ROAD Construction Partners Inc

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-280299, 333-224974 and 333-272142) of Construction Partners, Inc. of our report dated January 13, 2025 relating to the consolidated and combined financial statements of Asphalt Inc., LLC d/b/a Lone Star Paving Company and ACE Aggregates, LLC as of and for the twelve months ended September 30, 2024, which appears in this Current Report on Form 8-K/A.

/s/ Armanino LLP

Austin, Texas

January 17, 2025

Exhibit 99.1

Unaudited Pro Forma Condensed Combined Financial Information

On October 20, 2024, Construction Partners, Inc. (the “Company”) entered into a Unit Purchase Agreement (the “Purchase Agreement”) with Asphalt Inc., LLC d/b/a Lone Star Paving (“Lone Star Paving”), the selling unitholders party thereto, and John J. Wheeler, in his capacity as the selling unitholders’ representative thereunder, pursuant to which the Company agreed to purchase all the issued and outstanding membership units of Lone Star Paving (the “Acquisition”).

On November 1, 2024, the Company completed the Acquisition for (i) $654.2 million in cash and (ii) 3,000,000 shares of Class A common stock, par value $0.001, of the Company (“Class A common stock”) having an aggregate fair market value of approximately $236.3 million at closing. In addition, the Company agreed to (i) pay cash to the selling unitholders in an amount equal to the working capital remaining in Lone Star Paving at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unitholders for $30.0 million in cash an entity that owns certain real property following receipt of specified operational entitlements by such entity. The cash paid at closing was funded from the proceeds of the Term Loan B, as defined below in Note 5 – Financing and Other Adjustments. The transaction will be accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations, which allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their fair values, other than leases acquired in connection with business combinations, which are recorded based on Topic 842, Leases, and contract assets and liabilities acquired in connection with business combinations, which are recorded based on ASC Topic 606, Revenue from Contracts with Customers.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024 is presented as if the Acquisition had occurred on September 30, 2024 and is based on the consolidated balance sheet of the Company as of September 30, 2024 (as filed with the Securities and Exchange Commission (“SEC”) in its annual report on Form 10-K for the fiscal year ended September 30, 2024) (the “2024 Form 10-K”) and the audited consolidated and combined balance sheet of Lone Star Paving for the year ended September 30, 2024 (included in Exhibit 99.1 to this Current Report on Form 8-K/A) (the “Lone Star Financial Statements”) and pro forma adjustments described in the accompanying notes.

The unaudited pro forma condensed combined statement of comprehensive income for the year ended September 30, 2024 is presented as if the Acquisition had occurred on October 1, 2023, and is based on the consolidated statement of comprehensive income of the Company for the year ended September 30, 2024 as presented in the 2024 Form 10-K and the audited consolidated and combined statement of income of Lone Star Paving for the year ended September 30, 2024 as presented in the Lone Star Financial Statements and pro forma adjustments described in the accompanying notes.

The unaudited pro forma condensed combined financial information should be read in conjunction with the Company’s and Lone Star Paving’s historical financial statements described above, and the accompanying notes to the unaudited pro forma condensed combined financial statements, which describe the assumptions and estimates underlying the adjustments set forth therein. The pro forma adjustments, which management believes are reasonable under the circumstances, are preliminary and based upon available information and certain assumptions described in the accompanying notes to the unaudited pro forma condensed combined financial information. Accordingly, the actual financial condition or performance of Lone Star Paving following the completion of the Acquisition in subsequent periods may differ materially from that which is reflected in the unaudited pro forma condensed combined financial information. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Transactions in subsequent periods may differ materially from that which is reflected in the unaudited pro forma condensed combined financial information. Additionally, the final determination of consideration and the purchase price allocation will be based on Lone Star Paving’s net assets as of the closing of the working capital period and will depend on a number of factors that cannot be predicted with certainty at this time. Actual results and estimates of fair value may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined consolidated financial information is for illustrative purposes only, is hypothetical in nature and does not purport to represent what the Company’s results of operations, balance sheet or other financial information would have been if the Acquisition had occurred as of the dates indicated. The unaudited pro forma adjustments are based upon available information and certain assumptions that the Company’s management believes are reasonable, including an allocation of the purchase price based on an estimate of fair value. These estimates are preliminary, are based on information currently available and could change significantly.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2024

