x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2018
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
.
|
Delaware
(State or Other Jurisdiction of Incorporation or Organization) |
26-0758017
(I.R.S. Employer Identification Number) |
290 Healthwest Drive, Suite 2
Dothan, Alabama 36303
(Address of Principal Executive Offices) (ZIP Code)
|
|
(334) 673-9763
(Registrant’s telephone number, including area code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Class A Common Stock, par value $0.001 per share
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
x
|
Smaller reporting company
|
x
|
Emerging growth company
|
x
|
|
|
|
||
|
|
|
|
PART I
|
|
|
PART II
|
|
|
PART III
|
|
|
PART IV
|
|
|
•
|
declines in public infrastructure construction and reductions in government funding, including the funding by transportation authorities and other state and local agencies;
|
•
|
risks related to our operating strategy;
|
•
|
competition for projects in our local markets;
|
•
|
risks associated with our capital-intensive business;
|
•
|
government requirements and initiatives, including those related to funding for public or infrastructure construction, land usage and environmental, health and safety matters;
|
•
|
unfavorable economic conditions and restrictive financing markets;
|
•
|
our ability to successfully identify, manage and integrate acquisitions;
|
•
|
our ability to obtain sufficient bonding capacity to undertake certain projects;
|
•
|
our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;
|
•
|
the cancellation of a significant number of contracts or our disqualification from bidding for new contracts;
|
•
|
risks related to adverse weather conditions;
|
•
|
our substantial indebtedness and the restrictions imposed on us by the terms thereof;
|
•
|
our ability to maintain favorable relationships with third parties that supply us with equipment and essential supplies;
|
•
|
our ability to retain key personnel and maintain satisfactory labor relations;
|
•
|
property damage, results of litigation and other claims and insurance coverage issues;
|
•
|
risks related to our information technology systems and infrastructure; and
|
•
|
our ability to remediate the material weaknesses in internal control over financial reporting identified in preparing our consolidated financial statements included in this report and to subsequently maintain effective internal control over financial reporting.
|
•
|
Phase One
: We review the plans and specifications of the project so that we can identify (i) the various types of work involved and related estimated materials, (ii) the contract duration and schedule, and (iii) any unique or risky aspects of the project.
|
•
|
Phase Two
: We estimate the cost and availability of labor, materials and equipment, subcontractors and the project team required to complete the contract in accordance with the plans, specifications and construction schedule. Substantially all of our estimates are made on a per-unit basis for each bid item, with the typical contract containing 50 to 200 bid items.
|
•
|
Phase Three
: Management conducts a detailed review of the estimate. This review includes an analysis of assumptions regarding (i) cost, approach, means and methods of completing the project, (ii) staffing and productivity and (iii) risk. After concluding this detailed review of the cost estimate, management determines the appropriate profit margin to calculate the total bid amount. This profit amount varies according to management’s perception of the degree of difficulty
|
•
|
requirements to obtain a permit or other approval before conducting regulated activities;
|
•
|
restrictions on the types, quantities and concentration of materials that can be released into the environment;
|
•
|
limitation or prohibition of activities on certain lands lying within wilderness, wetlands, and other protected areas;
|
•
|
requirements to comply with specific health and safety criteria addressing worker protection; and
|
•
|
the imposition of substantial liabilities for pollution resulting from our operations.
|
•
|
the failure to include materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a fixed total price contract;
|
•
|
delays caused by weather conditions or otherwise failing to meet scheduled acceptance dates;
|
•
|
contract or project modifications or conditions creating unanticipated costs that are not covered by change orders;
|
•
|
changes in the availability, proximity and costs of materials, including liquid asphalt cement, aggregates and other construction materials, as well as fuel and lubricants for our equipment;
|
•
|
to the extent not covered by contractual cost escalators, variability and inability to predict the costs of purchasing diesel, liquid asphalt and cement;
|
•
|
the availability and skill level of workers;
|
•
|
the failure by our suppliers, subcontractors, designers, engineers or customers to perform their obligations;
|
•
|
fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers, customers or our own personnel;
|
•
|
mechanical problems with our machinery or equipment;
|
•
|
citations issued by a government authority, including OSHA or MSHA citations;
|
•
|
difficulties in obtaining required government permits or approvals;
|
•
|
changes in applicable laws and regulations;
|
•
|
uninsured claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part; and
|
•
|
public infrastructure customers seeking to impose contractual risk-shifting provisions that result in increased risks to us.
|
•
|
we may become liable for certain liabilities of an acquired business, whether or not known to us, which could include, among others, tax liabilities, product liabilities, environmental liabilities and liabilities for employment practices;
|
•
|
we may not be able to retain local managers and key employees who are important to the operations of an acquired business;
|
•
|
substantial attention from our senior management and the management of an acquired business may be required, which could decrease the time that they have to service and attract customers;
|
•
|
we may not effectively utilize new equipment that we acquire through acquisitions;
|
•
|
the complete integration of an acquired company depends, to a certain extent, on the full implementation of our financial and management information systems, business practices and policies; and
|
•
|
we may actively pursue a number of opportunities simultaneously and we may encounter unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight.
|
•
|
we may be required to use a significant percentage of our cash flow from operations for debt service and the repayment of our indebtedness, and any such cash flow would not be available for other purposes;
|
•
|
our ability to borrow money or issue equity to fund our working capital, capital expenditures, acquisitions and debt service requirements may be limited;
|
•
|
our interest expense could increase if interest rates in general increase because a portion of our indebtedness bears interest at floating rates;
|
•
|
our flexibility in planning for or reacting to changes in our business and future business opportunities may be limited;
|
•
|
we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
|
•
|
we may be more vulnerable to a downturn in our business or the economy; and
|
•
|
our ability to exploit business opportunities may be limited.
|
•
|
a dual class common stock structure, which currently provides SunTx and its affiliates and the other holders of our Class B common stock with the ability to control the outcome of matters requiring stockholder approval, so long as they continue to beneficially own a sufficient number of shares of our Class B common stock, even if they own significantly less than 50% of the shares of our outstanding common stock;
|
•
|
a classified board of directors with three-year staggered terms;
|
•
|
provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual meetings of our stockholders;
|
•
|
limitations on the ability of our stockholders to call a special meeting;
|
•
|
the ability of our board of directors to adopt, amend or repeal bylaws, and the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained for stockholders to amend our amended and restated bylaws;
|
•
|
the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained to remove directors;
|
•
|
the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained to amend our amended and restated certificate of incorporation; and
|
•
|
the authorization given to our board of directors to issue and set the terms of preferred stock without the approval of our stockholders.
