Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 11, 2019 | Mar. 29, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Construction Partners, Inc. | ||
Entity Central Index Key | 0001718227 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Small Business | true | ||
Trading Symbol | ROAD | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 152,136,672 | ||
Entity File Number | 001-38479 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Class A common stock, par value $0.001 | ||
City Area Code | 334 | ||
Local Phone Number | 673-9763 | ||
Security Exchange Name | NASDAQ | ||
Entity Address, State or Province | AL | ||
Entity Address, City or Town | Dothan | ||
Entity Address, Address Line One | 290 Healthwest Drive, Suite 2 | ||
Entity Address, Postal Zip Code | 36303 | ||
Entity Tax Identification Number | 26-0758017 | ||
Entity Incorporation, State or Country Code | DE | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the registrant’s fiscal year ended September 30, 2019 in connection with the registrant’s 2020 annual meeting of stockholders are incorporated by reference into Part III of this report. | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 32,705,418 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 19,076,327 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 80,619 | $ 99,137 |
Contracts receivable including retainage, net | 139,882 | 120,291 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 12,030 | 9,334 |
Inventories | 34,291 | 24,556 |
Prepaid expenses and other current assets | 13,144 | 14,137 |
Total current assets | 279,966 | 267,455 |
Property, plant and equipment, net | 205,870 | 178,692 |
Goodwill | 38,546 | 32,919 |
Intangible assets, net | 3,434 | 3,735 |
Investment in joint venture | 496 | 1,659 |
Other assets | 2,284 | 10,270 |
Deferred income taxes, net | 1,173 | 1,580 |
Total assets | 531,769 | 496,310 |
Current liabilities: | ||
Accounts payable | 70,442 | 63,510 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 31,115 | 38,738 |
Current maturities of debt | 7,538 | 14,773 |
Accrued expenses and other current liabilities | 19,078 | 17,520 |
Total current liabilities | 128,173 | 134,541 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 42,458 | 48,115 |
Deferred income taxes, net | 11,480 | 8,890 |
Other long-term liabilities | 6,108 | 5,295 |
Total long-term liabilities | 60,046 | 62,300 |
Total liabilities | 188,219 | 196,841 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2019 and September 30, 2018 and no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 243,452 | 242,493 |
Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 | (15,603) | (15,603) |
Retained earnings | 115,646 | 72,525 |
Total stockholders’ equity | 343,550 | 299,469 |
Total liabilities and stockholders’ equity | 531,769 | 496,310 |
Class A Common Stock | ||
Stockholders’ Equity: | ||
Common stock, value | 33 | 12 |
Total stockholders’ equity | 33 | 12 |
Class B Common Stock | ||
Stockholders’ Equity: | ||
Common stock, value | 22 | 42 |
Total stockholders’ equity | $ 22 | $ 42 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2019$ / sharesshares |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 |
Preferred stock, shares outstanding (in shares) | 0 |
Class A Common Stock | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized (in shares) | 400,000,000 |
Common stock, shares issued (in shares) | 32,597,736 |
Common stock, shares outstanding (in shares) | 32,597,736 |
Class B Common Stock | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 |
Common stock, shares issued (in shares) | 22,106,961 |
Common stock, shares outstanding (in shares) | 19,184,009 |
Treasury stock, shares (in shares) | 2,922,952 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 783,238 | $ 680,096 |
Cost of revenues | 665,285 | 580,560 |
Gross profit | 117,953 | 99,536 |
General and administrative expenses | (62,724) | (55,303) |
Settlement income | 0 | 14,803 |
Gain on sale of equipment, net | 1,909 | 2,392 |
Operating income | 57,138 | 61,428 |
Interest expense, net | (1,861) | (1,270) |
Other income (expense) | 416 | (101) |
Income before provision for income taxes and earnings from investment in joint venture | 55,693 | 60,057 |
Provision (benefit) for income taxes | 13,909 | 10,525 |
Earnings from investment in joint venture | 1,337 | 1,259 |
Net income | $ 43,121 | $ 50,791 |
Net income per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.84 | $ 1.11 |
Diluted (in dollars per share) | $ 0.84 | $ 1.11 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 51,421,159 | 45,605,845 |
Diluted (in shares) | 51,427,220 | 45,919,648 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Class A Common Stock | Class B Common Stock |
Beginning balance (in shares) at Sep. 30, 2017 | 44,987,575 | 0 | 0 | ||||
Beginning balance at Sep. 30, 2017 | $ 152,181 | $ 45 | $ 142,385 | $ (11,983) | $ 21,734 | $ 0 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Reclassification of common stock (in shares) | 44,987,575 | 44,987,571 | |||||
Reclassification of common stock | 0 | $ (45) | $ 45 | ||||
Issuance of stock (in shares) | 9,350,000 | ||||||
Issuance of stock | 98,009 | 98,000 | $ 9 | ||||
Conversion of Class B common stock to Class A common stock (in shares) | 2,600,000 | 2,600,000 | |||||
Conversion of Class B common stock to Class A common stock | 0 | $ 3 | $ (3) | ||||
Issuance of restricted shares from treasury | 5 | (453) | 458 | ||||
Cashless option exercise | (2,492) | 1,586 | (4,078) | ||||
Equity-based compensation expense | 975 | 975 | |||||
Net income | 50,791 | 50,791 | |||||
Ending balance (in shares) at Sep. 30, 2018 | 0 | 11,950,000 | 42,387,571 | ||||
Ending balance at Sep. 30, 2018 | 299,469 | $ 0 | 242,493 | (15,603) | 72,525 | $ 12 | $ 42 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of stock (in shares) | 292,534 | ||||||
Issuance of stock | 0 | ||||||
Stock option exercise (in shares) | 74,592 | ||||||
Stock option exercise | 3 | 3 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 20,355,202 | 20,355,202 | |||||
Conversion of Class B common stock to Class A common stock | 0 | $ 20 | $ (20) | ||||
Cashless option exercise | 957 | 957 | 0 | ||||
Net income | 43,121 | 43,121 | |||||
Ending balance (in shares) at Sep. 30, 2019 | 0 | 32,597,736 | 22,106,961 | ||||
Ending balance at Sep. 30, 2019 | $ 343,550 | $ 0 | $ 243,452 | $ (15,603) | $ 115,646 | $ 33 | $ 22 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 43,121 | $ 50,791 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization of long-lived assets | 31,231 | 25,321 |
Amortization of deferred debt issuance costs | 109 | 94 |
Provision for bad debt | 995 | 604 |
Gain on sale of equipment | (1,909) | (2,392) |
Equity-based compensation expense | 957 | 975 |
Earnings from investment in joint venture | (1,337) | (1,259) |
Deferred income taxes | 2,997 | (481) |
Changes in operating assets and liabilities: | ||
Contracts receivable including retainage, net | (20,586) | 9,273 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (2,696) | (2,955) |
Inventories | (8,826) | (2,746) |
Prepaid expenses and other current assets | 993 | (8,886) |
Other assets | 7,986 | (7,787) |
Accounts payable | 6,932 | 7,462 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (7,623) | 2,041 |
Accrued expenses and other current liabilities | 2,117 | (4,778) |
Other long-term liabilities | 813 | 844 |
Net cash provided by operating activities, net of acquisitions | 55,274 | 66,121 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (42,479) | (42,804) |
Acquisition of liquid asphalt terminal assets | (10,848) | 0 |
Proceeds from sale of equipment | 4,456 | 4,931 |
Business acquisitions, net of cash acquired | (13,854) | (51,319) |
Investment in joint venture | 0 | (400) |
Distributions received from investment in joint venture | 2,500 | 0 |
Net cash used in investing activities | (60,225) | (89,592) |
Cash flows from financing activities: | ||
Repayments on revolving credit facility | 0 | (5,000) |
Proceeds from issuance of long-term debt, net of debt issuance costs and discount | 0 | 21,917 |
Repayments of long-term debt | (13,001) | (12,361) |
Payment to seller of pre-acquisition balance due | 0 | (4,940) |
Payment of treasury stock purchase obligation | (569) | (2,569) |
Proceeds from initial public offering of Class A common stock, net of offering costs | 0 | 98,009 |
Proceeds from sale of stock | 3 | 5 |
Net cash (used in) provided by financing activities | (13,567) | 95,061 |
Net change in cash and cash equivalents | (18,518) | 71,590 |
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Beginning of period | 99,137 | 27,547 |
End of period | 80,619 | 99,137 |
Supplemental cash flow information: | ||
Cash paid for interest | 2,639 | 2,336 |
Cash paid for income taxes | 9,119 | 14,357 |
Non-cash items: | ||
Property, plant and equipment financed with accounts payable | $ 904 | $ 395 |
General
General | 12 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Business Description Construction Partners, Inc. (the “Company”) is a leading infrastructure and road construction company operating in Alabama, Florida, Georgia, North Carolina and South Carolina through its wholly owned subsidiaries. The Company provides site development, paving, utility and drainage systems services, as well as hot mix asphalt (“HMA”), aggregates, ready-mix concrete, and liquid asphalt cement supply. The Company executes projects for a mix of private, municipal, state, and federal customers that are both privately and publicly funded. The majority of the work is performed under fixed unit price contracts and, to a lesser extent, fixed total price contracts. The Company was formed as a Delaware corporation in 2007 as a holding company for its wholly owned subsidiary, Construction Partners Holdings, Inc. (“CPHI”), a Delaware corporation incorporated in 1999 that began operations in 2001, to execute an acquisition growth strategy in the HMA paving and construction industry. SunTx Capital Partners (“SunTx”), a private equity firm based in Dallas, Texas, is the Company’s majority investor and has owned a controlling interest in the Company’s stock since the Company’s inception. 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, goodwill and other intangible assets, allowance for doubtful accounts, valuation allowances related to income taxes, accruals for potential liabilities related to lawsuits or insurance claims, and the fair value of equity-based compensation awards. Estimates are continually evaluated based on historical information and actual experience; however, actual results could differ from these estimates. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Common share and per share amounts have been retroactively adjusted for all periods presented to give effect to the Stock Split described in Note 12 - Equity. Emerging Growth Company The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups Act (the “JOBS Act”) enacted in April 2012. As an emerging growth company, the Company could have taken advantage of an exemption that would have allowed the Company to wait to comply with new or revised financial accounting standards until the effective date of such standards for private companies. However, the Company has irrevocably elected to opt out of such extended transition period, which means that when a new or revised standard has different effective dates for public and private companies, the Company is required to adopt the standard at the effective date applicable to public companies that are not emerging growth companies. Cash and Cash Equivalents Cash consists principally of currency on hand and demand deposits at commercial banks. Cash equivalents are short-term, highly liquid investments 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 investments 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. 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 the customer pending 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 contract terms. Such amounts, defined as retainage, represent a contract asset and are included on the Consolidated Balance Sheet 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. The carrying value of contracts receivable including retainage, net of the allowance for doubtful accounts represents their estimated net realizable value. 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, and current economic conditions. 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 of 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 (formerly known as the percentage-of-completion 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 Sheet 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 September 30, 2019 or September 30, 2018. Projects performed for various Departments of Transportation accounted for 40.4% and 42.9% of consolidated revenues for the fiscal years ended September 30, 2019 and 2018, respectively. Two customers accounted for more than 10% of consolidated revenues for the fiscal years ended September 30, 2019 and 2018, as follows: % of Consolidated 2019 2018 Alabama Department of Transportation 13.8 % 15.1 % North Carolina Department of Transportation 13.1 % 13.3 % Inventories The Company’s inventories are stated at the lower of cost or net realizable value and are accounted for on an average cost basis or a first-in, first-out cost basis. The cost of inventory includes the cost of material, labor, trucking and other equipment costs associated with procuring and transporting materials to HMA plants for production and delivery to customers. Inventories consist primarily of raw materials, including asphalt cement, aggregate and millings that the Company expects to utilize on construction projects within one year. Revenues from Contracts with Customers The Company derives all of its 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, (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. % of Consolidated 2019 2018 Private 30.7% 28.6% Public 69.3% 71.4% 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. Revisions in estimates related to amounts recorded in prior periods resulted in the Company recording net increases in revenues of $3.8 million and $6.9 million during the fiscal years ended September 30, 2019 and 2018, respectively. 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. We account 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. 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. Fair Value Measurements The Company measures and discloses certain financial assets and liabilities at fair value. The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , defines fair value as 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, contracts receivable including retainage and accounts payable reflected as current assets and current liabilities on its Consolidated Balance Sheets at September 30, 2019 and 2018. Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has term loans and a revolving credit facility, as described in Note 11 - Debt. The carrying value of amounts outstanding under these credit facilities is reflected as long-term debt, net of current maturities and current maturities of debt on the Company’s Consolidated Balance Sheets at September 30, 2019 and 2018. Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value. Management applies fair value measurement guidance to its impairment analysis for tangible and intangible assets. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements for operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. Quarry reserves are depleted in accordance with the units-of-production method as aggregate is extracted, using the initial allocation of cost based on proven and probable reserves. Routine repair and maintenance costs are expensed as incurred. Asset improvements are capitalized at cost and amortized over the remaining useful life of the related asset. The useful lives of property, plant and equipment categories are as follows: Category Estimated Useful Life Land and improvements Land, unlimited; improvements, 15-25 years Quarry reserves Based on depletion Buildings 5 - 39 years Plants 3 - 20 years Construction equipment 3 - 10 years Furniture and fixtures 5 - 10 years Leasehold improvements The shorter of 15 years or the remaining lease term Management periodically assesses the estimated useful life over which assets are depreciated, depleted or amortized. If the analysis warrants a change in the estimated useful life of property, plant and equipment, management will reduce the estimated useful life and depreciate, deplete or amortize the carrying value prospectively over the shorter remaining useful life. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the period of disposal, and the resulting gains and losses are included in the results of operations during the same period. Impairment of Long-Lived Assets The carrying value of property, plant and equipment and intangible assets subject to amortization is evaluated whenever events or changes in circumstances indicate that the carrying amount of such assets, or an asset group, may not be recoverable. Events or circumstances that might cause management to perform impairment testing include, but are not limited to, (i) a significant decrease in the market price of an asset, (ii) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, (iii) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset, (iv) an operating or cash flow performance combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of an asset, and (v) an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life. If indicators of potential impairment are present, management performs a recoverability test and, if necessary, records an impairment loss. If the total estimated future undiscounted cash flows to be generated from the use and ultimate disposition of an asset or asset group is less than its carrying value, an impairment loss is recorded in the Company’s results of operations, measured as the amount required to reduce the carrying value to fair value. Fair value is determined in accordance with the best available information based on the hierarchy described under “Fair Value Measurements” above. For example, the Company would first seek to identify quoted prices or other observable market data. If observable data is not available, management would apply the best available information under the circumstances to a technique such as a discounted cash flow model to estimate fair value. Impairment analysis involves estimates and the use of assumptions in connection with judgments made in forecasting long-term estimated inflows and outflows resulting from the use and ultimate disposition of an asset, and determining the ultimate useful lives of assets. Actual results may differ from these estimates using different assumptions, which could materially impact the results of an impairment assessment. Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired and liabilities assumed in a business combination. Other intangible assets consist of an indefinite-lived name license in connection with a business acquired, and finite-lived assets including a non-compete agreement, customer relationships and construction backlog, each acquired in business acquisitions. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, management evaluates whether events and circumstances continue to support an indefinite useful life. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of the business. Annually, on the first day of the Company’s fourth fiscal quarter, management performs an analysis of the carrying value of goodwill at its reporting unit for potential impairment. In accordance with GAAP, the Company may assess its goodwill for impairment initially using a qualitative approach to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If management concludes, based on its assessment of relevant events, facts and circumstances, that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine whether there is any impairment. The Company may also elect to initially perform a quantitative analysis instead of starting with a qualitative assessment. Because the Company has only one reporting unit, a market capitalization calculation can be performed as the first step of the quantitative assessment by comparing the book value of the Company’s stock (determined by reference to the Company’s stockholders’ equity) to the fair market value of a share of the Company’s stock. If the fair value of the stock is greater than the calculated book value of the stock, goodwill is deemed not to be impaired, and no further testing is required. If the fair value is less than the calculated book value, then the Company must take a second step to determine the impairment amount, as described below. The second step requires comparing the carrying value of a reporting unit, including goodwill, to its fair value, typically using the multiple period discounting method under the income approach and market approach. The income approach uses a discounted cash flow model, which involves significant estimates and assumptions, including preparation of revenues and profitability growth forecasts, selection of a discount rate, and selection of a terminal year multiple, to estimate fair value. The market approach could include applying a control premium to the market price of the Company’s common stock or utilizing guideline public company multiples. Management’s assessment of facts and circumstances at each analysis date could cause these assumptions to change. If the fair value of the respective reporting unit exceeds its carrying amount, goodwill is not considered to be impaired, and no further testing is required. If the carrying amount of a reporting unit exceeds its fair value, an impairment charge is recorded to write down goodwill to its fair value and is recorded in the Company’s results of operations. The Company performed a quantitative assessment of goodwill using the market capitalization calculation for fiscal years 2019 and 2018 and determined that the fair value of its reporting unit exceeded its carrying value, and thus concluded that the carrying value of goodwill was not impaired at September 30, 2019 or 2018. Accordingly, no further analysis was required or performed. Management also annually assesses the carrying value of the Company’s indefinite-lived intangible assets other than goodwill on the first day of the fiscal fourth quarter. Management tests indefinite-lived intangible assets for impairment by comparing their carrying value to their estimated fair value. An impairment loss is recorded in the Company’s results of operations to the extent that the carrying value of an indefinite-lived intangible asset exceeds its fair value. Similar to the assessment of goodwill, events and changes in circumstances could cause management to utilize different assumptions in subsequent evaluations, which could materially impact the results of an impairment assessment. Management concluded that the carrying value of the Company’s indefinite-lived intangible assets other than goodwill was not impaired at September 30, 2019 or September 30, 2018. Deferred Debt Issuance Costs Costs directly associated with obtaining debt financing are deferred and amortized over the term of the related debt agreement. Unamortized amounts related to long-term debt are reflected on the Consolidated Balance Sheet as a direct deduction from the carrying amount of the related long-term debt liability. Comprehensive Income Comprehensive income is a measure of net income and all other changes in equity that result from transactions other than transactions with stockholders. Management has determined that net income is the Company’s only component of comprehensive income. Accordingly, there is no difference between net income and comprehensive income. 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 Sheet. The Company classifies income tax-related interest and penalties as interest expense and other expenses, respectively. Equity-Based Incentive Plans Compensation costs related to equity-classified share-based awards are recognized in the consolidated financial statements based on grant date fair value. Compensation cost for graded-vesting awards is recognized ratably over the respective vesting periods. Accrued Insurance Costs The Company carries insurance policies to cover various risks, including primarily general liability, automobile liability and workers’ compensation, under which it is liable to reimburse the insurance company for a portion of each claim paid. The amount for which the Company is liable for general liability, automobile liability and workers’ compensation claims ranges from $100,000 to $500,000 per occurrence. Management accrues for probable losses, both reported and unreported, that are reasonably estimable using actuarial methods based on historic trends modified, if necessary, by recent events. Changes in loss assumptions caused by changes in actual experience would affect the assessment of the ultimate liability and could have an effect on the Company’s operating results and financial position up to $500,000 per occurrence for general liability, automobile liability and workers’ compensation claims. The Company provides employee medical insurance under policies that are both fixed-premium, fully-insured policies and self-insured policies that are administered by the insurance company. Under the self-insured policies, the Company is liable to reimburse the insurance company for actual claims paid plus an administrative fee. The Company purchases separate stop-loss insurance that limits the individual participant claim loss to amounts ranging from $75,000 to $160,000. In addition to the retention items noted above, the Company’s insurance provider requires the Company to maintain a standby letter of credit. This letter of credit serves as a guarantee by the banking institution to pay the Company’s insurance provider the incurred claim costs attributable to general liability, workers’ compensation and automobile liability claims, up to the amount stated in the standby letter of credit, in the event that these claims are not paid by the Company (see Note 18 - Commitments and Contingencies). 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. Segment Reporting and Reporting Units The Company operates in Alabama, Florida, Georgia, North Carolina and South Carolina through its wholly owned subsidiaries located in four southeastern states. Each of the Company’s platform operating companies engages in essentially the same business, primarily infrastructure and road construction. Management determined that the Company functions as a single operating segment, and thus reports as a single reportable segment. This determination is based on rules prescribed by GAAP applied to the manner in which management operates the Company. In particular, management assessed the discrete financial information routinely reviewed by the Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, to monitor the Company’s operating performance |
Accounting Standards
Accounting Standards | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards | Accounting Standards Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which added a new ASC Topic 606 (“ASC 606”). ASC 606 revises and consolidates prior guidance, eliminates industry-specific revenue recognition guidance and establishes a comprehensive principle-based approach for determining revenue recognition. The core principle of the guidance is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for providing those goods or services. ASC 606 sets forth a five-step revenue recognition model to be applied consistently to all contracts with customers, except those that are within the scope of other topics in the ASC: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update also provides guidance regarding the recognition of costs related to obtaining and fulfilling customer contracts. This update also requires quantitative and qualitative disclosures sufficient to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including disclosures on significant judgments made when applying the guidance. The FASB subsequently amended ASC 606 on multiple occasions to, among other things, delay its effective date and clarify certain implementation guidance. Management adopted this update for the Company’s fiscal year beginning October 1, 2018, using a modified retrospective approach. Under this approach, the Company’s financial statements are prepared under the revised guidance for the year of adoption, but not for prior years, and the Company recognizes a cumulative adjustment to the opening balance of retained earnings for contracts that still require performance by the Company at the date of adoption. The adoption of ASC 606 on October 1, 2018 did not result in a material impact that required recognition of a cumulative adjustment of the opening retained earnings balance for contracts that still required performance at September 30, 2018. Application of ASC 606 for the fiscal year ended September 30, 2019 had the following impact on the Company’s Consolidated Balance Sheet at September 30, 2019 and Consolidated Statement of Income for the fiscal year ended September 30, 2019 (in thousands): At September 30, 2019 As Reported Impact of ASC 606 Without Application of ASC 606 Costs and estimated earnings in excess of billings on uncompleted contracts $ 12,030 $ (599) $ 12,629 Inventories $ 34,291 $ 1,602 $ 32,689 Accrued expenses and other current liabilities $ 19,078 $ (39) $ 19,039 Billings in excess of costs and estimated earnings on uncompleted contracts $ 31,115 $ 1,167 $ 29,948 For the Fiscal Year Ended September 30, 2019 Revenues $ 783,238 $ (1,766) $ 785,004 Cost of revenues $ 665,285 $ (1,602) $ 666,887 Provision (benefit) for income taxes $ 13,909 $ (39) $ 13,948 Net income $ 43,121 $ (125) $ 43,246 The Company has refined its accounting policies and related internal controls affected by ASC 606. Management’s assessment of the Company’s construction contracts under the new standard supports the recognition of revenue over time using the cost-to-cost input method (formerly known as the percentage-of-completion method of accounting), measured by the relationship of total cost incurred to total estimated contract costs, which is consistent with the Company’s historical revenue recognition practices. As such, the Company’s construction contracts continue to be recognized over time considering the continuous transfer of control to its customers during the performance of construction projects. The Company also enhanced its disclosures regarding judgments and estimates used by management in the application of ASC 606 in Note 2 - Significant Accounting Policies. In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASC 805”). The amendments of this update refine the definition of a business. Prior to this update, guidance in ASC 805 defined a business as having an integrated set of assets along with three elements or activities: inputs, processes, and outputs (collectively referred to as a “set”). ASC 805 provides a framework to assist in the evaluation of whether a set is a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If that threshold is not met, the Company must perform further analysis to determine whether the set is a business. At a minimum, the set must include an input and a substantive process that together significantly contribute to the ability to create outputs. The Company adopted this update for the Company’s fiscal year beginning October 1, 2018 and applied the guidance to acquisitions during the fiscal year ended September 30, 2019 as described in Note 4 - Business Acquisitions and Note 8 - Property, Plant and Equipment. Recently Issued Accounting Pronouncements Not Yet Adopted The FASB has issued certain ASUs that are applicable to the Company and will be adopted in future periods. The consolidated financial statements and related disclosures for the fiscal years ended September 30, 2019 and 2018 do not reflect the requirements of this guidance. The following is a brief description of the recently issued ASUs and management’s current assessment regarding the methods, timing and impact of adoption of such ASUs by the Company in the future. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently issued related ASUs that require lessees to present right-of-use assets and lease liabilities on the balance sheet for most leases. The ASU will be effective commencing with the Company’s fiscal quarter ending December 31, 2019. The Company will adopt the new guidance using a modified retrospective approach, recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company anticipates applying the optional package of practical expedients upon adoption. Based on a preliminary assessment, management expects the adoption of this ASU to result in the recognition of $9.0 million to $10.0 million of right-of-use assets and lease liabilities on the Company’s Consolidated Balance Sheet, with an immaterial impact to the opening balance of retained earnings. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on eight cash flow classification issues: debt prepayment and debt extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The amendments of this update are effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company expects to adopt this guidance as required and does not expect a material impact to the Company’s consolidated financial statements. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions The Scruggs Company On May 15, 2018, the Company acquired all of the common shares and voting interests of The Scruggs Company ( “ Scruggs ” ). The acquisition complemented the Company ’ s vertically integrated southeastern United States operations, providing new bidding areas in the expanding Georgia market. This acquisition was accounted for as a business combination in accordance with ASC 805 . Management completed the purchase price allocation for this acquisition during the fiscal year ended September 30, 2018. 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 fair values of assets acquired and liabilities assumed, and the estimated useful lives of intangible assets acquired, were as follows (in thousands): Contracts receivable including retainage $ 9,184 Costs and estimated earnings in excess of billings on uncompleted contracts 1,787 Inventory 4,323 Other current assets (1) 731 Property, plant and equipment: Construction equipment 17,571 Quarry reserves 13,986 Land and land improvements 7,302 Plant 6,917 Buildings 1,552 Backlog intangible (2) 594 Customer relationship (3) 1,100 Goodwill 2,319 Accounts payable (3,646) Billings in excess of costs and estimated earnings on uncompleted contracts (4,589) Current maturities of long-term debt (358) Other current liabilities (1,770) Payable to seller (4,940) Long-term debt, net of current maturities (744) $ 51,319 (1) Other current assets excludes cash acquired. (2) The estimated useful life of the backlog intangible asset is 17 months. (3) The estimated useful life of the customer relationship intangible is 8 years. The amount of the purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed was recorded as goodwill. Under the terms of the Stock Purchase Agreement, the parties made a Section 338(h)(10) election under the Internal Revenue Code. Accordingly, goodwill, the backlog intangible and customer relationship intangible assets allocated to the purchase price and the step-up to fair value of property, plant and equipment reflected in the acquisition date balance sheet are deductible by the Company for income tax purposes. Goodwill primarily represents the assembled work force and synergies expected to result from the acquisition. The Consolidated Statement of Income for the fiscal year ended September 30, 2018 includes $35.8 million of revenue and $3.5 million of net income attributable to the operations of Scruggs. The following table presents pro forma revenues and net income as though the Company had acquired Scruggs on October 1, 2017 (unaudited, in thousands): For the Fiscal Year Ended September 30, 2018 Pro forma revenues $ 735,197 Pro forma net income 55,558 Pro forma financial information is presented as if the operations of Scruggs had been included in the consolidated results of the Company since October 1, 2017, and gives effect to transactions that are directly attributable to Scruggs, including adjustments to: a. Include the pro forma results of operations of Scruggs for the fiscal year ended September 30, 2018. b. Include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and quarry reserves, as applicable, as if such assets were acquired on October 1, 2016, and the Company ’ s depreciation and depletion methodologies were consistently applied to such assets. c. Include interest expense under the Term Loan, d efined in Note 11 - Debt, as if the $22.0 million borrowed to partially finance the purchase price was borrowed on October 1, 2016. Interest expense calculations further assume that no principal payments were made applicable to the $22.0 million borrowed during the period from October 1, 2016 through September 30, 2018, and that the interest rate in effect on the date the Company made the additional $22.0 million borrowing on May 15, 2018 was in effect for the period from October 1, 2016 through September 30, 2018. Pro forma information is presented for informational purposes and may not be indicative of revenue or net income that would have been achieved if the Company had acquired Scruggs on October 1, 2017. Alabama Acquisition On July 12, 2019, a subsidiary of the Company acquired substantially all of the assets of an HMA manufacturing plant and paving company located near Gadsden, Alabama. The acquired business is expected to benefit from synergies resulting from its proximity to the Company’s preexisting operations in northeast Alabama, including an aggregates quarry. The acquisition was accounted for as a business combination in accordance with ASC 805. The purchase price of $5.0 million was paid from cash on hand at closing. 