Cardinal agrees to ~$358M Hughes Brothers acquisition
Hughes Brothers reported $220.003 million in revenue and $55.001 million in Adjusted EBITDA for the twelve months ended June 30, 2026.
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Rhea-AI Filing Summary
Cardinal Infrastructure Group Inc. (CDNL) agreed to acquire Hughes Brothers Construction Inc. for approximately $357.5 million, subject to adjustment. The amended consideration is 60% cash ($214.5 million) and $143.0 million in Cardinal Class A common stock, representing 5,255,420 shares at $27.21 per share.
Hughes Brothers’ sellers may receive an additional payment of up to $162.5 million, based on the companies’ Adjusted EBITDA for the twelve months ending June 30, 2027. Any earned amount is payable 60% in cash and 40% in stock; at the maximum, the stock portion would include up to approximately 2,388,827 shares at $27.21 per share. The cash consideration is expected to be funded with cash on hand and borrowings under Cardinal’s credit facility.
For the twelve months ended June 30, 2026, Hughes Brothers reported revenue of $220.003 million, Adjusted EBITDA of $55.001 million and an Adjusted EBITDA margin of 25.0%; its current backlog is approximately $350 million. Cardinal expects closing in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions. The stock consideration is to be issued in a transaction not involving a public offering, and the sellers agreed to a 180-day transfer restriction after closing, subject to customary exceptions.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On October 13, 2026, Cardinal Infrastructure Group Inc. (“Cardinal”) entered into an Agreement and Plan of Merger (the “Original Merger Agreement”) by and among Cardinal, CHBC Intermediate Holdco, Inc., a Delaware corporation and wholly owned subsidiary of Cardinal (“Merger Sub 1”), CHBC Holding Company, LLC, a Delaware limited liability company and wholly owned subsidiary of Cardinal (“Merger Sub 2”), HBC Holdco, Inc., a Delaware corporation (“Target”), Hughes Brothers Construction Inc., a Florida corporation (“HBC”), the stockholders of HBC party thereto (the “Stockholders”), and Chad Hughes, in his capacity as the representative of the Stockholders (the “Stockholder Representative”). Target, HBC and their respective subsidiaries are referred to herein as the “Group Companies.” On October 18, 2026, Cardinal, Merger Sub 1, Merger Sub 2, Target, HBC and the Stockholders entered into Amendment No. 1 to the Merger Agreement, dated October 18, 2026 (the “Amendment”), HBC, headquartered in Wildwood, Florida, is engaged in the business of providing civil construction and infrastructure services to residential, commercial and public projects in Central Florida.
The following description is of the Original Merger Agreement as amended by the Amendment (the “Merger Agreement”).
The Mergers
Prior to the Closing (as defined below), and pursuant to the terms of the Merger Agreement, the Stockholders will complete a pre-closing restructuring (the “Restructuring”) pursuant to which, among other things, (i) the Stockholders will contribute all of the outstanding shares of HBC to Target, (ii) Target will make an election to treat HBC as a qualified subchapter S subsidiary, (iii) HBC will convert into a Florida limited liability company, (iv) Utility Services Construction, LLC, a Florida limited liability company, will become a wholly owned subsidiary of HBC (the “USC Contribution”), and (v) HBC will distribute its interest in HB Equipment Company, LLC to the Stockholders.
Upon the terms and subject to the conditions of the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), (i) Merger Sub 1 will merge with and into Target (the “First Merger”), with Target surviving the First Merger as a wholly owned subsidiary of Cardinal, and (ii) immediately thereafter, Target will merge with and into Merger Sub 2 (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub 2 surviving the Second Merger as a direct wholly owned subsidiary of Cardinal. The parties intend that the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
Consideration
Pursuant to the Merger Agreement, Cardinal has agreed to pay an aggregate purchase price of approximately $357.5 million, subject to adjustment as set forth in the Merger Agreement (as adjusted, the “Purchase Price”).
Pursuant to the Merger Agreement, the aggregate Purchase Price will be payable in (i) an amount in cash equal to sixty percent (60%) of the Purchase Price (or $214.5 million) (the “Cash Consideration”), and (ii) $143.0 million in value of Cardinal’s Class A common stock, par value $0.0001 per share (the “Common Stock”) based on the volume weighted average price of the Common Stock for the 33 consecutive trading days ending on and including October 14, 2026 (the “Signing Date VWAP”) (the “Stock Consideration,” and together with the Cash Consideration, the “Merger Consideration”). Based on a Signing Date VWAP of $27.21, the Stock Consideration is 5,255,420 shares of Common Stock.