|
•
|
any derivative action or proceeding brought on our behalf;
|
•
|
any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;
|
•
|
any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”); or
|
•
|
any action asserting a claim against us that is governed by the internal affairs doctrine.
|
|
For the Fiscal Year
Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands, except percentages)
|
|
|
|
||||
Net income
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Interest expense, net
|
1,270
|
|
|
3,960
|
|
||
Provision for income taxes
|
10,525
|
|
|
14,742
|
|
||
Depreciation, depletion and amortization of long-lived assets
|
25,321
|
|
|
21,072
|
|
||
Equity-based compensation expense
|
975
|
|
|
513
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
1,638
|
|
||
Settlement income
(1)
|
(14,803
|
)
|
|
—
|
|
||
Management fees and expenses
(2)
|
1,457
|
|
|
1,309
|
|
||
Adjusted EBITDA
|
$
|
75,536
|
|
|
$
|
69,274
|
|
Revenues
|
$
|
680,096
|
|
|
$
|
568,212
|
|
Adjusted EBITDA Margin
|
11.1
|
%
|
|
12.2
|
%
|
(1)
|
Represents pre-tax income recognized in connection with the Settlement (see Note 21 - Settlement Agreement to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
|
(2)
|
Reflects fees and reimbursement of certain travel expenses under a management services agreement with SunTx (see Note 18 - Related Parties to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
|
|
For the Fiscal Year Ended September 30,
|
|
Change from Fiscal Year
2017 to Fiscal Year 2018 |
|||||||||||||||||
|
2018
|
|
2017
|
|
||||||||||||||||
|
Dollars
|
|
% of
Revenues |
|
Dollars
|
|
% of
Revenues |
|
$ Change
|
|
%
Change |
|||||||||
(in thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
$
|
680,096
|
|
|
100.0
|
%
|
|
$
|
568,212
|
|
|
100.0
|
%
|
|
$
|
111,884
|
|
|
19.7
|
%
|
Cost of revenues
|
580,560
|
|
|
85.4
|
%
|
|
477,241
|
|
|
84.0
|
%
|
|
103,319
|
|
|
21.6
|
%
|
|||
Gross profit
|
99,536
|
|
|
14.6
|
%
|
|
90,971
|
|
|
16.0
|
%
|
|
8,565
|
|
|
9.4
|
%
|
|||
General and administrative expenses
|
(55,303
|
)
|
|
(8.2
|
)%
|
|
(47,867
|
)
|
|
(8.4
|
)%
|
|
(7,436
|
)
|
|
15.5
|
%
|
|||
Settlement income
|
14,803
|
|
|
2.2
|
%
|
|
—
|
|
|
—
|
%
|
|
14,803
|
|
|
N/A
|
|
|||
Gain on sale of equipment, net
|
2,392
|
|
|
0.4
|
%
|
|
3,481
|
|
|
0.6
|
%
|
|
(1,089
|
)
|
|
(31.3
|
)%
|
|||
Operating income
|
61,428
|
|
|
9.0
|
%
|
|
46,585
|
|
|
8.2
|
%
|
|
14,843
|
|
|
31.9
|
%
|
|||
Interest expense, net
|
(1,270
|
)
|
|
(0.2
|
)%
|
|
(3,960
|
)
|
|
(0.7
|
)%
|
|
2,690
|
|
|
(67.9
|
)%
|
|||
Loss on extinguishment of debt
|
—
|
|
|
—
|
%
|
|
(1,638
|
)
|
|
(0.3
|
)%
|
|
1,638
|
|
|
(100.0
|
)%
|
|||
Other expense
|
(101
|
)
|
|
—
|
%
|
|
(205
|
)
|
|
—
|
%
|
|
104
|
|
|
(50.7
|
)%
|
|||
Income before provision for income taxes and earnings from investment in joint venture
|
60,057
|
|
|
8.8
|
%
|
|
40,782
|
|
|
7.2
|
%
|
|
19,275
|
|
|
47.3
|
%
|
|||
Provision for income taxes
|
10,525
|
|
|
1.5
|
%
|
|
14,742
|
|
|
2.6
|
%
|
|
(4,217
|
)
|
|
(28.6
|
)%
|
|||
Earnings from investment in
joint venture |
1,259
|
|
|
0.2
|
%
|
|
—
|
|
|
—
|
%
|
|
1,259
|
|
|
N/A
|
|
|||
Net income
|
$
|
50,791
|
|
|
7.5
|
%
|
|
$
|
26,040
|
|
|
4.6
|
%
|
|
$
|
24,751
|
|
|
95.0
|
%
|
Adjusted EBITDA
|
$
|
75,536
|
|
|
11.1
|
%
|
|
$
|
69,274
|
|
|
12.2
|
%
|
|
$
|
6,262
|
|
|
9.0
|
%
|
|
For the Fiscal Year
Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Net cash provided by operating activities, net of acquisition
|
$
|
66,121
|
|
|
$
|
46,927
|
|
Net cash used in investing activities
|
(89,592
|
)
|
|
(30,686
|
)
|
||
Net cash provided by (used in) financing activities
|
95,061
|
|
|
(39,779
|
)
|
||
Net change in cash and cash equivalents
|
$
|
71,590
|
|
|
$
|
(23,538
|
)
|
|
|
|
|
Audited Consolidated Financial Statements
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
99,137
|
|
|
$
|
27,547
|
|
Contracts receivable including retainage, net
|
120,291
|
|
|
120,984
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
9,334
|
|
|
4,592
|
|
||
Inventories
|
24,556
|
|
|
17,487
|
|
||
Prepaid expenses and other current assets
|
14,137
|
|
|
4,520
|
|
||
Total current assets
|
267,455
|
|
|
175,130
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
178,692
|
|
|
115,911
|
|
||
Goodwill
|
32,919
|
|
|
30,600
|
|
||
Intangible assets, net
|
3,735
|
|
|
2,550
|
|
||
Investment in joint venture
|
1,659
|
|
|
—
|
|
||
Other assets
|
10,270
|
|
|
2,483
|
|
||
Deferred income taxes, net
|
1,580
|
|
|
1,876
|
|
||
Total assets
|
$
|
496,310
|
|
|
$
|
328,550
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
63,510
|
|
|
$
|
52,402
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
38,738
|
|
|
32,108
|
|
||
Current maturities of debt
|
14,773
|
|
|
10,000
|
|
||
Accrued expenses and other current liabilities
|
17,520
|
|
|
20,036
|
|
||
Total current liabilities
|
134,541
|
|
|
114,546
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt, net of current maturities