(in thousands, except share and per share data)

Unaudited Pro Forma Condensed Combined Statement of Comprehensive Income

For the Fiscal Year Ended September 30, 2024

(in thousands, except share and per-share data)

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

Note 1 – Lone Star Paving Acquisition

On November 1, 2024, the Company completed the Acquisition for (i) $654.2 million in cash and (ii) 3,000,000 shares of Class A common stock having an aggregate fair market value of approximately $236.3 million at closing. In addition, the Company agreed to (i) pay cash to the selling unit holders in an amount equal to the working capital remaining in Lone Star Paving at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unitholders for $30.0 million in cash an entity that owns certain real property following receipt of specified operational entitlements by such entity. The cash paid at closing was funded from the proceeds of the Term Loan B, as defined below in Note 5 – Financing and Other Adjustments. As a result of the Acquisition, Lone Star Paving is a wholly-owned subsidiary of the Company.

Total consideration as of September 30, 2024, is as follows (in thousands):

The following table summarizes the preliminary purchase price allocation if the Acquisition had occurred as of September 30, 2024 (in thousands):

This purchase price allocation is preliminary and has not been finalized due to the recent timing of the Acquisition, as certain information is pending on such date to finalize estimates of fair value of certain assets acquired and liabilities assumed. The Company has consulted with independent third parties to assist in the valuation process. The Company expects to finalize the estimate of fair values as soon as practicable and no later than one year from the November 1, 2024 Acquisition date.

The amount of the purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed is recorded as preliminary goodwill in the amount of approximately $395.5 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled workforce and synergies expected to result from the Acquisition. Goodwill will be reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company is obligated to purchase certain real property from Burnet Ranch Investments, LLC, for $30.0 million in cash following receipt of specified operational entitlements. Burnet Ranch Investments, LLC, and LSA Investment Holdings, LLC, which were not acquired as part of the Acquisition, have been removed from the unaudited pro forma condensed combined financial statements.

Note 2 – Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial statements are prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”. The historical information of the Company and Lone Star Paving is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain reclassifications have been made in order to align the historical presentation of Lone Star Paving to the Company. Refer to Note 6 – Reclassification Adjustments for more information.

The Acquisition will be treated as a business combination for accounting purposes, with the Company determined to be the accounting acquirer. The purchase price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values as of November 1, 2024.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of what the actual results and operations and financial position would have been had the Acquisition taken place on the dates indicated, are not necessarily indicative of the future consolidated results of operations or financial position of the Company, and are based on the information available at the time of their preparation. Actual results may differ materially from the assumptions and estimates within the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial statements are intended to provide information about the impact of the Acquisition as if it had been consummated on the dates specified. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable and are expected to have an impact on consolidated results of operations or financial position of the Company. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma condensed combined financial statements have been made.

Note 3 – Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The following adjustments were made in the preparation of the unaudited pro forma condensed combined balance sheet as of September 30, 2024:

Note 4 – Adjustments to Unaudited Pro Forma Condensed Combined Statement of Comprehensive Income

The following adjustments were made in the preparation of the unaudited pro forma condensed combined statement of comprehensive income for the fiscal year ended September 30, 2024:

Note 5 – Financing and Other Adjustments

In connection with the Acquisition, the Company entered into a Term Loan Credit Agreement with Bank of America, N.A., as administrative agent, BofA Securities, Inc., PNC Capital Markets LLC, Regions Capital Markets, a division of Regions Bank, and TD Securities (USA) LLC, each as joint lead arranger and joint bookrunner, and certain other lenders party thereto (the “Term Loan B Credit Agreement”), which provided for a senior secured first lien term loan facility in the aggregate principal amount of $850.0 million, the full amount of which was drawn on November 1, 2024 (the “Term Loan B”). A portion of the proceeds of the Term Loan B was used to finance the cash portion of the consideration for the Acquisition, including the repayment of certain outstanding indebtedness of Lone Star Paving and its subsidiaries at the closing. The remaining loan proceeds were used (i) to repay the Company’s outstanding borrowings under other credit facilities and (ii) to pay fees and expenses incurred in connection with the debt financing transaction and the Acquisition.

The Company only used $654.2 million of the net proceeds from the Term Loan B Credit Agreement to repay outstanding indebtedness of Lone Star Paving and its subsidiaries at the closing. This repayment is included in the consideration transferred; refer to Note 1. The remaining net proceeds of $195.8 million were used to pay down the Revolving Credit Facility provided by Term Loan A and fees and expenses incurred in connection with Term Loan B. There would be no material difference in interest expense between Term Loan A and Term Loan B for the pay down of the Revolving Credit Facility provided by Term Loan A.

The following adjustments were made in the preparation of the unaudited pro forma condensed combined balance sheet as of September 30, 2024:

The following adjustments were made in the preparation of the unaudited pro forma condensed combined statement of comprehensive income for the fiscal year ended September 30, 2024:

Note 6 – Reclassification Adjustments

The tables below represent the reclassification adjustments for certain financial statement line items, as reported by Lone Star Paving under GAAP, to align with the expected classifications of the Company, post-Acquisition.

Reclassifications in the unaudited pro forma condensed combined balance sheet as of September 30, 2024:

Notes:

Reclassifications in the unaudited pro forma condensed combined statement of comprehensive income for the year ended September 30, 2024:

Note:

Exhibit 99.2

TABLE OF CONTENTS

INDEPENDENT AUDITOR’S REPORT

To the Members

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE

 Aggregates, LLC

Austin, Texas

Opinion

We have audited the accompanying consolidated and combined financial statements of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC (collectively, the ‘‘Company’’), which comprise the consolidated and combined balance sheet as of September 30, 2024, and the related consolidated and combined statements of income, changes in members’ equity, and cash flows for the year then ended, and the related notes to the consolidated and combined financial statements.

In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the financial position of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC as of September 30, 2024, and for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated and combined financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated and combined financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and combined financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated and combined financial statements.

1

In performing an audit in accordance with auditing standards generally accepted in the United States of America, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated and combined financial statements as a whole. The supplementary information on pages 24 - 29 is presented for purposes of additional analysis and is not a required part of the consolidated and combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated and combined financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the consolidated and combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated and combined financial statements or to the consolidated and combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated and combined financial statements as a whole.

January 13, 2025

2

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Balance Sheet

September 30, 2024

LIABILITIES AND MEMBERS’ EQUITY

The accompanying notes are an integral part of these consolidated and combined financial statements.

3

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Income

For the Year Ended September 30, 2024

The accompanying notes are an integral part of these consolidated and combined financial statements.

4

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Changes in Members’ Equity

For the Year Ended September 30, 2024

The accompanying notes are an integral part of these consolidated and combined financial statements.

5

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Consolidated and Combined Statement of Cash Flows

For the Year Ended September 30, 2024

6

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

The accompanying notes are an integral part of these consolidated and combined financial statements.

7

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Asphalt, Inc., LLC dba Lone Star Paving and ACE Aggregates, LLC, (collectively the “Company”) share common control. Asphalt, Inc., LLC dba Lone Star Paving was organized in the State of Texas on September 18, 2013 and ACE Aggregates, LLC, was organized in the State of Texas in 2017. The Company is primarily engaged in highway and road paving, maintenance and repair of parking lots, rock quarrying, and manufacturing of hotmix and mining of limestone for internal use and sale to third parties.

