QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(Nasdaq Global Select Market) |
☒ | Accelerated Filer | ☐ | |||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
Emerging Growth Company |
December 31, | September 30, | ||||||||||
2023 | 2023 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Contracts receivable including retainage, net | |||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Investment in joint venture | |||||||||||
Restricted investments | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Current maturities of long-term debt | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities: | |||||||||||
Long-term debt, net of current maturities and deferred debt issuance costs | |||||||||||
Operating lease liabilities, net of current portion | |||||||||||
Deferred income taxes, net | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Class A common stock, par value $ | |||||||||||
Class B common stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, Class A common stock, par value $ | ( | ( | |||||||||
Treasury stock, Class B common stock, par value $ | ( | ( | |||||||||
Accumulated other comprehensive income, net | |||||||||||
Retained earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
For the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Revenues | $ | $ | ||||||||||||
Cost of revenues | ||||||||||||||
Gross profit | ||||||||||||||
General and administrative expenses | ( | ( | ||||||||||||
Gain on sale of property, plant and equipment, net | ||||||||||||||
Gain on facility exchange | ||||||||||||||
Operating income | ||||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Other (expense) income | ( | |||||||||||||
Income before provision for income taxes | ||||||||||||||
Provision for income taxes | ||||||||||||||
Net income | ||||||||||||||
Other comprehensive loss, net of tax | ||||||||||||||
Unrealized loss on interest rate swap contract, net | ( | ( | ||||||||||||
Unrealized gain on restricted investments, net | ||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||
Comprehensive income | $ | $ | ||||||||||||
Net income per share attributable to common stockholders: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
For the Three Months Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Treasury Stock Class A Common Stock | Treasury Stock Class B Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss), net | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock grant awards | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Treasury Stock Class A Common Stock | Treasury Stock Class B Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss), net | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock grant awards | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities: | |||||||||||
Depreciation, depletion, accretion and amortization | |||||||||||
Amortization of deferred debt issuance costs | |||||||||||
Unrealized loss on derivative instruments | |||||||||||
Provision for bad debt | |||||||||||
Gain on sale of property, plant and equipment | ( | ( | |||||||||
Gain on facility exchange | ( | ||||||||||
Realized loss on sales, calls and maturities of restricted investments | |||||||||||
Share-based compensation expense | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
Other non-cash adjustments | ( | ( | |||||||||
Changes in operating assets and liabilities, net of business acquisitions: | |||||||||||
Contracts receivable including retainage, net | |||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Other assets | ( | ( | |||||||||
Accounts payable | ( | ( | |||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | |||||||||||
Accrued expenses and other current liabilities | ( | ( | |||||||||
Other long-term liabilities | |||||||||||
Net cash provided by operating activities, net of business acquisitions | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Proceeds from facility exchange | |||||||||||
Proceeds from sales, calls and maturities of restricted investments | |||||||||||
Business acquisitions, net of cash acquired | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving credit facility | |||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Purchase of treasury stock | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net change in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for operating lease liabilities | $ | $ | |||||||||
Non-cash items: | |||||||||||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | |||||||||
Property, plant and equipment financed with accounts payable | $ | $ | |||||||||
% of Consolidated Revenues for the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Florida Department of Transportation | * | |||||||||||||
North Carolina Department of Transportation | * | |||||||||||||
% of Consolidated Revenues for the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Public | ||||||||||||||
Private | ||||||||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Pro forma revenues | $ | $ | |||||||||
Pro forma net income | $ | $ |
December 31, 2023 | September 30, 2023 | ||||||||||
(unaudited) | |||||||||||
Contracts receivable | $ | $ | |||||||||
Retainage receivable | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Contracts receivable including retainage, net | $ | $ | |||||||||
December 31, 2023 | September 30, 2023 | ||||||||||
(unaudited) | |||||||||||
Costs on uncompleted contracts | $ | $ | |||||||||
Estimated earnings to date on uncompleted contracts | |||||||||||
Billings to date on uncompleted contracts | ( | ( | |||||||||
Net billings in excess of costs and estimated earnings on uncompleted contracts | $ | ( | $ | ( | |||||||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | |||||||||||||||
September 30, 2022 | $ | $ | ( | $ | ( | ||||||||||||
Changes in revenue billed, contract price or cost estimates | $ | $ | ( | $ | ( | ||||||||||||
December 31, 2022 (unaudited) | $ | $ | ( | $ | ( | ||||||||||||
September 30, 2023 | $ | $ | ( | $ | ( | ||||||||||||
Changes in revenue billed, contract price or cost estimates | $ | $ | ( | $ | ( | ||||||||||||
December 31, 2023 (unaudited) | $ | $ | ( | $ | ( | ||||||||||||
December 31, 2023 | September 30, 2023 | |||||||||||||
(unaudited) | ||||||||||||||
Construction equipment | $ | $ | ||||||||||||
Plants | ||||||||||||||
Land and improvements | ||||||||||||||
Mineral reserves | ||||||||||||||
Buildings | ||||||||||||||
Furniture and fixtures | ||||||||||||||
Leasehold improvements | ||||||||||||||
Total property, plant and equipment, gross | ||||||||||||||
Accumulated depreciation, depletion, and amortization | ( | ( | ||||||||||||
Construction in progress | ||||||||||||||
Total property, plant and equipment, net | $ | $ | ||||||||||||
December 31, 2023 | September 30, 2023 | ||||||||||
(unaudited) | |||||||||||
Long-term debt: | |||||||||||
Term Loan | $ | $ | |||||||||
Revolving Credit Facility | |||||||||||
Total long-term debt | |||||||||||
Deferred debt issuance costs | ( | ( | |||||||||
Current maturities of long-term debt | ( | ( | |||||||||
Long-term debt, net of current maturities and deferred debt issuance costs | $ | $ | |||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Numerator | |||||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Denominator | |||||||||||
Weighted average number of common shares outstanding, basic | |||||||||||
Net income per common share attributable to common stockholders, basic | $ | $ | |||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Numerator | |||||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Denominator | |||||||||||
Weighted average number of basic common shares outstanding, basic | |||||||||||
Effect of dilutive securities: | |||||||||||
Restricted stock grants | |||||||||||
Weighted average number of diluted common shares outstanding: | |||||||||||
Net income per diluted common share attributable to common stockholders | $ | $ | |||||||||
Revenue Earned (Expense Incurred) | Accounts Receivable (Payable) | |||||||||||||||||||||||||
For the Three Months Ended December 31, | December 31, | September 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2023 | |||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||
Purchaser of Subsidiary | $ | $ | $ | $ | ||||||||||||||||||||||
Disposed Entity | ||||||||||||||||||||||||||
Land Development Project | ||||||||||||||||||||||||||
Subcontracting Services | ( | (1) | ( | (1) | ( | ( | ||||||||||||||||||||
Island Pond | ( | (2) | ( | (2) | ||||||||||||||||||||||
SunTx | ( | (2) | ( | (2) | ||||||||||||||||||||||
(1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Comprehensive Income. | ||||||||||||||||||||||||||
(2) Cost is reflected as general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income. | ||||||||||||||||||||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
(unaudited) | (unaudited) | ||||||||||
Equity classified awards | $ | $ | |||||||||
Liability classified awards | |||||||||||
Employee stock purchase plan | |||||||||||
Total share-based compensation expense | $ | $ | |||||||||
For the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Operating lease expense | $ | $ | ||||||||||||
Short-term lease expense | ||||||||||||||
Total lease expense | $ | $ | ||||||||||||
Fiscal Year | Amount | |||||||
Remainder of 2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
2029 and thereafter | ||||||||
Total future minimum lease payments | $ | |||||||
Less: imputed interest | ||||||||
Total | $ | |||||||
For the Three Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||||||||||||
Change in | Change in | |||||||||||||||||||||||||||||||||||||
Income Statement Classification | Realized Gain (Loss) | Unrealized Gain (Loss) | Total Gain (Loss) | Realized Gain (Loss) | Unrealized Gain (Loss) | Total Gain (Loss) | ||||||||||||||||||||||||||||||||
Cost of revenues | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
December 31, 2023 | September 30, 2023 | |||||||||||||
Balance Sheet Classification | (unaudited) | |||||||||||||
Prepaid expenses and other current assets - commodity swaps | $ | $ | ||||||||||||
Other assets - interest rate swaps (1) | ||||||||||||||
Accrued expense and other current liabilities - commodity swaps | ( | ( | ||||||||||||
Net unrealized gain position | $ | $ | ||||||||||||
December 31, 2023 | September 30, 2023 | ||||||||||
(unaudited) | |||||||||||
Level 2 | Level 2 | ||||||||||
Assets: | |||||||||||
Commodity swap contracts | $ | $ | |||||||||
Interest rate swap | |||||||||||
Corporate debt securities | |||||||||||
U.S. government securities | |||||||||||
Municipal government securities | |||||||||||
Agency backed securities | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities: | |||||||||||
Commodity swap contracts | $ | $ | |||||||||
Total liabilities | $ | $ | |||||||||
Fiscal Year | Amount | |||||||
Remainder of 2024 | $ | |||||||
2025 | ||||||||
Total | $ | |||||||
Fiscal Year | Amount | |||||||
Remainder of 2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total | $ | |||||||
December 31, 2023 | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
U.S. government securities | $ | $ | $ | $ | ||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Municipal government securities | ||||||||||||||||||||||||||
Agency backed securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
U.S. government securities | $ | $ | $ | $ | ||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Municipal government securities | ||||||||||||||||||||||||||
Other debt securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||
Due within one year | $ | $ | ||||||||||||
Due after one year through three years | ||||||||||||||
Due after three years | ||||||||||||||
Total | $ | $ | ||||||||||||
AOCI | December 31, 2023 (unaudited) | September 30, 2023 | ||||||||||||
Interest rate swap contract, net of blend and extend arrangement | $ | $ | ||||||||||||
Unrealized loss on available-for-sale securities | ( | ( | ||||||||||||
Less tax effect of other comprehensive income (loss) items | ( | ( | ||||||||||||
Total | ||||||||||||||
AOCI | Interest Rate Hedge | |||||||
Balance at September 30, 2023 | $ | |||||||
Net OCI changes | ( | |||||||
Balance at December 31, 2023 (unaudited) | $ | |||||||
AOCI | Interest Rate Hedge | |||||||
Balance at September 30, 2022 | $ | |||||||
Net OCI changes | ( | |||||||
Balance at December 31, 2022 (unaudited) | $ | |||||||
For the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Interest expense (benefit) | $ | ( | $ | ( | ||||||||||
Benefit from income taxes | ||||||||||||||
Total reclassifications from AOCI to earnings | $ | ( | $ | ( | ||||||||||
For the Three Months Ended December 31, | ||||||||||||||
2023 | 2022 (1) | |||||||||||||
Net income | $ | 9,843 | $ | 1,892 | ||||||||||
Interest expense, net | 3,746 | 3,960 | ||||||||||||
Provision for income taxes | 3,118 | 510 | ||||||||||||
Depreciation, depletion, accretion and amortization | 21,121 | 18,375 | ||||||||||||
Share-based compensation expense | 3,046 | 2,480 | ||||||||||||