|
48,115
|
|
|
47,136
|
|
||
Deferred income taxes, net
|
8,890
|
|
|
9,667
|
|
||
Other long-term liabilities
|
5,295
|
|
|
5,020
|
|
||
Total long-term liabilities
|
62,300
|
|
|
61,823
|
|
||
Total liabilities
|
196,841
|
|
|
176,369
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2018 and 1,000,000 shares authorized at September 30, 2017 and no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class A common stock, par value $0.001; 400,000,000 shares authorized, 11,950,000 shares issued and outstanding at September 30, 2018, and no shares authorized, issued and outstanding at September 30, 2017
|
12
|
|
|
—
|
|
||
Class B common stock, par value $0.001; 100,000,000 shares authorized, 42,387,571 shares issued and 39,464,619 shares outstanding at September 30, 2018, and no shares authorized, issued and outstanding at September 30, 2017
|
42
|
|
|
—
|
|
||
Common stock, $.001 par value, no shares authorized, issued and outstanding at September 30, 2018, and 126,000,000 shares authorized, 44,987,575 shares issued and 41,691,541 shares outstanding at September 30, 2017
|
—
|
|
|
45
|
|
||
Additional paid-in capital
|
242,493
|
|
|
142,385
|
|
||
Treasury stock, at cost
|
(15,603
|
)
|
|
(11,983
|
)
|
||
Retained earnings
|
72,525
|
|
|
21,734
|
|
||
Total stockholders’ equity
|
299,469
|
|
|
152,181
|
|
||
Total liabilities and stockholders’ equity
|
$
|
496,310
|
|
|
$
|
328,550
|
|
|
|
|
|
|
|
For the Fiscal Year Ended
September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues
|
|
$
|
680,096
|
|
|
$
|
568,212
|
|
Cost of revenues
|
|
580,560
|
|
|
477,241
|
|
||
Gross profit
|
|
99,536
|
|
|
90,971
|
|
||
General and administrative expenses
|
|
(55,303
|
)
|
|
(47,867
|
)
|
||
Settlement income
|
|
14,803
|
|
|
—
|
|
||
Gain on sale of equipment, net
|
|
2,392
|
|
|
3,481
|
|
||
Operating income
|
|
61,428
|
|
|
46,585
|
|
||
Interest expense, net
|
|
(1,270
|
)
|
|
(3,960
|
)
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
(1,638
|
)
|
||
Other expense
|
|
(101
|
)
|
|
(205
|
)
|
||
Income before provision for income taxes and earnings from investment
in joint venture
|
|
60,057
|
|
|
40,782
|
|
||
Provision for income taxes
|
|
10,525
|
|
|
14,742
|
|
||
Earnings from investment in joint venture
|
|
1,259
|
|
|
—
|
|
||
Net income
|
|
$
|
50,791
|
|
|
$
|
26,040
|
|
|
|
|
|
|
||||
Net income per share attributable to common stockholders:
|
|
|
|
|
||||
Basic
|
|
$
|
1.11
|
|
|
$
|
0.63
|
|
Diluted
|
|
$
|
1.11
|
|
|
$
|
0.63
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
45,605,845
|
|
|
41,550,293
|
|
||
Diluted
|
|
45,919,648
|
|
|
41,550,293
|
|
||
|
|
|
|
|
|
Common Stock
|
|
Class A Common Stock
|
|
Class B Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||||||
Balance, September 30, 2016
|
44,987,575
|
|
|
$
|
45
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
141,872
|
|
|
$
|
(12,621
|
)
|
|
$
|
26,987
|
|
|
$
|
156,283
|
|
Sale of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|
—
|
|
|
638
|
|
|||||||
Common stock dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,293
|
)
|
|
(31,293
|
)
|
|||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,040
|
|
|
26,040
|
|
|||||||
Balance, September 30, 2017
|
44,987,575
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,385
|
|
|
(11,983
|
)
|
|
21,734
|
|
|
152,181
|
|
|||||||
Reclassification of common stock
|
(44,987,575
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
44,987,571
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Conversion of Class B common stock to Class A common stock in
connection with initial public offering of Class A common stock |
—
|
|
|
—
|
|
|
2,600,000
|
|
|
3
|
|
|
(2,600,000
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Initial public offering of Class A common stock, net of offering costs
|
—
|
|
|
—
|
|
|
9,350,000
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
98,000
|
|
|
—
|
|
|
—
|
|
|
98,009
|
|
|||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
975
|
|
|
—
|
|
|
—
|
|
|
975
|
|
|||||||
Sale of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|
458
|
|
|
—
|
|
|
5
|
|
|||||||
Cashless option exercise
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,586
|
|
|
(4,078
|
)
|
|
—
|
|
|
(2,492
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,791
|
|
|
50,791
|
|
|||||||
Balance, September 30, 2018
|
—
|
|
|
$
|
—
|
|
|
11,950,000
|
|
|
$
|
12
|
|
|
42,387,571
|
|
|
$
|
42
|
|
|
$
|
242,493
|
|
|
$
|
(15,603
|
)
|
|
$
|
72,525
|
|
|
$
|
299,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year
Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization of long-lived assets
|
25,321
|
|
|
21,072
|
|
||
Amortization of deferred debt issuance costs
|
94
|
|
|
660
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
1,638
|
|
||
Provision for bad debt
|
604
|
|
|
1,445
|
|
||
Gain on sale of equipment
|
(2,392
|
)
|
|
(3,481
|
)
|
||