Basis of accounting and consolidation and combination

The consolidated financial statements present the financial position and results of operations of the Company and its wholly-owned subsidiaries, and have been combined with the results and operations of ACE Aggregates, LLC, which shares common control. All significant intercompany transactions and accounts have been eliminated in the consolidated and combined financial statements. The accompanying consolidated and combined financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP).

Operating cycle

The Company’s work is performed under quantity pricing, fixed-price contracts, and fixed-price contracts modified by incentive and penalty provisions. These contracts are primarily performed under subcontractor agreements. The length of the Company’s contracts varies but is typically less than six months. In accordance with industry practice, contract-related assets and liabilities that are realizable or payable over periods in excess of one year, but within the Company’s normal operating cycle, are recorded as current assets and liabilities.

Use of estimates

The preparation of the consolidated and combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash consists primarily of cash on deposit.

8

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Contracts receivable

Contracts receivable are recorded on construction contracts and include billed and unbilled amounts for services provided to customers for which the Company has an unconditional right to payment. Billed and unbilled amounts for which payment is contingent on anything other than the passage of time are included in contract assets and contract liabilities on a net basis at the individual contract level.

Retainage for which the Company has an unconditional right to payment that is subject only to the passage of time is included in contracts receivable.

Allowance for credit losses

Financial assets, which potentially subject the Company to credit losses, consist primarily of contract receivables and contract assets. The Company recognizes an allowance for credit losses for financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 326, Financial Instruments - Credit Losses. Such allowance is based on the credit losses expected to arise over the life of the asset. The allowance for credit losses is based on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial stability of its customers. Amounts are considered past due based on the billing date and are written off after all reasonable collection efforts have been exhausted. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary reserve at the balance sheet date. The allowance for credit losses was $950,000 at September 30, 2024.

Inventory

Inventories consist primarily of stockpiles of rock, sand and gravel, liquid asphalt, supplies, and other materials. Inventories are carried at the lower of cost or net realizable value using the first- in, first-out method.

Fixed assets

Fixed assets are reported at cost less accumulated depreciation, which is generally provided on a straight-line method over the estimated useful lives of the assets. Estimated useful lives range from three to forty years. Significant expenditures, which extend the useful lives of existing assets, are capitalized. Maintenance and repair costs are expensed as incurred.

9

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Business combinations

The Company records business acquisitions in accordance with FASB ASC 805, Business Combination which requires the acquisition purchase price to be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of the purchase price over these estimated fair values is recorded to goodwill. Significant estimates and assumptions, including fair value estimates, are used to determine the fair value of assets acquired, liabilities assumed, and contingent consideration transferred as well as the useful lives of long-lived assets acquired. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to initial estimates and assumptions. Upon conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to operating expenses on the accompanying consolidated and combined statement of operations.

Goodwill

The Company has accounted for goodwill in accordance with the FASB ASC 350, Intangibles - Goodwill and Other. The carrying amount of goodwill is reviewed annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the year ending September 30, 2024, the Company did not identify an event or circumstance that indicated the fair value of the Company is below its carrying value.

Long-lived assets - impairments and disposals

The Company reviews the carrying values of its long-lived and identifiable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair value less cost to sell. No impairment provisions were recorded by the Company during the year.

10

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Operating leases

The Company leases land and equipment under various operating leases with terms exceeding one year, exclusive of optional renewal periods, and accounts for these leases in accordance with FASB ASC 842, Leases (“ASC 842”). This guidance requires lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with terms greater than 12 months on its balance sheet. Whether an arrangement contains a lease is evaluated at the inception of the arrangement. The Company estimates its lease liability at the present value of future rent payments required under a lease using its incremental borrowing rate for a term approximating the lease term, exclusive of optional term extensions or terminations. The Company’s right-of-use asset initially is equal to its lease liability, adjusted for any lease incentives received or lease payments made. Rent expense is recorded on a straight-line basis over the term of a lease. At September 30, 2024, the Company does not lease any assets under finance leases. Leases of 12 months or less are not included in the Company’s right-of-use assets and lease liabilities. Rent expense for such leases is recorded on a straight-line basis over the term of the lease.