The Stockholders will also be eligible to receive an additional payment (the “Additional Payment”) of up to $162.5 million based on the Adjusted Company EBITDA (as defined in the Merger Agreement) of the Group Companies for the twelve months ending June 30, 2027. Any Additional Payment earned will be paid 60% in cash and 40% in shares of Common Stock based on the Signing Date VWAP. Based on the Signing Date VWAP of $27.21, Cardinal would issue a maximum of approximately 2,388,827 shares if the Group Companies achieved the maximum Adjusted Company EBITDA target.
Cardinal is entitled to set off against any Additional Payment amounts owed to it in respect of indemnification claims under the Merger Agreement. The Cash Consideration is expected to be funded through a combination of cash on hand and borrowings under the credit facility of Cardinal’s subsidiaries.
Representations and Warranties, Covenants, Conditions to Closing, and Termination
The Merger Agreement contains customary representations and warranties and certain covenants for transactions of this type. The representations and warranties of the parties contained in the Merger Agreement have been made for the benefit of the other parties and should not be relied upon by any other person. Such representations and warranties (i) have been qualified by schedules and exhibits, (ii) are subject to materiality standards that may differ from what may be viewed as material by investors, (iii) are made as of specified dates, and (iv) may have been used for the purpose of allocating risk among the parties rather than establishing matters of fact. Accordingly, the representations and warranties should not be relied upon as characterizations of the actual state of facts. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Cardinal’s public disclosures.
In connection with its entry into the Merger Agreement, Cardinal also expects to obtain a customary buyer-side representations and warranties insurance policy (the “R&W Insurance Policy”) to cover certain losses arising out of breaches of the representations and warranties of the Stockholders and Group Companies contained in the Merger Agreement. The R&W Insurance Policy is expected to be subject to certain policy limits, exclusions, deductibles and other terms and conditions.
The Merger Agreement contains customary covenants for transactions of this type, including, among others, covenants (i) regarding the conduct of the business of the Group Companies prior to the Closing, (ii) prohibiting the Group Companies and the Stockholders from soliciting, or entering into discussions regarding, alternative transactions, and (iii) requiring the parties to make any required regulatory filings, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”).
The obligation of Cardinal, Merger Sub 1 and Merger Sub 2 to consummate the Mergers is subject to the satisfaction or waiver of customary conditions, including, among others, (i) the accuracy of the representations and warranties of the Group Companies and the Stockholders, (ii) the performance in all material respects of their covenants, (iii) the absence of any injunction, order or pending Action (as defined in the Merger Agreement) restraining or prohibiting the Mergers, (iv) the absence of a Material Adverse Effect (as defined in the Merger Agreement) on the Group Companies, (v) HSR clearance, and (vi) completion of the USC Contribution and the Restructuring. The Closing is currently expected to occur in the fourth quarter of 2026.
The Merger Agreement may be terminated prior to the Closing under certain circumstances, including (i) by mutual written consent of HBC, Cardinal and Target, (ii) by either Cardinal, on the one hand, or Target and HBC, on the other hand, in the event of an uncured breach by the other party that would cause a closing condition to fail (subject to a ten-day cure period), (iii) by either Cardinal, on the one hand, or Target and HBC, on the other hand, if the closing conditions have not been fulfilled and (iv) if a law or final, non-appealable order prohibits the Mergers.
Each of the Stockholders entered into a restrictive covenant agreement with Cardinal (the “Restrictive Covenant Agreements”) containing customary non-competition, non-solicitation, confidentiality and non-disparagement covenants for a specified period following the Closing. Each of the Stockholders also entered into a lock-up agreement (the “Lock-Up Agreements”) pursuant to which the Stockholders agreed not to transfer the shares of Common Stock to be received as Stock Consideration for a period of 180 days following the Closing, subject to customary exceptions. At the Closing, the Stockholders will become parties to the Registration Rights Agreement, dated December 9, 2025 (the “Registration Rights Agreement”), by and among Cardinal and the Initial Holders (as defined therein), which contains customary registration rights with respect to shares of Common Stock.
The foregoing description of the Merger Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K (this “Report”) and is incorporated herein by reference. The foregoing description of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 10.3 to Cardinal’s Current Report on Form 8-K filed on December 12, 2025, and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 to this Report is incorporated herein by reference into this Item 3.02.
The shares of Common Stock issuable as Stock Consideration pursuant to the Merger Agreement will be issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), in a transaction not involving a public offering. Such shares will be issued to the Stockholders in exchange for their equity interests in Target pursuant to the Mergers. In the Merger Agreement, each Stockholder represented, among other things, that such Stockholder is an accredited investor and is acquiring the shares for investment purposes and not with a view to distribution in violation of the Securities Act.