Equity-based compensation expense
|
975
|
|
|
513
|
|
||
Earnings from investment in joint venture
|
(1,259
|
)
|
|
—
|
|
||
Deferred income taxes
|
(481
|
)
|
|
865
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Contracts receivable including retainage, net
|
9,273
|
|
|
(19,619
|
)
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
(2,955
|
)
|
|
2,854
|
|
||
Inventories
|
(2,746
|
)
|
|
(3,063
|
)
|
||
Other current assets
|
(8,886
|
)
|
|
(2,178
|
)
|
||
Other assets
|
(7,787
|
)
|
|
(286
|
)
|
||
Accounts payable
|
7,462
|
|
|
11,639
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
2,041
|
|
|
5,220
|
|
||
Accrued expenses and other current liabilities
|
(4,778
|
)
|
|
5,505
|
|
||
Other long-term liabilities
|
844
|
|
|
(1,897
|
)
|
||
Net cash provided by operating activities, net of acquisition
|
66,121
|
|
|
46,927
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(42,804
|
)
|
|
(24,399
|
)
|
||
Proceeds from sale of equipment
|
4,931
|
|
|
4,556
|
|
||
Business acquisition, net of cash acquired
|
(51,319
|
)
|
|
(10,843
|
)
|
||
Investment in joint venture
|
(400
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(89,592
|
)
|
|
(30,686
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments on revolving credit facility
|
(5,000
|
)
|
|
(5,101
|
)
|
||
Proceeds from revolving credit facility
|
—
|
|
|
10,000
|
|
||
Proceeds from issuance of long-term debt, net of debt issuance costs and discount
|
21,917
|
|
|
49,617
|
|
||
Repayments of long-term debt
|
(12,361
|
)
|
|
(60,640
|
)
|
||
Payment to seller of pre-acquisition balance due
|
(4,940
|
)
|
|
—
|
|
||
Payment of treasury stock purchase obligation
|
(2,569
|
)
|
|
(3,000
|
)
|
||
Proceeds from initial public offering of Class A common stock, net of offering costs
|
98,009
|
|
|
—
|
|
||
Proceeds from sale of treasury stock
|
5
|
|
|
638
|
|
||
Common stock dividend paid
|
—
|
|
|
(31,293
|
)
|
||
Net cash provided by (used in) financing activities
|
95,061
|
|
|
(39,779
|
)
|
||
Net change in cash and cash equivalents
|
71,590
|
|
|
(23,538
|
)
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of Period
|
27,547
|
|
|
51,085
|
|
||
End of Period
|
$
|
99,137
|
|
|
$
|
27,547
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
2,336
|
|
|
$
|
3,307
|
|
Cash paid for income taxes
|
$
|
14,357
|
|
|
$
|
12,530
|
|
Non-cash items:
|
|
|
|
||||
Property, plant and equipment financed with accounts payable
|
$
|
395
|
|
|
$
|
—
|
|
Outstanding note receivable in consideration of disposition of assets
|
$
|
850
|
|
|
$
|
—
|
|
|
|
|
|
|
|
% of Consolidated
Revenues
for the Fiscal
Year Ended September 30,
|
||||
|
|
2018
|
|
2017
|
||
Alabama Department of Transportation
|
|
15.1
|
%
|
|
14.9
|
%
|
North Carolina Department of Transportation
|
|
13.3
|
%
|
|
13.9
|
%
|
Contracts receivable including retainage
|
|
$
|
9,184
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
1,787
|
|
|
Inventory
|
|
4,323
|
|
|
Other current assets
(1)
|
|
731
|
|
|
Property, plant and equipment:
|
|
|
||
Construction equipment
|
|
17,571
|
|
|
Quarry reserves
|
|
13,986
|
|
|
Land and land improvements
|
|
7,302
|
|
|
Plant
|
|
6,917
|
|
|
Buildings
|
|
1,552
|
|
|
Backlog intangible
(2)
|
|
594
|
|
|
Customer relationship
(3)
|
|
1,100
|
|
|
Goodwill
|
|
2,319
|
|
|
Accounts payable
|
|
(3,646
|
)
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
(4,589
|
)
|
|
Current maturities of long-term debt
|
|
(358
|
)
|
|
Other current liabilities
|
|
(1,770
|
)
|
|
Payable to seller
|
|
(4,940
|
)
|
|
Long-term debt, net of current maturities
|
|
(744
|
)
|
|
|
|
$
|
51,319
|
|
|
|
|
|
|
For the Fiscal Year Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Pro forma revenues
|
|
$
|
735,197
|
|
|
$
|
661,979
|
|
Pro forma net income
|
|
55,558
|
|
|
34,671
|
|
||
|
|
|
|
|
(a)
|
Include the pro forma results of operations of Scruggs for the fiscal years ended
September 30, 2018
and
2017
.
|
(b)
|
Include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and quarry reserves, as applicable, as if such assets were acquired on October 1, 2016 and consistently applied to the Company’s depreciation and depletion methodologies.
|
(c)
|
Include interest expense under the Compass Term Loan as if the
$22.0 million
borrowed to partially finance the purchase price was borrowed on October 1, 2016. Interest expense calculations further assume that no principal payments were made applicable to the
$22.0 million
borrowed during the period from October 1, 2016 through September 30, 2018, and that the interest rate in effect on the date the Company made the additional
$22.0 million
borrowing on May 15, 2018 was in effect for the period from October 1, 2016 through
September 30, 2018
.
|
(d)
|
Exclude
$0.2 million
of acquisition-related expenses from the fiscal year ended
September 30, 2018
, as though such expenses were incurred prior to the pro forma acquisition date of October 1, 2016.