Adjusted EBITDA | $ | 40,874 | $ | 27,217 | ||||||||||
Revenues | $ | 396,505 | $ | 341,779 | ||||||||||
Adjusted EBITDA Margin | 10.3 | % | 8.0 | % |
Change From the Three Months Ended | |||||||||||||||||||||||||||||||||||
For the Three Months Ended December 31, | December 31, 2022 | ||||||||||||||||||||||||||||||||||
to the Three Months Ended | |||||||||||||||||||||||||||||||||||
2023 | 2022 | December 31, 2023 | |||||||||||||||||||||||||||||||||
Dollars | % of Revenues | Dollars | % of Revenues | $ Change | % Change | ||||||||||||||||||||||||||||||
Revenues | $ | 396,505 | 100.0 | % | $ | 341,779 | 100.0 | % | $ | 54,726 | 16.0 | % | |||||||||||||||||||||||
Cost of revenues | 344,625 | 86.9 | % | 311,283 | 91.1 | % | 33,342 | 10.7 | % | ||||||||||||||||||||||||||
Gross profit | 51,880 | 13.1 | % | 30,496 | 8.9 | % | 21,384 | 70.1 | % | ||||||||||||||||||||||||||
General and administrative expenses | (35,981) | (9.1) | % | (29,725) | (8.7) | % | (6,256) | 21.0 | % | ||||||||||||||||||||||||||
Gain on sale of property, plant and equipment | 836 | 0.2 | % | 168 | — | % | 668 | 397.6 | % | ||||||||||||||||||||||||||
Gain on facility exchange | — | — | % | 5,389 | 1.6 | % | (5,389) | (100.0) | % | ||||||||||||||||||||||||||
Operating income | 16,735 | 4.2 | % | 6,328 | 1.9 | % | 10,407 | 164.5 | % | ||||||||||||||||||||||||||
Interest expense, net | (3,746) | (0.9) | % | (3,960) | (1.2) | % | 214 | (5.4) | % | ||||||||||||||||||||||||||
Other income (expense) | (28) | — | % | 34 | — | % | (62) | (182.4) | % | ||||||||||||||||||||||||||
Income before provision for income taxes | 12,961 | 3.3 | % | 2,402 | 0.7 | % | 10,559 | 439.6 | % | ||||||||||||||||||||||||||
Provision for income taxes | 3,118 | 0.8 | % | 510 | 0.1 | % | 2,608 | 511.4 | % | ||||||||||||||||||||||||||
Net income | $ | 9,843 | 2.5 | % | $ | 1,892 | 0.6 | % | $ | 7,951 | 420.2 | % | |||||||||||||||||||||||
Adjusted EBITDA | $ | 40,874 | 10.3 | % | $ | 27,217 | 8.0 | % | $ | 13,657 | 50.2 | % | |||||||||||||||||||||||
For the Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by operating activities, net of acquisitions | $ | 60,378 | $ | 28,884 | |||||||
Net cash used in investing activities | (104,661) | (70,670) | |||||||||
Net cash provided by financing activities | 64,914 | 49,736 | |||||||||
Net change in cash and cash equivalents | $ | 20,631 | $ | 7,950 | |||||||
Payments Due by Fiscal Year | |||||||||||||||||||||||||||||||||||||||||
Total | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 and Thereafter | |||||||||||||||||||||||||||||||||||
Debt obligations | $ | 443,100 | $ | 11,250 | $ | 18,750 | $ | 22,500 | $ | 390,600 | $ | — | $ | — | |||||||||||||||||||||||||||
Operating leases | 21,677 | 3,031 | 3,545 | 3,353 | 2,984 | 2,492 | 6,272 | ||||||||||||||||||||||||||||||||||
Purchase commitments | 3,326 | 3,115 | 211 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Royalty payments | 2,525 | 282 | 256 | 192 | 180 | 145 | 1,470 | ||||||||||||||||||||||||||||||||||
Asset retirement obligations | 2,432 | — | — | — | — | — | 2,432 | ||||||||||||||||||||||||||||||||||
Total | $ | 473,060 | $ | 17,678 | $ | 22,762 | $ | 26,045 | $ | 393,764 | $ | 2,637 | $ | 10,174 | |||||||||||||||||||||||||||
Carrying Amount | Fair Value | ||||||||||
Fuel swap contracts (1) | |||||||||||
Contract volumes (1,000 gallons) | 378 | ||||||||||
Weighted average price (per gallon) | $ | 2.71 | |||||||||
Contract amount (in thousands) | $ | (42) | $ | (42) | |||||||
For the Fiscal Year Ending September 30, | Fair | |||||||||||||||||||||||||||||||||||||||||||
2024 | 2025 | 2026 | 2027 | Thereafter | Total | Value | ||||||||||||||||||||||||||||||||||||||
Debt obligations | ||||||||||||||||||||||||||||||||||||||||||||
Term Loan Principal Payments | $ | 11,250 | $ | 18,750 | $ | 22,500 | $ | 227,500 | $ | — | $ | 280,000 | $ | 280,000 | ||||||||||||||||||||||||||||||
Revolving Credit Facility Principal Payments | — | — | — | 163,100 | — | 163,100 | 163,100 | |||||||||||||||||||||||||||||||||||||
Interest payments (1) | 22,901 | 29,590 | 28,124 | 20,067 | — | |||||||||||||||||||||||||||||||||||||||
(1) Represents projected interest payments using the Company’s December 2023 SOFR-based floating rate of 6.95% per annum. |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased under the Plans or Programs | ||||||||||||||||||||||
October 1, 2023 - October 31, 2023 | — | — | — | — | ||||||||||||||||||||||
November 1, 2023 - November 30, 2023 | 33,772 | $ | 36.56 | — | — | |||||||||||||||||||||
December 1, 2023 - December 31, 2023 | — | — | — | — | ||||||||||||||||||||||
Total | 33,772 | $ | 36.56 | — | — | |||||||||||||||||||||
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
95.1* | ||||||||
101.INS* | Inline XBRL Instance Document | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. |
CONSTRUCTION PARTNERS, INC. | ||||||||
By: | /s/ Fred J. Smith, III | |||||||
Fred J. Smith, III | ||||||||
President and Chief Executive Officer |
Name and Signature | Title | Date | ||||||||||||
/s/ Fred J. Smith, III | President and Chief Executive Officer | February 9, 2024 | ||||||||||||
Fred J. Smith, III | (Principal Executive Officer and duly authorized officer) | |||||||||||||
/s/ Gregory A. Hoffman | Senior Vice President and Chief Financial Officer | February 9, 2024 | ||||||||||||
Gregory A. Hoffman | (Principal Financial Officer and duly authorized officer) | |||||||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Construction Partners, Inc. for the quarterly period ended December 31, 2023; | |||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 9, 2024 | By: | /s/ Fred J. Smith, III | ||||||||||||
Fred J. Smith, III | ||||||||||||||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Construction Partners, Inc. for the quarterly period ended December 31, 2023; | |||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 9, 2024 | By: | /s/ Gregory A. Hoffman | ||||||||||||
Gregory A. Hoffman | ||||||||||||||
Senior Vice President and Chief Financial Officer |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||||
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 9, 2024 | By: | /s/ Fred J. Smith, III | ||||||||||||
Fred J. Smith, III | ||||||||||||||
President and Chief Executive Officer |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||||
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 9, 2024 | By: | /s/ Gregory A. Hoffman | ||||||||||||
Gregory A. Hoffman | ||||||||||||||
Senior Vice President and Chief Financial Officer |
(A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | ||||||||||||||||||||||||||||||||||||||||||||||
Mine Name / ID | Section 104 S&S | Section 104(b) | Section 104(d) | Section 110(b)(2) | Section 107(a) | Proposed Assessments | Fatalities | Pending Legal Action | |||||||||||||||||||||||||||||||||||||||||||||
Allstate / 01-03406 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Ashville / 01-03234 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Drummond / 01-03126 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Baldree Sand / 09-01166 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Battleground / 01-03100 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Blount Springs / 01-03047 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Camden / 31-02100 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Coosa / 01-03327 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Hickory Bend / 01-03403 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Lambert / 01-03363 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Montgomery Sand / 09-00737 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Riverbend Sand / 09-01023 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Skyline / 01-03158 | 1 | — | — | — | — | $ | 620 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Total | 1 | — | — | — | — | $ | 620 | — | — |
(A) | The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under Section 104 of the Mine Act for which the operator received a citation from MSHA. | ||||
(B) | The total number of orders issued under Section 104(b) of the Mine Act. | ||||
(C) | The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act. | ||||
(D) | The total number of flagrant violations under Section 110(b)(2) of the Mine Act. | ||||
(E) | The total number of imminent danger orders issued under Section 107(a) of the Mine Act. | ||||
(F) | The total dollar value of proposed assessments from MSHA under the Mine Act. | ||||
(G) | The total number of mining-related fatalities. | ||||
(H) | Any pending legal action before the Federal Mine Safety and Health Review Commission involving the applicable mine(s). |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 43,896,017 | 43,760,546 |
Common stock, shares outstanding (in shares) | 43,828,855 | 43,727,680 |
Treasury stock, shares (in shares) | 67,162 | 32,866 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 11,921,463 | |
Common stock, shares outstanding (in shares) | 8,998,511 | |
Treasury stock, shares (in shares) | 2,922,952 | 2,922,952 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands |
Total |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss), net |
Common Class A |
Common Class A
Common Stock
|
Common Class A
Treasury Stock, Common Stock
|
Common Class B
Common Stock
|
Common Class B
Treasury Stock, Common Stock
|
---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Sep. 30, 2022 | 41,195,730 | 14,275,867 | |||||||
Beginning balance at Sep. 30, 2022 | $ 455,879 | $ 256,571 | $ 197,274 | $ 17,620 | $ 41 | $ (39) | $ 15 | $ (15,603) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 1,892 | 1,892 | |||||||
Share-based compensation expense | 2,480 | 2,480 | |||||||
Issuance of stock grant awards (in shares) | 180,798 | ||||||||
Purchase of treasury stock | (139) | (139) | 0 | ||||||
Other comprehensive (loss) | (1,256) | (1,256) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 41,376,528 | 14,275,867 | |||||||
Ending balance at Dec. 31, 2022 | 458,856 | 259,051 | 199,166 | 16,364 | $ 41 | (178) | $ 15 | (15,603) | |
Beginning balance (in shares) at Sep. 30, 2023 | 43,760,546 | 11,921,463 | |||||||
Beginning balance at Sep. 30, 2023 | 516,574 | 267,330 | 246,275 | 18,694 | $ 44 | (178) | $ 12 | (15,603) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 9,843 | 9,843 | |||||||
Share-based compensation expense | 2,783 | 2,783 | |||||||
Issuance of stock grant awards (in shares) | 55,358 | 135,471 | |||||||
Purchase of treasury stock | (1,336) | (1,336) | 0 | ||||||
Other comprehensive (loss) | (6,705) | (6,705) | |||||||
Ending balance (in shares) at Dec. 31, 2023 | 43,896,017 | 11,921,463 | |||||||
Ending balance at Dec. 31, 2023 | $ 521,159 | $ 270,113 | $ 256,118 | $ 11,989 | $ 44 | $ (1,514) | $ 12 | $ (15,603) |
General |
3 Months Ended |
---|---|
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Business Description Construction Partners, Inc. (the “Company”) is a civil infrastructure company that specializes in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. Through its wholly-owned subsidiaries, the Company provides a variety of products and services to both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments. The Company’s primary operations consist of (i) manufacturing and distributing hot mix asphalt (“HMA”) for both internal use and sales to third parties in connection with construction projects, (ii) paving activities, including the construction of roadway base layers and application of asphalt pavement, (iii) site development, including the installation of utility and drainage systems, (iv) mining aggregates, such as sand, gravel and construction stone, that are used as raw materials in the production of HMA and for sales to third parties, and (v) distributing liquid asphalt cement for both internal use and sales to third parties in connection with HMA production. The Company was formed in 2007 as a holding company to facilitate an acquisition growth strategy in the HMA paving and construction industry. Seasonality The use and consumption of the Company’s products and services fluctuate due to seasonality. The Company’s products are used, and its construction operations and production facilities are located, outdoors. Therefore, seasonal changes and other weather-related conditions, such as snowy, rainy or cold weather in the winter, spring or fall and major weather events, such as hurricanes, tornadoes, tropical storms and heavy snows, can adversely affect the Company’s business and operations through a decline in both the use of the Company’s products and demand for the Company’s services. In addition, construction materials production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. The first and second quarters of the Company’s fiscal year typically have lower levels of activity due to less favorable weather conditions. Warmer and drier weather during the Company's third and fourth fiscal quarters typically result in higher activity and revenues during those quarters.