Revenue and cost recognition

FASB ASC 606, Revenue from Contracts with Customers, (“ASC 606”) requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for the products or services.

Revenue from contracts with customers is recognized using the following five steps:

The Company’s performance obligations for contracts with customers for asphalt sales do not meet the criteria to be recognized over time, therefore, those performance obligations are recognized at a point-in-time and the related revenue is recognized only when the performance obligation is complete, generally upon delivery to the customer. Revenue from the sale of asphalt is recognized upon delivery of the asphalt to the customer’s transportation unit at the asphalt plant.

11

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Revenue and cost recognition (continued)

The Company’s paving contract costs and related revenues are generally recognized over time as work progresses due to continuous transfer to the customer. Revenues from fixed-price and modified fixed-price construction contracts are recognized on the percentage-of-completion method measured by the cost-to-cost method. This method is used because management considers expended costs to be the best available measure of progress on these contracts.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, equipment rental, supplies, tools, repairs and depreciation costs. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the year in which such losses are determined. 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 costs and income and are recognized in the year in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. Claims are charged against revenues when realization is probable and can be reasonably estimated.

The asset on the accompanying consolidating and combined balance sheet, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess of amounts billed. The liability on the accompanying consolidated and combined balance sheet, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

Advertising expense

The Company accounts for advertising costs as expenses in the year in which they are incurred. Advertising expense for the year ending September 30, 2024 was $249,234 and is included in selling, general and administrative expenses on the accompanying consolidated and combined statement of income.

Income taxes

The Company is a limited liability company, and such does not incur income taxes directly. Accordingly, all income and expenses flow directly to the members for Federal income tax purposes. Therefore, no provision or liability for current or deferred federal income taxes has been included in these consolidated and combined financial statements. However, the Company is subject to state tax based on the Company’s taxable gross margin.

12

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Income taxes (continued)

The FASB ASC, 740-10 Accounting for Uncertainty in Income Taxes clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The Company did not identify any uncertain tax positions therefore, no adjustments were made to the consolidated and combined financial statements.

Sales tax

The Company records sales and other taxes collected from customers and subsequently remitted to government authorities as accounts receivable with a corresponding offset to sales tax payable. The Company removes sales tax payable balances from the consolidated and combined balance sheet as cash is collected from the customer and remitted to the tax authority.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and contract receivables. The Company maintains its cash balances in highly rated financial institutions, which at times may exceed federally insured limits. The Company has not experienced any loss relating to cash and cash equivalents in these accounts.

The Company is engaged primarily in highway and road paving, maintenance and repair of parking lots in the Central and South Texas region. Concentrations of credit risk with respect to contract receivables are with property management companies, construction companies and developers. Liens are filed on properties when necessary to assure payment. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral.

One customer represented 25% of the Company’s total revenues and total contract receivables at and as of September 30, 2024, respectively.

The Company purchases a substantial portion of materials from third-party vendors. As of September 30, 2024, one represented 14% of the Company’s total accounts payable. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive.

13

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Subsequent events

The Company has evaluated subsequent events occurring after September 30, 2024, the date of the most recent consolidated and combined balance sheet date, through January 13, 2025, the date the consolidated and combined financial statements were issued. See specific subsequent events disclosed in Note 15.

Contract receivables consisted of the following:

Costs and estimated earnings on uncompleted contracts are summarized as follows:

Costs, estimated earnings and billings on uncompleted contracts are included in the accompanying consolidated and combined balance sheet under the following captions:

14

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Inventory consisted of the following:

Fixed assets consisted of the following:

Depreciation expense totaled $21,939,485 for the year and is included in cost of paving and material revenues, and selling, general and administrative expenses on the accompanying consolidated and combined statement of income.