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 amounts allocated were not material to the Company’s Consolidated Balance Sheet. The amount of the purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed was recorded as goodwill in the amount of approximately $2.4 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled work force and synergies expected to result from the acquisition. The results of operations since the July 12, 2019 acquisition date attributable to this acquisition are included in the Company’s consolidated financial statements and were not material to the Consolidated Statements of Income for the fiscal year ended September 30, 2019. Pro forma results of operations as if the acquisition had been consummated on October 1, 2018 would not be material to the Consolidated Statements of Income. The Company recorded certain costs to effect the acquisition as they were incurred, which are reflected as general and administrative expenses on the Consolidated Statements of Income in the amount of $0.1 million for the fiscal year ended September 30, 2019. Florida Acquisition On February 28, 2019, a subsidiary of the Company acquired substantially all of the assets of an HMA and ready-mix concrete business located in Okeechobee, Florida. This transaction enables the Company to serve new markets in south central Florida through an expanded geographic presence in the state. The acquisition was accounted for as a business combination in accordance with ASC 805. The purchase price of $8.9 million was paid from cash on hand at closing. 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 amounts allocated were not material to the Company’s Consolidated Balance Sheet. The purchase price exceeding the net fair value of identifiable assets acquired and liabilities assumed was recorded as goodwill and other identifiable intangible assets, including customer relationships and customer backlog, in the amount of $3.2 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled work force and synergies expected to result from the acquisition. The results of operations since the February 28, 2019 acquisition date attributable to this acquisition are included in the consolidated financial statements since the acquisition date and were not material to the Consolidated Statements of Income for the year fiscal ended September 30, 2019. Pro forma results of operations as if the acquisition had been consummated on October 1, 2018 would not be material to the Consolidated Statements of Income. The Company recorded certain costs to effect the acquisition as they were incurred, which are reflected as general and administrative expenses on the Consolidated Statements of Income in the amount of $0.1 million for the fiscal year ended September 30, 2019. |
Contracts Receivable Including
Contracts Receivable Including Retainage, net | 12 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Contracts Receivable Including Retainage, net | Contracts Receivable Including Retainage, net Contracts receivable including retainage, net consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Contracts receivable $ 121,050 $ 104,541 Retainage 19,835 16,848 140,885 121,389 Allowance for doubtful accounts (1,003) (1,098) Contracts receivable including retainage, net $ 139,882 $ 120,291 The following is a summary of changes in the allowance for doubtful accounts balance during the fiscal years ended September 30, 2019 and 2018 (in thousands): For the Fiscal Year Ended 2019 2018 Balance at beginning of period $ 1,098 $ 1,734 Charged to bad debt expense 995 604 Write-off of contracts receivable including retainage (1,090) (1,240) Balance at end of period $ 1,003 $ 1,098 Retainage receivables have been billed, but are not due, until contract completion and acceptance by the customer. |
Contract Assets and Liabilities
Contract Assets and Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Contract Assets and Liabilities | Contract Assets and Liabilities Costs and estimated earnings compared to billings on uncompleted contracts at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Costs on uncompleted contracts $ 900,880 $ 743,322 Estimated earnings to date on uncompleted contracts 123,256 95,155 1,024,136 838,477 Billings to date on uncompleted contracts (1,043,221) (867,881) Net billings in excess of costs and estimated earnings on uncompleted contracts $ (19,085) $ (29,404) 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, 2018 to September 30, 2019 are presented below (in thousands): Costs and Estimated Earnings in Excess of Billings on Billings in Excess of Costs and Estimated Earnings on Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts September 30, 2018 $ 9,334 $ (38,738) $ (29,404) Changes in revenue billed, contract price or cost estimates 2,696 7,623 10,319 September 30, 2019 $ 12,030 $ (31,115) $ (19,085) At September 30, 2019, the Company had unsatisfied or partially unsatisfied performance obligations under construction project contracts representing approximately $481.1 million in aggregate transaction price. The Company expects to earn revenue as it satisfies its performance obligations under those contracts in the amount of approximately $386.2 million during the fiscal year ending September 30, 2020 and approximately $94.9 million thereafter. |
Other Assets
Other Assets | 12 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Settlement receivable $ 7,706 $ 7,874 Prepaid expenses 3,043 4,989 Other current assets 2,395 1,274 Total prepaid expenses and other current assets $ 13,144 $ 14,137 Other Assets Other assets consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Settlement receivable $ — $ 7,224 Notes receivable 2,124 2,561 Other assets 160 485 Total other assets $ 2,284 $ 10,270 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Construction equipment $ 214,500 $ 190,420 Plants 92,279 79,563 Land and improvements 34,365 29,624 Quarry reserves 20,678 20,908 Buildings 15,458 12,416 Furniture and fixtures 4,864 4,422 Leasehold improvements 1,135 765 Total property, plant and equipment, gross 383,279 338,118 Accumulated depreciation, depletion and amortization (177,927) (160,795) Construction in progress 518 1,369 Total property, plant and equipment, net $ 205,870 $ 178,692 On February 28, 2019, the Company acquired a liquid asphalt terminal located in Panama City, Florida. The purchase price of $10.9 million was paid from cash on hand on the acquisition date. The Company uses the terminal to receive, store and process liquid asphalt primarily for use in its construction projects. The transaction was accounted for as an asset acquisition in accordance with ASC 805. Accordingly, the purchase price and direct costs of $0.1 million incurred to complete the transaction were allocated to asset categories based on their relative fair value at the date of acquisition. Depreciation, depletion and amortization expense related to property, plant and equipment for the fiscal years ended September 30, 2019 and 2018 was $30.1 million and $24.8 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following presents goodwill activity during the fiscal years ended September 30, 2019 and 2018 (in thousands): Balance at September 30, 2017 $ 30,600 Additions 2,319 Balance at September 30, 2018 32,919 Additions 5,627 Balance at September 30, 2019 $ 38,546 A summary of other intangible assets at September 30, 2019 and 2018 is as follows (in thousands): September 30, 2019 2018 Useful Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived: License Indefinite $ 2,000 $ — $ 2,000 $ 2,000 $ — $ 2,000 Definite-lived: Customer relationship 8 years 1,645 (229) 1,416 1,100 (52) 1,048 Acquired construction backlog 7-17 months 820 (820) — 594 (157) 437 Non-compete agreements 5 years 1,520 (1,502) 18 1,500 (1,250) 250 Total intangible assets $ 5,985 $ (2,551) $ 3,434 $ 5,194 $ (1,459) $ 3,735 Total amortization expense related to definite-lived intangible assets was $1.1 million and $0.5 million for the fiscal years ended September 30, 2019 and 2018, respectively. Estimated future total amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year Estimated Amortization Expense 2020 $ 210 2021 210 2022 210 2023 210 2024 206 Thereafter 388 Total $ 1,434 |
Liabilities
Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Liabilities [Abstract] | |
Liabilities | Liabilities Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Accrued payroll and benefits 15,173 12,802 Treasury stock purchase obligation — 569 Accrued insurance costs 1,761 1,750 Other current liabilities 2,144 2,399 Total accrued expenses and other current liabilities $ 19,078 $ 17,520 Other Long-Term Liabilities Other long-term liabilities consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Accrued insurance costs $ 5,358 $ 4,826 Other 750 469 Total other long-term liabilities $ 6,108 $ 5,295 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company maintains various credit facilities from time to time to finance acquisitions, the purchase of real estate, construction equipment, plants and other fixed assets, and for general working capital purposes. Debt at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Long-term debt: BBVA Term Loan $ 44,700 $ 57,300 BBVA Revolving Credit Facility 5,000 5,000 Other long-term debt 563 964 Total long-term debt 50,263 63,264 Deferred debt issuance costs (263) (362) Debt discount (4) (14) Current maturities of long-term debt (7,538) (14,773) Long-term debt, net of current maturities $ 42,458 $ 48,115 BBVA Credit Agreement The Company and each of its subsidiaries are parties to a credit agreement with BBVA USA (formerly known as Compass Bank), as agent, issuing bank and a lender, and certain other lenders (as amended, the “BBVA Credit Agreement”). The BBVA Credit Agreement provides for a term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”). At September 30, 2019 and 2018, there was $44.7 million and $57.3 million, respectively, of principal outstanding under the Term Loan, $5.0 million and $5.0 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $14.4 million and $14.0 million, respectively, under the Revolving Credit Facility, including reduction for outstanding letters of credit. The obligations of the borrower entities under the Term Loan and the Revolving Credit Facility are secured by a first priority security interest in substantially all of the Company’s assets and are guaranteed by the Company, as the ultimate parent company of the borrower entities. In August 2019, the BBVA Credit Agreement was amended to, among other things, modify the interest rate and fee structure, as well as the repayment schedule and amounts. Currently, the BBVA Credit Agreement provides for a four-tier escalating interest rate for both the Term Loan and the Revolving Credit Facility that is tied to the London Interbank Offered Rate (“LIBOR”). The baseline rate for such borrowings is LIBOR plus 1.20%, and the rate may increase up to LIBOR plus 1.70% if the Company’s consolidated leverage ratio exceeds 2.00%. Prior to the August 2019 amendment, the interest rate on any particular borrowing was calculated based on one of several indices set forth in the agreement, plus an applied markup of 2.0% to 2.25%. At September 30, 2019 and 2018, the interest rate on outstanding borrowings under the Term Loan and Revolving Credit Facility was 3.24% and 4.24%, respectively. Principal repayments under the Term Loan are made in quarterly installments in an amount equal to 2.50% of the original amount borrowed, a reduction from the 5.00% rate that the Company paid prior to the August 2019 amendment. The Company pays a commitment fee of 0.20% per annum on the aggregate unused commitment amount under the Revolving Credit Facility, a reduction from 0.35% prior to the August 2019 amendment, as well as fees with respect to any letters of credit issued thereunder. As of September 30, 2019, all amounts borrowed under the BBVA Credit Agreement were scheduled to mature on July 1, 2022. The BBVA Credit Agreement contains usual and 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 BBVA 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 2.75-to-1.00, subject to certain adjustments. Prior to the August 2019 amendment, the maximum consolidated leverage ratio was 2.00 to 1.00. At September 30, 2019 and 2018, the Company’s fixed charge coverage ratio was 4.04-to-1.00 and 1.51-to-1.00, respectively, and the Company’s consolidated leverage ratio was 0.66-to-1.00 and 0.88-to-1.00, respectively. At both September 30, 2019 and 2018, the Company was in compliance with all covenants under the BBVA 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. On June 30, 2017, the Company entered into an interest rate swap agreement with a notional amount of $25.0 million, under which the Company pays a fixed percentage rate of 2.02% and receives a credit based on the applicable LIBOR rate. On May 15, 2018, the Company entered into an additional $11.0 million notional interest rate swap agreement applicable to the $22.0 million amount borrowed under the Term Loan on that date, under which the Company pays a fixed percentage rate of 3.01% and receives a credit based on the applicable LIBOR rate. These interest rate swap agreements do not meet the criteria for hedge accounting treatment in accordance with GAAP. At September 30, 2019 and 2018, the aggregate notional value of these interest rate swap agreements was $21.5 million and $28.7 million, respectively, and the fair value was $(0.3) million and $0.3 million, respectively, which is included within other liabilities or other assets on the Company’s Consolidated Balance Sheets. The BBVA Credit Agreement was amended subsequent to September 30, 2019. For more information about the amendment, see Note 22 - Subsequent Events. Acquired Debt In connection with the acquisition of Scruggs, the Company assumed $1.1 million of debt that had been used to finance equipment purchases and was collateralized by the purchased equipment. These loans, included in other long-term debt in the table above, include (i) three zero-interest notes having an aggregate estimated fair value at the acquisition date of approximately $0.4 million (determined in accordance with the methodology described under “ Fair Value Measurements ” in Note 2 - Significant Accounting Policies) that require monthly payments and have maturity dates between February 2020 and May 2020, and (ii) approximately $0.7 million in other loans with fixed interest rates ranging from 4.50% to 5.95% that require monthly payments and have maturity dates ranging from 2019 through 2023. The scheduled contractual repayment terms of long-term debt at September 30, 2019 were as follows: Fiscal Year Amount 2020 $ 7,538 2021 7,346 2022 35,357 2023 22 2024 — Total $ 50,263 Interest expense was $3.3 million and $2.0 million for the fiscal years ended September 30, 2019 and 2018, respectively. Amortization of deferred issuance costs and debt discounts included in interest expense was $0.1 million for the fiscal years ended September 30, 2019 and 2018, respectively. |
Equity
Equity | 12 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | Equity Reclassification of Common Stock and Initial Public Offering O n April 23, 2018, the Company amended and restated its certificate of incorporation to effectuate a dual class common stock structure consisting of Class A common stock and Class B common stock. Each share of common stock issued at that time was split into 25.2 shares (the “Stock Split”) and reclassified as Class B common stock (the “Reclassification”), resulting in 41,817,537 shares of Class B common stock outstanding and 3,170,034 shares of Class B common stock held by the Company in treasury. All share and per share amounts have been retroactively adjusted for all periods presented to give effect to the Reclassification and Stock Split. Shares of Class A common stock and Class B common stock are identical in all respects, 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. On May 8, 2018, the Company completed its IPO, in which the Company and certain selling stockholders sold a total of 11,250,000 shares of Class A common stock at a price of $12.00 per share, less underwriting discounts and commissions. Of these shares, 9,000,000 were sold by the Company and 2,250,000 were sold by holders of Class B common stock, which shares upon sale automatically converted into 2,250,000 shares of Class A common stock. On May 24, 2018, the underwriters of the IPO partially exercised their over-allotment option to purchase an additional 700,000 shares of Class A common stock at a price of $12.00 per share, less underwriting discount and commissions. Of these shares, 350,000 were sold by the Company and 350,000 were sold by holders of Class B common stock, which shares upon sale automatically converted into 350,000 shares of Class A common stock. Conversion of Class B Common Stock to Class A Common Stock During the fiscal year ended September 30, 2019, certain stockholders of the Company converted a total of 20,355,202 shares of Class B common stock into shares of Class A common stock on a one-for-one basis. Following the conversions, there were 32,597,736 shares of Class A common stock and 19,184,009 shares of Class B common stock outstanding. Restricted Stock Awards and Options During the fiscal year ended September 30, 2018, certain employees of the Company exercised non-plan options granted in 2010, resulting in the purchase of 768,984 shares of Class B common stock at a price of $5.70 per share. These shares were issued from treasury shares at an average cost of $3.64 per share. The transaction was executed as a net exercise. In addition, the Company sold to certain employees a total of 126,000 restricted shares of common stock at a purchase price of $0.04 per share, which shares were converted to shares of Class B common stock in connection with the Reclassification. All such shares vested during the fiscal year ended September 30, 2018. During the fiscal year ended September 30, 2019, the Company awarded a total of 292,534 restricted shares of Class A common stock to its non-employee directors under the Construction Partners, Inc. 2018 Equity Incentive Plan (the “Equity Incentive Plan”). In addition, an employee of the Company exercised an option to purchase 74,592 shares of Class B common stock at an exercise price of $0.0357 per share. Additional information about these transactions is set forth in Note 14 - Equity-Based Compensation. Amendment to the Equity Incentive Plan On May 24, 2019, the Company adopted an amendment to the Equity Incentive Plan relating to exceptions from the $750,000 limit on