Construction Partners, Inc. Net Income to Adjusted EBITDA Reconciliation Fiscal Quarters Ended December 31, 2020 and 2019 (in thousands, except percentages) For the Three Months Ended December 31, 2020 2019 Net income $ 7,871 $5,461 Interest expense, net 468 281 Provision for income taxes 2,680 1,319 Depreciation, depletion and amortization of long-lived assets 11,094 9,438 Equity-based compensation expense 395 395 Management fees and expenses (1) 617 314 Adjusted EBITDA $ 23,125 $17,208 Revenues $ 190,929 $175,314 Adjusted EBITDA Margin 12.1% 9.8% (1) Reflects fees and reimbursement of certain out-of-pocket expenses under a management services agreement with SunTx Capital Partners, the Company's controlling shareholder.Deferred income taxes 386 386 Total assets $ 604,227 $ 628,114 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 49,727 $ 64,732 Billings in excess of costs and estimated earnings on uncompleted contracts 30,930 33,704 Current portion of operating lease liabilities 1,712 2,046 Current maturities of long-term debt 13,000 13,000 Accrued expenses and other current liabilities 12,150 22,347 Total current liabilities 107,519 135,829 Long-term liabilities: Long-term debt, net of current maturities and deferred debt issuance costs 75,867 79,053 Operating lease liabilities, net of current portion 5,422 5,554 Deferred income taxes 14,003 14,003 Other long-term liabilities 7,955 8,480 Total long-term liabilities 103,247 107,090 Total liabilities 210,766 242,919 Commitments and contingencies Stockholders' Equity: Preferred stock, par value $0.001; 10,000,000 shares authorized at December 31, 2020 and September 30, 2020 and no shares issued and outstanding -- -- Class A common stock, par value $0.001; 400,000,000 shares authorized, 33,875,884 shares issued and outstanding at December 31, 2020 and September 30, 2020 34 34 Class B common stock, par value $0.001; 100,000,000 shares authorized, 20,828,813 shares issued and 17,905,861 outstanding at December 31, 2020 and September 30, 2020 21 21 Additional paid-in capital 245,417 245,022 Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 (15,603) (15,603) Retained earnings 163,592 155,721 Total stockholders' equity 393,461 385,195 Total liabilities and stockholders' equity $ 604,227 $ 628,114 CONSTRUCTION PARTNERS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) For the Three Months Ended December 31, 2020 2019 Cash flows from operating activities: Net income $ 7,871 $ 5,461 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization of long-lived assets 11,094 9,438 Amortization of deferred debt issuance costs and debt discount 64 36 Unrealized gain on derivative instruments (1,165) (66) Provision for bad debt 175 145 Gain on sale of equipment, net (333) (309) Equity-based compensation expense 395 395 Earnings from investment in joint venture (11) (43) Distribution of earnings from investment in joint venture 100 139 Other non-cash adjustments (21) (6) Changes in operating assets and liabilities, net of acquisition: Contracts receivable including retainage, net 18,538 21,981 Costs and estimated earnings in excess of billings on uncompleted contracts (4,275) (2,122) Inventories 928 (1,535) Prepaid expenses and other current assets (4,119) (2,943) Other assets (946) 331 Accounts payable (15,255) (21,815) Billings in excess of costs and estimated earnings on uncompleted contracts (2,774) 54 Accrued expenses and other current liabilities (9,427) (7,444) Other long-term liabilities (130) (11) Net cash provided by operating activities, net of acquisition 709 1,686 Cash flows from investing activities: Purchases of property, plant and equipment (10,462) (23,595) Proceeds from sale of equipment 492 492 Business acquisitions, net of cash acquired (84,086) (17,748) Distributions received from investment in joint venture -- 361 Net cash used in investing activities (94,056) (40,490) Cash flows from financing activities: Proceeds from issuance of long-term debt, net of debt issuance costs and discount -- 9,777 Repayments of long-term debt (3,250) (2,149) Net cash (used in) provided by financing activities (3,250) 7,628 Net change in cash and cash equivalents (96,597) (31,176) Cash and cash equivalents: Beginning of period 148,316 80,619 End of period $ 51,719 $ 49,443 Supplemental cash flow information: Cash paid for interest $ 672 $ 496 Cash paid for income taxes $ -- $ 300 Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 282 $ 217 Cash paid for operating lease liabilities $ 748 $ 870 Non-cash items: Property, plant and equipment financed with accounts payable $ 1,549 $ 391
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation, depletion and amortization of long-lived assets, (iv) equity-based compensation expense, (v) loss on the extinguishment of debt and (vi) certain management fees and expenses. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues for each period. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA and Adjusted EBITDA Margin because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly named measures reported by other companies. Potential differences may include differences in capital structures, tax positions and the age and book depreciation of intangible and tangible assets.
The following table presents a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA and the calculation of Adjusted EBITDA Margin for the periods presented.
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SOURCE Construction Partners, Inc.
/Web site: http://www.constructionpartners.net
(END) Dow Jones Newswires
February 05, 2021 07:30 ET (12:30 GMT)