|
Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. These interim consolidated statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The Company's Consolidated Balance Sheets as of September 30, 2023 were derived from the Company's audited financial statements for the fiscal year then ended, but do not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) with respect to annual financial statements. In the opinion of management, these unaudited consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Form 10-K”). Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period. Management’s Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the recorded amounts of assets, liabilities, stockholders’ equity, revenues and expenses during the reporting period, and the disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used in accounting for items such as recognition of revenues and cost of revenues, investments, mineral reserves, goodwill and other intangible assets, business acquisitions, valuation of operating lease right-of-use assets, allowance for doubtful accounts, valuation allowances related to income taxes, accruals for potential liabilities related to lawsuits or insurance claims, asset retirement obligations, valuation of derivative instruments and valuation of share-based compensation awards. Estimates are continually evaluated based on historical information and actual experience; however, actual results could differ from these estimates. A description of certain critical accounting policies of the Company is presented below. Additional critical accounting policies and the underlying judgments and uncertainties are described in the notes to the Company’s annual consolidated financial statements included in the 2023 Form 10-K. Cash and Cash Equivalents Cash consists principally of currency on hand and demand deposits at commercial banks. Cash equivalents are short-term, highly liquid securities that are both readily convertible to known amounts of cash and are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents include securities with original maturities of three months or less. The Company maintains demand accounts, money market accounts and certificates of deposit at several banks. From time to time, account balances have exceeded the maximum available federal deposit insurance coverage limit. The Company has not experienced any losses in such accounts and regularly monitors its credit risk. Restricted Cash Construction Partners Risk Management, Inc. (the “Captive”), a captive insurance company and wholly-owned subsidiary of the Company, provides general liability, automobile liability and workers’ compensation insurance coverage to the Company and its subsidiaries. Restricted cash represents cash held in a fiduciary capacity by the Captive for the payment of casualty insurance claims. The Company had restricted cash of $1.0 million and $0.8 million at December 31, 2023 and September 30, 2023, respectively. Restricted Investments The Company’s restricted investments consist of debt securities held in a fiduciary capacity by the Captive for the payment of casualty insurance claims. The Company determines the classification of its securities at the time of purchase and re-evaluates the determination at each balance sheet date. The Company has classified securities held by the Captive as available-for-sale. As a result, these securities are carried at their fair value. Purchases and sales of debt securities are recorded on the trade date. Interest income on debt securities is recorded when earned using an effective yield method. Unrealized gains and losses are reported as components of accumulated other comprehensive income (loss), net. These securities have been classified as non-current assets based on their respective maturity dates and the Company’s intent to reinvest sales proceeds into new restricted investments. The Company had restricted investments of $14.6 million and $15.1 million at December 31, 2023 and September 30, 2023, respectively. The Company evaluates its available-for-sale debt securities quarterly to determine whether there has been a decline in the fair value below the amortized cost due to credit losses or other factors. This evaluation process entails judgement by the Company, and considers factors including the issuer’s financial condition and near-term prospects, future economic conditions, interest rate changes and changes in the rating of the security. When the Company has determined that it intends to sell, or that it is more likely than not that the Company will be required to sell a security before it recovers its amortized cost basis above fair value, the individual security is written down to fair value, with a corresponding charge to “Other income” within the Consolidated Statements of Comprehensive Income. For available-for-sale debt securities that do not meet the intent impairment criteria but for which the Company has determined that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss allowance is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis. For the three months ended December 31, 2023 and 2022, the Company had no intent impairments or credit losses. Contracts Receivable Including Retainage, Net Contracts receivable are generally based on amounts billed and currently due from customers, amounts currently due but unbilled, and amounts retained by customers pending satisfactory completion of a project. It is common in the Company’s industry for a small portion of either progress billings or the contract price, typically 10%, to be withheld by the customer until the Company completes a project to the satisfaction of the customer in accordance with the applicable contract terms. Such amounts, defined as retainage, are included on the Consolidated Balance Sheets as “Contracts receivable including retainage, net.” Based on the Company’s experience with similar contracts in recent years, billings for such retainage balances are generally collected within one year of the completion of the project. Contracts receivable including retainage, net is stated at the amount management expects to collect from outstanding balances. Management provides for uncollectible accounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the current status of individual accounts, type of service performed, current economic conditions, historical losses and other information available to management. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and an adjustment to the contract receivable. Contract Assets and Contract Liabilities Billing practices for the Company’s contracts are governed by the contract terms of each project based on (i) progress toward completion approved by the owner, (ii) achievement of milestones or (iii) pre-agreed schedules. Billings do not necessarily correlate with revenues recognized under the cost-to-cost input method. The Company records contract assets and contract liabilities to account for these differences in timing. The contract asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, arises when the Company recognizes revenues for services performed under its construction projects, but the Company is not yet entitled to bill the customer under the terms of the contract. Amounts billed to customers are excluded from this asset and reflected on the Consolidated Balance Sheets as “Contracts receivable including retainage, net”. Included in costs and estimated earnings on uncompleted contracts are amounts the Company seeks or will seek to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims). Such amounts are recorded to the extent that the amount can be reasonably estimated and recovery is probable. Claims and unapproved change orders made by the Company may involve negotiation and, in rare cases, litigation. Unapproved change orders and claims also involve the use of estimates, and revenues associated with unapproved change orders and claims are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company did not recognize any material amounts associated with claims and unapproved change orders during the periods presented. The contract liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents the Company’s obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered significant financing components. Concentration of Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of contracts receivable including retainage. In the normal course of business, the Company provides credit to its customers and does not generally require collateral. The Company monitors concentrations of credit risk associated with these receivables on an ongoing basis. The Company has not historically experienced significant credit losses, due primarily to management’s assessment of customers’ credit ratings. The Company principally deals with recurring customers, state and local governments and well-known local companies whose reputations are known to management. The Company performs credit checks for significant new customers and generally requires progress payments for significant projects. The Company generally has the ability to file liens against the property if payments are not made on a timely basis. No single customer accounted for more than 10% of the Company’s contracts receivable including retainage, net balance at December 31, 2023 or September 30, 2023. Projects performed for various departments of transportation accounted for 37.7% and 33.7% of consolidated revenues for the three months ended December 31, 2023 and 2022, respectively. Customers that accounted for more than 10% of consolidated revenues during either the three months ended December 31, 2023 or the three months ended December 31, 2022 are presented below:
Revenues from Contracts with Customers The Company derives revenues from contracts with its customers, predominantly by performing construction services for both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments. These projects are performed for a mix of federal, state, municipal and private customers. In addition, the Company generates revenues from the sale of construction materials, including HMA, aggregates, liquid asphalt and ready-mix concrete, to third-party public and private customers pursuant to contracts with those customers. The following table reflects, for the periods presented, the percentage of (i) revenues generated from public infrastructure construction projects and the sale of construction materials to public customers and (ii) revenues generated from private infrastructure construction projects and the sale of construction materials to private customers.
Revenues derived from construction projects are recognized over time as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer. Recognition of revenues and cost of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and measurement of progress toward completion. Management believes the Company maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs. A reduction to costs related to back charges is recognized when estimated recovery is probable and the amount can be reasonably estimated. Contract costs consist of (i) direct costs on contracts, including labor, materials, and amounts payable to subcontractors and (ii) indirect costs related to contract performance, such as insurance, employee benefits, and equipment (primarily depreciation, fuel, maintenance and repairs). Progress toward completion is estimated using the input method, measured by the relationship of total cost incurred through the measurement date to total estimated costs required to complete the project (cost-to-cost method). The Company believes this method best depicts the transfer of goods and services to the customer because it represents satisfaction of the Company’s performance obligation under the contract, which occurs as the Company incurs costs. The Company measures percentage of completion based on the performance of a single performance obligation under its construction projects. Each of the Company’s construction contracts represents a single performance obligation to complete a defined construction project. This is because goods and services promised for delivery to a customer are not distinct, as the customer cannot benefit from any individual portion of the services on its own. All deliverables under a contract are part of a project defined by a customer and represent a series of integrated goods and services that have the same pattern of delivery to the customer and use the same measure of progress toward satisfaction of the performance obligation as the customer’s asset is created or enhanced by the Company. The Company’s obligation is not satisfied until the entire project is complete. Revenue recognized during a reporting period is based on the cost-to-cost input method applied to the total transaction price, including adjustments for variable consideration, such as liquidated damages, penalties or bonuses, related to the timeliness or quality of project performance. The Company includes variable consideration in the estimated transaction price at the most likely amount to which the Company expects to be entitled or the most likely amount the Company expects to incur, in the case of liquidated damages or penalties. Such amounts are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company accounts for changes to the estimated transaction price using a cumulative catch-up adjustment. The majority of the Company’s public construction contracts are fixed unit price contracts. Under fixed unit price contracts, the Company is committed to providing materials or services required by a contract at fixed unit prices (for example, dollars per ton of asphalt placed). The Company’s private customer contracts are primarily fixed total price contracts, also known as lump sum contracts, which require that the total amount of work be performed for a single price. Contract cost is recorded as incurred, and revisions in contract revenue and cost estimates are reflected in the accounting period when known. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements, may result in revisions to estimated revenues and costs and are recognized in the period in which the revisions are determined. Change orders are modifications of an original contract that effectively change the existing provisions of the contract and become part of the single performance obligation that is partially satisfied at the date of the contract modification. This is because goods and services promised under change orders are generally not distinct from the remaining goods and services under the existing contract, due to the significant integration of services performed in the context of the contract. Accordingly, change orders are generally accounted for as a modification of the existing contract and single performance obligation. The Company accounts for the modification using a cumulative catch-up adjustment. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Revenues derived from the sale of HMA, aggregates, ready-mix concrete, and liquid asphalt are recognized at a point in time, which is when control of the product is transferred to the customer. Generally, that point in time is when the customer accepts delivery at its facility or receives product in its own transport vehicles from one of the Company’s HMA plants or aggregates facilities. Upon purchase, the Company generally provides an invoice or similar document detailing the goods transferred to the customer. The Company generally offers payment terms customary in the industry, which typically require payment ranging from point-of-sale to 30 days following purchase. Income Taxes The provision for income taxes includes federal and state income taxes. Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which the temporary differences are expected to be reversed or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Management evaluates the realization of deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Deferred tax assets and deferred tax liabilities are presented on a net basis by taxing authority and classified as non-current on the Consolidated Balance Sheets. Earnings per Share Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share attributable to common stockholders is the same as basic net income per share attributable to common stockholders, but includes dilutive unvested stock awards using the treasury stock method. Fair Value Measurements The Company measures and discloses certain financial assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are classified using the following hierarchy: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3. Inputs are unobservable for the asset or liability and include situations in which there is little, if any, market activity for the asset or liability. The inputs used in the determination of fair value are based on the best information available under the circumstances and may require significant management judgment or estimation. The Company endeavors to utilize the best available information in measuring fair value. The Company’s financial instruments include cash and cash equivalents, restricted cash, contracts receivable including retainage, accounts payable and accrued expenses reflected as current assets and current liabilities on its Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. These investments are adjusted to fair value at each balance sheet date and are considered Level 2 fair value measurements. The Company also has a Term Loan and a Revolving Credit Facility, as defined and further described in Note 8 - Debt. The carrying value of amounts outstanding under these credit facilities is reflected as long-term debt, net of current maturities and deferred debt issuance cost and current maturities of long-term debt on the Company’s Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has derivative instruments. The fair value of commodity and interest rate swaps are based on forward and spot prices, as described in Note 16 - Fair Value Measurements. Level 3 fair values are used to value acquired mineral reserves and leased mineral interests. The fair values of mineral reserves and leased mineral interests are determined using an excess earnings approach, which requires management to estimate future cash flows. The estimate of future cash flows is based on available historical information and forecasts determined by management, but is inherently uncertain. Key assumptions in estimating future cash flows include sales price, volumes and expected profit margins, net of capital requirements. The present value of the projected net cash flows represents the fair value assigned to mineral reserves and mineral interests. The discount rate is a significant assumption used in the valuation model and is based on the required rate of return that a hypothetical market participant would assume if purchasing the acquired business. Management applies fair value measurement guidance to its impairment analysis for tangible and intangible assets, including goodwill. Comprehensive Income The Company reports comprehensive income in its Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity. Comprehensive income comprises two subsets: net income and other comprehensive income (loss) (“OCI”). OCI includes adjustments for changes in fair value of an interest rate swap contract derivative and available-for-sale restricted investments. For additional information about comprehensive income, see Note 19 - Other Comprehensive Income (Loss).