the aggregate dollar value of equity-based awards granted during any calendar year to a non-employee director. Prior to the adoption of the amendment, the limit could be multiplied by two with respect to awards granted in the calendar year in which a non-employee director first joined the Company’s board of directors. The amendment changed the period within which the aggregate value of equity-based awards may be multiplied by two to be the calendar year in which a non-employee director is first granted equity-based awards under the Equity Incentive Plan. Secondary Offering of Class A Common Stock In September 2019, certain stockholders of the Company (the “Selling Stockholders”) completed an underwritten secondary offering (the “Secondary Offering”) of 5,000,000 shares of Class A common stock at a public offering price of $14.25 per share. The Company did not receive any proceeds from the sale of shares by the Selling Stockholders and, pursuant to a registration rights agreement with the Selling Stockholders, incurred approximately $0.7 million in expenses in connection with the Secondary Offering. Registration Rights Agreement The Company is a party to a registration rights agreement (the “Registration Rights Agreement”) with certain of the Company’s directors and officers and affiliates of SunTx (collectively, the “RRA Holders”). Under the Registration Rights Agreement, the RRA Holders have “demand” registration rights, meaning that the Company must register under the Securities Act shares of the Company’s common stock owned by such RRA Holders upon their demand under certain circumstances, and “piggyback” registration rights, meaning that, if the Company proposes to register an offering of securities, it generally must give written notice to the RRA Holders to allow each to include its shares in the registration. In general, the Company must pay all out-of-pocket expenses in connection with a registration under the Registration Rights Agreement, including filing and registration fees, printing costs, fees and expenses of the Company’s legal counsel and independent registered public accountants and fees and expenses for one legal counsel for the applicable RRA Holders. The RRA Holders whose shares are registered must pay all incremental selling expenses relating to any offering, such as underwriters’ commissions and discounts, brokerage fees, underwriter marketing costs and any additional legal counsel that they may engage. As of September 30, 2019, a total of 33,075,417 shares of the Company’s common stock were subject to the registration rights |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share As discussed in Note 12 - Equity, the Company has Class A common stock and Class B common stock. Because the only difference between the two classes of common stock is related to voting rights, we have 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 (in thousands, except share and per share amounts): For the Fiscal Year Ended September 30, 2019 2018 Numerator Net income attributable to common shareholders $ 43,121 $ 50,791 Denominator Weighted average number of common shares outstanding, basic 51,421,159 45,605,845 Net income per common share attributable to common shareholders, basic $ 0.84 $ 1.11 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 (in thousands, except share and per share amounts): For the Fiscal Year Ended September 30, 2019 2018 Numerator Net income attributable to common stockholders $ 43,121 $ 50,791 Denominator Weighted average number of basic common 51,421,159 45,605,845 Effect of dilutive securities: 2010 non-plan stock option agreement options — 272,915 2018 restricted stock grants 6,061 40,888 Weighted average number of diluted common 51,427,220 45,919,648 Net income per diluted common share attributable $ 0.84 $ 1.11 |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Restricted Stock Awards and Options On February 23, 2018, the Company sold to certain employees a total of 126,000 restricted shares of common stock at a purchase price of $0.04 per share, which shares were issued from treasury shares and converted to shares of Class B common stock in connection with the Reclassification. The Company recorded proceeds of $5,000 from the sale. Half of the shares vested immediately on February 23, 2018, and the remaining half of the shares vested on July 1, 2018. During the fiscal year ended September 30, 2018, the Company recorded compensation expense in connection with these grants in the amount of $1.0 million, which is reflected as general and administrative expenses on the Company’s Consolidated Statements of Income. The Company also recorded a reduction to additional paid-in capital of approximately $0.5 million, representing the cost of treasury shares issued in excess of the purchase price paid by the employees. The grant date fair value of the shares was estimated to be $7.78 per share. At September 30, 2018, there was no unrecognized compensation expense related to the sale of these shares. During the fiscal year ended September 30, 2019, the Company awarded a total of 292,534 restricted shares of Class A common stock to its non-employee directors under the Equity Incentive Plan in lieu of cash compensation. The grants are classified as equity awards. The aggregate grant date fair value of these restricted stock awards was $3.8 million. The grants will vest as to two-thirds of the underlying shares on January 1, 2021 and as to the remaining one-third of the underlying shares on January 1, 2022. During the fiscal year ended September 30, 2019, the Company recorded $0.5 million of compensation expense in connection with these grants, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Income. At September 30, 2019, there was approximately $3.2 million of unrecognized compensation expense related to these awards. Option Exercises In June 2018, certain employees of the Company exercised options to purchase a total of 768,984 shares of Class B common stock at a price of $5.70 per share. The options were granted in 2010 pursuant to a non-plan option agreement and were classified as equity awards. The shares were issued from the Company’s treasury at an average cost of approximately $3.64 per share. The transaction was executed as a cashless exercise, through which the Company concurrently repurchased from the option holders a total of 521,902 shares of Class B common stock at a price of $13.17 per share (the closing price for a share of Class A common stock on the exercise date) in order to fund the exercise price for the options and satisfy the statutory federal, state and payroll tax withholding requirements applicable to the employees in connection with the exercise. The net result was an increase of 247,082 shares of Class B common stock outstanding. Of the aggregate repurchase price, the Company recorded the total exercise price of approximately $4.4 million as additional paid-in capital and withheld and submitted to applicable taxing authorities approximately $2.5 million in satisfaction of the employees’ tax obligations. In August 2019, an employee of the Company exercised an option to purchase 74,592 shares of Class B common stock at a price of $0.0357 per share. The option was granted in March 2017 pursuant to a non-plan option agreement. The option was fully vested upon the date of grant, but, until the option agreement was subsequently amended, the option was exercisable only during the ten-day period immediately preceding a change in control of the Company. In August 2019, the Company and the employee amended the option agreement to (i) adjust the number of underlying shares and exercise price of the option to account for the Stock Split and Reclassification; (ii) reduce the exercise price (as adjusted) for the shares underlying the option; (iii) make the option immediately exercisable; and (iv) provide that the option would expire on the earlier of December 31, 2019 or the occurrence of one of the other expiration events set forth in the option agreement. During the fiscal year ended September 30, 2019, the Company recorded approximately $0.4 million of compensation expense in connection with the option amendment, which is reflected in general administrative expenses on the Company’s Consolidated Statements of Income. At September 30, 2019, there was no unrecognized compensation expense related to the option. |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
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 enacted tax laws and regulations and believes that they are supportable based on their specific technical merits and the facts and circumstances of the transactions. The provision for income taxes for the fiscal years ended September 30, 2019 and 2018 consisted of the following (in thousands): For the Fiscal Year Ended 2019 2018 Current U.S. Federal $ 9,780 $ 9,380 State 1,132 1,626 Total current 10,912 11,006 Deferred U.S. Federal 2,203 (1,003) State 794 522 Total deferred 2,997 (481) Provision for income taxes $ 13,909 $ 10,525 Differences exist between income and expenses reported on the consolidated financial statements and those deducted for U.S. federal and state income tax reporting. The Company’s deferred tax assets and liabilities consisted of the following temporary difference tax effects at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Deferred tax assets Allowance for bad debt $ 425 $ 444 Amortization of finite-lived intangible assets 487 499 State net operating loss 1,330 1,695 Accrued insurance claims 1,332 1,202 Total deferred tax assets, net 3,574 3,840 Deferred tax liabilities Amortization of goodwill (4,278) (3,925) Property, plant and equipment (9,525) (7,162) Other (78) (63) Total deferred tax liabilities, net (13,881) (11,150) Net deferred tax assets (liabilities) $ (10,307) $ (7,310) The Consolidated Balance Sheets at September 30, 2019 and 2018 include gross deferred tax assets of $3.6 million and $3.8 million, respectively. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment. Based on the weight of all evidence known and available as of the balance sheet date, management believes that these tax benefits are more likely than not to be realized in the future. To the extent that management does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. Income taxes payable have been reduced by fuel tax credits of $0.3 million for each of the fiscal years ended September 30, 2019 and 2018. The remaining amount of goodwill expected to be deductible for tax purposes was $19.0 million and $14.9 million at September 30, 2019 and 2018, respectively. The following is a reconciliation of net deferred tax assets (liabilities) to amounts reflected on the Company’s Consolidated Balance Sheets at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Asset: Deferred income taxes, net $ 1,173 $ 1,580 Liability: Deferred income taxes, net (11,480) (8,890) Net deferred tax assets (liabilities) $ (10,307) $ (7,310) At September 30, 2019 and 2018, the Company had a state net operating loss carryforward of $31.6 million and $38.3 million, respectively. The state net operating loss credit carryforwards expire in varying amounts between the fiscal years ended September 30, 2020 and September 30, 2030. The U.S. statutory federal income tax rate applicable to the Company was 21% during the fiscal year ended September 30, 2019. On December 22, 2017, the U.S. government enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act included broad and complex changes to the U.S. tax code, including a reduction in the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Company completed its accounting for the income tax effects of the Tax Act during fiscal 2018 and recorded a discrete tax benefit of $4.6 million related to the Tax Act, primarily due to an adjustment in the Company’s deferred federal income tax liabilities by the same amount as a result of the reduction in the U.S. federal corporate tax rate. This net reduction in deferred tax liabilities also included the estimated impact on the Company’s net state deferred tax assets. Accordingly, the Company recorded its income tax provision for the fiscal year ended September 30, 2018 based on a blended U.S. federal statutory tax rate of 24.5%, which was based on a proration of the applicable tax rates before and after the effective date of the Tax Act, and the effect of applicable state income taxes. The federal statutory rate of 21% applies for fiscal years beginning after September 30, 2018. During the fiscal year ended September 30, 2018, the Company also realized a $2.3 million permanent tax benefit, including $1.4 million resulting from the deduction of the excess fair market value of options exercised by certain employees of the Company over the exercise price. The following table reconciles income taxes based on the U.S. federal statutory tax rate to the Company’s income before provision for income taxes for the fiscal years ended September 30, 2019 and 2018 (in thousands): For the Fiscal Year Ended 2019 2018 Provision for income tax at federal statutory rate $ 11,976 $ 15,023 State income taxes 1,521 1,622 Change in deferred federal income taxes due to Tax Act — (4,552) Permanent differences 319 (2,282) Other 93 714 Provision for income taxes $ 13,909 $ 10,525 Uncertain Tax Positions ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement model for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return and provides guidance on derecognition classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is subject to tax audits in various jurisdictions in the United States. Tax audits, by their nature, are often complex. In the normal course of business, the Company is subject to challenges from the Internal Revenue Service (“IRS”) and other tax authorities regarding amounts of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. As part of the calculation of the provision for income taxes on earnings, management determines whether the benefits of the Company’s tax positions are at least more likely than not to be sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not to be sustained upon audit, management accrues the largest amount of the benefit that is more likely than not to be sustained. Such accruals require management to make estimates and judgments with respect to the ultimate outcome of a tax audit. Actual results could vary materially from these estimates. The Company performed an analysis of its tax positions and determined that no uncertain tax positions existed at September 30, 2019 or 2018. Accordingly, there was no liability for uncertain tax positions at September 30, 2019 or 2018. Based on the provisions of ASC 740, the Company had no material unrecognized tax benefits at September 30, 2019 or 2018. Due to the utilization of net operating loss carryforwards, the Company’s federal income tax returns for fiscal years ended September 30, 2013 through September 30, 2019 are subject to examination. Various state income tax returns for fiscal years ended September 30, 2011 through September 30, 2019 are also subject to examination. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit PlansThe Company offers a 401(k) retirement plan covering substantially all employees who are at least 18 years old and have more than one year of service. The Company makes discretionary employer contributions, subject to IRS safe harbor rules. Employer contributions charged to earnings during the fiscal years ended September 30, 2019 and 2018 were $2.9 million and $2.3 million, respectively. |
Related Parties
Related Parties | 12 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Related PartiesOn December 31, 2017, the Company sold an indirect wholly owned subsidiary to an immediate family member of a Senior Vice President of the Company (“Purchaser of subsidiary”) in consideration for an interest-bearing note receivable in the amount of $1.0 million, which approximated the net book value of the disposed entity. At September 30, 2019, $0.1 million and $0.7 million was reflected on the Company’s Consolidated Balance Sheet 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 an interest-bearing 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 subsidiary that were paid by the Company. At September 30, 2019, $0.1 million and $0.7 million was reflected on the Company’s Consolidated Balance Sheet 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 2020 through fiscal year 2026. From time to time, the Company conducts or has conducted business with the following related parties: • On January 30, 2015, a subsidiary of the Company entered into a master services subcontract with Austin Trucking, LLC (“Austin Trucking”), an entity owned by an immediate family member of a Senior Vice President of the Company. Pursuant to the agreement, Austin Trucking performs subcontract work for the subsidiary of the Company, including trucking services. • From time to time, a subsidiary of the Company provides construction services to various companies owned by family members of a Senior Vice President of the Company (“Construction Services”). • 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 are guaranteed by a separate entity owned by the same family member of the officer. Amounts outstanding under the advances do not bear interest and must be repaid in full no later than March 17, 2021 (“Land Development Project”). • On June 1, 2014, the Company entered into an access agreement with Island Pond Corporate Services, LLC (“Island Pond”), 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. • The Company rents and purchases vehicles from an entity owned by a family member of a Senior Vice President of the Company (“Vehicles”). • Family members of a Senior Vice President of the Company provide consulting services to a subsidiary of the Company (“Consulting Services”). • A law firm previously owned by a family member of a Senior Vice President of the Company provided legal services to a subsidiary of the Company (“Legal Services”). • A subsidiary of the Company leased office space for its Dothan, Alabama office from H&K, Ltd. (“H&K”), an entity partially owned by a Senior Vice President of the Company. The office space was originally leased through early 2020, but the subsidiary terminated the lease in June 2019 and paid $15,000 to H&K as consideration for the early termination. Under the lease agreement, the Company paid a fixed minimum rent per month. • A subsidiary of the Company leased office space for its Montgomery, Alabama office from H&A Properties LLC (“H&A”), an entity partially owned by two Senior Vice Presidents of the Company. Under the lease agreement, the Company paid a fixed minimum rent per month. In September 2018, the subsidiary purchased this office from H&A for $0.5 million. • Entities owned by immediate family members of a Senior Vice President of the Company perform subcontract work for a subsidiary of the Company, including trucking and grading services (“Subcontracting Services”) • The Company is party to a management services agreement with SunTx, under which the Company pays SunTx $0.25 million per fiscal quarter and reimburses certain travel expenses and other out-of-pocket expenses. The following table presents revenues earned and expenses incurred by the Company during the fiscal years ended September 30, 2019 and 2018, and accounts receivable and accounts payable balances at September 30, 2019 and 2018, related to transactions with the related parties described above (in thousands): Revenue Earned (Expense Incurred) Accounts Receivable (Payable) For the Fiscal Year Ended September 30, September 30, 2019 2018 2019 2018 Purchaser of subsidiary $ — $ — $ 756 $ 850 Disposed entity — — 846 937 Land Development Project — — 774 774 Subcontracting Services (19,491) (1) (13,245) (1) (1,238) (790) Construction Services 5,936 1,753 2,434 2,863 Island Pond (320) (2) (320) (2) — — Vehicles (1,491) (2) (1,149) (2) — — Consulting Services (265) (2) (272) (2) — — Legal Services — (2) (58) (2) — — H&K (78) (2) (84) (2) — — H&A — (2) (61) (2) — — SunTx (1,252) (2) (1,457) (2) — — (1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Income. (2) Cost is reflected as general and administrative expenses on the Company’s Consolidated Statements of Income. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases office premises and equipment. Where leases contain escalation clauses or concessions, such as rent holidays and landlord/tenant incentives or allowances, the impact of such adjustment is recognized on a straight-line basis over the minimum lease period. Certain leases provide for renewal options and require the payment of real estate taxes or other occupancy costs, which are also subject to escalation clauses. Operating lease expense amounted to approximately $9.4 million and $11.2 million for the fiscal years ended September 30, 2019 and 2018, respectively, which is primarily included in cost of revenues in the Consolidated Statements of Income. Future minimum obligations under non-cancelable operating leases at September 30, 2019 were as follows (in thousands): Fiscal Year Amount 2020 $ 6,537 2021 3,043 2022 1,041 2023 351 2024 255 Thereafter 58 Total $ 11,285 Subsequent to September 30, 2019, the Company paid approximately $10.0 million to purchase certain assets previously subject to operating leases. Future minimum lease payments of $4.1 million related to these items are reflected in the table above. See Note 22 - Subsequent Events. Litigation, Claims, and Assessments From time to time, the Company is subject to inquiries or audits by taxing authorities arising from its operations, covering a wide range of matters that arise in the ordinary course of business, such as income taxes and other types of taxes. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may not be resolved in the Company’s favor. The Company is also involved in other legal and administrative proceedings arising in the ordinary course of business. The outcomes of these inquiries and legal proceedings are not expected to have a material effect on the Company’s financial position or results of operations on an individual basis, although adverse outcomes in a significant number of such ordinary course inquiries and legal proceedings could, in the aggregate, have a material adverse effect on the Company’s financial condition and results of operations. Letters of Credit Under the Revolving Credit Facility, the Company has a total capacity of $30.0 million that may be used for a combination of cash borrowings and letter of credit issuances. At September 30, 2019 and 2018, the Company had aggregate letters of credit outstanding in the amount of $10.9 million and $11.8 million, respectively, primarily related to certain insurance policies as described in Note 2 - Significant Accounting Policies. |
Joint Venture
Joint Venture | 12 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Joint Venture | Joint Venture In November 2017, one of the Company’s wholly owned subsidiaries entered into a joint venture agreement (the “JV”) with a third party for the sole purpose of bidding on and performing a construction project for the Alabama Department of Transportation. The Company and the third party each own a 50% partnership interest in the JV and share revenue and expenses equally. The JV is jointly managed by representatives of the Company and the third party, and all labor, material and equipment required to perform the contract is subcontracted, with both of the participants of the JV performing some portion of the subcontracted work. The Company accounts for this joint venture as an equity method investment in accordance with GAAP. At September 30, 2019 and 2018, the Company’s investment in the JV was $0.5 million and $1.7 million, respectively, which is reflected as “Investment in joint venture” on the Company’s Consolidated Balance Sheets. During the fiscal years ended September 30, 2019 and 2018, the Company recognized $1.3 million of pre-tax income, representing its 50% interest in the earnings of the JV, which is reflected as “Earnings from investment in joint venture” on the Company’s Consolidated Statements of Income. The income tax impact attributable to the Company’s investment in the JV is included within the provision for income taxes in the Company’s Consolidated Statements of Income. |
Settlement Agreement
Settlement Agreement | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Settlement Agreement | Settlement AgreementOn April 19, 2018, certain of the Company’s subsidiaries entered into settlement agreements with a third party arising from an interruption event not directly related to the Company’s business that the Company does not expect to reoccur (the “Settlement”). The Settlement provides for the Company’s subsidiaries to receive aggregate net payments of approximately $15.7 million in four equal installments between January 2019 and July 2020, in exchange for releasing and waiving all current and future claims against the third party. The Company recorded a pre-tax gain of $14.8 million during the fiscal year ended September 30, 2018 related to the Settlement. The subsidiaries received approximately $7.9 million in installment payments during the fiscal year ended September 30, 2019. Future payments are reflected on the Company’s Consolidated Balance Sheets at September 30, 2019 as other current assets in the amount of $7.8 million. |
Condensed Financial Statements
Condensed Financial Statements of Registrant | 12 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Statements of Registrant | CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2019 2018 ASSETS Cash and cash equivalents $ 31,610 $ 53,352 Investment in subsidiaries 313,277 247,944 Due from subsidiaries 1,020 545 Other assets 551 1,226 Total current assets 346,458 303,067 Property, plant and equipment 606 131 Total assets $ 347,064 $ 303,198 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Treasury stock purchase obligation $ — $ 569 Due to subsidiaries 400 800 Other current liabilities 1,231 183 Total current liabilities 1,631 1,552 Long-term liabilities: Due to subsidiaries 1,883 2,177 Total long-term liabilities 1,883 2,177 Total liabilities 3,514 3,729 Stockholders’ Equity Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2019 and September 30, 2018 and no shares issued and outstanding — — Class A common stock, par value $0.001; 400,000,000 shares authorized, 32,597,736 shares issued and outstanding at September 30, 2019, and 11,950,000 shares issued and outstanding at September 30, 2018 33 12 Class B common stock, par value 0.001; 100,000,000 shares authorized, 22,106,961 shares issued and 19,184,009 shares outstanding at September 30, 2019, and 42,387,571 issued and 39,464,619 outstanding at September 30, 2018 22 42 Additional paid-in capital 243,452 242,493 Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 (15,603) (15,603) Retained earnings 115,646 72,525 Total stockholders’ equity 343,550 299,469 Total liabilities and stockholders’ equity $ 347,064 $ 303,198 See note to condensed financial statements of parent company. CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME (in thousands, except per share amounts) For the Fiscal Year Ended 2019 2018 Equity in net income of subsidiaries $ 45,631 $ 51,515 Equity-based compensation expense (957) (975) General and administrative expenses (3,369) (1,542) Interest income, net 373 72 Income before provision for income taxes 41,678 49,070 Income tax benefit 1,443 1,721 Net income $ 43,121 $ 50,791 Net income per share attributable to common stockholders: Basic $ 0.84 $ 1.11 Diluted $ 0.84 1.11 Weighted average number of common shares outstanding: Basic 51,421,159 45,605,845 Diluted 51,427,220 45,919,648 See note to condensed financial statements of parent company. CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS (in thousands) For the Fiscal Year Ended 2019 2018 Cash flows from operating activities: Net income $ 43,121 $ 50,791 Adjustments to reconcile net income to net cash used in operating activities: Amortization of deferred debt issuance costs 6 6 Equity-based compensation expense 957 975 Equity in net income of subsidiaries (45,631) (51,515) Changes in operating assets and liabilities: Other current assets 675 969 Other liabilities 1,049 (3,369) Net cash provided by (used in) operating activities 177 (2,143) Cash flows from investing activities: Purchases of property, plant and equipment (475) (131) Investment in subsidiary (19,703) (34,155) Net cash (used in) provided by investing activities (20,178) (34,286) Cash flows from financing activities: Change in amounts due to (from) subsidiaries, net (1,175) (6,994) Payment of treasury stock purchase obligation (569) (2,569) Proceeds from initial public offering of Class A common stock, net of offering costs — 98,009 Proceeds from sale of stock 3 5 Net cash provided by (used in) financing activities (1,741) 88,451 Net change in cash and cash equivalents (21,742) 52,022 Cash and cash equivalents: Beginning of period 53,352 1,330 End of period $ 31,610 $ 53,352 See note to condensed financial statements of parent company. Note to Condensed Financial Statements of Parent Company These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of Construction Partners, Inc. (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the consolidated net assets of the Company. The ability of Construction Partners, Inc.’s operating subsidiaries to pay dividends is restricted by the terms of the credit facilities described in Note 11 - Debt. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Amendments to BBVA Credit Agreement On October 1, 2019, the Company and each of its wholly owned subsidiaries entered into an amendment to the BBVA Credit Agreement that, among other things, (i) added Bank of America, N.A. as a party in connection with the assignment by BBVA to Bank of America of certain of its lending obligations under the BBVA Credit Agreement; (ii) increased the aggregate amount of the Term Loan commitment by the lenders of $10,000,000, to $54,700,000; (iii) provided for a Term Loan advance to the Company in the aggregate amount of $10,000,000, with the proceeds to be used solely for the purpose of buying out certain operating lease obligations; and (iv) extended the maturity date for the outstanding term loan advances from July 1, 2022 to October 1, 2024. In order to hedge against the risk of changes in interest rates on this advance, on October 1, 2019, the Company entered into an interest rate swap agreement with a notional amount of $5.9 million, under which the Company pays a fixed percentage rate of 1.58% and receives a credit based on the applicable LIBOR rate. On October 18, 2019, the parties further amended the BBVA Credit Agreement to correct a clerical error that had previously transposed the formulas for calculating annual maintenance fees and issuance fees for letters of credit. As a result of this amendment, (i) the annual maintenance fee for each letter of credit is the greater of $600 or the applicable letter of credit fee rate of the aggregate average daily undrawn amount, and (ii) the fee for issuing each letter of credit is equal to the product obtained by multiplying the face amount of such letter of credit by 0.20%. Florida Acquisition On October 1, 2019, a subsidiary of the Company acquired substantially all of the assets of an HMA manufacturing plant and paving company located in Palm City, Florida. The acquired business is expected to benefit from geographic synergies resulting from its proximity to the Company’s current operations in central Florida, including its Okeechobee, Florida operation, which the Company acquired in February 2019. The acquisition will be accounted for as a business combination in accordance with ASC 805. The purchase price of $17.3 million was paid from cash on hand at closing. The provisional allocation of the purchase price to assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, was determined in accordance with the methodology described under Fair Value Measurements above in Note 2 - Significant Accounting Policies. The purchase price exceeding the preliminary net fair value of identifiable assets acquired and liabilities assumed will be recorded as goodwill in the amount of $6.9 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled workforce and synergies expected to result from the acquisition. Upon finalizing the accounting for this transaction, management expects to ascribe value to other identifiable intangible assets, including customer relationships and customer backlog, which will reduce the preliminary amount allocated to goodwill. Secondary Offering — Exercise of Over-Allotment Option On October 21, 2019, the underwriters of the Secondary Offering of the Company’s Class A common stock described above in Note 12 - Equity exercised their option to purchase from the Selling Stockholders a total of 750,000 shares of the Company’s Class A common stock at a price of $14.25 per share, before selling commissions and discounts. The Company did not receive any proceeds from the Secondary Offering or the underwriters’ exercise of their over-allotment option. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
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, goodwill and other intangible assets, allowance for doubtful accounts, valuation allowances related to income taxes, accruals for potential liabilities related to lawsuits or insurance claims, and the fair value of equity-based compensation awards. Estimates are continually evaluated based on historical information and actual experience; however, actual results could differ from these estimates. |
Basis of Presentation and Emerging Growth Company | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Common share and per share amounts have been retroactively adjusted for all periods presented to give effect to the Stock Split described in Note 12 - Equity. Emerging Growth Company The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups Act (the “JOBS Act”) enacted in April 2012. As an emerging growth company, the Company could have taken advantage of an exemption that would have allowed the Company to wait to comply with new or revised financial accounting standards until the effective date of such standards for private companies. However, the Company has irrevocably elected to opt out of such extended transition period, which means that when a new or revised standard has different effective dates for public and private companies, the Company is required to adopt the standard at the effective date applicable to public companies that are not emerging growth companies. |
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 investments 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 investments 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. |
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 the customer pending 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 contract terms. Such amounts, defined as retainage, represent a contract asset and are included on the Consolidated Balance Sheet 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. The carrying value of contracts receivable including retainage, net of the allowance for doubtful accounts represents their estimated net realizable value. 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, and current economic conditions. 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 of the contract receivable. |
Contract Assets and Contract Liabilities | 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 (formerly known as the percentage-of-completion 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 Sheet 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. |
Concentration of Risks | Concentration of RisksFinancial 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. |
Inventories | Inventories The Company’s inventories are stated at the lower of cost or net realizable value and are accounted for on an average cost basis or a first-in, first-out cost basis. The cost of inventory includes the cost of material, labor, trucking and other equipment costs associated with procuring and transporting materials to HMA plants for production and delivery to customers. Inventories consist primarily of raw materials, including asphalt cement, aggregate and millings that the Company expects to utilize on construction projects within one year. |
