Construction Partners, Inc.: Form 10-Q for the period ended Mar 31, 2026

This discussion and analysis of our financial condition and results of operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition during the period covered by this report. Historical results may not be indicative of future performance. This discussion includes forward-looking statements that reflect our plans, estimates and beliefs. Such statements involve risks and uncertainties. Our actual results may differ materially from those contemplated by these forward-looking statements as a result of various factors, including those set forth under the headings “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements”. This discussion should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto included in the 2025 Form 10-K. In this discussion, we use certain non-GAAP financial measures. Explanations of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are included in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Investors should not consider non-GAAP financial measures in isolation or as substitutes for financial information presented in compliance with GAAP.

Overview

We are a civil infrastructure company that specializes in the building and maintenance of transportation networks. Our operations leverage a highly-skilled workforce, strategically located HMA plants, substantial construction assets and select material deposits. We provide construction products and services to both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential sites across the Sunbelt in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

Our public projects are funded by federal, state and local governments and include roads, highways, bridges, airports and other forms of infrastructure. Public transportation infrastructure projects historically have been a relatively stable portion of state and federal budgets and represent a significant share of the U.S. construction market. Federal funds are allocated on a state-by-state basis, and each state is required to match a portion of the federal funds that it receives. Federal highway spending uses funds predominantly from the Highway Trust Fund, which derives its revenues from fuel taxes and other user fees.

In addition to public infrastructure projects, we provide a wide range of large site work construction and HMA paving services to private construction customers, including commercial and residential developers and local businesses.

Contract Backlog

At March 31, 2026, our contract backlog was $3.1 billion. Contract backlog is a financial measure that reflects the dollar value of work that the Company expects to perform in the future. We include a construction project in our contract backlog at the time it is awarded and to the extent we believe funding is probable. Our backlog consists of uncompleted work on contracts in progress and contracts for which we have executed a contract but have not commenced the work. For uncompleted work on contracts in progress, we include (i) executed change orders, (ii) pending change orders for which we expect to receive confirmation in the ordinary course of business and (iii) claims that we have made against our customers for which we have determined we have a legal basis under existing contractual arrangements and as to which we consider collection to be probable. Backlog of uncompleted work on contracts under which work was either in progress or had not yet begun was $2.6 billion at March 31, 2026. Our contract backlog also includes low bid/no contract projects, which consist of (i) public bid projects for which we were the low bidder and no contract has been executed and (ii) private work projects for which we have been notified that we are the low bidder or have been given a notice to proceed, but no contract has been executed. Low bid/no contract backlog was $0.5 billion at March 31, 2026.

Recent Developments

Business Acquisitions

On October 3, 2025, we acquired certain asphalt manufacturing and construction assets from affiliates of Vulcan Materials Company in the Houston, Texas metro area. The transaction added eight HMA plants and related crews and equipment, expanding the Company’s operations in southeastern Texas. For further discussion regarding this transaction, see Note 4 - Business Acquisitions to the unaudited consolidated financial statements included elsewhere in this report.

On October 20, 2025, we acquired all of the equity interests of P&S Paving, LLC, an asphalt manufacturing and construction business headquartered in Daytona Beach, Florida. The transaction expanded the Company’s operations in Florida, adding two HMA plants and related crews and equipment serving northeast and central Florida. For further discussion regarding this transaction, see Note 4 - Business Acquisitions to the unaudited consolidated financial statements included elsewhere in this report.

On January 30, 2026, we acquired substantially all of the assets of GMJ Paving Company, LLC , an asphalt manufacturing and construction business in the Houston, Texas metro area. The transaction added an HMA plant in Baytown, Texas and related crews and equipment, expanding the Company’s operations in southeastern Texas. For further discussion regarding this transaction, see Note 4 - Business Acquisitions to the unaudited consolidated financial statements included elsewhere in this report.