Item 7.01 Regulation FD Disclosure.
On October 13, 2026, Cardinal issued a press release announcing, among other things, the entry into the Original Merger Agreement and, on October 19, 2026, Cardinal issued a press release announcing, among other things, the entry into the Amendment. The releases are furnished as Exhibits 99.1 and 99.2, respectively, to this Report.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or Exhibits 99.1 and 99.2 be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Exhibits.
(d) Exhibits
Exhibit |
Description |
2.1* |
Agreement and Plan of Merger, dated as of October 13, 2026, by and among Cardinal Infrastructure Group Inc., CHBC Intermediate Holdco, Inc., CHBC Holding Company, LLC, HBC Holdco, Inc., Hughes Brothers Construction Inc., the Stockholders party thereto and Chad Hughes, as Stockholder Representative |
2.2 |
Amendment No. 1 to Agreement and Plan of Merger, dated as of October 18, 2026, by and among Cardinal Infrastructure Group Inc., CHBC Intermediate Holdco, Inc., CHBC Holding Company, LLC, HBC Holdco, Inc., Hughes Brothers Construction Inc. and the Stockholders party thereto |
10.1 |
Registration Rights Agreement, dated as of December 9, 2025, by and among Cardinal Infrastructure Group Inc. and the Initial Holders (as defined therein) (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed December 12, 2025) |
99.1 |
Press release, dated October 13, 2026 |
99.2 |
Press release, dated October 19, 2026 |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain schedules (and similar attachments) to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). Cardinal agrees to furnish supplementally a copy of any omitted schedule (or similar attachment) to the SEC upon its request.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K and the exhibits hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, the Mergers, the expected timing of the Closing and the expected benefits of the Mergers. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These statements involve risks and uncertainties and Cardinal’s actual results could differ materially from the results expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this Report include, but are not limited to, the ultimate outcome of the Mergers; the satisfaction of conditions to the closing of the Mergers; that any of the anticipated benefits of the Mergers will not be realized to the extent or when expected; the risk that integration of HBC’s operations with those of Cardinal will be materially delayed or
will be more costly or difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the Mergers on HBC’s and Cardinal’s business relationships, operating results and business generally; difficulty in sustaining rapid revenue growth, which may place significant demands on Cardinal’s administrative, operational and financial resources; fluctuations in Cardinal’s revenue; and the concentration of Cardinal’s business in the Southeastern United States. Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in Cardinal’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report”), and elsewhere in the Annual Report, as well as in Cardinal’s subsequent filings with the Securities and Exchange Commission. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good faith beliefs of Cardinal’s management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law. These cautionary statements qualify all forward-looking statements attributable to Cardinal or persons acting on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CARDINAL INFRASTRUCTURE GROUP INC. |
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October 19, 2026 |
By: |
/s/ Mike Rowe |
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Mike Rowe |
EXHIBIT 99.1
Cardinal Infrastructure Group (CDNL) Announces Acquisition of Hughes Brothers Construction Inc.
October 13, 2026
Raleigh, North Carolina - October 13, 2026 - Cardinal Infrastructure Group, Inc. (NASDAQ: CDNL) ("Cardinal" or the "Company") announced today that it has entered into a definitive agreement to acquire Hughes Brothers Construction Inc. (“Hughes Brothers”), a leading Central Florida heavy civil and site development contractor, for $357.5 million, at a purchase price multiple consistent with Cardinal’s typical range for new market platform acquisitions. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions.
Cardinal management will host a conference call and live webcast for investors and analysts today, October 13, 2026, at 10:30 a.m. ET to discuss the acquisition. The call will be webcast on the "Events & Presentations" section of Cardinal's website. A replay of the webcast will be available at the same location shortly after the conclusion of the presentation.
Strategic Highlights
Establishes a scaled platform in the attractive Central Florida market
Adds a highly complementary, turnkey business with differentiated capabilities and scale
Immediately accretive financial profile and a substantial backlog enhance revenue visibility
Creates multiple opportunities for continued growth and value creation
Disciplined transaction structure consistent with Cardinal's proven M&A framework
Experienced local leadership team to remain in place and drive continued growth
Management Commentary
"We are excited to welcome Hughes Brothers to Cardinal as we take another important step in our strategy to build the Southeast’s premier site development platform by moving into the fast-growing Central Florida market,” said Jeremy Spivey, CEO of Cardinal Infrastructure Group. “Hughes Brothers is an exceptional founder-led business that culturally aligns with what we’re building. They bring an experienced team, both in terms of field personnel and corporate leadership, longstanding customer relationships, highly complementary capabilities that further strengthen our turnkey offering and an immediately accretive financial profile. We see significant opportunities to build upon this strong foundation by deploying our proven growth playbook, expanding service offerings and deepening our presence across the Central Florida market. We are looking forward to partnering with Chad, Justin and the entire Hughes Brothers team to create long-term value for all our customers, employees and shareholders.”