Revenues from Contracts with Customers | Revenues from Contracts with Customers The Company derives all of its 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, (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. % of Consolidated 2019 2018 Private 30.7% 28.6% Public 69.3% 71.4% 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. Revisions in estimates related to amounts recorded in prior periods resulted in the Company recording net increases in revenues of $3.8 million and $6.9 million during the fiscal years ended September 30, 2019 and 2018, respectively. 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. We account 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. 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. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses certain financial assets and liabilities at fair value. The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , defines fair value as 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, contracts receivable including retainage and accounts payable reflected as current assets and current liabilities on its Consolidated Balance Sheets at September 30, 2019 and 2018. Due to the short-term nature of these instruments, management considers their carrying value to approximate their fair value. The Company also has term loans and a revolving credit facility, as described in Note 11 - Debt. The carrying value of amounts outstanding under these credit facilities is reflected as long-term debt, net of current maturities and current maturities of debt on the Company’s Consolidated Balance Sheets at September 30, 2019 and 2018. Due to the variable rate or short-term nature of these instruments, management considers their carrying value to approximate their fair value. Management applies fair value measurement guidance to its impairment analysis for tangible and intangible assets. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements for operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. Quarry reserves are depleted in accordance with the units-of-production method as aggregate is extracted, using the initial allocation of cost based on proven and probable reserves. Routine repair and maintenance costs are expensed as incurred. Asset improvements are capitalized at cost and amortized over the remaining useful life of the related asset. The useful lives of property, plant and equipment categories are as follows: Category Estimated Useful Life Land and improvements Land, unlimited; improvements, 15-25 years Quarry reserves Based on depletion Buildings 5 - 39 years Plants 3 - 20 years Construction equipment 3 - 10 years Furniture and fixtures 5 - 10 years Leasehold improvements The shorter of 15 years or the remaining lease term Management periodically assesses the estimated useful life over which assets are depreciated, depleted or amortized. If the analysis warrants a change in the estimated useful life of property, plant and equipment, management will reduce the estimated useful life and depreciate, deplete or amortize the carrying value prospectively over the shorter remaining useful life. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the period of disposal, and the resulting gains and losses are included in the results of operations during the same period. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of property, plant and equipment and intangible assets subject to amortization is evaluated whenever events or changes in circumstances indicate that the carrying amount of such assets, or an asset group, may not be recoverable. Events or circumstances that might cause management to perform impairment testing include, but are not limited to, (i) a significant decrease in the market price of an asset, (ii) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, (iii) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset, (iv) an operating or cash flow performance combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of an asset, and (v) an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life. If indicators of potential impairment are present, management performs a recoverability test and, if necessary, records an impairment loss. If the total estimated future undiscounted cash flows to be generated from the use and ultimate disposition of an asset or asset group is less than its carrying value, an impairment loss is recorded in the Company’s results of operations, measured as the amount required to reduce the carrying value to fair value. Fair value is determined in accordance with the best available information based on the hierarchy described under “Fair Value Measurements” above. For example, the Company would first seek to identify quoted prices or other observable market data. If observable data is not available, management would apply the best available information under the circumstances to a technique such as a discounted cash flow model to estimate fair value. Impairment analysis involves estimates and the use of assumptions in connection with judgments made in forecasting long-term estimated inflows and outflows resulting from the use and ultimate disposition of an asset, and determining the ultimate useful lives of assets. Actual results may differ from these estimates using different assumptions, which could materially impact the results of an impairment assessment. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired and liabilities assumed in a business combination. Other intangible assets consist of an indefinite-lived name license in connection with a business acquired, and finite-lived assets including a non-compete agreement, customer relationships and construction backlog, each acquired in business acquisitions. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, management evaluates whether events and circumstances continue to support an indefinite useful life. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of the business. Annually, on the first day of the Company’s fourth fiscal quarter, management performs an analysis of the carrying value of goodwill at its reporting unit for potential impairment. In accordance with GAAP, the Company may assess its goodwill for impairment initially using a qualitative approach to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If management concludes, based on its assessment of relevant events, facts and circumstances, that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine whether there is any impairment. The Company may also elect to initially perform a quantitative analysis instead of starting with a qualitative assessment. Because the Company has only one reporting unit, a market capitalization calculation can be performed as the first step of the quantitative assessment by comparing the book value of the Company’s stock (determined by reference to the Company’s stockholders’ equity) to the fair market value of a share of the Company’s stock. If the fair value of the stock is greater than the calculated book value of the stock, goodwill is deemed not to be impaired, and no further testing is required. If the fair value is less than the calculated book value, then the Company must take a second step to determine the impairment amount, as described below. The second step requires comparing the carrying value of a reporting unit, including goodwill, to its fair value, typically using the multiple period discounting method under the income approach and market approach. The income approach uses a discounted cash flow model, which involves significant estimates and assumptions, including preparation of revenues and profitability growth forecasts, selection of a discount rate, and selection of a terminal year multiple, to estimate fair value. The market approach could include applying a control premium to the market price of the Company’s common stock or utilizing guideline public company multiples. Management’s assessment of facts and circumstances at each analysis date could cause these assumptions to change. If the fair value of the respective reporting unit exceeds its carrying amount, goodwill is not considered to be impaired, and no further testing is required. If the carrying amount of a reporting unit exceeds its fair value, an impairment charge is recorded to write down goodwill to its fair value and is recorded in the Company’s results of operations. The Company performed a quantitative assessment of goodwill using the market capitalization calculation for fiscal years 2019 and 2018 and determined that the fair value of its reporting unit exceeded its carrying value, and thus concluded that the carrying value of goodwill was not impaired at September 30, 2019 or 2018. Accordingly, no further analysis was required or performed. Management also annually assesses the carrying value of the Company’s indefinite-lived intangible assets other than goodwill on the first day of the fiscal fourth quarter. Management tests indefinite-lived intangible assets for impairment by comparing their carrying value to their estimated fair value. An impairment loss is recorded in the Company’s results of operations to the extent that the carrying value of an indefinite-lived intangible asset exceeds its fair value. Similar to the assessment of goodwill, events and changes in circumstances could cause management to utilize different assumptions in subsequent evaluations, which could materially impact the results of an impairment assessment. Management concluded that the carrying value of the Company’s indefinite-lived intangible assets other than goodwill was not impaired at September 30, 2019 or September 30, 2018. |
Deferred Debt Issuance Costs and Equity Issuance Costs | Deferred Debt Issuance Costs Costs directly associated with obtaining debt financing are deferred and amortized over the term of the related debt agreement. Unamortized amounts related to long-term debt are reflected on the Consolidated Balance Sheet as a direct deduction from the carrying amount of the related long-term debt liability. |
Comprehensive Income | Comprehensive Income Comprehensive income is a measure of net income and all other changes in equity that result from transactions other than transactions with stockholders. Management has determined that net income is the Company’s only component of comprehensive income. Accordingly, there is no difference between net income and comprehensive income. |
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 Sheet. The Company classifies income tax-related interest and penalties as interest expense and other expenses, respectively. |
Equity-Based Incentive Plans | Equity-Based Incentive Plans Compensation costs related to equity-classified share-based awards are recognized in the consolidated financial statements based on grant date fair value. Compensation cost for graded-vesting awards is recognized ratably over the respective vesting periods. |
Accrued Insurance Costs | Accrued Insurance Costs The Company carries insurance policies to cover various risks, including primarily general liability, automobile liability and workers’ compensation, under which it is liable to reimburse the insurance company for a portion of each claim paid. The amount for which the Company is liable for general liability, automobile liability and workers’ compensation claims ranges from $100,000 to $500,000 per occurrence. Management accrues for probable losses, both reported and unreported, that are reasonably estimable using actuarial methods based on historic trends modified, if necessary, by recent events. Changes in loss assumptions caused by changes in actual experience would affect the assessment of the ultimate liability and could have an effect on the Company’s operating results and financial position up to $500,000 per occurrence for general liability, automobile liability and workers’ compensation claims. The Company provides employee medical insurance under policies that are both fixed-premium, fully-insured policies and self-insured policies that are administered by the insurance company. Under the self-insured policies, the Company is liable to reimburse the insurance company for actual claims paid plus an administrative fee. The Company purchases separate stop-loss insurance that limits the individual participant claim loss to amounts ranging from $75,000 to $160,000. |
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. |
Segment Reporting and Reporting Units | Segment Reporting and Reporting Units The Company operates in Alabama, Florida, Georgia, North Carolina and South Carolina through its wholly owned subsidiaries located in four southeastern states. Each of the Company’s platform operating companies engages in essentially the same business, primarily infrastructure and road construction. Management determined that the Company functions as a single operating segment, and thus reports as a single reportable segment. This determination is based on rules prescribed by GAAP applied to the manner in which management operates the Company. In particular, management assessed the discrete financial information routinely reviewed by the Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, to monitor the Company’s operating performance and support decisions regarding allocation of resources to its operations. Specifically, performance is continuously monitored at the consolidated level and at the individual contract level to timely identify deviations from expected results. Resource allocations are based on the capacity of the Company’s operating facilities to pursue new project opportunities, including reallocation of assets that are underutilized from time to time at a certain operating facility to another operating facility where additional resources might be required to fully meet demand. Other factors further supporting this conclusion include substantial similarities throughout all of the Company’s operations with respect to services provided, type of customers, sourcing of materials and manufacturing and delivery methodologies. Management further determined that, based on their economic similarities, the Company’s five platform operating companies, representing components, should be aggregated into one reporting unit for purposes of assessing potential impairment of goodwill in accordance with ASC Topic 350, Intangibles — Goodwill and Other . These legal entities represent material acquisitions that occurred over time in Alabama, Florida, Georgia and North Carolina pursuant to the Company’s strategic growth strategy. Each platform company is managed by its president, who has primary responsibility for the respective operating company. Collectively, these presidents are directly accountable to, and maintain regular contact with, the CODM as a team to discuss operating activities, financial results, forecasts, and operating plans for the Company’s single operating segment. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which added a new ASC Topic 606 (“ASC 606”). ASC 606 revises and consolidates prior guidance, eliminates industry-specific revenue recognition guidance and establishes a comprehensive principle-based approach for determining revenue recognition. The core principle of the guidance is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for providing those goods or services. ASC 606 sets forth a five-step revenue recognition model to be applied consistently to all contracts with customers, except those that are within the scope of other topics in the ASC: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update also provides guidance regarding the recognition of costs related to obtaining and fulfilling customer contracts. This update also requires quantitative and qualitative disclosures sufficient to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including disclosures on significant judgments made when applying the guidance. The FASB subsequently amended ASC 606 on multiple occasions to, among other things, delay its effective date and clarify certain implementation guidance. Management adopted this update for the Company’s fiscal year beginning October 1, 2018, using a modified retrospective approach. Under this approach, the Company’s financial statements are prepared under the revised guidance for the year of adoption, but not for prior years, and the Company recognizes a cumulative adjustment to the opening balance of retained earnings for contracts that still require performance by the Company at the date of adoption. The adoption of ASC 606 on October 1, 2018 did not result in a material impact that required recognition of a cumulative adjustment of the opening retained earnings balance for contracts that still required performance at September 30, 2018. Application of ASC 606 for the fiscal year ended September 30, 2019 had the following impact on the Company’s Consolidated Balance Sheet at September 30, 2019 and Consolidated Statement of Income for the fiscal year ended September 30, 2019 (in thousands): At September 30, 2019 As Reported Impact of ASC 606 Without Application of ASC 606 Costs and estimated earnings in excess of billings on uncompleted contracts $ 12,030 $ (599) $ 12,629 Inventories $ 34,291 $ 1,602 $ 32,689 Accrued expenses and other current liabilities $ 19,078 $ (39) $ 19,039 Billings in excess of costs and estimated earnings on uncompleted contracts $ 31,115 $ 1,167 $ 29,948 For the Fiscal Year Ended September 30, 2019 Revenues $ 783,238 $ (1,766) $ 785,004 Cost of revenues $ 665,285 $ (1,602) $ 666,887 Provision (benefit) for income taxes $ 13,909 $ (39) $ 13,948 Net income $ 43,121 $ (125) $ 43,246 The Company has refined its accounting policies and related internal controls affected by ASC 606. Management’s assessment of the Company’s construction contracts under the new standard supports the recognition of revenue over time using the cost-to-cost input method (formerly known as the percentage-of-completion method of accounting), measured by the relationship of total cost incurred to total estimated contract costs, which is consistent with the Company’s historical revenue recognition practices. As such, the Company’s construction contracts continue to be recognized over time considering the continuous transfer of control to its customers during the performance of construction projects. The Company also enhanced its disclosures regarding judgments and estimates used by management in the application of ASC 606 in Note 2 - Significant Accounting Policies. In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASC 805”). The amendments of this update refine the definition of a business. Prior to this update, guidance in ASC 805 defined a business as having an integrated set of assets along with three elements or activities: inputs, processes, and outputs (collectively referred to as a “set”). ASC 805 provides a framework to assist in the evaluation of whether a set is a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If that threshold is not met, the Company must perform further analysis to determine whether the set is a business. At a minimum, the set must include an input and a substantive process that together significantly contribute to the ability to create outputs. The Company adopted this update for the Company’s fiscal year beginning October 1, 2018 and applied the guidance to acquisitions during the fiscal year ended September 30, 2019 as described in Note 4 - Business Acquisitions and Note 8 - Property, Plant and Equipment. Recently Issued Accounting Pronouncements Not Yet Adopted The FASB has issued certain ASUs that are applicable to the Company and will be adopted in future periods. The consolidated financial statements and related disclosures for the fiscal years ended September 30, 2019 and 2018 do not reflect the requirements of this guidance. The following is a brief description of the recently issued ASUs and management’s current assessment regarding the methods, timing and impact of adoption of such ASUs by the Company in the future. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently issued related ASUs that require lessees to present right-of-use assets and lease liabilities on the balance sheet for most leases. The ASU will be effective commencing with the Company’s fiscal quarter ending December 31, 2019. The Company will adopt the new guidance using a modified retrospective approach, recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company anticipates applying the optional package of practical expedients upon adoption. Based on a preliminary assessment, management expects the adoption of this ASU to result in the recognition of $9.0 million to $10.0 million of right-of-use assets and lease liabilities on the Company’s Consolidated Balance Sheet, with an immaterial impact to the opening balance of retained earnings. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on eight cash flow classification issues: debt prepayment and debt extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The amendments of this update are effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company expects to adopt this guidance as required and does not expect a material impact to the Company’s consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of customer concentration risk | Two customers accounted for more than 10% of consolidated revenues for the fiscal years ended September 30, 2019 and 2018, as follows: % of Consolidated 2019 2018 Alabama Department of Transportation 13.8 % 15.1 % North Carolina Department of Transportation 13.1 % 13.3 % |