On April 1, 2026, we acquired substantially all of the assets of Four Star Paving, LLC (“Four Star”), a commercial paving contractor in the Nashville, Tennessee metro area. The transaction added construction crews and equipment, expanding the Company’s operations in middle Tennessee. For further discussion regarding this transaction, see Note 20 - Subsequent Events to the unaudited consolidated financial statements included elsewhere in this report.

How We Assess Performance of Our Business

Revenues

We derive our revenues predominantly by providing construction products and services for both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential sites. Our projects represent a mix of federal, state, municipal and private customers. We also derive revenues from the sale of HMA, aggregates and liquid asphalt cement to customers. We recognize revenues derived from projects as we satisfy our performance obligations over time, measured by the relationship of total cost incurred compared to total estimated contract costs (cost-to-cost input method). Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to estimated costs and income, and are recognized in the period in which the revisions are determined. Revenues derived from the sale of HMA, aggregates and liquid asphalt cement are recognized when the risks associated with ownership have passed to the customer.

Gross Profit

Gross profit represents revenues less cost of revenues. Cost of revenues consists of all direct and indirect costs associated with construction contracts, including raw materials, labor, equipment costs, depreciation, lease expenses, subcontract costs and other expenses at our HMA plants, aggregates mining facilities and liquid asphalt cement terminals. Our cost of revenues is directly affected by fluctuations in commodity prices, primarily liquid asphalt, diesel fuel and natural gas. From time to time, when appropriate, we limit our exposure to changes in commodity prices by entering into forward purchase commitments. In addition, our public infrastructure contracts often provide for price adjustments based on fluctuations in certain commodity-related product costs. These price adjustment provisions are in place for most of our public infrastructure contracts, and we seek to include similar provisions in our private contracts.

Significant or sustained increases in the prices of petroleum-based products and fuels, including liquid asphalt, diesel fuel and natural gas, could adversely affect our profitability to the extent such cost increases are not offset through contract price adjustment provisions, operational efficiencies, fuel hedging activities, or timely increases in pricing to customers. Although many of our public infrastructure contracts contain escalation clauses designed to mitigate the impact of commodity price volatility, there can be no assurance that such mechanisms will fully compensate for increased fuel costs or that similar protections will be available in private contracts. Prolonged fuel price volatility may also negatively impact demand, project timing, equipment operating costs and overall margins.

Depreciation, Depletion, Accretion and Amortization

Property, plant and equipment are initially recorded at cost or, if acquired as a business combination, at fair value. Depreciation on property, plant and equipment is computed on a straight-line basis over the estimated useful life of the asset. Amortization expense is the periodic expense related to leasehold improvements and intangible assets. Leasehold improvements are amortized over the lesser of the life of the underlying asset or the remaining lease term. Our intangible assets were recognized as a result of certain acquisitions and are generally amortized on a straight-line basis over the estimated useful lives of the assets. Our unfavorable contract liabilities were recognized as a result of certain acquisitions and are amortized as the associated projects progress. Mineral reserves are depleted in accordance with the units-of-production method as aggregates are extracted, using the initial allocation of cost based on proven and probable reserves.

General and Administrative Expenses

General and administrative expenses include costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate offices. These expenses consist primarily of salaries and personnel costs for our administration, finance and accounting, legal, information systems, human resources and certain managerial employees. General and administrative expenses also include audit, consulting and professional fees, share-based compensation expense, travel, insurance, office space rental costs, property taxes and other corporate and overhead expenses.

Acquisition-Related Expenses

Acquisition-related expenses include costs incurred in connection with our business acquisitions. These expenses typically include legal, accounting, tax, other professional costs, employee transaction bonuses and contingent consideration payable to sellers in connection with the achievement of specified performance criteria.

Gain on Sale of Property, Plant and Equipment

In the normal course of business, we sell assets for various reasons, including when the cost of maintaining the asset exceeds the cost of replacing it. The gain or loss on the sale of property, plant and equipment reflects the difference between the carrying value at the date of disposal and the net consideration received from the sale during the period.