About Hughes Brothers
Hughes Brothers is a leading Central Florida heavy civil and site development contractor focused on underground utilities, site preparation, earthwork, sewer, gas main installation, roadway construction and related infrastructure work. The company serves residential, commercial, industrial and municipal customers, with expertise in wet utility installation and large-scale site development projects. Hughes Brothers self-performs a significant portion of its work and owns its fleet through a dedicated equipment subsidiary.
About Cardinal
Cardinal Infrastructure Group, Inc., (NASDAQ: CDNL) delivers its suite of comprehensive infrastructure services that support the planning, preparation, installation, and development of residential, commercial, industrial, municipal, and state infrastructure projects through wholly owned, market leading subsidiaries. Cardinal’s operations leverage in-house, highly skilled teams and equipment fleets to deliver wet utility installations (water, sewer, and stormwater systems), as well as site clearing, grading, erosion control, drilling and blasting, paving, and other related site services across the Southeast. Cardinal’s relationship-based approach is grounded in operational discipline, market expansion, and commitment to integrity from the ground up.
Important Information for Investors and Stockholders
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Cardinal Infrastructure Group, Inc.’s (“Cardinal”) acquisition (the “Hughes Brothers Acquisition”) of Hughes Brothers Construction Inc., (“Hughes Brothers”) and the expected benefits of the Hughes Brothers Acquisition. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These statements involve risks and uncertainties, and Cardinal’s actual results could differ materially from the results expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the possibility that any of the anticipated benefits of the Hughes Brothers Acquisition will not be realized to the extent or when expected; the risk that integration of Hughes Brothers’ operations with those of Cardinal will be materially delayed or will be more costly or difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the Hughes Brothers Acquisition on Hughes Brothers’ and Cardinal’s business relationships, operating results and business generally; difficulty in sustaining rapid revenue growth, which may place significant demands on Cardinal’s administrative, operational and financial resources, fluctuations in Cardinal’s revenue and the concentration of Cardinal’s business in the Southeastern United States. Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled "Risk Factors" in Cardinal's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "Annual Report"), and elsewhere in the Annual Report, as well as in Cardinal's subsequent filings with the Securities and Exchange Commission. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good faith beliefs of Cardinal’s management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law. These cautionary statements qualify all forward-looking statements attributable to Cardinal or persons acting on its behalf.
Company Contact:
Cardinal Infrastructure Group, Inc. Mike Rowe, CFO
919-268-6386
EXHIBIT 99.2
Cardinal Infrastructure Group (CDNL) Enters Into Amended Agreement for Acquisition of Hughes Brothers Construction Inc.
October 19, 2026
Raleigh, North Carolina - October 19, 2026 - Cardinal Infrastructure Group, Inc. (NASDAQ: CDNL) (“Cardinal” or the “Company”) today announced that it has entered into an amendment to its previously announced agreement to acquire Hughes Brothers Construction Inc. (“Hughes Brothers”), a leading Central Florida heavy civil and site development contractor.
The amended agreement maintains the $357.5 million purchase price and changes the consideration to 60% cash and 40% Cardinal Class A common stock, from 50% of each previously. Hughes Brothers’ owners will receive approximately $214.5 million in cash and 5,255,420 shares of Cardinal Class A common stock, based on an issue price of $27.21 per share.
The amendment also revises the earnout so that the sellers will be eligible to receive up to a maximum of $162.5 million based on Hughes Brothers adjusted EBITDA for the twelve months ending June 30, 2027, payable 60% in cash and 40% in stock. At the maximum, the earnout would include up to approximately 2,388,827 additional shares at the issue price of $27.21 per share.
Cardinal expects the acquisition to be immediately accretive to adjusted EBITDA per share. Hughes Brothers generated an adjusted EBITDA margin1 of 25% on revenue of $220 million for the twelve months ended June 30, 2026, and its current backlog of approximately $350 million provides visibility into future revenue and profitability. The acquisition establishes a scaled platform in the fast-growing Central Florida market and supports Cardinal’s strategy to build the Southeast’s premier site development platform.
The transaction is still expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions. The cash consideration will be funded through cash on hand and borrowings under Cardinal’s existing credit facility.
For more details, see Cardinal’s Current Report on Form 8-K filed today with the Securities and Exchange Commission.
