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3/25/22, 9:42 AM
<br />Table of Contents
<br />Item IA. Risk Factors.
<br />road -20210930
<br />An investment in our Class A common stock involves risks. You should carefully read and consider the following risks, as well as all of
<br />the other information contained in this report, before making an investment decision. Our business, financial condition and results of
<br />operations could be materially and adversely affected by any of these risks. As a result, the trading price of our Class A common stock
<br />could decline, and you could lose all or part of your investment. The risks described below are not the only ones that we face.
<br />Additional risks not presently known to us or that we currently consider immaterial also may adversely affect us.
<br />Risks Related to our Business
<br />A significant slowdown or decline in economic conditions, particularly in the southeastern United States, could adversely impact
<br />our results of operations.
<br />We currently operate in Alabama, Florida, Georgia, North Carolina and South Carolina. A significant slowdown or decline in economic
<br />conditions or uncertainty regarding the economic outlook in the United States generally, or in any of these states particularly, could
<br />reduce demand for infrastructure projects. Demand for infrastructure projects depends on overall economic conditions, the need for
<br />new or replacement infrastructure, the priorities placed on various projects funded by governmental entities and federal, state and local
<br />government spending levels. In particular, low tax revenues, credit rating downgrades, budget deficits and financing constraints,
<br />including timing and amount of federal funding and competing governmental priorities, could negatively impact the ability of
<br />government agencies to fund existing or new public infrastructure projects. In addition, any instability in the financial and credit
<br />markets could negatively impact our customers' ability to pay us on a timely basis, or at all, for work on projects already in progress,
<br />could cause our customers to delay or cancel construction projects in our contract backlog, and could create difficulties for customers
<br />to obtain adequate financing to fund new construction projects, including through the issuance of municipal bonds.
<br />Our business depends on federal, state and local government spending for public infrastructure construction, and reductions in
<br />government funding could adversely affect our results of operations.
<br />During the fiscal year ended September 30, 2021, we generated approximately 61 .3% of our construction contract revenues from
<br />publicly funded construction projects and the sale of construction materials to public customers at the federal, state and local levels. As
<br />a result, if publicly funded construction decreases due to reduced federal, state or local funding or otherwise, our financial condition,
<br />results of operations and liquidity could be materially adversely affected.
<br />Federal highway bills provide spending authorizations that represent the maximum amounts available for federally funded construction
<br />projects. Each year, Congress passes an appropriation act establishing the amount that can be used for particular programs. The annual
<br />funding level is generally tied to receipts of highway user taxes placed in the federal Highway Trust Fund. Once Congress passes the
<br />annual appropriation, the federal goverment distributes funds to each state based on formulas or other procedures. States generally
<br />must spend these funds on the specific programs outlined in the federal legislation. In recent years, the Highway Trust Fund has faced
<br />insolvency as outlays have outpaced revenues. In recent years, annual shortfalls have been addressed primarily by short-term measures.
<br />In November 2021, the IIJA was signed into law, which increases federal spending on surface transportation programs and provides
<br />additional funding for highways, bridges and airports over a five-year period. Although the law provides for funding at historically
<br />high levels, the timing, nature and scale of the projects for which these funds will be used remains uncertain. As a result, we cannot be
<br />assured of the existence, timing or amount of future federal highway funding. Federal highway funding is also subject to uncertainties
<br />associated with congressionall spending as a whole, including the potential impacts of budget deficits, government shutdowns and
<br />federal sequestration. Any reduction in federal highway funding, particularly in the amounts allocated to states in which we operate,
<br />could have a material adverse effect on our results of operations. While the incoming administration has announced an infrastructure
<br />stimulus plan, we cannot predict the impact, if any, that it or other proposed changes in law and regulations may have on our business.
<br />Each state funds its infrastructure spending from specially allocated amounts collected from various state taxes, typically fuel taxes and
<br />vehicle fees, as well as from voter -approved bond programs. Shortages in state tax revenues can reduce the amount spent or delay
<br />expenditures on state infrastructure projects. Many states have experienced state -level funding pressures caused by lower tax revenues
<br />and an inability to finance approved projects. To address these pressures, some states have adopted measures to promote stable funding
<br />for infrastructure investment, including special-purpose taxes and increased fuel taxes. Any reduction in state infrastructure funding in
<br />the states in which we operate could have a material adverse effect on our results of operations.
<br />We derive a significant portion of our revenues from state DOTS. The loss of our ability to competitively bid for certain projects or
<br />successfully contract with state DOTs could have a material adverse effect on our business.
<br />Our largest customers are state DOTs. During the fiscal year ended September 30, 2021, the Alabama DOT and the North Carolina
<br />DOT accounted for 10.8% and 10.3% of our revenues, respectively, and projects performed for all DOTS accounted for 33.7% of our
<br />revenues. We believe that we will continue to rely on state DOTS for a substantial portion of our revenues for the foreseeable future.
<br />https://www.sec.gov/Archives/edgar/data/0o01718227/00017182272'� 000107/road-20210930.htm 201144
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