Construction Partners, Inc. operates as a civil infrastructure company that specializes in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas.
The company, through its wholly owned subsidiaries, 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. Consistent with the compan...
Construction Partners, Inc. operates as a civil infrastructure company that specializes in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas.
The company, through its wholly owned subsidiaries, 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. Consistent with the company’s vertical integration strategy, 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.
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 customers of Lone Star Paving include the Texas Department of Transportation (‘TxDOT’), local municipalities, heavy civil contractors, and commercial and residential developers.
The company operates in the large and growing highway and road construction industry and specifically within the asphalt paving materials and services segment.
Projects and Customers
The company provides construction products and services to both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports, and commercial and residential sites throughout the Sunbelt in Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Texas. The company provides a wide range of large sitework construction, including site development, paving, and utility and drainage systems construction, and supply the HMA required for the projects. The company’s projects consist of both new construction and maintenance services. Publicly funded projects and third-party sales accounted for approximately 63%, and privately funded projects and third-party sales accounted for approximately 37%, of the company’s fiscal 2024 (the fiscal year ended September 30, 2024) revenues. The company’s public customers include federal agencies, state DOTs and local municipalities. The company’s private clients include commercial and residential developers and businesses.
The company’s largest customers are state DOTs. For the fiscal year ended September 30, 2024, the Florida DOT accounted for 13.6% of the company’s revenues, and projects performed for all DOTs accounted for 40.7% of the company’s revenues. The company’s 25 largest projects accounted for 15.7% of the company’s revenues for the fiscal year ended September 30, 2024.
During the fiscal year ended September 30, 2024, the company generated approximately 63% of the company’s construction contract revenues from publicly funded construction projects and the sale of construction materials to public customers at the federal, state and local levels.
Types of Contracts
The company’s public customer contracts are primarily fixed unit price contracts. Pricing on a fixed unit price contract is typically based on approved quantities. 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. The company also occasionally enters into design-build contracts, which generally are performed under fixed total price contracts. For the majority of the company’s contracts, the company receives its final payment when contracts are near completion or fully completed. For some contracts, the company is required to furnish a warranty on its construction.
Contract Management
The company identifies potential contracts through a variety of sources, including: (i) subscriber services that consolidate and alert the company to contracts open for bidding; (ii) posted solicitations by federal, state and local governmental entities through agency websites, disclosure of long-term infrastructure plans or advertising and other general solicitations; (iii) the company’s business development efforts; and (iv) communications with other participants in the company’s industry.
Most of the company’s contracts with governmental agencies provide for termination at the convenience of the customer, with requirements to pay the company for work performed through the date of termination.
The company acts as prime contractor on most of its construction projects. As prime contractor, the company is responsible for the performance of the entire contract, including subcontract work.
Insurance and Bonding
The company maintains general and excess liability, property, workers’ compensation and medical insurance, all in amounts consistent with industry practice.
In the ordinary course of the company’s business, the company is required to provide various types of surety bonds that provide an additional measure of security to the customer for the company’s performance under certain public and private sector contracts.
Seasonality
The activity of the company’s business fluctuates due to seasonality because the company’s business is primarily conducted outdoors. Warmer and drier weather during the company’s third and fourth fiscal quarters (year ended September 2024) typically result in higher activity and revenues during those quarters. The company’s first and second fiscal quarters typically have lower levels of activity due to adverse weather conditions. The company’s third fiscal quarter varies greatly with spring rains and wide temperature variations.
Government and Environmental Regulations
The company’s operations are subject to stringent and complex federal, state and local laws and regulations governing the environmental, health and safety aspects of the company’s operations or otherwise relating to environmental protection. These laws and regulations impose numerous obligations and limitations on the company’s operations, including:
Zoning and other requirements to obtain a permit or other approval before conducting regulated activities;
Restrictions on the types, quantities and concentration of materials that can be released into the environment;
Limitation or prohibition of activities on certain lands lying within wilderness, wetlands, and other protected areas;
Obligations to restore or reclaim former mining areas;
Requirements to comply with specific health and safety criteria addressing worker protection; and
The imposition of substantial liabilities for pollution resulting from the company’s operations.
Such federal laws include, but are not limited to, (i) the Federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, the Pollution Prevention Act and the Comprehensive Environmental Response, Compensation and Liability Act, governing solid and hazardous waste management, (ii) the Clean Air Act, the Clean Water Act and the Safe Drinking Water Act, protecting air and water resources, and (iii) the Emergency Planning and Community Right-to-Know Act and Toxic Substances Control Act, governing the management of hazardous materials, (iv) the federal Mine Safety and Health Act of 1977, requiring certain disclosures of mining-related health and safety violations, orders, citations, assessments, legal actions, and mining-related fatalities, and (v) the Occupational Safety and Health Act, governing working conditions for workers, in addition to analogous state laws. Numerous governmental authorities, such as the Environmental Protection Agency and corresponding state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them.
History
The company was founded as a Delaware corporation in 2007. It was incorporated in 2007. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in 2017.