|
3125/22, 9:42 AM
<br />Table of Contents
<br />road -20210930
<br />weather during our third and fourth fiscal quarters typically result in higher activity and revenues during those quarters. Our first and
<br />second fiscal quarters typically have lower levels of activity due to adverse weather conditions. Our third fiscal quarter varies greatly
<br />with spring rains and wide temperature variations. A coal, wet spring increases drying time on projects, which can delay sales in the
<br />third fiscal quarter, while a warm, dry spring may facilitate earlier project commencement dates.
<br />Sources and Availability of Raw Materials
<br />We purchase raw materials, including, but not limited to, diesel fuel, liquid asphalt, other petroleum-based resources, sand and rock
<br />from numerous sources. With few exceptions, we do not enter into long-term agreements to purchase raw materials. We receive quotes
<br />from suppliers, most with a "not to exceed" price for the quoted product over the life of a project. In the HMA production process,
<br />components of a mix include virgin aggregates, such as sand and rock, liquid asphalt, and reclaimed asphalt pavement C'RAP'). We are
<br />able to intemally supply RAP, a byproduct of asphalt resurfacing projects, to all of our HMA plants, and virgin aggregates in some of
<br />our market areas. The majority of our HMA plants sit in or near suppliers' aggregates facilities, thereby reducing the hauling cost of
<br />material to our plant. The price and availability of raw materials may vary from year to year due to market conditions and production
<br />capacities. We do not expect a lack of availability of any raw materials over the next 12 months.
<br />Government and Environmental Regulations
<br />Our operations are subject to stringent and complex federal, state and local laws and regulations governing the environmental, health
<br />and safety aspects of our operations or otherwise relating to environmental protection. These laws and regulations impose numerous
<br />obligations and limitations on our operations, including:
<br />• requirements to obtain a permit or other approval before conducting regulated activities;
<br />• restrictions on the types, quantities and concentration of materials that can be released into the environment;
<br />• limitation or prohibition of activities on certain lands lying within wilderness, wetlands, and other protected areas;
<br />• requirements to comply with specific health and safety criteria addressing worker protection; and
<br />• the imposition of substantial liabilities for pollution resulting from our operations.
<br />Such federal laws include (i) the Resource Conservation and Recovery Act, the Pollution Prevention Act and the Comprehensive
<br />Environmental Response, Compensation and Liability Act, governing solid and hazardous waste management, (ii) the Clean Air Act
<br />and the Clean Water Act, protecting air and water resources, and (iii) the Emergency Planning and Community Right -to -Know Act and
<br />Toxic Substances Control Act, governing the management of hazardous materials, in addition to analogous state laws. Numerous
<br />governmental authorities, such as the Environmental Protection Agency and corresponding state agencies, have the power to enforce
<br />compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve difficult and
<br />costly compliance measures or corrective actions. Failure to comply with these laws and regulations may result in the assessment of
<br />sanctions, including administrative, civil or criminal penalties, compensatory damages, the imposition of investigatory or remedial
<br />obligations, and the issuance of orders limiting or prohibiting some or all of our operations. In addition, we may experience delays in
<br />obtaining, or be unable to obtain, required permits, which may delay or interrupt our operations and limit our growth and revenue.
<br />Certain environmental laws impose strict liability (i.e., no showing of "fault" is required) as well as joint and several liability for costs
<br />required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. We may
<br />be required to remediate contaminated properties currently or formerly owned or operated by us, regardless of whether such
<br />contamination resulted from the conduct of others or from the consequences of our own actions that complied with applicable laws at
<br />the time those actions were taken. In connection with certain acquisitions, we could assume, or be required to provide indemnification
<br />against, environmental liabilities that could expose us to material losses. Furthermore, the existence of contamination at properties we
<br />own, lease or operate could result in increased operational costs or restrictions on our ability to use those properties as intended,
<br />including for mining purposes.
<br />In certain instances, citizen groups also have the ability to bring legal proceedings against us if we are not in compliance with
<br />environmental laws, or to challenge our ability to receive environmental permits that we need to operate. In addition, claims for
<br />damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of our
<br />operations. Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental
<br />claim is made against us. Moreover, public interest in the protection of the environment has increased dramatically in recent years. The
<br />trend of more expansive and stringent environmental legislation and regulations applied to the construction industry could continue,
<br />resulting in increased costs of doing business and consequently affecting profitability.
<br />httpsJ/www.sec.gov/Archives/edgar/data/0001718227/000171822721000107/road-20210930.htm 16/144
<br />
|