In November of 2023, the Company completed the asset purchase of an entity engaged in the business of producing, transporting, distributing and selling construction aggregates. The total purchase price was $29,482,625 which was paid in cash. The goodwill arising from the acquisition consists largely of the Company’s efforts to expand operations in Texas. The acquisition has been accounted for as a business combination under ASC 805.

The purchase price was allocated to the assets acquired based on their fair value at the acquisition date which are reflected in the accompanying consolidated and combined balance sheet as follows.

15

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Allocation of purchase price:

In February 2024, the Company completed the asset purchase of an entity engaged in the business of producing, transporting, distributing and selling hot mix asphalt. The total purchase price was $20,714,733 which was paid in cash. The goodwill arising from the acquisition consists largely of the Company’s efforts to expand operations in Texas. The acquisition has been accounted for as a business combination under ASC 805.

The estimated fair values of assets acquired are provisional and are based on the information that was available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired, but the company is waiting for additional information necessary to finalize those fair values. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

Accordingly, the purchase price was preliminarily allocated to the assets acquired based on their fair value at the acquisition date which are reflected in the accompanying consolidated and combined balance sheet as follows.

Allocation of purchase price:

For the year ended September 30, 2024, operating lease expense was approximately $1,300,000.

16

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

At September 30, 2024, future minimum payments due under these operating leases agreements were as follows:

The weighted average remaining lease term was 3.70 years and the weighted average discount rate was 5.90% as of September 30, 2024.

The Company entered into a $40 million line of credit with a bank that expires in November 2026. On June 20, 2024, an amendment was entered into on this note to temporarily increase the principal amount to $60,000,000 for the period from June 20, 2024 through and including October 31, 2024. After November 1, 2024, the aggregate principal amount will reduce to $35,000,000. Bank advances on the credit line are payable on demand and carry an interest rate at 2.0% above Secured Overnight Financing Rate (SOFR) Average, which was 5.16% at September 30, 2024. The line is secured by substantially all assets of the Company. There was a balance of $13,668,194 on the line of credit as of September 30, 2024.

The Company also entered into a $1 million line of credit with a bank that expired on September 19, 2024. Effective December 6, 2023, the line of credit expiration date was amended to September 30, 2025 and effective May 9, 2024, the principal amount was increased to $10 million. Bank advances on the credit line are payable on demand and carry an interest rate at 4.10%. The line is secured by substantially all assets of the Company. There was a balance of $500,000 on the line of credit as of September 30, 2024.

Interest expense for the line of credit totaled $1,446,675 for the year ended September 30, 2024 and is included in interest expense on the accompanying consolidated and combined statement of income.

17

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Long-term debt consisted of the following:

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Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

The future maturities of the long-term debt are as follows:

Interest expense for the long-term debt obligations totaled $8,232,908 for the year ended September 30, 2024 and is included in interest expense on the accompanying consolidated and combined statement of income.

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Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

Members’ capital consists of membership units. As of September 30, 2024, there are 384,637 membership units issued and outstanding. No additional membership units in the Company may be issued in the absence of the affirmative vote of the members holding at least 85% of the units.

Distributions are paid based on the respective membership interest. Distributions of $35,000,000 were paid in the year ending September 30, 2024. Contributions of $750,000 were received.

Management of the Company shall be performed by the Operating Manager. The Operating Manager may be removed as a manager upon the affirmative vote of the Members holding at least 85% of the units.

Legal proceedings

The Company carries a broad range of insurance coverage, including general liability, workers’ compensation and an umbrella policy.

In the normal course of business, the Company is subject to various litigation; however, there are no legal proceedings pending against the Company that would have a material adverse effect on the financial position or results of operations of the Company.

