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3/25/22, 9:42 AM
<br />Table of Contents
<br />road -20210930
<br />general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to
<br />attract and retain employees, and could negatively affect our ability to complete our construction projects according to the required
<br />schedule or otherwise efficiently operate our business. If we are unable to hire and retain employees capable of performing at a high
<br />level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third -party outsourcing,
<br />have unintended negative effects, our business could be adversely affected. In addition, we distribute our products and receive raw
<br />materials primarily by truck. Reduced availability of trucking capacity due to shortages of drivers, primarily as a result of the COVID-
<br />19 pandemic, has caused an increase in the cost of transportation for us and our suppliers. An overall labor shortage, lack of skilled
<br />labor, increased turnover or labor inflation, caused by COVED -19 or as a result of general macroeconomic factors, could have a
<br />material adverse impact on our operations, results of operations, liquidity or cash flows.
<br />We depend on Surd parties for equipment and supplies essential to operate our business.
<br />We rely on third parties to sell or lease real property, plants and equipment to us and to provide us with supplies, including liquid
<br />asphalt cement, aggregates and other construction materials necessary for our operations. The inability to purchase or lease the
<br />properties, plants or equipment that are necessary for our operations could severely impact our business. If we lose our supply contracts
<br />and receive insufficient supplies from third parties to meet our customers' needs, or if our suppliers experience price increases or
<br />disruptions to their business, such as labor disputes, supply shortages, financial or regulatory difficulties or distribution problems, our
<br />ability to bid for or complete contracts could be impaired, in which case our business, financial condition, results of operations,
<br />liquidity and cash flows would be materially and adversely affected.
<br />Supply chain issues, including shortages of raw materials needed for HMA production, equipment, vehicles and construction
<br />supplies, could increase our costs or cause delays in our ability to complete our projects, which could have an adverse impact on
<br />our business and our relationships with customers.
<br />We rely on our supply chain for raw materials to manufacture HMA and for equipment, vehicles and construction supplies in order to
<br />complete our projects. A reduction or interruption in supply, including disruptions due to the COVID-19 pandemic, a significant
<br />natural disaster, shortages in global freight capacity, significant increases in the price of critical components and raw materials, a failure
<br />to appropriately forecast or adjust our requirements based on our business needs, or volatility in demand for our products and services
<br />could materially adversely affect our business, operating results, and financial condition and could materially damage customer
<br />relationships. Our vendors and subcontractors also may be unable to meet our demand, significantly increase lead times for deliveries
<br />or impose significant price increases that we are unable to offset through alternate sources of supply, price increases to our customers
<br />or increased productivity in our operations. In some cases, we procure certain inputs and services from single or limited suppliers or
<br />subcontractors. In the event of supply disruptions from these suppliers or subcontractors, we may not be able to diversify our resources
<br />for such materials or services in a timely manner or may experience quality issues with alternate sources. Our growth and ability to
<br />meet customer demand depend in large part on our ability to obtain timely deliveries of raw materials, plant components, equipment
<br />and vehicles from our suppliers, and significant disruptions in their supply could materially adversely affect our business, operating
<br />results, and financial condition and could materially damage customer relationships.
<br />We consume natural gas, electricity, diesel fuel, liquid asphalt and other petroleum-based resources that are subject to potential
<br />reliability issues, supply constraints and signifi'cantpriee fluctuations.
<br />In our production and distribution processes, we consume significant amounts of natural gas, electricity, diesel fuel, liquid asphalt and
<br />other petroleum-based resources. The availability and pricing of these resources are subject to market forces that are beyond our
<br />control, such as unavailability due to refinery turnarounds, higher prices charged for petroleum-based products, and other factors.
<br />Furthermore, we are vulnerable to any reliability issues expe-lenced by our suppliers, which also are beyond our control. Our suppliers
<br />contract separately for the purchase of such resources, and our sources of supply could be interrupted if our suppliers are unable to
<br />obtain these materials due to higher demand or other factors that interrupt their availability. Additionally, increases in the costs of fuel
<br />and other petroleum-based products utilized in our operations, particularly increases following a bid based on lower costs for such
<br />products, could result in a lower profit, or a loss, on a contract. Variability in the supply and prices of these resources could have a
<br />material adverse effect on our financial condition, results of operations and liquidity.
<br />Our contract backlog is subject to reductions in scope and cancellations and therefore could be an unreliable indicator of our
<br />future earnings.
<br />At September 30, 2021, our contract backlog was $966.2 million, compared to $608.1 million at September 30, 2020. Our contract
<br />backlog generally consists of construction projects for which we either have an executed contract or commitment with a client or have
<br />submitted the current low bid. Contract backlog does not include external sales of HMA, aggregates, and liquid asphalt cement.
<br />Moreover, our contract backlog reflects our expected revenues from the contract, commitment or bid, which is often subject to revision
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