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Accounting Standards |
3 Months Ended |
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Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards | Accounting Standards The Company did not adopt any new accounting standards or updates during the three months ended December 31, 2023.
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Business Acquisitions and Disposition |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | Business Acquisitions Acquisitions - Provisional On October 2, 2023, the Company acquired substantially all of the assets of Hubbard Paving & Grading, Inc., an asphalt and paving company headquartered in Walhalla, South Carolina, for $3.0 million. This transaction added an HMA plant and expanded the Company’s service market in the Upstate region of South Carolina. On November 1, 2023, the Company acquired three HMA plants and certain related assets from Reeves Construction Company for $18.3 million. This transaction added HMA plants in Concord, North Carolina and Rock Hill and McConnells, South Carolina. On December 29, 2023, the Company acquired all issued and outstanding membership interest of SJ&L General Contractor, LLC, an HMA and sitework company headquartered in Huntsville, Alabama, for $60.1 million. This transaction expanded the Company’s service capabilities in the Huntsville, Alabama metro area. The total amount of consideration for these transactions remains subject to post-closing adjustments with respect to inventory quantities, settlement of working capital and other matters. Combined Acquisitions During the Three Months Ended December 31, 2023 The foregoing acquisitions were accounted for as business combinations in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”). As of December 31, 2023, the purchase price allocation had not yet been finalized due to the recent timing of these acquisitions, as certain information was pending on such date to finalize estimates of fair value of certain assets acquired and liabilities assumed. The Company consulted with independent third parties to assist in the valuation process. The Company expects to finalize the estimate of fair values as soon as practicable and no later than one year from their respective acquisition dates. Identifiable assets acquired and liabilities assumed were recorded at their estimated fair values based on the methodology described under Fair Value Measurements in Note 2 - Significant Accounting Policies. The amount of the purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed was recorded as provisional goodwill in the amount of approximately $17.3 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled work force and synergies expected to result from the acquisitions. Upon finalizing the accounting for these transactions, management expects to ascribe value to other identifiable intangible assets, including customer relationships and customer backlog, which will reduce the provisional amount allocated to goodwill. Total consideration transferred for these acquisitions was $81.4 million, which was paid from available cash and a draw from the Revolving Credit Facility (as defined in Note 8 - Debt). The combined total consideration has been provisionally allocated as follows: $15.7 million of net working capital, $47.8 million of property, plant and equipment and $17.9 million of goodwill and intangibles. The Consolidated Statements of Comprehensive Income include $4.7 million of revenue and $0.3 million of net loss attributable to the operations of these acquisitions for the period from the respective acquisition dates through December 31, 2023. The Company recorded certain costs to effect the acquisitions as they were incurred, which are reflected in general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income in the amount of $0.5 million for the three months ended December 31, 2023. The following table presents pro forma revenues and net income as though the acquisitions had occurred on October 1, 2022 (unaudited, in thousands):
Pro forma financial information is presented as if the operations of the acquisitions had been included in the consolidated results of the Company since October 1, 2022, and gives effect to transactions that are directly attributable to the acquisitions, including adjustments to: (a)include the pro forma results of operations of the acquisitions for the three months ended December 31, 2023 and 2022; (b)include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and reserves at aggregates facilities, as applicable, as if such assets were acquired on October 1, 2022 and consistently applied to the Company’s depreciation and depletion methodologies; (c)include interest expense under the Revolving Credit Facility as if the funds borrowed to finance the purchase prices were borrowed on October 1, 2022 (interest expense calculations further assume that no principal payments were made during the period from October 1, 2022 through December 31, 2023, and that the interest rate in effect on the date the Company made the acquisitions was in effect for the period from October 1, 2022 through December 31, 2023); and (d)exclude $0.5 million of acquisition-related expenses from the three months ended December 31, 2023, as though such expenses were incurred prior to the pro forma acquisition date of October 1, 2022. Pro forma information is presented for informational purposes and may not be indicative of revenue or net income that would have been achieved if these acquisitions had occurred on October 1, 2022. Provisional Accounting In April 2023, the Company acquired an HMA paving company headquartered in Anderson, South Carolina. In May 2023, the Company acquired an excavation, grading and utility company headquartered in Huntsville, Alabama. As of December 31, 2023, there had been no material adjustments to the September 30, 2023 provisional accounting for either acquisition as reported in the 2023 Form 10-K.
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Contracts Receivable Including Retainage, Net |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contracts Receivable Including Retainage, Net | Contracts Receivable Including Retainage, Net Contracts receivable including retainage, net consisted of the following at December 31, 2023 and September 30, 2023 (in thousands):
Retainage receivable has been billed and the Company has an unconditional right to payment, but such payment is not due until satisfactory contract completion and acceptance by the customer.
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Contract Assets and Liabilities |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Liabilities | Contract Assets and Liabilities Costs and estimated earnings compared to billings on uncompleted contracts at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
Significant changes to balances of costs and estimated earnings in excess of billings (contract asset) and billings in excess of costs and estimated earnings (contract liability) on uncompleted contracts from September 30, 2022 to December 31, 2022 and September 30, 2023 to December 31, 2023 are presented below (in thousands):
At December 31, 2023, the Company had unsatisfied or partially unsatisfied performance obligations under construction project contracts representing approximately $1.29 billion in aggregate transaction price. The Company expects to earn revenue as it satisfies its performance obligations under such contracts in the amount of approximately $874.7 million during the remainder of the fiscal year ending September 30, 2024 and $411.5 million thereafter.
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Property, Plant and Equipment |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
Depreciation, depletion, and amortization expense related to property, plant and equipment for the three months ended December 31, 2023 and 2022 was $21.0 million and $19.3 million, respectively.
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Debt |
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Debt | Debt The Company maintains credit facilities to finance acquisitions, to fund the purchase of real estate, construction equipment, plants and other fixed assets, and for general working capital purposes. Debt at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
The Company and each of its subsidiaries are parties to a Third Amended and Restated Credit Agreement, dated June 30, 2022 with PNC Bank, National Association, as administrative agent and lender, PNC Capital Markets LLC, as joint lead arranger and sole bookrunner, Regions Bank and BofA Securities, Inc., each as a joint arranger, and certain other lenders (as amended and restated, the “Credit Agreement”). The Credit Agreement provides for (i) a term loan facility in an initial aggregate principal amount of $250.0 million (the “Term Loan”) the full amount of which was drawn at closing, (ii) a revolving credit facility in an initial aggregate principal amount of $325.0 million (the “Revolving Credit Facility”), and (iii) a delayed draw term loan facility in an initial aggregate principal amount of $50.0 million (the “Delayed Draw Term Loan”). All outstanding advances under the Term Loan and Revolving Credit Facility are due and payable in full on June 30, 2027 (the “Maturity Date”). The Term Loan (commencing on September 30, 2022) and the Delayed Draw Term Loan (commencing on December 31, 2023), amortize in quarterly installments in an amount (subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal) equal to: (a) 1.25% of the original principal amount on each of the following eleven quarter-end payment dates; (b) 1.875% of the original principal amount on each of the next eight quarter-end payment dates; and (c) all remaining principal on the Maturity Date. The annual interest rates applicable to advances will be calculated, at the Company’s option, by using either a base rate, Daily Simple SOFR plus 0.10%, or Term SOFR plus 0.10%, in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio. Subject to various requirements, the Company generally may (and, under certain circumstances, must), prepay all or a portion of the outstanding balance of the advances, together with accrued interest thereon, prior to their contractual maturity. The obligations of the Company and its subsidiaries under the Credit Agreement are secured by a first priority security interest in substantially all of the Company’s assets. At December 31, 2023 and September 30, 2023, there was $280.0 million and $283.8 million, respectively, of principal outstanding under the Term Loan, $163.1 million and $93.1 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $153.6 million and $222.1 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit. The Credit Agreement contains customary negative covenants for agreements of this type, including, but not limited to, restrictions on the Company’s ability to make acquisitions, make loans or advances, make capital expenditures and investments, pay dividends, create or incur indebtedness, create liens, wind up or dissolve, consolidate, merge or liquidate, or sell, transfer or dispose of assets. The Credit Agreement also requires the Company to satisfy certain financial covenants, including a minimum fixed charge coverage ratio of 1.20- to-1.00 and a maximum consolidated leverage ratio of 3.50-to-1.00, subject to certain adjustments. At December 31, 2023 and September 30, 2023, the Company’s fixed charge coverage ratio was 3.35-to-1.00 and 2.56-to-1.00, respectively, and the Company’s consolidated leverage ratio was 1.78-to-1.00 and 1.72-to-1.00, respectively. At both December 31, 2023 and September 30, 2023, the Company was in compliance with all covenants under the Credit Agreement. From time to time, the Company has entered into interest rate swap agreements to hedge against the risk of changes in interest rates. At both December 31, 2023 and September 30, 2023, the aggregate notional value of these interest rate swap agreements was $300.0 million, and the fair value was $17.6 million and $26.9 million, respectively, which is included within other assets on the Company’s Consolidated Balance Sheets.