Interest Expense, Net

Interest expense, net primarily represents interest incurred on our long-term debt, such as the Term Loans and the Revolving Credit Facility, fees associated with debt modifications and amortization of deferred debt issuance costs. These amounts are partially offset by interest income earned on short-term investments of cash balances in excess of our current operating needs.

Other Key Performance Indicators - Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income

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, accretion and amortization, (iv) share-based compensation expense, (v) loss on the extinguishment of debt and (vi) nonrecurring expenses related to transformative acquisitions, which management considers to include transactions of a size that would require clearance under federal antitrust laws. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenues for each period. Adjusted net income represents net income before (i) nonrecurring expenses related to transformative acquisitions, which management considers to include transactions of a size that would require clearance under federal antitrust laws, and (ii) nonrecurring fees associated with financing arrangements incurred in connection with transformative acquisitions. 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, Adjusted EBITDA margin and Adjusted net income 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, Adjusted EBITDA margin and Adjusted net income 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 (unaudited, in thousands, except percentages):

The following table presents a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted net income for the periods presented (in thousands):

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Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table sets forth selected financial data for the three months ended March 31, 2026 and 2025 (unaudited, in thousands, except percentages):

Revenues. Revenues for the three months ended March 31, 2026 increased $197.5 million, or 34.6%, to $769.2 million from $571.7 million for the three months ended March 31, 2025. The increase included $134.8 million of revenues attributable to acquisitions completed during or subsequent to the three months ended March 31, 2025 and $62.7 million of revenues in our existing markets from contract work and sales of HMA and aggregates to third parties. The 11.0% increase in revenues in our existing markets was due to strong demand in both public and private work.

Gross Profit. Gross profit for the three months ended March 31, 2026 increased $27.5 million, or 38.5%, to $98.9 million from $71.4 million for the three months ended March 31, 2025. The increase in gross profit was primarily the result of a 34.6% increase in revenues for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 and a higher gross profit margin. The higher gross profit margin was due to efficient utilization of our plants, terminals and equipment fleet.

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2026 increased $16.9 million, or 36.3%, to $63.6 million from $46.7 million for the three months ended March 31, 2025. The increase was attributable to general and administrative expenses associated with the operations of businesses acquired during or subsequent to March 31, 2025 and an increase in share-based compensation expense.

Acquisition-Related Expenses. Acquisition-related expenses for the three months ended March 31, 2026 increased $1.7 million to $2.5 million from $0.8 million for the three months ended March 31, 2025. The increase was primarily due to the amortization of certain prepaid expenses associated with the acquisition of Durwood Greene Construction Co. in August 2025.

Gain on Sale of Property, Plant and Equipment. Gain on sale of property, plant and equipment for the three months ended March 31, 2026 increased $1.2 million, or 35.2%, to $4.6 million from $3.4 million for the three months ended March 31, 2025. The increase was primarily the result of higher disposals of equipment and components during the three months ended March 31, 2026.

Interest Expense, Net. Interest expense, net for the three months ended March 31, 2026 increased $4.0 million, or 18.5%, to $25.6 million compared to $21.6 million for the three months ended March 31, 2025. The increase in interest expense, net was primarily related to additional borrowings under our Term Loan A / Revolver Credit Agreement.

Provision for Income Taxes. Our effective tax rate increased to 23.9% for the three months ended March 31, 2026, from 23.7% for the three months ended March 31, 2025. Our higher effective tax rate during the three months ended March 31, 2026 was due to differences in state tax rates at our operating subsidiaries.

Net Income. Net income increased $5.0 million to $9.2 million for the three months ended March 31, 2026, compared to $4.2 million for the three months ended March 31, 2025. The increase in net income was primarily a result of higher gross profit and gain on sale of property, plant and equipment, partially offset by an increase in general and administrative expenses, acquisition-related expenses, interest expense, net and provision for income taxes, all as described above.

Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA margin were $93.3 million and 12.1%, respectively, for the three months ended March 31, 2026, compared to $69.3 million and 12.1%, respectively, for the three months ended March 31, 2025. The increase in Adjusted EBITDA and Adjusted EBITDA margin resulted from a $5.0 million increase in net income as described above, a $9.0 million increase in depreciation, depletion, accretion and amortization, a $4.0 million increase in interest expense, net, and a $3.1 million increase in share-based compensation expense. For a description of Adjusted EBITDA and Adjusted EBITDA margin, as well as a reconciliation of Adjusted EBITDA to net income and the calculation of Adjusted EBITDA margin, see above under the heading “How We Assess Performance of Our Business — Other Key Performance Indicators — Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income.”

Adjusted Net Income. Adjusted net income increased $6.0 million to $10.4 million for the three months ended March 31, 2026, compared to $4.4 million for the three months ended March 31, 2025. The increase in Adjusted net income was primarily a result of higher gross profit and gain on sale of property, plant and equipment, partially offset by an increase in general and administrative expenses, acquisition-related expenses, interest expense and provision for income taxes, all as described above. For a description of Adjusted net income, as well as a reconciliation of Adjusted net income to net income, see above under the heading “How We Assess Performance of Our Business — Other Key Performance Indicators — Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income.”

Six Months Ended March 31, 2026 Compared to Six Months Ended March 31, 2025

The following table sets forth selected financial data for the six months ended March 31, 2026 and 2025 (unaudited, in thousands, except percentages):

Revenues. Revenues for the six months ended March 31, 2026 increased $445.4 million, or 39.3%, to $1.6 billion from $1.1 billion for the six months ended March 31, 2025. The increase included $363.0 million of revenues attributable to acquisitions completed during or subsequent to the six months ended March 31, 2025 and $82.4 million of revenues attributable to our existing markets from contract work and sales of HMA and aggregates to third parties. The 7.3% increase in revenues in our existing markets was due to strong demand in both public and private work.

Gross Profit. Gross profit for the six months ended March 31, 2026 increased $72.4 million, or 49.0%, to $220.4 million from $147.9 million for the six months ended March 31, 2025. The increase in gross profit was primarily the result of a 39.3% increase in revenues for the six months ended March 31, 2026 compared to the six months ended March 31, 2025 and a higher gross profit margin. The higher gross profit margin was due to efficient utilization of our plants, terminals and equipment fleet.

General and Administrative Expenses. General and administrative expenses for the six months ended March 31, 2026 increased $34.2 million, or 37.6%, to $125.1 million from $90.9 million for the six months ended March 31, 2025. The increase was attributable to general and administrative expenses associated with the operations of businesses acquired during or subsequent to March 31, 2025 and an increase in share-based compensation expense.

Acquisition-Related Expenses. Acquisition-related expenses for the six months ended March 31, 2026 decreased $6.2 million to $14.1 million from $20.4 million for the six months ended March 31, 2025. The decrease was primarily due to higher transformative acquisition expenses in the six months ended March 31, 2025 associated with the Lone Star Acquisition.

Gain on Sale of Property, Plant and Equipment. Gain on sale of property, plant and equipment for the six months ended March 31, 2026 increased $2.1 million, or 48.9%, to $6.6 million from $4.5 million for the six months ended March 31, 2025. The increase was primarily the result of higher disposals of equipment and components during the six months ended March 31, 2026.

Interest Expense, Net. Interest expense, net for the six months ended March 31, 2026 increased $13.2 million, or 33.3%, to $53.0 million compared to $39.7 million for the six months ended March 31, 2025. The increase in interest expense, net was primarily related to borrowings under the Term Loan B Credit Agreement that was entered into on November 1, 2024 and additional borrowings under our Term Loan A / Revolver Credit Agreement.

Provision for Income Taxes. Our effective tax rate decreased to 24.3% for the six months ended March 31, 2026, from 28.4% for the six months ended March 31, 2025. Our lower effective tax rate during the six months ended March 31, 2026 was due to differences in state tax rates at our operating subsidiaries.