|
Inventory
|
$
|
1,179
|
|
Quarry reserves
|
4,800
|
|
|
Land
|
1,746
|
|
|
Plant
|
1,247
|
|
|
Equipment
|
1,228
|
|
|
Goodwill
|
643
|
|
|
|
$
|
10,843
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Contracts receivable
|
$
|
104,541
|
|
|
$
|
109,538
|
|
Retainage
|
16,848
|
|
|
13,180
|
|
||
|
121,389
|
|
|
122,718
|
|
||
Allowance for doubtful accounts
|
(1,098
|
)
|
|
(1,734
|
)
|
||
Contracts receivable including retainage, net
|
$
|
120,291
|
|
|
$
|
120,984
|
|
|
|
|
|
|
For the Fiscal Year Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
1,734
|
|
|
$
|
1,039
|
|
Charged to bad debt expense
|
604
|
|
|
1,445
|
|
||
Write-off of contracts receivable including retainage
|
(1,240
|
)
|
|
(750
|
)
|
||
Balance at end of period
|
$
|
1,098
|
|
|
$
|
1,734
|
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Costs on uncompleted contracts
|
$
|
743,322
|
|
|
$
|
489,661
|
|
Estimated earnings to date on uncompleted contracts
|
95,155
|
|
|
62,193
|
|
||
|
838,477
|
|
|
551,854
|
|
||
Billings to date on uncompleted contracts
|
(867,881
|
)
|
|
(579,370
|
)
|
||
Net billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
(29,404
|
)
|
|
$
|
(27,516
|
)
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
9,334
|
|
|
$
|
4,592
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(38,738
|
)
|
|
(32,108
|
)
|
||
Net billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
(29,404
|
)
|
|
$
|
(27,516
|
)
|
|
|
|
|
|
|
September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Settlement receivable
|
|
$
|
7,874
|
|
|
$
|
—
|
|
Prepaid expenses
|
|
4,989
|
|
|
1,503
|
|
||
Other current assets
|
|
1,274
|
|
|
3,017
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
14,137
|
|
|
$
|
4,520
|
|
|
|
|
|
|
|
|
September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Settlement receivable
|
|
$
|
7,224
|
|
|
$
|
—
|
|
Notes receivable
|
|
2,561
|
|
|
1,106
|
|
||
Other assets
|
|
485
|
|
|
1,377
|
|
||
Total other assets
|
|
$
|
10,270
|
|
|
$
|
2,483
|
|
|
|
|
|
|
|
|
September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Construction equipment
|
|
$
|
190,420
|
|
|
$
|
154,911
|
|
Asphalt plants
|
|
79,563
|
|
|
66,379
|
|
||
Land and improvements
|
|
29,624
|
|
|
20,991
|
|
||
Quarry reserves
|
|
20,908
|
|
|
7,219
|
|
||
Buildings
|
|
12,416
|
|
|
9,848
|
|
||
Furniture and fixtures
|
|
4,422
|
|
|
3,870
|
|
||
Leasehold improvements
|
|
765
|
|
|
765
|
|
||
Total property, plant and equipment, gross
|
|
338,118
|
|
|
263,983
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(160,795
|
)
|
|
(148,072
|
)
|
||
Construction in progress
|
|
1,369
|
|
|
—
|
|
||
Total property, plant and equipment, net
|
|
$
|
178,692
|
|
|
$
|
115,911
|
|
|
|
|
|
|
Balance at September 30, 2016
|
$
|
29,957
|
|
Additions
|
643
|
|
|
Balance at September 30, 2017
|
30,600
|
|
|
Additions
|
2,319
|
|
|
Balance at September 30, 2018
|
$
|
32,919
|
|
|
|
|
|
|
September 30,
|
||||||||||||||||||||||
|
|
|
2017
|
|
2018
|
||||||||||||||||||||
|
Useful
Life |
|
Gross
|
|
Accumulated
Amortization |
|
Net Book
Value |
|
Gross
|
|
Accumulated
Amortization |
|
Net Book
Value |
||||||||||||
Indefinite-lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
Indefinite
|
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
Definite-lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationship
|
8 years
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|
(52
|
)
|
|
1,048
|
|
||||||
Acquired construction backlog
|
17 months
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|
(157
|
)
|
|
437
|
|
||||||
Non-compete agreements
|
5 years
|
|
1,500
|
|
|
(950
|
)
|
|
550
|
|
|
1,500
|
|
|
(1,250
|
)
|
|
250
|
|
||||||
Total intangible assets
|
|
|
$
|
3,500
|
|
|
$
|
(950
|
)
|
|
$
|
2,550
|
|
|
$
|
5,194
|
|
|
$
|
(1,459
|
)
|
|
$
|
3,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
Estimated Amortization Expense
|
||
2019
|
|
$
|
825
|
|
2020
|
|
138
|
|
|
2021
|
|
138
|
|
|
2022
|
|
138
|
|
|
2023
|
|
138
|
|
|
Thereafter
|
|
358
|
|
|
Total
|
|
$
|
1,735
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Accrued payroll and benefits
|
12,802
|
|
|
13,364
|
|
||
Treasury stock purchase obligation
|
569
|
|
|
2,569
|
|
||
Accrued insurance costs
|
1,750
|
|
|
1,198
|
|
||
Other current liabilities
|
2,399
|
|
|
2,905
|
|
||
Total accrued expenses and other current liabilities
|
$
|
17,520
|
|
|
$
|
20,036
|
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Treasury stock purchase obligation
|
$
|
—
|
|
|
$
|
569
|
|
Accrued insurance costs
|
4,826
|
|
|
3,796
|
|
||
Other
|
469
|
|
|
655
|
|
||
Total other long-term liabilities
|
$
|
5,295
|
|
|
$
|
5,020
|
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Long-term debt:
|
|
|
|
||||
Compass Term Loan
|
$
|
57,300
|
|
|
$
|
47,500
|
|
Compass Revolving Credit Facility
|
5,000
|
|
|
10,000
|
|
||
Other long-term debt
|
964
|
|
|
—
|
|
||
Total long-term debt
|
63,264
|
|
|
57,500
|
|
||
Deferred debt issuance costs
|
(362
|
)
|
|
(364
|
)
|
||
Debt discount
|
(14
|
)
|
|
—
|
|
||
Current maturities of long-term debt
|
(14,773
|
)
|
|
(10,000
|
)
|
||
Long-term debt, net of current maturities
|
$
|
48,115
|
|
|
$
|
47,136
|
|
|
|
|
|
Fiscal Year
|
Amount
|
||
2019
|
$
|
14,773
|
|
2020
|
14,762
|
|
|
2021
|
14,555
|
|
|
2022
|
19,157
|
|
|
2023
|
17
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
63,264