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Shares of Class A common stock and Class B common stock are identical, except with respect to voting rights, conversion rights and transfer restrictions applicable to shares of Class B common stock. The holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share. The holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders, including the election of directors, unless otherwise required by applicable law or the Company’s certificate of incorporation or bylaws. Shares of Class B common stock are convertible into shares of Class A common stock at any time at the option of the holder or upon any transfer, subject to certain limited exceptions. In addition, upon the election of the holders of a majority of the then-outstanding shares of Class B common stock, all outstanding shares of Class B common stock will be converted into shares of Class A common stock. Once converted into shares of Class A common stock, shares of Class B common stock will not be reissued. Class A common stock is not convertible into any other class of the Company’s capital stock. Treasury Stock During the three months ended December 31, 2023, the Company received a total of 33,772 shares of Class A common stock from employees for reimbursement of income taxes paid by the Company on behalf of these employees related to the vesting of restricted stock awards and 524 shares of Class A common stock through forfeitures of restricted stock awards by terminated employees. Restricted Stock Awards During the three months ended December 31, 2023, the Company awarded a total of 80,113 restricted shares of Class A common stock to certain directors, officers and employees of the Company under the Construction Partners, Inc. 2018 Equity Incentive Plan (the “Equity Incentive Plan”). Performance Stock Units During the three months ended December 31, 2023, the Company issued a total of 55,358 shares of Class A common stock in settlement of vested performance stock units ("PSUs") under the Equity Incentive Plan. Additional information about these transactions is set forth in Note 13 - Share-Based Compensation. Other Comprehensive IncomeComprehensive income comprises two subsets: net income and OCI. The components of OCI are presented in the accompanying Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity, net of applicable taxes. The Company’s interest rate swap contract hedge included in other comprehensive income was entered into on July 1, 2022 with an original notional value of $300.0 million. The maturity date of this swap is June 30, 2027. Amounts in accumulated other comprehensive income (“AOCI”), net of tax, at December 31, 2023 and September 30, 2023, were as follows (in thousands):
Changes in AOCI, net of tax, are as follows (in thousands):
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share As discussed in Note 9 - Equity, the Company has Class A common stock and Class B common stock. Because the only differences between the two classes of common stock are related to voting rights, conversion rights and transfer restrictions applicable to shares of Class B common stock, the Company has not presented earnings per share under the two-class method, as the earnings per share are the same for both Class A common stock and Class B common stock. The following table summarizes the weighted-average number of basic common shares outstanding and the calculation of basic earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):
The following table summarizes the calculation of the weighted-average number of diluted common shares outstanding and the calculation of diluted earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):
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Provision for Income Taxes |
3 Months Ended |
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Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Provision for Income Taxes The Company files a consolidated United States federal income tax return and income tax returns in various states. Management evaluated the Company’s tax positions based on appropriate provisions of applicable tax laws and regulations and believes that they are supportable based on their specific technical merits and the facts and circumstances of the respective transactions. The Company’s effective income tax rate for the three months ended December 31, 2023 and 2022 was 24.1% and 21.2%, respectively. The changes in the Company’s effective rates are due to differences in state tax rates at its operating subsidiaries.
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Related Parties |
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Related Parties | Related Parties On December 31, 2017, the Company sold an indirect wholly owned subsidiary to an immediate family member of an executive officer of the Company (“Purchaser of Subsidiary”) in consideration for a note receivable in the amount of $1.0 million, which approximated the net book value of the disposed entity. At December 31, 2023, $0.1 million and $0.2 million was reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets, respectively, representing the remaining balances on this note receivable. In connection with this transaction, the Company also received a note receivable from the disposed entity (“Disposed Entity”) on December 31, 2017 in the amount of $1.0 million representing certain accounts payable of the Disposed Entity that were paid by the Company. At December 31, 2023, $0.1 million and $0.1 million was reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets, respectively, representing the remaining balances on this note receivable. Remaining principal and interest payments are scheduled to be made in periodic installments during fiscal year 2024 through fiscal year 2026. Prior to its acquisition by the Company, a current subsidiary of the Company advanced funds to an entity owned by an immediate family member of an officer of the Company in connection with a land development project. The obligations of the borrower entity to repay the advances were guaranteed by a separate entity owned by the same family member of the officer. Amounts outstanding under the advances did not bear interest and matured in full in March 2021. In March 2021, the subsidiary of the Company amended and restated the terms of the repayment obligation, as a result of which the officer personally assumed the remaining balance of the obligation. No new amounts were advanced to the officer by the Company or any subsidiary or affiliate thereof in connection with the transaction. Under the amended and restated terms, the officer executed a promissory note in favor of the Company’s subsidiary in the principal amount of $0.8 million. The note bears simple interest at a rate of 4.0% and requires annual minimum payments of $0.1 million inclusive of principal and accrued interest, with any remaining principal and accrued interest due and payable in full on December 31, 2027. Amounts outstanding under the note are reflected on the Company’s Consolidated Balance Sheets within other current assets and other assets (“Land Development Project”). From time to time, the Company conducts or has conducted business with the following related parties: •Entities owned by immediate family members of an executive officer of the Company perform subcontract work for a subsidiary of the Company, including trucking and grading services (“Subcontracting Services”). •Since June 1, 2014, the Company has been a party to an access agreement with Island Pond Corporate Services, LLC, which provides a location for the Company to conduct business development activities from time to time on a property owned by the Executive Chairman of the Company’s Board of Directors (“Island Pond”). •The Company is party to a management services agreement with SunTx Capital Partners, a private equity firm based in Dallas, Texas and a member of the Company’s controlling group ("SunTx"), under which the Company pays SunTx $0.30 million per fiscal quarter and reimburses certain travel and other out-of-pocket expenses associated with services rendered under the management services agreement. The following table presents revenues earned and expenses incurred by the Company during the three months ended December 31, 2023 and 2022, and accounts receivable and payable balances at December 31, 2023 and September 30, 2023, related to transactions with the related parties described above (in thousands):
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Share-Based Compensation |
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Share-Based Compensation | Share-Based Compensation The following table summarizes the components of share-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income during the three months ended December 31, 2023 and 2022 (in thousands):
Restricted Stock - Equity Classified Awards During the quarter ended December 31, 2023, the Company awarded a total of 80,113 restricted shares of Class A common stock to certain members of Company management under the Equity Incentive Plan. The grants are classified as equity awards. The aggregate grant date fair value of these restricted awards was $3.5 million. During the quarter ended December 31, 2023, the Company recorded compensation expense in connection with these and prior restricted stock grants in the amount of $2.4 million, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income. At December 30, 2023, there was approximately $10.9 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.8 years. Performance Stock Units - Equity Classified Awards PSUs provide for the issuance of shares of Class A common stock upon vesting, which occurs at the end of the performance period based on achievement of certain Company performance metrics established by the Compensation Committee of the Company’s Board of Directors. The final number of shares of Class A common stock issuable upon vesting of PSUs can range from 0% to 150% of the number of PSUs initially granted, depending on the level of achievement, as determined by the Compensation Committee of the Company’s Board of Directors. The achievement of performance goals is modified by the total shareholder return ranking of the Company against the Russell 2000 Index over the performance period and can increase or decrease the achieved award by up to 15%. The Company recognizes expense, net of estimated forfeitures, for PSUs based on the forecasted achievement of Company performance metrics, multiplied by the fair value of the total number of shares of common stock that the Company anticipates will be issued based on such achievement. During the quarter ended December 31, 2023, the Company issued 55,358 shares of Class A common stock as a result of the vesting of PSUs granted to certain members of Company management on December 29, 2021. During the quarter ended December 31, 2023, the Company awarded PSUs representing a target of 83,044 shares and forecasted vesting of 62,283 shares of Class A common stock to certain members of Company management. The grants are classified as equity awards. The aggregate grant date fair value of these awards was $2.7 million. During the quarter ended December 31, 2023, the Company recorded compensation expense in connection with these type awards in the amount of $0.4 million, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income. At December 31, 2023, there was approximately $4.4 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.5 years. Cash-Settled Restricted Stock Units - Liability Classified Awards During the three months ended December 31, 2023, the Company granted 114,264 of cash-settled restricted stock units ("RSUs") to members of Company management under the Equity Incentive Plan. The aggregate grant date fair value of these awards was $5.1 million. Compensation expense associated with these awards for the three months ended December 31, 2023 and 2022 was $0.1 million and $0.0 million, respectively, and is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income. As of December 31, 2023 and September 30, 2023, the liability for cash-settled RSUs was $0.1 million and $0.0 million and is included in accrued expenses and other current liabilities and other long-term liabilities. At December 31, 2023, there was approximately $5.0 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 3.8 years. The grant date fair value of these awards is based on the price of the Company’s Class A common stock and the number of shares awarded on the date of grant. The award must be settled in cash and is accounted for as a liability-type award. The expense is recognized over the requisite service period with remeasurement at the end of each reporting period at fair value until settlement. The requisite service period is based on the vesting provisions of the awards which generally occurs in four equal annual installments beginning on the date of the first fiscal year-end after the grant date. Employee Stock Purchase Plan The Construction Partners, Inc. Employee Stock Purchase Plan (the ESPP) became effective on May 13, 2021. The ESPP is intended to provide eligible employees of the Company an opportunity to purchase shares of the Company’s Class A common stock at a discounted rate using funds withheld through payroll deductions. The maximum number of Shares that will be offered under the ESPP is 1,000,000. The first offering period under the ESPP commenced on July 1, 2023. Since that date, the Company has purchased 20,619 shares under the ESPP. Compensation expense associated with the ESPP for the three months ended December 31, 2023 and 2022 was $0.2 million and $0.0 million, respectively, and is included in in general and administrative expenses in the Consolidated Statements of Comprehensive Income.