Schedule of Revenue by Major Customers by Reporting Segments | The following table reflects, for the periods presented, (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. % of Consolidated 2019 2018 Private 30.7% 28.6% Public 69.3% 71.4% |
Schedule of useful lives of property, plant and equipment | The useful lives of property, plant and equipment categories are as follows: Category Estimated Useful Life Land and improvements Land, unlimited; improvements, 15-25 years Quarry reserves Based on depletion Buildings 5 - 39 years Plants 3 - 20 years Construction equipment 3 - 10 years Furniture and fixtures 5 - 10 years Leasehold improvements The shorter of 15 years or the remaining lease term Property, plant and equipment at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Construction equipment $ 214,500 $ 190,420 Plants 92,279 79,563 Land and improvements 34,365 29,624 Quarry reserves 20,678 20,908 Buildings 15,458 12,416 Furniture and fixtures 4,864 4,422 Leasehold improvements 1,135 765 Total property, plant and equipment, gross 383,279 338,118 Accumulated depreciation, depletion and amortization (177,927) (160,795) Construction in progress 518 1,369 Total property, plant and equipment, net $ 205,870 $ 178,692 |
Accounting Standards (Tables)
Accounting Standards (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Application of ASC 606 for the fiscal year ended September 30, 2019 had the following impact on the Company’s Consolidated Balance Sheet at September 30, 2019 and Consolidated Statement of Income for the fiscal year ended September 30, 2019 (in thousands): At September 30, 2019 As Reported Impact of ASC 606 Without Application of ASC 606 Costs and estimated earnings in excess of billings on uncompleted contracts $ 12,030 $ (599) $ 12,629 Inventories $ 34,291 $ 1,602 $ 32,689 Accrued expenses and other current liabilities $ 19,078 $ (39) $ 19,039 Billings in excess of costs and estimated earnings on uncompleted contracts $ 31,115 $ 1,167 $ 29,948 For the Fiscal Year Ended September 30, 2019 Revenues $ 783,238 $ (1,766) $ 785,004 Cost of revenues $ 665,285 $ (1,602) $ 666,887 Provision (benefit) for income taxes $ 13,909 $ (39) $ 13,948 Net income $ 43,121 $ (125) $ 43,246 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of fair values of assets acquired and liabilities assumed | The fair values of assets acquired and liabilities assumed, and the estimated useful lives of intangible assets acquired, were as follows (in thousands): Contracts receivable including retainage $ 9,184 Costs and estimated earnings in excess of billings on uncompleted contracts 1,787 Inventory 4,323 Other current assets (1) 731 Property, plant and equipment: Construction equipment 17,571 Quarry reserves 13,986 Land and land improvements 7,302 Plant 6,917 Buildings 1,552 Backlog intangible (2) 594 Customer relationship (3) 1,100 Goodwill 2,319 Accounts payable (3,646) Billings in excess of costs and estimated earnings on uncompleted contracts (4,589) Current maturities of long-term debt (358) Other current liabilities (1,770) Payable to seller (4,940) Long-term debt, net of current maturities (744) $ 51,319 (1) Other current assets excludes cash acquired. (2) The estimated useful life of the backlog intangible asset is 17 months. (3) The estimated useful life of the customer relationship intangible is 8 years. |
Schedule of pro forma revenues and net income - Scruggs acquisition | The following table presents pro forma revenues and net income as though the Company had acquired Scruggs on October 1, 2017 (unaudited, in thousands): For the Fiscal Year Ended September 30, 2018 Pro forma revenues $ 735,197 Pro forma net income 55,558 |
Contracts Receivable Includin_2
Contracts Receivable Including Retainage, net (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Schedule of Contracts Receivable Including Retainage, Net | Contracts receivable including retainage, net consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Contracts receivable $ 121,050 $ 104,541 Retainage 19,835 16,848 140,885 121,389 Allowance for doubtful accounts (1,003) (1,098) Contracts receivable including retainage, net $ 139,882 $ 120,291 The following is a summary of changes in the allowance for doubtful accounts balance during the fiscal years ended September 30, 2019 and 2018 (in thousands): For the Fiscal Year Ended 2019 2018 Balance at beginning of period $ 1,098 $ 1,734 Charged to bad debt expense 995 604 Write-off of contracts receivable including retainage (1,090) (1,240) Balance at end of period $ 1,003 $ 1,098 |
Contract Assets and Liabiliti_2
Contract Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Costs and Estimated Earnings Compared to Billings on Uncompleted Contracts | Costs and estimated earnings compared to billings on uncompleted contracts at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Costs on uncompleted contracts $ 900,880 $ 743,322 Estimated earnings to date on uncompleted contracts 123,256 95,155 1,024,136 838,477 Billings to date on uncompleted contracts (1,043,221) (867,881) Net billings in excess of costs and estimated earnings on uncompleted contracts $ (19,085) $ (29,404) 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, 2018 to September 30, 2019 are presented below (in thousands): Costs and Estimated Earnings in Excess of Billings on Billings in Excess of Costs and Estimated Earnings on Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts September 30, 2018 $ 9,334 $ (38,738) $ (29,404) Changes in revenue billed, contract price or cost estimates 2,696 7,623 10,319 September 30, 2019 $ 12,030 $ (31,115) $ (19,085) |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | Prepaid expenses and other current assets consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Settlement receivable $ 7,706 $ 7,874 Prepaid expenses 3,043 4,989 Other current assets 2,395 1,274 Total prepaid expenses and other current assets $ 13,144 $ 14,137 |
Schedule of other noncurrent assets | Other assets consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Settlement receivable $ — $ 7,224 Notes receivable 2,124 2,561 Other assets 160 485 Total other assets $ 2,284 $ 10,270 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The useful lives of property, plant and equipment categories are as follows: Category Estimated Useful Life Land and improvements Land, unlimited; improvements, 15-25 years Quarry reserves Based on depletion Buildings 5 - 39 years Plants 3 - 20 years Construction equipment 3 - 10 years Furniture and fixtures 5 - 10 years Leasehold improvements The shorter of 15 years or the remaining lease term Property, plant and equipment at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Construction equipment $ 214,500 $ 190,420 Plants 92,279 79,563 Land and improvements 34,365 29,624 Quarry reserves 20,678 20,908 Buildings 15,458 12,416 Furniture and fixtures 4,864 4,422 Leasehold improvements 1,135 765 Total property, plant and equipment, gross 383,279 338,118 Accumulated depreciation, depletion and amortization (177,927) (160,795) Construction in progress 518 1,369 Total property, plant and equipment, net $ 205,870 $ 178,692 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following presents goodwill activity during the fiscal years ended September 30, 2019 and 2018 (in thousands): Balance at September 30, 2017 $ 30,600 Additions 2,319 Balance at September 30, 2018 32,919 Additions 5,627 Balance at September 30, 2019 $ 38,546 |
Schedule of Finite-Lived Intangible Assets | A summary of other intangible assets at September 30, 2019 and 2018 is as follows (in thousands): September 30, 2019 2018 Useful Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived: License Indefinite $ 2,000 $ — $ 2,000 $ 2,000 $ — $ 2,000 Definite-lived: Customer relationship 8 years 1,645 (229) 1,416 1,100 (52) 1,048 Acquired construction backlog 7-17 months 820 (820) — 594 (157) 437 Non-compete agreements 5 years 1,520 (1,502) 18 1,500 (1,250) 250 Total intangible assets $ 5,985 $ (2,551) $ 3,434 $ 5,194 $ (1,459) $ 3,735 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future total amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year Estimated Amortization Expense 2020 $ 210 2021 210 2022 210 2023 210 2024 206 Thereafter 388 Total $ 1,434 |
Liabilities (Tables)
Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Liabilities [Abstract] | |
Schedule of Accrued Expenses And Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Accrued payroll and benefits 15,173 12,802 Treasury stock purchase obligation — 569 Accrued insurance costs 1,761 1,750 Other current liabilities 2,144 2,399 Total accrued expenses and other current liabilities $ 19,078 $ 17,520 |
Schedule of Other Noncurrent Liabilities | Other long-term liabilities consisted of the following at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Accrued insurance costs $ 5,358 $ 4,826 Other 750 469 Total other long-term liabilities $ 6,108 $ 5,295 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt at September 30, 2019 and 2018 consisted of the following (in thousands): September 30, 2019 2018 Long-term debt: BBVA Term Loan $ 44,700 $ 57,300 BBVA Revolving Credit Facility 5,000 5,000 Other long-term debt 563 964 Total long-term debt 50,263 63,264 Deferred debt issuance costs (263) (362) Debt discount (4) (14) Current maturities of long-term debt (7,538) (14,773) Long-term debt, net of current maturities $ 42,458 $ 48,115 |
Contractual Obligation, Fiscal Year Maturity Schedule | The scheduled contractual repayment terms of long-term debt at September 30, 2019 were as follows: Fiscal Year Amount 2020 $ 7,538 2021 7,346 2022 35,357 2023 22 2024 — Total $ 50,263 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
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 (in thousands, except share and per share amounts): For the Fiscal Year Ended September 30, 2019 2018 Numerator Net income attributable to common shareholders $ 43,121 $ 50,791 Denominator Weighted average number of common shares outstanding, basic 51,421,159 45,605,845 Net income per common share attributable to common shareholders, basic $ 0.84 $ 1.11 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 (in thousands, except share and per share amounts): For the Fiscal Year Ended September 30, 2019 2018 Numerator Net income attributable to common stockholders $ 43,121 $ 50,791 Denominator Weighted average number of basic common 51,421,159 45,605,845 Effect of dilutive securities: 2010 non-plan stock option agreement options — 272,915 2018 restricted stock grants 6,061 40,888 Weighted average number of diluted common 51,427,220 45,919,648 Net income per diluted common share attributable $ 0.84 $ 1.11 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes for the fiscal years ended September 30, 2019 and 2018 consisted of the following (in thousands): For the Fiscal Year Ended 2019 2018 Current U.S. Federal $ 9,780 $ 9,380 State 1,132 1,626 Total current 10,912 11,006 Deferred U.S. Federal 2,203 (1,003) State 794 522 Total deferred 2,997 (481) Provision for income taxes $ 13,909 $ 10,525 |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities consisted of the following temporary difference tax effects at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Deferred tax assets Allowance for bad debt $ 425 $ 444 Amortization of finite-lived intangible assets 487 499 State net operating loss 1,330 1,695 Accrued insurance claims 1,332 1,202 Total deferred tax assets, net 3,574 3,840 Deferred tax liabilities Amortization of goodwill (4,278) (3,925) Property, plant and equipment (9,525) (7,162) Other (78) (63) Total deferred tax liabilities, net (13,881) (11,150) Net deferred tax assets (liabilities) $ (10,307) $ (7,310) |
Reconciliation Of Net Deferred Tax Assets (Liabilities) | The following is a reconciliation of net deferred tax assets (liabilities) to amounts reflected on the Company’s Consolidated Balance Sheets at September 30, 2019 and 2018 (in thousands): September 30, 2019 2018 Asset: Deferred income taxes, net $ 1,173 $ 1,580 Liability: Deferred income taxes, net (11,480) (8,890) Net deferred tax assets (liabilities) $ (10,307) $ (7,310) |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles income taxes based on the U.S. federal statutory tax rate to the Company’s income before provision for income taxes for the fiscal years ended September 30, 2019 and 2018 (in thousands): For the Fiscal Year Ended 2019 2018 Provision for income tax at federal statutory rate $ 11,976 $ 15,023 State income taxes 1,521 1,622 Change in deferred federal income taxes due to Tax Act — (4,552) Permanent differences 319 (2,282) Other 93 714 Provision for income taxes $ 13,909 $ 10,525 |
Related Parties Related Parties
Related Parties Related Parties (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table presents revenues earned and expenses incurred by the Company during the fiscal years ended September 30, 2019 and 2018, and accounts receivable and accounts payable balances at September 30, 2019 and 2018, related to transactions with the related parties described above (in thousands): Revenue Earned (Expense Incurred) Accounts Receivable (Payable) For the Fiscal Year Ended September 30, September 30, 2019 2018 2019 2018 Purchaser of subsidiary $ — $ — $ 756 $ 850 Disposed entity — — 846 937 Land Development Project — — 774 774 Subcontracting Services (19,491) (1) (13,245) (1) (1,238) (790) Construction Services 5,936 1,753 2,434 2,863 Island Pond (320) (2) (320) (2) — — Vehicles (1,491) (2) (1,149) (2) — — Consulting Services (265) (2) (272) (2) — — Legal Services — (2) (58) (2) — — H&K (78) (2) (84) (2) — — H&A — (2) (61) (2) — — SunTx (1,252) (2) (1,457) (2) — — (1) Cost is reflected as cost of revenues on the Company’s Consolidated Statements of Income. (2) Cost is reflected as general and administrative expenses on the Company’s Consolidated Statements of Income. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum obligations under non-cancelable operating leases | Future minimum obligations under non-cancelable operating leases at September 30, 2019 were as follows (in thousands): Fiscal Year Amount 2020 $ 6,537 2021 3,043 2022 1,041 2023 351 2024 255 Thereafter 58 Total $ 11,285 |
Condensed Financial Statement_2
Condensed Financial Statements of Registrant (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Balance Sheet | CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2019 2018 ASSETS Cash and cash equivalents $ 31,610 $ 53,352 Investment in subsidiaries 313,277 247,944 Due from subsidiaries 1,020 545 Other assets 551 1,226 Total current assets 346,458 303,067 Property, plant and equipment 606 131 Total assets $ 347,064 $ 303,198 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Treasury stock purchase obligation $ — $ 569 Due to subsidiaries 400 800 Other current liabilities 1,231 183 Total current liabilities 1,631 1,552 Long-term liabilities: Due to subsidiaries 1,883 2,177 Total long-term liabilities 1,883 2,177 Total liabilities 3,514 3,729 Stockholders’ Equity Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2019 and September 30, 2018 and no shares issued and outstanding — — Class A common stock, par value $0.001; 400,000,000 shares authorized, 32,597,736 shares issued and outstanding at September 30, 2019, and 11,950,000 shares issued and outstanding at September 30, 2018 33 12 Class B common stock, par value 0.001; 100,000,000 shares authorized, 22,106,961 shares issued and 19,184,009 shares outstanding at September 30, 2019, and 42,387,571 issued and 39,464,619 outstanding at September 30, 2018 22 42 Additional paid-in capital 243,452 242,493 Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 (15,603) (15,603) Retained earnings 115,646 72,525 Total stockholders’ equity 343,550 299,469 Total liabilities and stockholders’ equity $ 347,064 $ 303,198 |
Schedule of Condensed Income Statement | CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME (in thousands, except per share amounts) For the Fiscal Year Ended 2019 2018 Equity in net income of subsidiaries $ 45,631 $ 51,515 Equity-based compensation expense (957) (975) General and administrative expenses (3,369) (1,542) Interest income, net 373 72 Income before provision for income taxes 41,678 49,070 Income tax benefit 1,443 1,721 Net income $ 43,121 $ 50,791 Net income per share attributable to common stockholders: Basic $ 0.84 $ 1.11 Diluted $ 0.84 1.11 Weighted average number of common shares outstanding: Basic 51,421,159 45,605,845 Diluted 51,427,220 45,919,648 |
Schedule of Condensed Cash Flow Statement | CONSTRUCTION PARTNERS, INC. PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS (in thousands) For the Fiscal Year Ended 2019 2018 Cash flows from operating activities: Net income $ 43,121 $ 50,791 Adjustments to reconcile net income to net cash used in operating activities: Amortization of deferred debt issuance costs 6 6 Equity-based compensation expense 957 975 Equity in net income of subsidiaries (45,631) (51,515) Changes in operating assets and liabilities: Other current assets 675 969 Other liabilities 1,049 (3,369) Net cash provided by (used in) operating activities 177 (2,143) Cash flows from investing activities: Purchases of property, plant and equipment (475) (131) Investment in subsidiary (19,703) (34,155) Net cash (used in) provided by investing activities (20,178) (34,286) Cash flows from financing activities: Change in amounts due to (from) subsidiaries, net (1,175) (6,994) Payment of treasury stock purchase obligation (569) (2,569) Proceeds from initial public offering of Class A common stock, net of offering costs — 98,009 Proceeds from sale of stock 3 5 Net cash provided by (used in) financing activities (1,741) 88,451 Net change in cash and cash equivalents (21,742) 52,022 Cash and cash equivalents: Beginning of period 53,352 1,330 End of period $ 31,610 $ 53,352 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Sep. 30, 2019USD ($)reporting_unitstate | Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($) | |