Net Income. Net income increased $25.2 million to $26.4 million for the six months ended March 31, 2026, compared to $1.2 million for the six months ended March 31, 2025. The increase in net income was primarily a result of higher gross profit, decrease in acquisition-related expenses and gain on sale of property, plant and equipment, partially offset by an increase in general and administrative expenses, interest expense, net and provision for income taxes, all as described above.

Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA margin were $205.5 million and 13.0%, respectively, for the six months ended March 31, 2026, compared to $138.1 million and 12.2%, respectively, for the six months ended March 31, 2025. The increase in Adjusted EBITDA and Adjusted EBITDA margin resulted from a $25.2 million increase in net income as described above, a $22.9 million increase in depreciation, depletion, accretion and amortization, a $13.2 million increase in interest expense, net, and a $4.0 million increase in share-based compensation expense, offset by a decrease of $5.8 million in transformative acquisition expenses. For a description of Adjusted EBITDA and Adjusted EBITDA margin, as well as a reconciliation of Adjusted EBITDA to net income and the calculation of Adjusted EBITDA margin, see above under the heading “How We Assess Performance of Our Business — Other Key Performance Indicators — Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income.”

Adjusted Net Income. Adjusted net income increased $19.1 million to $36.8 million for the six months ended March 31, 2026, compared to Adjusted net income of $17.7 million for the six months ended March 31, 2025. The increase in Adjusted net income was primarily a result of higher gross profit, decrease in acquisition-related expenses and gain on sale of property, plant and equipment, partially offset by an increase in general and administrative expenses, interest expense, net and provision for income taxes, all as described above. For a description of Adjusted net income, as well as a reconciliation of Adjusted net income to net income, see above under the heading “How We Assess Performance of Our Business — Other Key Performance Indicators — Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income.”

Liquidity and Capital Resources

Cash Flows Analysis

The following table sets forth our cash flows for the periods indicated (unaudited, in thousands):

Operating Activities

During the six months ended March 31, 2026, cash provided by operating activities, net of acquisitions, was $147.8 million, primarily as a result of:

• net income of $26.4 million, including $91.3 million of depreciation, depletion, accretion and amortization, $22.4 million of share-based compensation expense and $6.6 million of gain on sale of property, plant and equipment;
• a decrease in contracts receivable including retainage, net of $58.8 million due to normal fluctuations resulting from the timing of processing transactions in our accounts receivable cycle;
• an increase in inventories of $9.8 million due to increased inventories from acquisitions, growth in existing markets, higher inventory costs and normal fluctuations in our inventory cycle;
• a decrease in accounts payable and accrued expenses and other current liabilities of $20.2 million due to the timing of processing transactions in our accounts payable cycle; and
• a net decrease in the difference between costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts of $17.8 million due to the timing of performing and closing projects.

During the six months ended March 31, 2025, cash provided by operating activities, net of acquisitions, was $96.3 million, primarily as a result of:

• net income of $1.2 million, including $68.4 million of depreciation, depletion, accretion and amortization, $18.9 million of share-based compensation expense and $4.5 million of gain on sale of property, plant and equipment;
• a decrease in contracts receivable including retainage, net of $49.3 million due to normal fluctuations resulting from the timing of processing transactions in our accounts receivable cycle;
• an increase in inventories of $4.4 million due to increased inventories from acquisitions, growth in existing markets, higher inventory costs and normal fluctuations in our inventory cycle;
• a decrease in accounts payable and accrued expenses and other current liabilities of $27.0 million due to the timing of processing transactions in our accounts payable cycle; and
• a net decrease in the difference between costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts of $9.7 million due to the timing of performing and closing projects.

Investing Activities

During the six months ended March 31, 2026, cash used in investing activities was $337.1 million, of which $275.9 million related to acquisitions completed or finalized in the period, $81.7 million was invested in property, plant and equipment and $2.4 million was used to purchase restricted investments, partially offset by $13.5 million of proceeds from the sale of property, plant and equipment and $9.4 million of proceeds from the sale of restricted investments.