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury Shares
|
||||||||||
|
Shares of Common Stock Outstanding
|
|
Shares of Class A Common Stock Outstanding
|
|
Shares of Class B Common Stock Outstanding
|
|
Additional Paid-in Capital
|
|
Shares
|
|
Cost
|
||||||||
Balance, September 30, 2016
|
41,502,490
|
|
|
—
|
|
|
—
|
|
|
$
|
141,872
|
|
|
(3,485,085
|
)
|
|
$
|
(12,621
|
)
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|
—
|
|
|
—
|
|
||
Sale of treasury stock
|
189,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,051
|
|
|
638
|
|
||
Balance, September 30, 2017
|
41,691,541
|
|
|
—
|
|
|
—
|
|
|
142,385
|
|
|
(3,296,034
|
)
|
|
(11,983
|
)
|
||
Sale of treasury stock
|
126,000
|
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|
126,000
|
|
|
458
|
|
||
Reclassification of common stock
|
(41,817,541
|
)
|
|
—
|
|
|
41,817,537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Conversion of Class B common stock to Class A common stock in connection with initial public
offering of Class A common stock |
—
|
|
|
2,600,000
|
|
|
(2,600,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Initial public offering of Class A common stock, net of offering costs
|
—
|
|
|
9,350,000
|
|
|
—
|
|
|
98,000
|
|
|
—
|
|
|
—
|
|
||
Cashless option exercise
|
—
|
|
|
—
|
|
|
247,082
|
|
|
1,586
|
|
|
247,082
|
|
|
(4,078
|
)
|
||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
975
|
|
|
—
|
|
|
—
|
|
||
Balance, September 30, 2018
|
—
|
|
|
11,950,000
|
|
|
39,464,619
|
|
|
$
|
242,493
|
|
|
(2,922,952
|
)
|
|
$
|
(15,603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Numerator
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Denominator
|
|
|
|
||||
Weighted average number of common shares outstanding, basic
|
45,605,845
|
|
|
41,550,293
|
|
||
Net income per common share attributable to common shareholders, basic
|
$
|
1.11
|
|
|
$
|
0.63
|
|
|
|
|
|
|
For the Fiscal Year Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Numerator
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Denominator
|
|
|
|
||||
Weighted average number of basic common
shares outstanding, basic |
45,605,845
|
|
|
41,550,293
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
2010 non-plan stock option agreement options
|
272,915
|
|
|
—
|
|
||
2018 restricted stock grants
|
40,888
|
|
|
—
|
|
||
Weighted average number of diluted common
shares outstanding: |
45,919,648
|
|
|
41,550,293
|
|
||
Net income per diluted common share attributable
to common stockholders |
$
|
1.11
|
|
|
$
|
0.63
|
|
|
|
|
|
Risk-free rate
|
2.04
|
%
|
|
Expected term (in years)
|
5
|
|
|
Expected volatility
|
50
|
%
|
|
Expected dividend yield
|
0
|
%
|
|
Value of underlying stock
|
$
|
5.56
|
|
Risk-free rate
|
1.31
|
%
|
|
Expected term (in years)
|
6
|
|
|
Expected volatility
|
50
|
%
|
|
Expected dividend yield
|
0
|
|
|
Value of underlying stock
|
$
|
4.97
|
|
Unvested options outstanding at September 30, 2016
|
189,000
|
|
Granted
|
—
|
|
Vested
|
(189,000
|
)
|
Forfeited
|
—
|
|
Unvested options outstanding at September 30, 2017
|
—
|
|
Granted
|
—
|
|
Vested
|
—
|
|
Forfeited
|
—
|
|
Unvested options outstanding at September 30, 2018
|
—
|
|
|
|
|
For the Fiscal Year Ended
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Current
|
|
|
|
||||
U.S. Federal
|
$
|
9,380
|
|
|
$
|
11,977
|
|
State
|
1,626
|
|
|
1,900
|
|
||
Total current
|
11,006
|
|
|
13,877
|
|
||
Deferred
|
|
|
|
||||
U.S. Federal
|
(1,003
|
)
|
|
711
|
|
||
State
|
522
|
|
|
154
|
|
||
Total deferred
|
(481
|
)
|
|
865
|
|
||
Provision for income taxes
|
$
|
10,525
|
|
|
$
|
14,742
|
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Allowance for bad debt
|
$
|
444
|
|
|
$
|
936
|
|
Amortization of finite-lived intangible assets
|
499
|
|
|
751
|
|
||
State net operating loss
|
1,695
|
|
|
1,928
|
|
||
Employee benefits
|
—
|
|
|
243
|
|
||
Accrued insurance claims
|
1,202
|
|
|
1,417
|
|
||
Other
|
—
|
|
|
506
|
|
||
Total deferred tax assets, net
|
3,840
|
|
|
5,781
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Amortization of goodwill
|
(3,925
|
)
|
|
(5,022
|
)
|
||
Property, plant and equipment
|
(7,162
|
)
|
|
(8,550
|
)
|
||
Other
|
(63
|
)
|
|
—
|
|
||
Total deferred tax liabilities, net
|
(11,150
|
)
|
|
(13,572
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(7,310
|
)
|
|
$
|
(7,791
|
)
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Asset: Deferred income taxes, net
|
$
|
1,580
|
|
|
$
|
1,876
|
|
Liability: Deferred income taxes, net
|
(8,890
|
)
|
|
(9,667
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(7,310
|
)
|
|
$
|
(7,791
|
)
|
|
|
|
|
|
For the Fiscal Year Ended
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Provision for income tax at federal statutory rate
|
$
|
15,023
|
|
|
$
|
14,260
|
|
State income taxes
|
1,622
|
|
|
1,268
|
|
||
Change in deferred federal income taxes due to Tax Act
|
(4,552
|
)
|
|
—
|
|
||
Permanent differences
|
(2,282
|
)
|
|
(686
|
)
|
||
Other
|
714
|
|
|
(100
|
)
|
||
Provision for income taxes
|
$
|
10,525
|
|
|
$
|
14,742
|
|
|
|
|
|
•
|
On January 30, 2015, a subsidiary of the Company entered into a master services subcontract with Austin Trucking, LLC (“Austin Trucking”), an entity owned by an immediate family member of a Senior Vice President of the Company. Pursuant to the agreement, Austin Trucking performs subcontract work for the subsidiary of the Company, including trucking services.
