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3/25/22, 9:42 AM
<br />Table of Contents
<br />Overview
<br />road -20210930
<br />We are a civil infrastructure company that specializes in the building and maintenance of transportation networks. Our operations
<br />leverage a highly -skilled workforce, strategically located HMA plants, substantial construction assets and select material deposits. We
<br />provide construction products and services to both public and private infrastructure projects, with an emphasis on highways, roads,
<br />bridges, airports and commercial and residential sites in the southeastern United States.
<br />Our public projects are funded by federal, state and local governments and include roads, highways, bridges, airports and other forms
<br />of infrastructure. Public transportation infrastructure projects historically have been a relatively stable portion of state and federal
<br />budgets and represent a significant share of the United States construction market. Federal funds are allocated on a state -by -state basis,
<br />and each state is required to match a portion of the federal funds that it receives. Federal highway spending uses funds predominantly
<br />from the Highway Trust Fund, which derives its revenues from fuel taxes and other user fees.
<br />In addition to public infrastructure projects, we provide a wide range of large site work construction and HMA paving services to
<br />private construction customers, including commercial and residential developers and local businesses.
<br />Fiscal 2021 Developments
<br />COVID-19
<br />We did not incur significant disruptions from the COViD-19 pandemic during the fiscal year ended September 30, 2021. However, we
<br />continue to closely monitor the impact of the pandemic on all aspects of our business, including its impact on our customers,
<br />employees, suppliers and vendors. Among the primary risks to our business from the pandemic are (i) employee absences, which could
<br />adversely affect our productivity and our ability to complete projects in accordance with our contractual obligations, and could require
<br />us to temporarily close our facilities or project sites, (ii) potential disruptions in our supply chains for raw materials or equipment,
<br />whether as a result of facility closures or otherwise, which could increase our labor and materials costs and impair our ability to
<br />manufacture HMA or the ability of our subcontractors to complete their required tasks, and (iii) the impact of the COVID-19 pandemic
<br />on our customers, which could cause these customers to cancel or delay current or prospective projects or become delinquent in their
<br />payments to us for work that we have performed. These risks materialized in varying degrees during fiscal 2021, but none of these
<br />risks, individually or in the aggregate, have significantly impacted our operations to date. In addition, the extent to which our
<br />operations may be impacted by the COVID-19 pandemic going forward will also depend on the duration of the pandemic, the
<br />emergence of different COVID-19 variants, the efficacy and adoption rates of vaccines, and actions by government authorities to
<br />contain the outbreak or mitigate the impact of the pandemic. For example, we continue to monitor the impact of vaccination
<br />requirements imposed by our customers or governmental authorities on our workforce, which could increase employee turnover and
<br />thereby impair our ability to perform our construction projects.
<br />Business Acquisitions
<br />We completed eight acquisitions during the fiscal year, through which we added eighteen HMA plants and five aggregates facilities
<br />located in North Carolina and Alabama. As a result of these acquisitions, we entered into several new markets, while also securing
<br />crushed stone and aggregates sources for certain of our markets as part of our vertical integration strategy and adding a diverse fleet of
<br />trucks and construction equipment to support our operations. For more information about our acquisitions during fiscal 2021, see Note
<br />4 - Business Acquisitions to our consolidated financial statements included elsewhere in this report.
<br />Amended and Restated Credit Agreement
<br />In June 2021, we amended and restated our existing Credit Agreement to, among other things, increase the amount of our Term Loan to
<br />an initial aggregate principal amount of $200 million (the full amount of which was drawn immediately) and the amount of our
<br />Revolving Credit Facility to an initial aggregate principal amount of $225 million. We used a portion of the proceeds advanced to us to
<br />refinance our indebtedness outstanding on the restatement date and to pay fees and expenses incurred in connection with the
<br />transaction, with the remainder available for our general corporate purposes, including permitted acquisitions. For more information
<br />about the Credit Agreement, see Note 11 - Debt to our consolidated financial statements included elsewhere in this report.
<br />Inflation, Supply Chain and Labor
<br />During fiscal 2021, we began to experience an upward trend in several inflation -sensitive inputs necessary for us to provide our
<br />products and services, including upward pressure on wages and increases in the cost of raw materials used to produce HMA and other
<br />items that are critical to our business, including fuel, concrete and steel. In addition, we experienced some disruptions from various
<br />participants in our supply chain, including subcontractors, materials suppliers and equipment manufacturers, who provide the raw
<br />materials, equipment, vehicles, construction supplies and other services we require in order to manufacture HMA and perform our
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