During the six months ended March 31, 2025, cash used in investing activities was $893.2 million, of which $828.7 million related to acquisitions completed or finalized in the period, $68.2 million was invested in property, plant and equipment and $6.2 million was invested in restricted investments, partially offset by $6.0 million of proceeds from the sale of property, plant and equipment and $3.9 million of proceeds from the sale of restricted investments.

Financing Activities

During the six months ended March 31, 2026, cash provided by financing activities was $107.3 million. We received $185.0 million of net proceeds from our Revolving Credit Facility, which were used for acquisitions completed in the period. This cash flow was partially offset by $49.3 million of principal payments on long-term debt, $26.0 million for the purchase of treasury stock and $2.5 million for settlement of performance share awards.

During the six months ended March 31, 2025, cash provided by financing activities was $823.8 million. We received $835.0 million of net proceeds from our Term Loan B, which were primarily used for the Lone Star Acquisition completed in the period, and $145.0 million of net proceeds from our Revolving Credit Facility, which were primarily used for other acquisitions completed during the period. This cash flow was partially offset by $135.6 million of principal payments on long-term debt and purchase of treasury stock of $20.1 million.

Capital Requirements and Sources of Liquidity

During the six months ended March 31, 2026 and 2025, our capital expenditures were approximately $81.7 million and $68.2 million, respectively. Our capital expenditures are typically made during the fiscal year in which they are approved. At March 31, 2026, our commitments for capital expenditures were not material to our financial condition or results of operations on a consolidated basis. For fiscal 2026, we expect total capital expenditures to be approximately $165.0 million to $185.0 million. Our capital expenditure budget is an estimate and is subject to change.

Historically, we have required significant amounts of cash in order to make capital expenditures, purchase materials, execute our growth strategy through acquisitions and fund our organic expansion into new markets. Our working capital needs are driven by the seasonality and growth of our business, with our cash requirements increasing in periods of growth. Additional cash requirements resulting from our growth include the costs of additional personnel, production and distribution facilities, enhancements to our information systems, integration costs related to any acquisitions and our compliance with laws and rules applicable to public companies. Furthermore, on March 2, 2026, we announced that our Board of Directors authorized a new stock repurchase program under which up to $50 million is available to purchase shares of our outstanding Class A common stock through September 30, 2028. The new stock repurchase program replaced the previous stock repurchase program, which expired on March 5, 2026.We intend to utilize the stock repurchase program to minimize the dilutive impact of awards granted under our equity incentive plans and to repurchase shares opportunistically. Shares of Class A common stock may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 plans. The stock repurchase program does not obligate the Company to repurchase any shares of Class A common stock, and the stock repurchase program may be modified, suspended, extended or terminated at any time by our Board of Directors. The actual timing, number and value of shares of Class A common stock repurchased will be determined by a committee of the Board of Directors at its discretion and will depend on a number of factors, including the market price of the Class A common stock, capital allocation alternatives, general market and economic conditions and other corporate considerations. During the six months ended March 31, 2026, the Company purchased 46,344 shares of Class A common stock for aggregate consideration of approximately $5.2 million through open market transactions.

We have historically relied on cash available through credit facilities, in addition to cash from operations, to finance our working capital requirements and to support our growth. We regularly monitor potential capital sources, including equity and debt markets, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success will depend on our ability to access outside sources of capital.