|
•
|
From time to time, a subsidiary of the Company provides construction services to various companies owned by a family member of a Senior Vice President of the Company ("Construction Services").
|
•
|
For periodic corporate events, the Company charters a boat from Deep South Adventures, LLC, which is owned by a Senior Vice President of the Company.
|
•
|
On June 1, 2014, the Company entered into an access agreement with Island Pond Corporate Services, LLC (“Island Pond”) regarding certain property owned by the Chairman of the Company's Board of Directors who is also the Managing Partner of SunTx. Pursuant to the access agreement, Island Pond grants the Company the non-exclusive right to use certain land located in Baker County, Georgia for the purposes of business development.
|
•
|
The Company rents vehicles from an entity owned by a family member of a Senior Vice President of the Company ("Vehicle Rentals"). The vehicles are rented on a month-to-month basis.
|
•
|
Family members of a Senior Vice President of the Company provide consulting services to a subsidiary of the Company ("Consulting Services").
|
•
|
A law firm owned by a family member of a Senior Vice President of the Company provides legal services to a subsidiary of the Company ("Legal Services").
|
•
|
A subsidiary of the Company leases office space for its Dothan, Alabama office from H&K, Ltd. (“H&K”), an entity partially owned by a Senior Vice President of the Company. The office space is leased through early 2020. Under the lease agreement, the Company pays a fixed minimum rent per month.
|
•
|
A subsidiary of the Company leased office space for its Montgomery, Alabama office from H&A Properties LLC (“H&A”), an entity partially owned by two Senior Vice Presidents of the Company. Under the lease agreement, the Company paid a fixed minimum rent per month. In September 2018, the subsidiary purchased this office from H&A for
$0.5 million
.
|
•
|
A company owned by an immediate family member of a Senior Vice President of the Company provides subcontracting services to a subsidiary of the Company ("Subcontracting Services")
|
•
|
The Company is party to a management services agreement with SunTx, under which the Company pays
$0.25 million
per fiscal quarter and reimburses certain travel expenses.
|
Fiscal Year
|
|
Amount
|
||
2019
|
|
$
|
9,007
|
|
2020
|
|
6,192
|
|
|
2021
|
|
2,820
|
|
|
2022
|
|
922
|
|
|
2023
|
|
208
|
|
|
Thereafter
|
|
188
|
|
|
Total
|
|
$
|
19,337
|
|
|
|
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
53,352
|
|
|
$
|
1,330
|
|
Investment in subsidiaries
|
247,944
|
|
|
162,274
|
|
||
Due from subsidiaries
|
545
|
|
|
—
|
|
||
Other assets
|
1,226
|
|
|
2,196
|
|
||
Total current assets
|
303,067
|
|
|
165,800
|
|
||
Property, plant and equipment
|
131
|
|
|
—
|
|
||
Total assets
|
$
|
303,198
|
|
|
$
|
165,800
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Treasury stock purchase obligation
|
$
|
569
|
|
|
$
|
2,569
|
|
Due to subsidiaries
|
800
|
|
|
6,449
|
|
||
Other current liabilities
|
187
|
|
|
1,062
|
|
||
Total short-term liabilities
|
1,556
|
|
|
10,080
|
|
||
Long-term liabilities:
|
|
|
|
|
|
||
Due to subsidiaries
|
2,177
|
|
|
2,971
|
|
||
Treasury stock purchase obligation
|
—
|
|
|
569
|
|
||
Total long-term liabilities
|
2,177
|
|
|
3,540
|
|
||
Total liabilities
|
3,733
|
|
|
13,620
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2018 and 1,000,000 shares authorized at September 30, 2017 and no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class A common stock, par value $0.001; 400,000,000 shares authorized, 11,950,000 shares issued and outstanding at September 30, 2018, and no shares authorized, issued and outstanding at September 30, 2017
|
12
|
|
|
—
|
|
||
Class B common stock, par value $0.001; 100,000,000 shares authorized, 42,387,571 shares issued and 39,464,619 shares outstanding at September 30, 2018, and no shares authorized, issued and outstanding at September 30, 2017
|
42
|
|
|
—
|
|
||
Common stock, $.001 par value, no shares authorized, issued and outstanding at September 30, 2018, and 126,000,000 shares authorized, 44,987,575 shares issued and 41,691,541 shares outstanding at September 30, 2017
|
—
|
|
|
45
|
|
||
Additional paid-in capital
|
242,489
|
|
|
142,385
|
|
||
Treasury stock, at cost
|
(15,603
|
)
|
|
(11,983
|
)
|
||
Retained earnings
|
72,525
|
|
|
21,733
|
|
||
Total stockholders’ equity
|
299,465
|
|
|
152,180
|
|
||
Total liabilities and stockholders’ equity
|
$
|
303,198
|
|
|
$
|
165,800
|
|
|
|
|
|
|
For the Fiscal Year Ended
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Equity in net income of subsidiaries
|
$
|
51,515
|
|
|
$
|
28,312
|
|
Equity-based compensation expense
|
(975
|
)
|
|
(513
|
)
|
||
General and administrative expenses
|
(1,542
|
)
|
|
(388
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
(714
|
)
|
||
Interest expense, net
|
72
|
|
|
(1,338
|
)
|
||
Income before provision for income taxes
|
49,070
|
|
|
25,359
|
|
||
Income tax benefit
|
1,721
|
|
|
681
|
|
||
Net income
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Net income per share attributable to common stockholders:
|
|
|
|
||||
Basic
|
$
|
1.11
|
|
|
$
|
0.63
|
|
Diluted
|
$
|
1.11
|
|
|
$
|
0.63
|
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
45,605,845
|
|
|
41,550,293
|
|
||
Diluted
|
45,919,648
|
|
|
41,550,293
|
|
||
|
|
|
|
|
For the Fiscal Year Ended
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
50,791
|
|
|
$
|
26,040
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Amortization of deferred debt issuance costs
|
6
|
|
|
216
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
714
|
|
||
Deferred income taxes
|
—
|
|
|
350
|
|
||
Equity-based compensation expense
|
975
|
|
|
513
|
|
||
