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<br />Table of Contents
<br />road -20210930
<br />• an increase in inventories of $3.9 million due to increased inventories from acquisitions and normal fluctuations in our
<br />inventory cycle;
<br />an increase in accounts payable and accrued expenses and other current liabilities of $24.0 million due to an increase in
<br />construction activity; and
<br />a net decrease in the difference between costs and estimated earnings in excess of billings on uncompleted contracts and
<br />billings in excess of costs and estimated earnings on uncompleted contracts of $15.1 million due to the timing of performing
<br />and closing projects.
<br />During fiscal 2020, cash provided by operating activities, net of acquisitions, was $105.2 million, primarily as a result of:
<br />net income of $40.3 million, including $39.3 million of depreciation, depletion and amortization of long-lived assets,
<br />unrealized losses on derivative instruments of $1.9 million and equity -based compensation expense of $1.6 million;
<br />• a decrease in prepaid expenses and other current assets of $8.1 million, primarily reflecting the $7.7 mullion payment received
<br />by certain of our subsidiaries from January 2020 to July 2020 in connection with a settlement agreement we entered into in
<br />April 2018 related to a business interruption event; and
<br />a decrease in contracts receivable including retainage, net of $7.4 million due to a reduction in fiscal year 2020 fourth quarter
<br />job activity in certain of our markets, including North Carolina, compared to the prior year.
<br />Investing Activities
<br />During fiscal 2021, cash used in investing activities was $263.4 million, of which $210.7 million related to acquisitions completed in
<br />the period and $56.3 million of which was invested in property, plant and equipment. These amounts were partially offset by $3.7
<br />million of proceeds from the sale of equipment.
<br />During fiscal 2020, cash used in investing activities was $79.4 million, of which $30.2 million related to acquisitions completed in the
<br />period and $52.6 million of which was invested in property, plant and equipment, which included $11.5 million for the buyout of
<br />equipment leases. These amounts were partially offset by $3.0 million of proceeds from the sale of equipment.
<br />Financing Activities
<br />During fiscal 2021, cash provided by financing activities was $123.8 million. We received $219.2 million from proceeds on long-term
<br />debt, net of debt issuance costs and discounts, which was offset by $95.4 million of principal payments on long-term debt.
<br />During fiscal 2020, cash provided by financing activities was $41.9 million. We received $72.3 million from proceeds on long-term
<br />debt, net of debt issuance costs and discounts, which was offset by $30.4 million of principal payments on long-term debt.
<br />Credit Agreement
<br />We and each of our subsidiaries are parties to the Credit Agreement, which provides for the Term Loan and the Revolving Credit
<br />Facility. At September 30, 2021 and 2020, we had $197.5 million and $92.9 million, respectively, of principal outstanding under the
<br />Term Loan, $20.0 million and $0.0 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability
<br />of $193.7 million and $39.3 million, respectively, under the Revolving Credit Facility, including reduction for outstanding letters of
<br />credit. The obligations of our subsidiaries under the Term Loan and the Revolving Credit Facility are secured by a first priority security
<br />interest in substantially all of our assets.
<br />The Credit Agreement requires the Company to satisfy certain financial covenants, including a minimum fixed charge coverage ratio of
<br />1.20 -to -1.00 and a maximum consolidated leverage ratio of 3.00 -to -1.00, subject to certain adjustments. At September 30, 2021 and
<br />2020, our fixed charge coverage ratio was 3.29 -to -1.00 and 2.85 -to -1.00, respectively, and our consolidated leverage ratio was 1.99 -to -
<br />1.00 and 1.08 -to -1.00, respectively.
<br />From time to time, the Company has entered into interest rate swap agreements to hedge against the risk of changes in interest rates. At
<br />September 30, 2021 and 2020, the aggregate notional value of these interest rate swap agreements was $198.3 million and $46.5
<br />million, respectively, and the fair value was $(0.8) million and $(1.7) million, respectively, which is included within other current
<br />liabilities or other long-term liabilities on the Company's Consolidated Balance Sheets.
<br />https://www.sec.gov/Archivesledgar/data/0001718227/000171822721000107/road-20210930.htm 61/144
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