About Hughes Brothers
Hughes Brothers is a leading Central Florida heavy civil and site development contractor focused on underground utilities, site preparation, earthwork, sewer, gas main installation, roadway construction and related infrastructure work. The company serves residential, commercial, industrial and municipal customers, with expertise in wet utility installation and large-scale site development projects. Hughes Brothers self-performs a significant portion of its work and owns its fleet through a dedicated equipment subsidiary.
About Cardinal
Cardinal Infrastructure Group delivers its suite of comprehensive infrastructure services that support the planning, preparation, installation, and development of residential, commercial, industrial, municipal, and state infrastructure projects through wholly owned, market leading subsidiaries. Cardinal’s operations leverage in-house, highly skilled teams and equipment fleets to deliver wet utility installations (water, sewer, and stormwater systems), as well as grading, site clearing, erosion control, drilling and blasting, paving, and other related site services.
Important Information for Investors and Stockholders
Non-GAAP Measures
This press release includes a discussion of Adjusted EBITDA and Adjusted EBITDA margin, which are “non-GAAP” financial measures as defined in Regulation G under the Securities Exchange Act of 1934. Cardinal and Hughes Brothers report financial results in accordance with U.S. generally accepted accounting principles (“GAAP”) but believe that certain non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of their respective ongoing operations and is useful for period-over-period comparisons of those operations. Non-GAAP measures should be used in addition to, and not in lieu of, results prepared in conformity with GAAP.
1 Adjusted EBITDA Margin is a Non-GAAP Financial Measure. See “Important Information for Investors and Stockholders – Non-GAAP Measures” regarding non-GAAP financial measures and a reconciliation of Adjusted EBITDA Margin to the most comparable GAAP financial measure..
The following table provides a reconciliation of Hughes Brothers net income to EBITDA, and adjusted EBITDA to adjusted EBITDA margin for the twelve months ended June 30, 2026:
(in thousands) |
Twelve months ended June 30, 2026 |
Revenue |
$ 220,003 |
Net income |
$ 27,588 |
Interest expense, net |
555 |
Income tax (benefit) expense |
— |
Depreciation and amortization expense |
13,799 |
EBITDA |
$ 41,942 |
Owner discretionary costs |
7,844 |
Non-recurring warranty matter, net |
4,048 |
Job margin true-ups, net |
2,992 |
Other normalization and pro forma, net |
(1,825) |
Adjusted EBITDA |
$ 55,001 |
Net Income Margin(1) |
12.5% |
EBITDA Margin(1) |
19.1% |
Adjusted EBITDA Margin(1) |
25.0% |
__________________________
(1) Calculated as a percentage of revenue
Cardinal is not able to provide the most directly comparable GAAP financial measure, or a quantitative reconciliation thereto, for the forward-looking guidance of estimated Adjusted EBITDA Margin without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and amount of certain items, including but not limited to amortization of intangible assets and depreciation, which may be significant and difficult to project with a reasonable degree of accuracy, as the allocation of purchase price to intangible assets and property and equipment has not yet been performed. Because these adjustments are inherently variable and uncertain and depend on various factors that are beyond Cardinal’s control, Cardinal is also unable to predict their probable significance. The variability of these items could have an unpredictable, and potentially significant, impact on Cardinal’s future GAAP financial results.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Cardinal Infrastructure Group, Inc.’s (“Cardinal”) acquisition (the “Hughes Brothers Acquisition”) of Hughes Brothers Construction Inc., (“Hughes Brothers”) and the expected benefits of the Hughes Brothers Acquisition. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These statements involve risks and uncertainties, and Cardinal’s actual results could differ materially from the results expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the possibility that any of the anticipated benefits of the Hughes Brothers acquisition will not be realized to the extent or when expected; the risk that integration of Hughes Brothers’ operations with those of Cardinal will be materially delayed or will be more costly or difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the Hughes Brothers acquisition on Hughes Brothers’ and Cardinal’s business relationships, operating results and business generally; difficulty in sustaining rapid revenue growth, which may place significant demands on Cardinal’s administrative, operational and financial resources, fluctuations in Cardinal’s revenue and the concentration of Cardinal’s business in the Southeastern United States. Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled "Risk Factors" in Cardinal's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "Annual Report"), and elsewhere in the Annual Report, as well as in Cardinal's subsequent filings with the Securities and Exchange Commission. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good faith beliefs of Cardinal’s management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law. These cautionary statements qualify all forward-looking statements attributable to Cardinal or persons acting on its behalf.
Company Contact:
Cardinal Infrastructure Group, Inc. Mike Rowe, CFO
919-268-6386