how much they would have been without whether I think you mentioned the 3 levers that are really kind of just driving the performance.
not irregardless of whether but
Taking the weather impact to be not as great, I'm just trying to think through the exercise. If you had normal weather in Q2, what kind of numbers could we have seen? I'm trying to think then for D3 and even just for next year.
Yeah.
uh, that's a good question, Brian and it's not an exact science Greg and I could sit here and argue for an hour about exactly what may have happened had we had normal weather
Um, but there's no question. Uh, our quarter would have been better. Um, we would have had, uh, more revenue and in the Summer where we over recovered on our fixed assets, uh, it would have been higher. And so, that's what we're looking forward to happening to, in the fourth quarter.
Got it. Then the last one for me, maybe on the Houston market. You've touched a bit on the call so far; massive market. Um, he's going to touch on.
How you plan that market now kind of like what services you offer and kind of what adjacent services are still still out there for both on. I guess really just the opportunity set there and maybe how that market looks between public and private Trends. Thank you.
Yeah. So Brian as we start in Houston, you know here this week really is our first week with the durwood Greene organization, they look a lot like our typical CPI company. You know, they they do Paving Services. Um, they do some other uh, concrete Paving Services, which is uh um, you know, a characteristic of the Houston Market um and they run 3 asphalt plants, do a lot of fob cells so very much, uh, like a typical CPI company and as we've said, as we get going in that market, today's Acquisitions Drive tomorrow's, organic growth. So we we're going to look for organic growth opportunities in the Houston Market just like we do everywhere else.
Get here. Thanks for passing along.
Next question, Brent theman with da Davidson, please go ahead.
Hey thanks. So hey uh congrats working through. You know some some tough conditions here. It's a good show in here. Um, do you want
You wanted to maybe ask a different way around. The weather in that, you know, I'm trying to think about the markets that were less impacted for you through the quarter. And really, this is kind of in context of.
kind of the bigger organic growth outlook for the year. But I mean, do you could you could you give any context on markets that are just really hitting all on all cylinders right now, maybe potentially Beyond kind of this 8 to 10%, organic growth rate you you've talked about for the year. Just trying to think through, you know, where are you really seeing some great momentum in the business?
Yeah, Brent. Um, you know, we've got a hundred different markets and so uh,
Uh, you know, I would say clearly, uh, the Lone Star markets of Austin and San Antonio and Temple Ken are big growth areas, the panhandle of Florida to Research Triangle here in North Carolina.
But we see a lot of growth in all of our markets. Um,
They're not all equal, but um,
You know, it's hard to. It's hard to.
Call out just a few, you know, the southeast as a whole just the region.
Um, you know, as I said in the prepared, remarks just continues to see a lot of my migration, the states are trying to keep up with the growth, and that's what you see coming through on the public side and the funding. And then, as I said, you know, I think with this the tariffs incentivizing American manufacturing. I think CPI is going to be a big beneficiary of companies saying, hey, we're going to make things in America and where do we want to locate? And I think the southeast and the sun belts going to get an outside share of that investment.
Okay. Yeah, that's that's interesting. Kind of a good. Follow on their Joel. I guess what I wanted to ask is is as that likely plays out here over the next
Few years.
Does the acquisition strategy that you have in place today? I mean, the types of companies that you're buying
Still play well. And to leveraging that um, those private markets that could certainly pick up in in your geographies. In other words.
You know, can you continue under the same program you're doing? Or are you looking at different types of deals, like potentially leverage, those that opportunity down the road.
Yeah. Brent, I would tell you, you know, we're talking to a lot of uh, potential sellers right now. As we have been, that's a a
Big part of my job is just to get to know these sellers. And I would tell you they look very much just like the businesses that have for 20 years, the CPI has looked at they're good construction companies. Um,
some of some of them don't have hot mix asphalt, they're more service related. Those are very value, added Acquisitions in the right, you know, where we're already in the market.
Um but when you look at uh PRI or a mobile asphalt um or durwood Greene there's just really some still a lot of still strategic opportunities in our space that do exactly what we do.
Okay. All right. Appreciate it. Thanks, guys.
All right, thank you, Brent.
Next question, Adam Taylor with Thompson Davis. Please go ahead.
Hey, good morning guys. Nice quarter. Considering the weather.
um,
the I was curious. I given given how wet the summer has been juel. Would you say you have any, uh, color or thoughts on the potential that the construction season could extend further into the December quarter?
well Adam, that's an interesting uh thought I mean, obviously every year uh when we get into December and December,
we have customers that are just begging us to get their projects done, it's a very, very busy time for our different, uh,
Markets. So, we're going to extend into it to the winner as much as we can. Obviously, weathered starts to play a factor but I don't Envision us, uh, going into November and December, without a full plate of work. With the backlog, we already have and what we're bidding now. I think it's going to be very busy and if we get a good, uh, warm November and December, you're going to see us make a lot of hay in those months.
That's what I figured. Um and then I wanted to ask about your recently acquired States, so Texas. Oklahoma to some extent Tennessee
How would you say that, uh, Transportation spending is trending versus your initial expectation?
I think that there, you know, we try to study the spending uh, and the budgets before, making the Acquisitions. And so I would say that on all 3 states, um, there it's a playing out exactly as we expected
Uh, Texas, Oklahoma and Tennessee. All have very healthy programs. I think Tennessee is up quite a bit year-over-year, so we're seeing a lot of bidding activity there.
um, in Texas, I mean, frankly, they're programmed dwarfs, uh, every other state in the nation and so
Um and we're benefiting from that and we're happy to be in Houston. So uh I would say all 3 states are doing very well.
Uh, it's good to hear and then, um, last 1. Lastly, I wanted to ask on labor
There's got to be a lot of value, you know, in your assembled, labor force of 6,200 Plus.
I'm just curious. Um,
If there's been any changes in the availability of Labor, either for you or your competitors, what's your what's your sense on that?
Um, I think Adam with labor, it's a two-fold answer. You know, the labor shortages we saw coming out of COVID have dissipated. We're back to a normal labor market.
When you know, when we were struggling to find truck drivers 3 and 4 years ago, that's gone.
And the laborers available were able to build our backlog.
but the longer term picture as you've heard me say before,
Is we're going through a generational shrinking slowly, but surely of our Workforce and we have a lot of gray hair out on our crews that are retiring.
And so that has, uh, forced CPI to be proactive in saying, how do we attract and retain a workforce? Whether it be the culture that we have in our companies, whether it be the compensation that we offer our workers, or whether it be the career opportunities. We call it the 3 C's: culture, compensation, and career.
And we feel like that if we can do a good job attracting and retaining a workforce, it's actually going to become a competitive advantage for us because the businesses in our industry that can attract and retain a workforce are going to be able to keep bidding and growing. And those that don't attract and retain the workforce are not going to be able to keep bidding and growing. And so it's something long-term that we know we have to be proactive, and if we are proactive, it's actually going to help us, you know, be one of the winners in our industry. And so workforce is a huge part of what we focus on every day.
Good color. Thanks Joel.
Okay, thank you. Adam.
I would like to turn the floor over to management for closing.
Yes, thanks to everyone for being with us and we look forward to uh speaking with you next quarter. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.