Equity in net income of subsidiaries
|
(51,515
|
)
|
|
(28,312
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Other current liabilities
|
—
|
|
|
1,061
|
|
||
Other current assets
|
969
|
|
|
(1,603
|
)
|
||
Other liabilities
|
(3,369
|
)
|
|
—
|
|
||
Net cash used in operating activities
|
(2,143
|
)
|
|
(1,021
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Return of investments in subsidiaries
|
—
|
|
|
27,000
|
|
||
Purchases of property, plant and equipment
|
(131
|
)
|
|
—
|
|
||
Investment in subsidiary
|
(34,155
|
)
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
(34,286
|
)
|
|
27,000
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Change in amounts due to (from) subsidiaries, net
|
(6,994
|
)
|
|
20,305
|
|
||
Repayments of long-term debt
|
—
|
|
|
(12,500
|
)
|
||
Payment of treasury stock purchase obligation
|
(2,569
|
)
|
|
(3,000
|
)
|
||
Proceeds from initial public offering of Class A common stock, net of offering costs
|
98,009
|
|
|
—
|
|
||
Proceeds from sale of treasury stock
|
5
|
|
|
638
|
|
||
Common stock dividend paid
|
—
|
|
|
(31,293
|
)
|
||
Net cash provided by (used in) financing activities
|
88,451
|
|
|
(25,850
|
)
|
||
Net change in cash and cash equivalents
|
$
|
52,022
|
|
|
$
|
129
|
|
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
$
|
1,330
|
|
|
$
|
1,201
|
|
End of period
|
$
|
53,352
|
|
|
$
|
1,330
|
|
|
|
|
|
•
|
Report of Independent Registered Public Accounting Firm — RSM US LLP
|
•
|
Consolidated Balance Sheets as of September 30, 2018 and 2017
|
•
|
Consolidated Statements of Income for the fiscal years ended September 30, 2018 and 2017
|
•
|
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended September 30, 2018 and 2017
|
•
|
Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2018 and 2017
|
•
|
Notes to Consolidated Financial Statements for the fiscal years ended September 30, 2018 and 2017
|
•
|
Parent Company Balance Sheets as of September 30, 2018 and 2017
|
•
|
Parent Company Statements of Income for the fiscal years ended September 30, 2018 and 2017
|
•
|
Parent Company Statements of Cash Flows for the fiscal years ended September 30, 2018 and 2017
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
10.1†
|
|
|
10.2
|
|
|
10.2A
|
|
Exhibit
Number
|
|
Description
|
10.2B
|
|
|
10.2C
|
|
|
10.2D
|
|
|
10.3†
|
|
|
10.4†
|
|
|
10.4A†
|
|
|
10.4B†
|
|
|
10.4C†
|
|
|
10.4D†
|
|
|
10.4E†
|
|
|
10.5
|
|
|
10.5A
|
|
|
10.6†
|
|
|
10.7†
|
|
|
|
CONSTRUCTION PARTNERS, INC.
|
|
|
|
|
By:
|
/s/ Charles E. Owens
|
|
|
Charles E. Owens
|
|
|
President and Chief Executive Officer
|
Name and Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Charles E. Owens
|
|
President, Chief Executive Officer and Director
|
|
December 14, 2018
|
Charles E. Owens
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ R. Alan Palmer
|
|
Executive Vice President and Chief Financial Officer
|
|
December 14, 2018
|
R. Alan Palmer
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Todd K. Andrews
|
|
Chief Accounting Officer
|
|
December 14, 2018
|
Todd K. Andrews
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Ned N. Fleming, III
|
|
Executive Chairman of the Board and Directors
|
|
December 14, 2018
|
Ned N. Fleming, III
|
|
|
|
|
|
|
|
|
|
/s/ Craig Jennings
|
|
Director
|
|
December 14, 2018
|
Craig Jennings
|
|
|
|
|
|
|
|
|
|
/s/ Mark R. Matteson
|
|
Director
|
|
December 14, 2018
|
Mark R. Matteson
|
|
|
|
|
|
|
|
|
|
/s/ Michael H. McKay
|
|
Director
|
|
December 14, 2018
|
Michael H. McKay
|
|
|
|
|
|
|
|
|
|
/s/ Stefan L. Shaffer
|
|
Director
|
|
December 14, 2018
|
Stefan L. Shaffer
|
|
|
|
|
Subsidiary
|
|
Jurisdiction of Incorporation/Formation
|
Construction Partners Holdings, Inc.
|
|
Delaware
|
C.W. Roberts Contracting, Inc.
|
|
Florida
|
Everett Dykes Grassing Co., Inc.
|
|
Georgia
|
Fred Smith Construction, Inc.
|
|
North Carolina
|
FSC II, LLC
|
|
North Carolina
|
The Scruggs Company
|
|
Georgia
|
Wiregrass Construction Company, Inc.
|
|
Alabama
|
1.
|
I have reviewed this Annual Report on Form 10-K of Construction Partners, Inc. for the fiscal year ended September 30, 2018;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
[Intentionally omitted];
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: December 14, 2018
|
|
By:
|
|
/s/ Charles E. Owens
|
|
|
|
|
Charles E. Owens
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Construction Partners, Inc. for the fiscal year ended September 30, 2018;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
[Intentionally omitted];
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date: December 14, 2018
|
|
By:
|
|
/s/ R. Alan Palmer
|
|
|
|
|
R. Alan Palmer
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: December 14, 2018
|
|
By:
|
|
/s/ Charles E. Owens
|
|
|
|
|
Charles E. Owens
|
|
|
|
|
President and Chief Executive Officer
|
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: December 14, 2018
|
|
By:
|
|
/s/ R. Alan Palmer
|
|
|
|
|
R. Alan Palmer
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(A)
|
The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under Section 104 of the Mine Act for which the operator received a citation from the MSHA.
|
(B)
|
The total number of orders issued under Section 104(b) of the Mine Act.
|
(C)
|
The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act.
|
(D)
|
The total number of flagrant violations under Section 110(b)(2) of the Mine Act.
|
(E)
|
The total number of imminent danger orders issued under Section 107(a) of the Mine Act.
|
(F)
|
The total dollar value of proposed assessments from the MSHA under the Mine Act.
|
(G)
|
The total number of mining-related fatalities.
|
(H)
|
Any pending legal action before the Federal Mine Safety and Health Review Commission involving the applicable mine(s).
|