struction Partners(US:ROAD)2022-05-06 13:43Financial Performance - The company reported a net loss of $9.418 million for the three months ended March 31, 2022, compared to a net loss of $4.935 million for the same period in 2021[134]. - Adjusted EBITDA for the three months ended March 31, 2022, was $7.824 million, with an Adjusted EBITDA Margin of 3.2%, down from 6.1% in the prior year[134]. - Revenues for the three months ended March 31, 2022, were $243.385 million, an increase from $179.112 million in the same period of 2021[134]. - Adjusted net income for the six months ended March 31, 2022, was a loss of $9.418 million, compared to an adjusted net income of $6.102 million for the same period in 2021[134]. - Revenues for the six months ended March 31, 2022 increased by $158.3 million, or 42.8%, to $528.3 million from $370.0 million for the same period in 2021[144]. - Gross profit for the three months ended March 31, 2022 decreased by $5.6 million, or 30.8%, to $12.5 million from $18.1 million for the same period in 2021[136]. - Gross profit for the six months ended March 31, 2022 decreased by $3.2 million, or 6.6%, to $45.5 million from $48.7 million for the same period in 2021[145]. - Net loss for the six months ended March 31, 2022 was $3.9 million, a decrease of $6.8 million compared to net income of $2.9 million for the same period in 2021[149]. - Adjusted net loss for the six months ended March 31, 2022 was $3.9 million, a decrease of $10.0 million compared to adjusted net income of $6.1 million for the same period in 2021[151]. Acquisitions - The company acquired Southern Asphalt, Inc. on March 7, 2022, enhancing its presence in the Wilmington, North Carolina metro area[123]. - On March 18, 2022, the company acquired GAC Contractors, Inc., improving operational resources in the Panama City, Florida market[124]. Expenses and Cost Management - General and administrative expenses include costs related to corporate offices and operational support, impacting overall profitability[128]. - General and administrative expenses for the three months ended March 31, 2022 increased by $0.5 million, or 2.1%, to $25.0 million compared to $24.5 million for the same period in 2021[137]. - General and administrative expenses for the six months ended March 31, 2022 increased by $5.4 million, or 12.1%, to $49.9 million compared to $44.6 million for the same period in 2021[146]. Inflation and Supply Chain - The company faced inflationary pressures, particularly in wages and raw materials, impacting profit margins and cost recovery on existing projects[122]. - The company has been able to mitigate some inflation and supply chain disruptions by increasing product prices, although challenges remain for projects already in backlog[122]. - The company is experiencing inflationary pressures, particularly in wages and raw materials, which may necessitate price adjustments to maintain profit margins[181]. Cash Flow and Debt - For the six months ended March 31, 2022, net cash provided by operating activities was $3.3 million, an increase from $2.4 million in the same period of 2021[155]. - Cash used in investing activities for the six months ended March 31, 2022, was $140.2 million, with $102.9 million allocated to acquisitions[157]. - Cash provided by financing activities was $111.0 million for the six months ended March 31, 2022, primarily from $116.0 million in proceeds from the Revolving Credit Facility[159]. - The company had $328.5 million in total debt obligations as of March 31, 2022, with a fixed charge coverage ratio of 3.24-to-1.00[161][162]. - For the fiscal year ending September 30, 2023, the company projects total debt obligations to reach $192.5 million, with term loans increasing from $5,000 in 2022 to $15,000 in 2025[180]. - Interest payments are expected to rise significantly, from $3,195 in 2022 to $6,243 in 2023, reflecting the company's reliance on a LIBOR-based floating rate of 1.96%[180]. Risk Management - The company is exposed to commodity price risk, particularly in liquid asphalt and energy, and has implemented measures to manage this risk[173]. - The company has entered into fuel and natural gas swap contracts to mitigate fluctuations in commodity prices, covering less than 50% of estimated usage for the remainder of fiscal year 2022 and the following two years[174]. - The notional amount of outstanding interest rate swap contracts was $194.2 million as of March 31, 2022, with a fair value of $10.0 million[180]. - A hypothetical 1% change in borrowing rates would result in a $3.3 million change in annual interest expense based on the company's variable rate debt[178]. Governance - There were no changes to the internal control over financial reporting during the quarter ended March 31, 2022, indicating stability in financial governance[182].