The Company maintains a 401(k) defined contribution plan for its qualified employees. The 401(k) plan allows eligible employees to defer a portion of their annual compensation. The Company provides matching contributions and contributions to this plan are discretionary. Contributions to the plan totaled $1,666,145 for the year ending September 30, 2024.

The Company was invested in two partnerships recorded under the equity method of accounting which sell readymix concrete and precast in Central Texas. In June of 2024, the Company purchased the remaining equity membership interests of the partnerships via a step acquisition, resulting in 100% ownership of both Partnerships. The Company remeasured its equity method interest to fair value, resulting in a net gain of $10,253,392. Simultaneously, certain assets of the partnership were exchanged with a member for the redemption of 20% ownership in Asphalt, Inc., LLC totaling $105,531,250.

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Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

The Company engages in business transactions with entities that have common minority ownership and/or employees. These activities include construction projects, subcontractor work, trucking, rent and royalties. The Company does not guarantee any of the liabilities of these entities. Additionally, the Company and these entities have no common primary beneficiary. Amounts due from and to these entities at September 30, 2024 were approximately $420,000 and $1,720,000, respectively. Amounts received from and paid to these entities during the year ended September 30, 2024 were approximately $1,560,000 and $9,420,000, respectively.

On December 31, 2023 the Company issued two notes receivable to related entities totaling $3,100,000. The notes bear interest at 3.5%, and interest-only payments are payable annually, with principal due December 31, 2028. On December 31, 2023, the Company issued a note receivable to a related entity totaling $4,800,000. The note bears interest at 5.0%, and interest and principal payments are payable monthly, with a maturity date of January 1, 2049. On December 1, 2023, the Company issued a note receivable to a related entity totaling $2,735,000. The note bears interest at 5.0%, and interest-only payments are payable monthly through December 31, 2024. Beginning January 1, 2025, principal and interest payments are payable monthly, with a maturity date of December 1, 2028. These notes are included in related party notes receivable on the accompanying consolidated and combined balance sheet, along with various existing notes receivables from related entities. The existing notes bear interest at 1.5%, and interest-only payments are payable annually, with principal due December 30, 2026. Outstanding balances on the related party notes receivable totaled $6,100,000 as of September 30, 2024. Interest income on these notes for the year ended September 30, 2024 totaled approximately $377,000 and is recorded in Other income on the accompanying consolidated and combined financial statements.

In January 2024, the Company purchased a 1,089 acre parcel of land from a related party for approximately $36,000,000 through a combination of cash and financing with a note payable to a bank with principal plus interest due in monthly payments of $47,230, bearing an interest rate of 6.35%.

On June 28, 2024, the Company issued nine notes payable to related parties totaling $57,742,500. These notes bear interest at 6.0% and are payable in a lump sum due January 1, 2025. During the year ended September 30, 2024, the Company made early payments on these notes totaling $4,030,000.

On October 17, 2024 the Company acquired all outstanding membership units of ACE Aggregates, LLC. The purchase price was $55,000,000 and consisted of a cash payment to members of $45,406,604 and the payoff of existing loans and fees totaling $9,593,396.

21

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Notes to Consolidated and Combined Financial Statements

September 30, 2024

On November 1, 2024 all outstanding membership units of the Company were acquired by Construction Partners, Inc. The aggregate consideration delivered at the closing of the acquisition consisted of (i) $654.2 million in cash and 3,000,000 shares of Class A common stock having an aggregate fair market value of approximately $238.9 million at closing. In addition, the acquiring party agreed to (i) pay cash to the selling unit holders in an amount equal to the working capital remaining in the Company at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unit holders for $30 million in cash an entity that owns certain real property following receipt of specified operational entitlements by such entity.

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SUPPLEMENTARY INFORMATION

Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Earnings from Construction Contracts

For the Year Ended September 30, 2024

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Asphalt, Inc., LLC dba Lone Star Paving Company and ACE Aggregates, LLC

Schedule of Earnings from Completed Contracts

For the Year Ended September 30, 2024