We believe that our operating cash flow and available borrowings under the Term Loan A / Revolver Credit Agreement will be sufficient to fund our operations, make planned capital expenditures, opportunistically repurchase shares of Class A common stock and fulfill other material contingent contractual obligations for at least the next 12 months. However, future cash flows are subject to a number of variables, including the potential impacts of inflation and supply chain constraints, and significant additional capital expenditures will be required to conduct our operations. There can be no assurance that operations and other capital resources will provide sufficient cash to maintain planned or future levels of capital expenditures. In the event that we make one or more acquisitions and the amount of capital required is greater than the amount of cash on hand we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital. If we seek additional capital, we may do so through borrowings under the Term Loan A / Revolver Credit Agreement or other credit facilities, joint ventures, asset sales, offerings of debt or equity securities or other means. However, our ability to engage in any such transactions may be constrained by economic conditions and other factors outside of our control. We cannot guarantee that additional capital will be available on acceptable terms or at all. If we are unable to obtain the funds we need, we may not be able to complete acquisitions that may be favorable to us or finance the capital expenditures necessary to conduct our operations.

Contractual Obligations

The following table summarizes our significant obligations outstanding as of March 31, 2026 (unaudited, in thousands):

Off-Balance Sheet Arrangements

As of March 31, 2026, we had aggregate letters of credit outstanding in the amount of $4.8 million, future purchase commitments of diesel fuel and natural gas of $4.5 million, and $3.5 million of minimum royalty payments related to aggregates facilities. Other than the letters of credit, future purchase commitments and minimum royalty payments, we do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. See Note 17 - Commitments to our unaudited consolidated financial statements included elsewhere in this report for additional information.

Interest Rate Risk

We are exposed to interest rate risk on certain of our short- and long-term debt obligations used to finance our operations and acquisitions. We have SOFR-based floating rate borrowings under the Term Loan A / Revolver Credit Agreement and Term Loan B Credit Agreement, which expose us to variability in interest payments due to changes in the reference interest rates. From time to time, we use derivative instruments as hedges against the impact of interest rate changes on future earnings and cash flows. We do not enter into such derivative instruments for speculative or trading purposes.

At March 31, 2026, we had a total of $1.76 billion of variable rate debt outstanding. Holding other factors constant and absent the interest rate swap agreements described above, a hypothetical 1% change in our borrowing rates would result in a $17.6 million change in our annual interest expense based on our variable rate debt outstanding at March 31, 2026. The notional amount of the Company’s outstanding interest rate swap contract at March 31, 2026 was $300.0 million. The maturity date of this swap is June 30, 2027, and the fair value of the outstanding swap contract was $6.7 million as of March 31, 2026. See also Note 15 - Investment in Derivative Instruments and Note 16 - Fair Value Measurements to the unaudited consolidated financial statements included elsewhere in this report.

The following table presents the future principal payment obligations, interest payments, and fair values associated with the Company’s debt instruments assuming the Company’s actual level of variable rate debt as of March 31, 2026 (unaudited, in thousands).

Evaluation of Disclosure Control and Procedures

Our management carried out, as of March 31, 2026, with the participation of our Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that material information required to be disclosed by us in reports we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other financial information set forth in this report, you should carefully consider the factors discussed below and in Part I, Item 1A, “Risk Factors,” in the 2025 Form 10-K that could materially affect our business, financial condition or future operating results. The risks described below and in the 2025 Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

Geopolitical conflict involving Iran and potential disruptions to shipping through the Strait of Hormuz could constrain global crude oil supply, increasing the cost and limiting the availability of key petroleum-based inputs such as liquid asphalt cement and diesel fuel, which may adversely affect our operations, margins, and overall financial performance.

Ongoing geopolitical conflict involving Iran, including the potential closure or disruption of shipping through the Strait of Hormuz, poses significant risks to global crude oil supply and energy markets. As a critical transit point for a substantial portion of the world’s oil, any sustained disruption could materially reduce supply and increase price volatility for crude oil and refined products. These conditions may adversely affect the availability and cost of liquid asphalt cement and diesel fuel, which are essential to our operations, leading to increased input costs and potential supply constraints. This volatility may negatively impact our margins, project profitability, and ability to competitively bid on work, particularly where contractual mechanisms do not fully offset rising costs. Prolonged disruptions could also contribute to broader economic pressures, including inflation and reduced infrastructure spending, which may further adversely affect our business, financial condition, and results of operations.