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Leases |
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Leases | Leases The Company leases certain facilities, office space, vehicles and equipment. As of December 31, 2023, operating leases under ASC Topic 842, Leases (“Topic 842”) were included in (i) operating lease right-of use assets, (ii) current portion of operating lease liabilities and (iii) operating lease liabilities, net of current portion on the Company’s Consolidated Balance Sheets in the amounts of $18.4 million, $3.5 million and $15.5 million, respectively. As of December 31, 2023, the Company did not have any lease contracts that had not yet commenced but had created significant rights and obligations. The components of lease expense were as follows (unaudited, in thousands):
Short-term leases (those with terms of 12 months or less) are not capitalized but are expensed on a straight-line basis over the lease term. The majority of the Company's short-term leases relate to equipment used on construction projects. These leases are entered into at periodic rental rates for an unspecified duration and typically have a termination for convenience provision. As of December 31, 2023, the weighted-average remaining term of the Company’s leases was 7.2 years, and the weighted-average discount rate was 3.62%. As of December 31, 2023, the lease liability was equal to the present value of the remaining lease payments, discounted using the incremental borrowing rate on the Company’s secured debt using a single maturity discount rate, as such rate is not materially different from the discount rate applied to each of the leases in the portfolio. The following table summarizes the Company’s undiscounted lease liabilities outstanding as of December 31, 2023 (unaudited, in thousands):
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Investment in Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Derivative Instruments | Investment in Derivative Instruments Interest Rate Swap Contracts The Company uses derivative instruments as part of its overall strategy to manage its exposure to market risks associated with fluctuations in interest rates. The Company regularly monitors the financial stability and credit standing of the counterparties to its derivative instruments. The Company does not enter into derivative financial instruments for speculative purposes. The Company records all derivatives at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as one of the following: (i) a hedge of a forecasted transaction or the variability of cash flows to be paid (“cash flow hedge”) or (ii) a hedge of the fair value of a recognized asset or liability (“fair value hedge”). Changes in the fair value of a derivative that is qualified and designated as a cash flow hedge or net investment hedge are recorded in other comprehensive income (loss) in the Company’s Consolidated Statements of Comprehensive Income until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified and designated as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. If the Company does not specifically designate a derivative as one of the above, changes in the fair value of the undesignated derivative instrument are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged in the Consolidated Statements of Cash Flows, while cash flows from undesignated derivative financial instruments are included as an investing activity. If the Company determines that it qualifies for and will designate a derivative as a hedging instrument, the Company formally documents all relationships between hedging activities, including the risk management objective and strategy for undertaking various hedge transactions. This process includes matching all derivatives that are designated as cash flow hedges to specific forecasted transactions and linking all derivatives designated as fair value hedges to specific assets and liabilities in the Consolidated Balance Sheets. The Company performs an initial prospective assessment of hedge effectiveness on a quantitative basis between the inception date and the earlier of the first quarterly hedge effectiveness date or the issuance of the financial statements that include the hedged transaction. On a quarterly basis, the Company assesses the effectiveness of its designated hedges in offsetting the variability in the cash flows or fair values of the hedged assets or obligations using the Hypothetical Derivative Method. The Hypothetical Derivative Method compares the change in fair value or cash flows of the hedging instrument with the change in fair value or cash flows of a hypothetical derivative that represents the hedged risk. The Company would discontinue hedge accounting prospectively when the derivative is no longer highly effective as a hedge, the underlying hedged transaction is no longer probable or the hedging instrument expires, is sold, terminated or exercised. Commodity Swap Contracts The Company’s operations expose it to a variety of market risks, including the effects of changes in commodity prices. As part of its risk management process, the Company has entered into commodity swap transactions through regulated commodity exchanges. The Company does not enter into derivative financial instruments for speculative purposes. Changes in fair value of commodity swaps are recognized in earnings. The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity derivative contracts for the three months ended December 31, 2023 and 2022 and the fair value of these derivatives as of December 31, 2023 and September 30, 2023 (in thousands):
(1) Includes designated cash flow hedge of $17.6 million and $26.9 million as of December 31, 2023 and September 30, 2023, respectively.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and September 30, 2023 under ASC 820, Fair Value Measurements (in thousands):
The fair value of the interest rate swap contract is based on a model-driven valuation using the observable components (e.g., interest rates), which are observable at commonly quoted intervals for the full term of the contracts. The fair value of the Company’s commodity swap contracts is based on an analysis of the expected cash flow of the contract in combination with observable forward price inputs obtained from a third-party pricing source. The calculations are adjusted for credit risk. Therefore, the Company’s derivative assets and liabilities are classified within Level 2 of the fair value hierarchy. Derivative assets are included within “Prepaid expenses and other current assets” and “Other assets” on the Company’s Consolidated Balance Sheets. Derivative liabilities are included within “Accrued expense and other current liabilities” and “Other long-term liabilities” on the Company’s Consolidated Balance Sheets.
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Commitments |
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Commitments | Commitments Letters of Credit Under the Revolving Credit Facility, the Company has a total capacity of $325.0 million that may be used for a combination of cash borrowings and letter of credit issuances. At December 31, 2023, the Company had aggregate letters of credit outstanding in the amount of $8.3 million, primarily related to certain insurance policies as described in Note 2 - Significant Accounting Policies. Purchase Commitments As of December 31, 2023, the Company had unconditional purchase commitments for diesel fuel and natural gas in the normal course of business in the aggregate amount of $3.3 million. Management does not expect any significant changes in the market value of these goods during the commitment period that would have a material adverse effect on the financial condition, results of operations and cash flows of the Company. As of December 31, 2023, the Company’s purchase commitments for the remainder of fiscal 2024 and in 2025 were as follows (unaudited, in thousands):
Minimum Royalties The Company has lease agreements associated with aggregates facilities under which the Company makes royalty payments. These agreements are outside the scope of Topic 842. The payments are generally based on tons sold in a particular period; however, certain agreements have minimum annual payments. The Company had commitments in the form of minimum royalties as of December 31, 2023 in the amount of $2.5 million, due as follows (unaudited, in thousands):
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Restricted Investments |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Investments | Restricted Investments The following is a summary of the Company’s debt securities as of December 31, 2023 and September 30, 2023 (in thousands):
The amortized cost and fair value of debt securities classified as available for sale by contractual maturity, as of December 31, 2023, are as follows (unaudited, in thousands):
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Other Comprehensive Income |
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Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | Equity Shares of Class A common stock and Class B common stock are identical, except with respect to voting rights, conversion rights and transfer restrictions applicable to shares of Class B common stock. The holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share. The holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders, including the election of directors, unless otherwise required by applicable law or the Company’s certificate of incorporation or bylaws. Shares of Class B common stock are convertible into shares of Class A common stock at any time at the option of the holder or upon any transfer, subject to certain limited exceptions. In addition, upon the election of the holders of a majority of the then-outstanding shares of Class B common stock, all outstanding shares of Class B common stock will be converted into shares of Class A common stock. Once converted into shares of Class A common stock, shares of Class B common stock will not be reissued. Class A common stock is not convertible into any other class of the Company’s capital stock. Treasury Stock During the three months ended December 31, 2023, the Company received a total of 33,772 shares of Class A common stock from employees for reimbursement of income taxes paid by the Company on behalf of these employees related to the vesting of restricted stock awards and 524 shares of Class A common stock through forfeitures of restricted stock awards by terminated employees. Restricted Stock Awards During the three months ended December 31, 2023, the Company awarded a total of 80,113 restricted shares of Class A common stock to certain directors, officers and employees of the Company under the Construction Partners, Inc. 2018 Equity Incentive Plan (the “Equity Incentive Plan”). Performance Stock Units During the three months ended December 31, 2023, the Company issued a total of 55,358 shares of Class A common stock in settlement of vested performance stock units ("PSUs") under the Equity Incentive Plan. Additional information about these transactions is set forth in Note 13 - Share-Based Compensation. Other Comprehensive IncomeComprehensive income comprises two subsets: net income and OCI. The components of OCI are presented in the accompanying Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity, net of applicable taxes. The Company’s interest rate swap contract hedge included in other comprehensive income was entered into on July 1, 2022 with an original notional value of $300.0 million. The maturity date of this swap is June 30, 2027. Amounts in accumulated other comprehensive income (“AOCI”), net of tax, at December 31, 2023 and September 30, 2023, were as follows (in thousands):
Changes in AOCI, net of tax, are as follows (in thousands):
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Subsequent Events |
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Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 2, 2024, the Company acquired substantially all of the assets of Littlefield Construction Company, a soil base, surface treatment and sitework company headquartered in Waycross, Georgia, for $6.4 million. The total amount of consideration for this transaction remains subject to post-closing adjustments with respect to inventory quantities and other matters as of the date of this report.
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Significant Accounting Policies (Policies) |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. These interim consolidated statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The Company's Consolidated Balance Sheets as of September 30, 2023 were derived from the Company's audited financial statements for the fiscal year then ended, but do not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) with respect to annual financial statements. In the opinion of management, these unaudited consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Form 10-K”). Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.
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Management’s Estimates | Management’s Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the recorded amounts of assets, liabilities, stockholders’ equity, revenues and expenses during the reporting period, and the disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used in accounting for items such as recognition of revenues and cost of revenues, investments, mineral reserves, goodwill and other intangible assets, business acquisitions, valuation of operating lease right-of-use assets, allowance for doubtful accounts, valuation allowances related to income taxes, accruals for potential liabilities related to lawsuits or insurance claims, asset retirement obligations, valuation of derivative instruments and valuation of share-based compensation awards. Estimates are continually evaluated based on historical information and actual experience; however, actual results could differ from these estimates. A description of certain critical accounting policies of the Company is presented below. Additional critical accounting policies and the underlying judgments and uncertainties are described in the notes to the Company’s annual consolidated financial statements included in the 2023 Form 10-K.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists principally of currency on hand and demand deposits at commercial banks. Cash equivalents are short-term, highly liquid securities that are both readily convertible to known amounts of cash and are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents include securities with original maturities of three months or less. The Company maintains demand accounts, money market accounts and certificates of deposit at several banks. From time to time, account balances have exceeded the maximum available federal deposit insurance coverage limit. The Company has not experienced any losses in such accounts and regularly monitors its credit risk.
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Restricted Cash | Restricted Cash Construction Partners Risk Management, Inc. (the “Captive”), a captive insurance company and wholly-owned subsidiary of the Company, provides general liability, automobile liability and workers’ compensation insurance coverage to the Company and its subsidiaries. Restricted cash represents cash held in a fiduciary capacity by the Captive for the payment of casualty insurance claims.
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Restricted Investments | Restricted Investments The Company’s restricted investments consist of debt securities held in a fiduciary capacity by the Captive for the payment of casualty insurance claims. The Company determines the classification of its securities at the time of purchase and re-evaluates the determination at each balance sheet date. The Company has classified securities held by the Captive as available-for-sale. As a result, these securities are carried at their fair value. Purchases and sales of debt securities are recorded on the trade date. Interest income on debt securities is recorded when earned using an effective yield method. Unrealized gains and losses are reported as components of accumulated other comprehensive income (loss), net. These securities have been classified as non-current assets based on their respective maturity dates and the Company’s intent to reinvest sales proceeds into new restricted investments. The Company had restricted investments of $14.6 million and $15.1 million at December 31, 2023 and September 30, 2023, respectively. The Company evaluates its available-for-sale debt securities quarterly to determine whether there has been a decline in the fair value below the amortized cost due to credit losses or other factors. This evaluation process entails judgement by the Company, and considers factors including the issuer’s financial condition and near-term prospects, future economic conditions, interest rate changes and changes in the rating of the security. When the Company has determined that it intends to sell, or that it is more likely than not that the Company will be required to sell a security before it recovers its amortized cost basis above fair value, the individual security is written down to fair value, with a corresponding charge to “Other income” within the Consolidated Statements of Comprehensive Income. For available-for-sale debt securities that do not meet the intent impairment criteria but for which the Company has determined that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss allowance is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis.
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Contracts Receivable Including Retainage, Net | Contracts Receivable Including Retainage, Net Contracts receivable are generally based on amounts billed and currently due from customers, amounts currently due but unbilled, and amounts retained by customers pending satisfactory completion of a project. It is common in the Company’s industry for a small portion of either progress billings or the contract price, typically 10%, to be withheld by the customer until the Company completes a project to the satisfaction of the customer in accordance with the applicable contract terms. Such amounts, defined as retainage, are included on the Consolidated Balance Sheets as “Contracts receivable including retainage, net.” Based on the Company’s experience with similar contracts in recent years, billings for such retainage balances are generally collected within one year of the completion of the project. Contracts receivable including retainage, net is stated at the amount management expects to collect from outstanding balances. Management provides for uncollectible accounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the current status of individual accounts, type of service performed, current economic conditions, historical losses and other information available to management. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and an adjustment to the contract receivable.
