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3/25/22,9:42 AM
<br />Table of Contents
<br />Financial Risks
<br />road -20210930
<br />Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations.
<br />Our debt consists primarily of our borrowings under the Credit Agreement, which, as of September 30, 2021, provided for a $200.0
<br />million Term Loan and a $225.0 million Revolving Credit Facility. A significant portion of our cash flow is required to pay interest and
<br />principal on our outstanding indebtedness, and we may be unable to generate sufficient cash flow from operations, or have future
<br />borrowings available, to enable us to repay our indebtedness or to fund other liquidity needs. Among other consequences, this level of
<br />indebtedness could:
<br />• require us to use a significant percentage of our cash flow from operations for debt service and the satisfaction of repayment
<br />obligations, and not for other purposes;
<br />• limit our ability to borrow money or issue equity to fund our working capital, capital expenditures, acquisitions and debt
<br />service requirements;
<br />• cause our interest expense to increase if there is a general increase in interest rates, because a portion of our indebtedness
<br />bears interest at floating rates;
<br />• limit our flexibility in planning for or reacting to changes in our business and future business opportunities;
<br />• cause us to be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
<br />• make us more vulnerable to a downturn in our business or the economy; and
<br />• limit our ability to exploit business opportunities.
<br />Although the Credit Agreement restricts our ability to incur additional indebtedness, these restrictions are subject to a number of
<br />qualifications and exceptions, and we could incur substantial additional indebtedness in compliance with these restrictions. This could
<br />reduce our ability to satisfy our current obligations and further exacerbate the risks to our financial condition described above.
<br />The Credit Agreement restricts our ability to engage in some business and financial transactions.
<br />The Credit Agreement contains a number of covenants that limit our ability to incur additional indebtedness or guarantees, create liens
<br />on assets, change our or our subsidiaries' fiscal year, enter into sale and leaseback transactions, enter into certain restrictive
<br />agreements, engage in mergers or consolidations, participate in partnerships and joint ventures, sell assets, incur additional liens, pay
<br />dividends or distributions and make other restricted payments, make investments, loans or advances, repay or amend the terms of
<br />subordinated indebtedness, make acquisitions, enter into certain operating leases, enter into certain hedge transactions, amend material
<br />contracts, and engage in certain transactions with affiliates. The Credit Agreement also requires us to maintain a fixed charge coverage
<br />ratio and a consolidated leverage ratio and contains certain customary representations and warranties, affirmative covenants and events
<br />of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under the
<br />Credit Agreement will be entitled to accelerate amounts due thereunder and take other actions permitted to be taken by a secured
<br />creditor. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated
<br />indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.
<br />The previously annouuneed phase-out of LIBOR, or the replacement of LIBOR with a different reference rate, may adversely affect
<br />the interest rate that we pay on our indebtedness.
<br />The annual interest rates applicable to advances made under the Credit Agreement is calculated, at our option, by using either a base
<br />rate or LIBOR, in each case plus an applicable margin percentage that corresponds to our consolidated total leverage ratio. In 2017, the
<br />United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced that it would phase out LIBOR by the end of
<br />2021. However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced that it intends to
<br />extend publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023. It is unclear whether new
<br />methods of calculating LIBOR will be established such that it continues to exist after 2023, or whether alternative rates or benchmarks
<br />will be adopted. Changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark,
<br />may adversely affect interest rates, including the rates we pay on borrowings under the Credit Agreement, and result in higher
<br />borrowing costs. The Credit Agreement provides that, upon the occurrence of certain triggering events relating to the end of LIBOR,
<br />we and the administrative agent under the Credit Agreement will select a different benchmark rate to replace LIBOR as the reference
<br />rate for interest accruing on certain advances. Changes in, or the inability to agree on, an alternative rate or benchmark may negatively
<br />impact the terms of such indebtedness.
<br />https:l/www.sec.govIArchivestedgar/data/0001718227/000171822721000107/road-20210930.htm 351144
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