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Contract Assets and Contract Liabilities and Revenues from Contracts with Customers | Contract Assets and Contract Liabilities Billing practices for the Company’s contracts are governed by the contract terms of each project based on (i) progress toward completion approved by the owner, (ii) achievement of milestones or (iii) pre-agreed schedules. Billings do not necessarily correlate with revenues recognized under the cost-to-cost input method. The Company records contract assets and contract liabilities to account for these differences in timing. The contract asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, arises when the Company recognizes revenues for services performed under its construction projects, but the Company is not yet entitled to bill the customer under the terms of the contract. Amounts billed to customers are excluded from this asset and reflected on the Consolidated Balance Sheets as “Contracts receivable including retainage, net”. Included in costs and estimated earnings on uncompleted contracts are amounts the Company seeks or will seek to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims). Such amounts are recorded to the extent that the amount can be reasonably estimated and recovery is probable. Claims and unapproved change orders made by the Company may involve negotiation and, in rare cases, litigation. Unapproved change orders and claims also involve the use of estimates, and revenues associated with unapproved change orders and claims are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company did not recognize any material amounts associated with claims and unapproved change orders during the periods presented. The contract liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents the Company’s obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered significant financing components. Revenues from Contracts with Customers The Company derives revenues from contracts with its customers, predominantly by performing construction services for both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports and commercial and residential developments. These projects are performed for a mix of federal, state, municipal and private customers. In addition, the Company generates revenues from the sale of construction materials, including HMA, aggregates, liquid asphalt and ready-mix concrete, to third-party public and private customers pursuant to contracts with those customers.Revenues derived from construction projects are recognized over time as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer. Recognition of revenues and cost of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and measurement of progress toward completion. Management believes the Company maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs. A reduction to costs related to back charges is recognized when estimated recovery is probable and the amount can be reasonably estimated. Contract costs consist of (i) direct costs on contracts, including labor, materials, and amounts payable to subcontractors and (ii) indirect costs related to contract performance, such as insurance, employee benefits, and equipment (primarily depreciation, fuel, maintenance and repairs). Progress toward completion is estimated using the input method, measured by the relationship of total cost incurred through the measurement date to total estimated costs required to complete the project (cost-to-cost method). The Company believes this method best depicts the transfer of goods and services to the customer because it represents satisfaction of the Company’s performance obligation under the contract, which occurs as the Company incurs costs. The Company measures percentage of completion based on the performance of a single performance obligation under its construction projects. Each of the Company’s construction contracts represents a single performance obligation to complete a defined construction project. This is because goods and services promised for delivery to a customer are not distinct, as the customer cannot benefit from any individual portion of the services on its own. All deliverables under a contract are part of a project defined by a customer and represent a series of integrated goods and services that have the same pattern of delivery to the customer and use the same measure of progress toward satisfaction of the performance obligation as the customer’s asset is created or enhanced by the Company. The Company’s obligation is not satisfied until the entire project is complete. Revenue recognized during a reporting period is based on the cost-to-cost input method applied to the total transaction price, including adjustments for variable consideration, such as liquidated damages, penalties or bonuses, related to the timeliness or quality of project performance. The Company includes variable consideration in the estimated transaction price at the most likely amount to which the Company expects to be entitled or the most likely amount the Company expects to incur, in the case of liquidated damages or penalties. Such amounts are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company accounts for changes to the estimated transaction price using a cumulative catch-up adjustment. The majority of the Company’s public construction contracts are fixed unit price contracts. Under fixed unit price contracts, the Company is committed to providing materials or services required by a contract at fixed unit prices (for example, dollars per ton of asphalt placed). The Company’s private customer contracts are primarily fixed total price contracts, also known as lump sum contracts, which require that the total amount of work be performed for a single price. Contract cost is recorded as incurred, and revisions in contract revenue and cost estimates are reflected in the accounting period when known. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements, may result in revisions to estimated revenues and costs and are recognized in the period in which the revisions are determined. Change orders are modifications of an original contract that effectively change the existing provisions of the contract and become part of the single performance obligation that is partially satisfied at the date of the contract modification. This is because goods and services promised under change orders are generally not distinct from the remaining goods and services under the existing contract, due to the significant integration of services performed in the context of the contract. Accordingly, change orders are generally accounted for as a modification of the existing contract and single performance obligation. The Company accounts for the modification using a cumulative catch-up adjustment. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Revenues derived from the sale of HMA, aggregates, ready-mix concrete, and liquid asphalt are recognized at a point in time, which is when control of the product is transferred to the customer. Generally, that point in time is when the customer accepts delivery at its facility or receives product in its own transport vehicles from one of the Company’s HMA plants or aggregates facilities. Upon purchase, the Company generally provides an invoice or similar document detailing the goods transferred to the customer. The Company generally offers payment terms customary in the industry, which typically require payment ranging from point-of-sale to 30 days following purchase.
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Concentration of Risks | Concentration of Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of contracts receivable including retainage. In the normal course of business, the Company provides credit to its customers and does not generally require collateral. The Company monitors concentrations of credit risk associated with these receivables on an ongoing basis. The Company has not historically experienced significant credit losses, due primarily to management’s assessment of customers’ credit ratings. The Company principally deals with recurring customers, state and local governments and well-known local companies whose reputations are known to management. The Company performs credit checks for significant new customers and generally requires progress payments for significant projects. The Company generally has the ability to file liens against the property if payments are not made on a timely basis.
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Income Taxes | Income Taxes The provision for income taxes includes federal and state income taxes. Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which the temporary differences are expected to be reversed or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Management evaluates the realization of deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Deferred tax assets and deferred tax liabilities are presented on a net basis by taxing authority and classified as non-current on the Consolidated Balance Sheets.
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Earnings per Share | Earnings per Share Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share attributable to common stockholders is the same as basic net income per share attributable to common stockholders, but includes dilutive unvested stock awards using the treasury stock method.
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Fair Value Measurements | Fair Value Measurements The Company measures and discloses certain financial assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are classified using the following hierarchy: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3. Inputs are unobservable for the asset or liability and include situations in which there is little, if any, market activity for the asset or liability. The inputs used in the determination of fair value are based on the best information available under the circumstances and may require significant management judgment or estimation. The Company endeavors to utilize the best available information in measuring fair value. The Company’s financial instruments include cash and cash equivalents, restricted cash, contracts receivable including retainage, accounts payable and accrued expenses reflected as current assets and current liabilities on its Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has debt securities reflected as restricted investments on its Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. These investments are adjusted to fair value at each balance sheet date and are considered Level 2 fair value measurements. The Company also has a Term Loan and a Revolving Credit Facility, as defined and further described in Note 8 - Debt. The carrying value of amounts outstanding under these credit facilities is reflected as long-term debt, net of current maturities and deferred debt issuance cost and current maturities of long-term debt on the Company’s Consolidated Balance Sheets at December 31, 2023 and September 30, 2023. Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has derivative instruments. The fair value of commodity and interest rate swaps are based on forward and spot prices, as described in Note 16 - Fair Value Measurements. Level 3 fair values are used to value acquired mineral reserves and leased mineral interests. The fair values of mineral reserves and leased mineral interests are determined using an excess earnings approach, which requires management to estimate future cash flows. The estimate of future cash flows is based on available historical information and forecasts determined by management, but is inherently uncertain. Key assumptions in estimating future cash flows include sales price, volumes and expected profit margins, net of capital requirements. The present value of the projected net cash flows represents the fair value assigned to mineral reserves and mineral interests. The discount rate is a significant assumption used in the valuation model and is based on the required rate of return that a hypothetical market participant would assume if purchasing the acquired business. Management applies fair value measurement guidance to its impairment analysis for tangible and intangible assets, including goodwill.
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Comprehensive Income | Comprehensive Income The Company reports comprehensive income in its Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders’ Equity. Comprehensive income comprises two subsets: net income and other comprehensive income (loss) (“OCI”). OCI includes adjustments for changes in fair value of an interest rate swap contract derivative and available-for-sale restricted investments. For additional information about comprehensive income, see Note 19 - Other Comprehensive Income (Loss).
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Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Concentration Risk | Customers that accounted for more than 10% of consolidated revenues during either the three months ended December 31, 2023 or the three months ended December 31, 2022 are presented below:
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Schedule of Revenue by Major Customers | The following table reflects, for the periods presented, the percentage of (i) revenues generated from public infrastructure construction projects and the sale of construction materials to public customers and (ii) revenues generated from private infrastructure construction projects and the sale of construction materials to private customers.
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Business Acquisitions (Tables) |
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Schedule of Pro Forma Revenues and Net Income | The following table presents pro forma revenues and net income as though the acquisitions had occurred on October 1, 2022 (unaudited, in thousands):
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Contracts Receivable Including Retainage, Net (Tables) |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contracts Receivable Including Retainage, Net | Contracts receivable including retainage, net consisted of the following at December 31, 2023 and September 30, 2023 (in thousands):
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Contract Assets and Liabilities (Tables) |
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Schedule of Costs and Estimated Earnings Compared to Billings on Uncompleted Contracts | Costs and estimated earnings compared to billings on uncompleted contracts at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
Significant changes to balances of costs and estimated earnings in excess of billings (contract asset) and billings in excess of costs and estimated earnings (contract liability) on uncompleted contracts from September 30, 2022 to December 31, 2022 and September 30, 2023 to December 31, 2023 are presented below (in thousands):
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Property, Plant and Equipment (Tables) |
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Schedule of Property, Plant and Equipment | Property, plant and equipment at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
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Debt (Tables) |
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Schedule of Debt | Debt at December 31, 2023 and September 30, 2023 consisted of the following (in thousands):
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Earnings Per Share (Tables) |
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Summary of Earnings Per Share | The following table summarizes the weighted-average number of basic common shares outstanding and the calculation of basic earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):
The following table summarizes the calculation of the weighted-average number of diluted common shares outstanding and the calculation of diluted earnings per share for the periods presented (unaudited in thousands, except share and per share amounts):
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Related Parties (Tables) |
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table presents revenues earned and expenses incurred by the Company during the three months ended December 31, 2023 and 2022, and accounts receivable and payable balances at December 31, 2023 and September 30, 2023, related to transactions with the related parties described above (in thousands):
|
Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Compensation Expense | The following table summarizes the components of share-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income during the three months ended December 31, 2023 and 2022 (in thousands):
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The components of lease expense were as follows (unaudited, in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Lease Liabilities | The following table summarizes the Company’s undiscounted lease liabilities outstanding as of December 31, 2023 (unaudited, in thousands):
|
Investment in Derivative Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity derivative contracts for the three months ended December 31, 2023 and 2022 and the fair value of these derivatives as of December 31, 2023 and September 30, 2023 (in thousands):
(1) Includes designated cash flow hedge of $17.6 million and $26.9 million as of December 31, 2023 and September 30, 2023, respectively.
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis | The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and September 30, 2023 under ASC 820, Fair Value Measurements (in thousands):
|
Commitments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrecorded Unconditional Purchase Obligations Disclosure | As of December 31, 2023, the Company’s purchase commitments for the remainder of fiscal 2024 and in 2025 were as follows (unaudited, in thousands):
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Royalty, Future Minimum Payments | The Company had commitments in the form of minimum royalties as of December 31, 2023 in the amount of $2.5 million, due as follows (unaudited, in thousands):
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Restricted Investments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt Securities | The following is a summary of the Company’s debt securities as of December 31, 2023 and September 30, 2023 (in thousands):
The amortized cost and fair value of debt securities classified as available for sale by contractual maturity, as of December 31, 2023, are as follows (unaudited, in thousands):
|
Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Amounts in accumulated other comprehensive income (“AOCI”), net of tax, at December 31, 2023 and September 30, 2023, were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | Changes in AOCI, net of tax, are as follows (in thousands):
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Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from AOCI to earnings are as follows (unaudited, in thousands):
|
Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2023 |
|
Concentration Risk [Line Items] | |||
Restricted cash | $ 973,000 | $ 837,000 | |
Restricted investments | 14,585,000 | $ 15,079,000 | |
Debt securities, available-for-sale, allowance for credit loss | $ 0 | $ 0 | |
Revenues | Customer Concentration Risk | Public | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 59.80% | 61.20% | |
Revenues | Customer Concentration Risk | Private | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 40.20% | 38.80% | |
Revenues | Customer Concentration Risk | Department of Transportation | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 37.70% | 33.70% | |
Revenues | Customer Concentration Risk | Florida Department of Transportation | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 12.60% | ||
Revenues | Customer Concentration Risk | North Carolina Department of Transportation | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.90% |
Business Acquisitions - Additional Information (Details) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Dec. 29, 2023
USD ($)
|
Nov. 01, 2023
USD ($)
plant
|
Oct. 02, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
|
|
Business Acquisition [Line Items] | |||||
Goodwill | $ 176,530 | $ 159,270 | |||
Revenues | 4,700 | ||||
Net loss | 300 | ||||
Expenses and losses recognized | 500 | ||||
Acquisition related costs | 500 | ||||
South Carolina Acquisition | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 3,000 | ||||
North Carolina and South Carolina Acquisitions November 2023 | |||||
Business Acquisition [Line Items] | |||||
Number of plants acquired | plant | 3 | ||||
Consideration transferred | $ 18,300 | ||||
Alabama Acquisition | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 60,100 | ||||
2023 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | 81,400 | ||||
Goodwill | 17,300 | ||||
Consideration transferred, net working capital | 15,700 | ||||
Property, plant and equipment | 47,800 | ||||
Goodwill and intangibles | $ 17,900 |
Business Acquisitions - Proforma Revenue and Net Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Business Combination and Asset Acquisition [Abstract] | ||
Pro forma revenues | $ 412,254 | $ 362,244 |
Pro forma net income | $ 9,780 | $ 983 |
Contracts Receivable Including Retainage, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Contractors [Abstract] | ||
Contracts receivable | $ 202,386 | $ 251,324 |
Retainage receivable | 54,308 | 53,286 |
Contracts receivable including retainage, gross | 256,694 | 304,610 |
Allowance for doubtful accounts | (1,165) | (906) |
Contracts receivable including retainage, net | $ 255,529 | $ 303,704 |
Contract Assets and Liabilities - Cost and Estimated Earnings Compared to Billings on Uncompleted Contracts (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|---|
Revenue from Contract with Customer [Abstract] | ||||
Costs on uncompleted contracts | $ 1,731,342 | $ 1,831,106 | ||
Estimated earnings to date on uncompleted contracts | 174,694 | 194,760 | ||
Costs and estimated earnings to date on uncompleted contracts | 1,906,036 | 2,025,866 | ||
Billings to date on uncompleted contracts | (1,964,246) | (2,077,475) | ||
Net billings in excess of costs and estimated earnings on uncompleted contracts | $ (58,210) | $ (51,609) | $ (24,752) | $ (23,206) |
Contract Assets and Liabilities - Reconciliation of Net Billings in Excess of Costs and Estimated Earnings (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | ||
Contract asset, beginning balance | $ 27,296 | $ 29,271 |
Changes in revenue billed, contract price or cost estimates | 3,143 | 3,124 |
Contract asset, ending balance | 30,439 | 32,395 |
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | ||
Contract liability, beginning balance | (78,905) | (52,477) |
Changes in revenue billed, contract price or cost estimates | (9,744) | (4,670) |
Contract liability, ending balance | (88,649) | (57,147) |
Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | ||
Net billings in excess of costs, beginning balance | (51,609) | (23,206) |
Changes in revenue billed, contract price or cost estimates | (6,601) | (1,546) |
Net billings in excess of costs, Ending balance | $ (58,210) | $ (24,752) |
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation, depletion, and amortization expense | $ 21.0 | $ 19.3 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Total long-term debt | $ 443,100 | $ 376,850 |
Deferred debt issuance costs | (1,036) | (1,110) |
Current maturities of long-term debt | (15,000) | (15,000) |
Long-term debt, net of current maturities and deferred debt issuance costs | 427,064 | 360,740 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 280,000 | 283,750 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 163,100 | $ 93,100 |
Earnings Per Share - Basic (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Numerator | ||
Net income attributable to common stockholders | $ 9,843 | $ 1,892 |
Denominator | ||
Weighted average number of basic common shares outstanding (in shares) | 51,892,426 | 51,824,948 |
Net income per common share attributable to common stockholders, basic (in dollars per share) | $ 0.19 | $ 0.04 |
Earnings Per Share - Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Numerator | ||
Net income attributable to common stockholders | $ 9,843 | $ 1,892 |
Denominator | ||
Weighted average number of basic common shares outstanding (in shares) | 51,892,426 | 51,824,948 |
Effect of dilutive securities: | ||
Restricted stock grants (in shares) | 538,438 | 295,636 |
Weighted average number of diluted common shares outstanding (in shares) | 52,430,864 | 52,120,584 |
Net income per diluted common share attributable to common stockholders (in dollars per share) | $ 0.19 | $ 0.04 |
Provision for Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate, percent | 24.10% | 21.20% |
Related Parties - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Sep. 30, 2023 |
Mar. 31, 2021 |
Dec. 31, 2017 |
|
Related Party Transaction [Line Items] | ||||
Other assets | $ 23,711 | $ 32,705 | ||
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Assumed debt | $ 800 | |||
Interest rate, percentage | 4.00% | |||
Debt instrument, annual principal payment | $ 100 | |||
SunTx Capital Partners | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Payment to related party | 300 | |||
Consideration Note Receivable | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Notes receivable | $ 1,000 | |||
Other current assets | 100 | |||
Other assets | 200 | |||
Accounts Payable Note Receivable | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Notes receivable | $ 1,000 | |||
Other current assets | 100 | |||
Other assets | $ 100 |
Share-Based Compensation - Schedule of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Employee stock purchase plan | ||
Compensation expense | $ 3,046 | $ 2,480 |
Equity classified awards | ||
Employee stock purchase plan | ||
Compensation expense | 2,783 | 2,480 |
Liability classified awards | ||
Employee stock purchase plan | ||
Compensation expense | 106 | 0 |
Employee stock purchase plan | ||
Employee stock purchase plan | ||
Compensation expense | $ 157 | $ 0 |
Leases - Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 18,415 | $ 14,485 |
Current portion of operating lease liabilities | 3,479 | 2,338 |
Operating lease liabilities, net of current portion | $ 15,493 | $ 12,649 |
Weighted-average remaining lease terms | 7 years 2 months 12 days | |
Weighted-average discount rate | 3.62% |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Leases [Abstract] | ||
Operating lease expense | $ 903 | $ 726 |
Short-term lease expense | 5,376 | 6,035 |
Total lease expense | $ 6,279 | $ 6,761 |
Leases - Future Lease Liabilities (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2024 | $ 3,031 |
2025 | 3,545 |
2026 | 3,353 |
2027 | 2,984 |
2028 | 2,492 |
2029 and thereafter | 6,272 |
Total future minimum lease payments | 21,677 |
Less: imputed interest | 2,705 |
Total | $ 18,972 |
Investment in Derivative Instruments - Income Statement Classification (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Realized Gain (Loss) | $ 2,619 | $ 1,936 |
Unrealized Gain (Loss) | (226) | (1,007) |
Total Gain (Loss) | 2,393 | 929 |
Cost of revenues | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Realized Gain (Loss) | (19) | 601 |
Unrealized Gain (Loss) | (226) | (1,007) |
Total Gain (Loss) | (245) | (406) |
Interest expense, net | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Realized Gain (Loss) | 2,638 | 1,335 |
Unrealized Gain (Loss) | 0 | 0 |
Total Gain (Loss) | $ 2,638 | $ 1,335 |
Commitments - Letters of Credit (Details) - USD ($) |
Dec. 31, 2023 |
Jun. 30, 2022 |
---|---|---|
Line of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding | $ 8,300,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Assumed debt | $ 325,000,000 | $ 325,000,000 |
Commitments - Purchase Commitments (Details) - Fuel $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Remainder of 2024 | $ 3,115 |
2025 | 211 |
Total | $ 3,326 |
Commitments - Minimum Royalties (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2024 | $ 282 | |
2025 | 256 | |
2026 | 192 | |
2027 | 180 | |
2028 | 145 | |
Thereafter | 1,470 | |
Total | 2,525 | |
Royalty expense | $ 400 | $ 400 |
Restricted Investments - Schedule of Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Amortized cost, due within on year | $ 2,126 | |
Amortized cost, due after one year through three years | 4,345 | |
Amortized cost, due after three years | 8,456 | |
Amortized Cost | 14,927 | $ 15,926 |
Fair value, due within one year | 2,110 | |
Fair value, due after one year through three years | 4,234 | |
Fair value, due after three years | 8,241 | |
Fair Value | $ 14,585 | $ 15,079 |
Other Comprehensive Income - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2023 |
Sep. 30, 2023 |
Jul. 01, 2022 |
---|---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Notional amount | $ 300.0 | $ 300.0 | |
Interest rate swap | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Notional amount | $ 300.0 |
Other Comprehensive Income - Schedule of AOCI (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Sep. 30, 2023 |
---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest rate swap contract, net of blend and extend arrangement | $ 16,114 | $ 25,533 |
Less tax effect of other comprehensive income (loss) items | (3,783) | (5,992) |
Total | 11,989 | 18,694 |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized loss on available-for-sale securities | $ (342) | $ (847) |
Other Comprehensive Income - Schedule of Cash Flow Hedges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
AOCI | ||
Beginning balance | $ 516,574 | $ 455,879 |
Ending balance | 521,159 | 458,856 |
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | ||
AOCI | ||
Beginning balance | 18,694 | 17,620 |
Net OCI changes | (6,705) | (1,256) |
Ending balance | $ 11,989 | $ 16,364 |
Other Comprehensive Income - Schedule of Reclassification of AOCI (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Provision for income taxes | $ (3,118) | $ (510) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest expense (benefit) | (2,638) | (1,335) |
Provision for income taxes | 654 | 344 |
Total reclassifications from AOCI to earnings | $ (1,984) | $ (991) |
Subsequent Events - Additional Information (Details) $ in Millions |
Jan. 02, 2024
USD ($)
|
---|---|
Subsequent Event | Georgia Acquisition | |
Subsequent Event [Line Items] | |
Consideration transferred | $ 6.4 |
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