Summary Of Accounting Policies [Line Items] | |||
Revisions in estimates related to amounts recorded in prior periods for revenue | $ 3,800,000 | $ 6,900,000 | |
Amount company is liable for per occurrence | $ 500,000 | ||
Number of reporting units | reporting_unit | 5 | ||
Minimum | |||
Summary Of Accounting Policies [Line Items] | |||
Amount company is liable for per occurrence | $ 100,000 | ||
Stop-loss insurance purchased | 75,000 | ||
Maximum | |||
Summary Of Accounting Policies [Line Items] | |||
Amount company is liable for per occurrence | 500,000 | ||
Stop-loss insurance purchased | $ 160,000 | ||
Accounting Standards Update 2016-02 | Forecast | Minimum | |||
Summary Of Accounting Policies [Line Items] | |||
Operating lease, right-of-use asset | $ 9,000,000 | ||
Operating lease, liability | 9,000,000 | ||
Accounting Standards Update 2016-02 | Forecast | Maximum | |||
Summary Of Accounting Policies [Line Items] | |||
Operating lease, right-of-use asset | 10,000,000 | ||
Operating lease, liability | $ 10,000,000 | ||
Alabama, Florida, Georgia, North Carolina And South Carolina | |||
Summary Of Accounting Policies [Line Items] | |||
Number of states | state | 4 |
Significant Accounting Polici_5
Significant Accounting Policies - Concentration of Risks (Detail) - Revenues - Customer Concentration Risk | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Department of Transportation | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 40.40% | 42.90% |
North Carolina Department of Transportation | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.10% | 13.30% |
Alabama Department of Transportation | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.80% | 15.10% |
Private | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 30.70% | 28.60% |
Public | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 69.30% | 71.40% |
Significant Accounting Polici_6
Significant Accounting Policies - Property, Plant and Equipment (Detail) | 12 Months Ended |
Sep. 30, 2019 | |
Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 25 years |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 39 years |
Asphalt plants | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Asphalt plants | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 20 years |
Construction Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Construction Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Accounting Standards (Detail)
Accounting Standards (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 12,030 | $ 9,334 |
Inventories | 34,291 | 24,556 |
Accrued expenses and other current liabilities | 19,078 | 17,520 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 31,115 | 38,738 |
Revenues | 783,238 | |
Cost of revenues | 665,285 | 580,560 |
Provision (benefit) for income taxes | 13,909 | 10,525 |
Net income | 43,121 | $ 50,791 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Impact of ASC 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | (599) | |
Inventories | 1,602 | |
Accrued expenses and other current liabilities | (39) | |
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,167 | |
Revenues | (1,766) | |
Cost of revenues | (1,602) | |
Provision (benefit) for income taxes | (39) | |
Net income | (125) | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 12,629 | |
Inventories | 32,689 | |
Accrued expenses and other current liabilities | 19,039 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | 29,948 | |
Revenues | 785,004 | |
Cost of revenues | 666,887 | |
Provision (benefit) for income taxes | 13,948 | |
Net income | $ 43,246 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 12, 2019 | Feb. 28, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | May 15, 2018 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||||||
Long-term debt | $ 63,264 | $ 50,263 | ||||
Goodwill | 32,919 | $ 38,546 | $ 30,600 | |||
Scruggs Company | ||||||
Business Acquisition [Line Items] | ||||||
Revenues | 35,800 | |||||
Net income | $ 3,500 | |||||
Long-term debt | $ 1,100 | |||||
Goodwill | 2,319 | |||||
Scruggs Company | Senior Notes | ||||||
Business Acquisition [Line Items] | ||||||
Long-term debt | $ 22,000 | |||||
Alabama Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash payment to acquire business | $ 5,000 | |||||
Goodwill | $ 2,400 | |||||
Florida Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash payment to acquire business | $ 8,900 | |||||
Goodwill | 3,200 | |||||
General and administrative expenses | $ 100 |
Business Acquisitions - Assets
Business Acquisitions - Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | May 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 38,546 | $ 32,919 | $ 30,600 | |
Acquired construction backlog | ||||
Business Acquisition [Line Items] | ||||
Useful Life | 17 months | |||
Customer relationship | ||||
Business Acquisition [Line Items] | ||||
Useful Life | 8 years | |||
Scruggs Company | ||||
Business Acquisition [Line Items] | ||||
Contracts receivable including retainage | $ 9,184 | |||
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,787 | |||
Inventory | 4,323 | |||
Other current assets | 731 | |||
Goodwill | 2,319 | |||
Accounts payable | (3,646) | |||
Billings in excess of costs and estimated earnings on uncompleted contracts | (4,589) | |||
Current maturities of long-term debt | (358) | |||
Other current liabilities | (1,770) | |||
Payable to seller | (4,940) | |||
Long-term debt, net of current maturities | (744) | |||
Fair value of assets acquired and liabilities assumed | 51,319 | |||
Revenues | 35,800 | |||
Net income | $ 3,500 | |||
Scruggs Company | Acquired construction backlog | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 594 | |||
Useful Life | 17 months | |||
Scruggs Company | Customer relationship | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 1,100 | |||
Useful Life | 8 years | |||
Scruggs Company | Equipment | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | $ 17,571 | |||
Scruggs Company | Quarry reserves | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | 13,986 | |||
Scruggs Company | Land and land improvements | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | 7,302 | |||
Scruggs Company | Plant | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | 6,917 | |||
Scruggs Company | Buildings | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | $ 1,552 |
Business Acquisitions - Proform
Business Acquisitions - Proforma Revenue and Net Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2019 | May 15, 2018 | |
Business Acquisition [Line Items] | |||
Long-term debt | $ 63,264 | $ 50,263 | |
Scruggs Company | |||
Business Acquisition [Line Items] | |||
Long-term debt | $ 1,100 | ||
Pro forma revenues | 735,197 | ||
Pro forma net income | $ 55,558 | ||
Senior Notes | Scruggs Company | |||
Business Acquisition [Line Items] | |||
Long-term debt | $ 22,000 |
Contracts Receivable Includin_3
Contracts Receivable Including Retainage, net - Schedule of Contracts Receivable (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Contractors [Abstract] | |||
Contracts receivable | $ 121,050 | $ 104,541 | |
Retainage | 19,835 | 16,848 | |
Contracts receivable including retainage, gross | 140,885 | 121,389 | |
Allowance for doubtful accounts | (1,003) | (1,098) | $ (1,734) |
Contracts receivable including retainage, net | $ 139,882 | $ 120,291 |
Contracts Receivable Includin_4
Contracts Receivable Including Retainage, net - Rollforward of Allowance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of period | $ 1,098 | $ 1,734 |
Charged to bad debt expense | 995 | 604 |
Write-off of contracts receivable including retainage | (1,090) | (1,240) |
Balance at end of period | $ 1,003 | $ 1,098 |
Contract Assets and Liabiliti_3
Contract Assets and Liabilities - Cost and Estimated Earnings Compared to Billings on Uncompleted Contracts (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Contractors [Abstract] | ||
Costs on uncompleted contracts | $ 900,880 | $ 743,322 |
Estimated earnings to date on uncompleted contracts | 123,256 | 95,155 |
Costs and estimated earnings to date on uncompleted contracts | 1,024,136 | 838,477 |
Billings to date on uncompleted contracts | (1,043,221) | (867,881) |
Net billings in excess of costs and estimated earnings on uncompleted contracts | $ 19,085 | $ 29,404 |
Contract Assets and Liabiliti_4
Contract Assets and Liabilities - Reconciliation of Net Billings in Excess of Costs and Estimated Earnings (Detail) $ in Thousands | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts [Abstract] | |
Contract asset, ending balance | $ 12,030 |
Changes in revenue billed, contract price or cost estimates | 2,696 |
Contract asset, beginning balance | 9,334 |
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts [Abstract] | |
Billings in excess of costs, beginning balance | (38,738) |
Changes in revenue billed, contract price or cost estimates | 7,623 |
Billings in excess of costs, ending balance | (31,115) |
Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts [Abstract] | |
Net billings in excess of costs, beginning balance | (29,404) |
Changes in revenue billed, contract price or cost estimates | 10,319 |
Net billings in excess of costs, ending balance | $ (19,085) |
Contract Assets and Liabiliti_5
Contract Assets and Liabilities - Narrative (Details) $ in Millions | Sep. 30, 2019USD ($) |
Contractors [Abstract] | |
Revenue, remaining performance obligation, amount | $ 481.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Contractors [Abstract] | |
Revenue, remaining performance obligation, amount | $ 94.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 12 months |
Other Assets - Other Current As
Other Assets - Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Settlement receivable | $ 7,706 | $ 7,874 |
Prepaid expenses | 3,043 | 4,989 |
Other current assets | 2,395 | 1,274 |
Total prepaid expenses and other current assets | $ 13,144 | $ 14,137 |
Other Assets - Other Noncurrent
Other Assets - Other Noncurrent Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Settlement receivable | $ 0 | $ 7,224 |
Notes receivable | 2,124 | 2,561 |
Other assets | 160 | 485 |
Total other assets | $ 2,284 | $ 10,270 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Property, Plant and Equipment [Abstract] | |||
Depreciation, depletion and amortization expense | $ 30,100 | $ 24,800 | |
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 383,279 | 338,118 | |
Accumulated depreciation, depletion and amortization | (177,927) | (160,795) | |
Construction in progress | 518 | 1,369 | |
Total property, plant and equipment, net | 205,870 | 178,692 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 214,500 | 190,420 | |
Asphalt plants | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 92,279 | 79,563 | |
Land and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 34,365 | 29,624 | |
Quarry reserves | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 20,678 | 20,908 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 15,458 | 12,416 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | 4,864 | 4,422 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 1,135 | $ 765 | |
Asphalt Terminal | |||
Property, Plant and Equipment [Line Items] | |||
Payments for asset acquisitions | $ 10,900 | ||
Asset acquisition, transaction costs | $ 100 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 32,919 | $ 30,600 |
Additions | 5,627 | 2,319 |
Ending balance | $ 38,546 | $ 32,919 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net Book Value | $ 2,000 | $ 2,000 |
Definite-lived: | ||
Accumulated Amortization | (2,551) | (1,459) |
Net Book Value | 1,434 | |
Total intangible assets, gross | 5,985 | 5,194 |
Total intangible assets, net | $ 3,434 | 3,735 |
Customer relationship | ||
Definite-lived: | ||
Useful Life | 8 years | |
Gross | $ 1,645 | 1,100 |
Accumulated Amortization | (229) | (52) |
Net Book Value | $ 1,416 | 1,048 |
Acquired construction backlog | ||
Definite-lived: | ||
Useful Life | 17 months | |
Gross | $ 820 | 594 |
Accumulated Amortization | (820) | (157) |
Net Book Value | $ 0 | 437 |
Non-compete agreements | ||
Definite-lived: | ||
Useful Life | 5 years | |
Gross | $ 1,520 | 1,500 |
Accumulated Amortization | (1,502) | (1,250) |
Net Book Value | $ 18 | $ 250 |
Minimum | Acquired construction backlog | ||
Definite-lived: | ||
Useful Life | 7 months | |
Maximum | Acquired construction backlog | ||
Definite-lived: | ||
Useful Life | 17 months |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Future Amortization Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible amortization expense | $ (1,100) | $ (500) |
2020 | 210 | |
2021 | 210 | |
2022 | 210 | |
2023 | 210 | |
2024 | 206 | |
Thereafter | 388 | |
Net Book Value | $ 1,434 |
Liabilities - Accrued Expenses
Liabilities - Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Liabilities [Abstract] | ||
Accrued payroll and benefits | $ 15,173 | $ 12,802 |
Treasury stock purchase obligation | 0 | 569 |
Accrued insurance costs | 1,761 | 1,750 |
Other current liabilities | 2,144 | 2,399 |
Accrued expenses and other current liabilities | $ 19,078 | $ 17,520 |
Liabilities - Other Noncurrent
Liabilities - Other Noncurrent Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Liabilities [Abstract] | ||
Accrued insurance costs | $ 5,358 | $ 4,826 |
Other | 750 | 469 |
Total other long-term liabilities | $ 6,108 | $ 5,295 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 50,263 | $ 63,264 |
Deferred debt issuance costs | (263) | (362) |
Debt discount | (4) | (14) |
Current maturities of long-term debt | (7,538) | (14,773) |
Long-term debt, net of current maturities | 42,458 | 48,115 |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 563 | $ 964 |
Debt - Additional Information (
Debt - Additional Information (Detail) | May 15, 2018USD ($)note | Aug. 31, 2019 | Jul. 31, 2019 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 50,263,000 | $ 63,264,000 | ||||
Deferred debt issuance costs | 263,000 | 362,000 | ||||
Interest expense | 3,300,000 | $ 2,000,000 | ||||
Amortization of deferred issuance costs and debt discounts | $ 100,000 | |||||
Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Notional amount | $ 11,000,000 | $ 25,000,000 | ||||
Derivative instrument, interest rate stated percentage | 0.0202 | |||||
Scruggs Company | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 1,100,000 | |||||
Estimated fair value of instrument | $ 400,000 | |||||
Number of interest notes payable | note | 3 | |||||
Principal balance assumed | $ 700,000 | |||||
BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated leverage ratio | 0.0200 | |||||
Percentage of principal payments in quarterly installments | 0.0250 | 0.0500 | ||||
Commitment fee | 0.20% | 0.35% | ||||
Maximum fixed coverage ratio | 1.20 | 4.04 | 1.51 | |||
Maximum consolidated coverage ratio | 2.75 | 2 | 0.66 | 0.88 | ||
LIBOR | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.20% | |||||
Minimum | Scruggs Company | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, percentage | 4.50% | |||||
Minimum | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate based on several indices plus applied mark up | 0.020 | |||||
Interest rate, percentage | 3.24% | |||||
Maximum | Scruggs Company | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, percentage | 5.95% | |||||
Maximum | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate based on several indices plus applied mark up | 0.0225 | |||||
Interest rate, percentage | 4.24% | |||||
Maximum | LIBOR | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.70% | |||||
Senior Notes | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Notional amount | $ 21,500,000 | $ 28,700,000 | ||||
Derivative assets (liabilities), at fair value | (300,000) | 300,000 | ||||
Senior Notes | Scruggs Company | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 22,000,000 | |||||
Senior Notes | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 44,700,000 | 57,300,000 | ||||
Remaining borrowing capacity | 14,400,000 | 14,000,000 | ||||
Interest rate, percentage | 3.01% | |||||
Assumed debt | $ 22,000,000 | |||||
Line of Credit | BBVA Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 5,000,000 | $ 5,000,000 |
Debt - Schedule of Contractual
Debt - Schedule of Contractual Repayments (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 7,538 | |
2021 | 7,346 | |
2022 | 35,357 | |
2023 | 22 | |
2024 | 0 | |
Total | $ 50,263 | $ 63,264 |
Equity (Detail)
Equity (Detail) $ / shares in Units, $ in Thousands | May 24, 2019USD ($) | May 24, 2018$ / sharesshares | May 08, 2018$ / sharesshares | Apr. 23, 2018shares | Sep. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018$ / shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018$ / sharesshares |
Schedule Of Stockholders Equity [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 11,250,000 | 39,464,619 | ||||||
Common stock, shares issued (in shares) | 42,387,571 | |||||||
Compensation expense | $ | $ 400 | |||||||
Class B Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Common stock split conversion ratio | 25.2 | |||||||
Conversion of stock, shares issued (in shares) | 2,250,000 | 41,817,537 | 126,000 | |||||
Common stock, shares outstanding (in shares) | 19,184,009 | 19,184,009 | ||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 0.04 | |||||||
Initial public offering (in shares) | 20,355,202 | 2,600,000 | ||||||
Common stock, shares issued (in shares) | 22,106,961 | 22,106,961 | ||||||
Exercises in period, weighted average (in dollars per share) | $ / shares | $ 5.70 | |||||||
Treasury shares issued (in dollars per share) | $ / shares | 3.64 | |||||||
Class A Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 2,250,000 | |||||||
Common stock, shares outstanding (in shares) | 9,000,000 | 32,597,736 | 32,597,736 | 11,950,000 | ||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 14.25 | $ 14.25 | ||||||
Common stock shares sold (in shares) | 350,000 | |||||||
Initial public offering (in shares) | 20,355,202 | 2,600,000 | ||||||
Conversion rate | 1 | |||||||
Common stock, shares issued (in shares) | 32,597,736 | 32,597,736 | 11,950,000 | |||||
Exercises in period, weighted average (in dollars per share) | $ / shares | $ 0.0357 | |||||||
Issuance of stock (in shares) | 292,534 | 9,350,000 | ||||||
Compensation expense | $ | $ 700 | |||||||
2010 non-plan stock option agreement options | Class B Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 768,984 | |||||||
Exercises in period, weighted average (in dollars per share) | $ / shares | $ 5.70 | |||||||
Treasury shares issued (in dollars per share) | $ / shares | $ 3.64 | |||||||
IPO | Class A Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 12 | $ 12 | ||||||
Common stock shares sold (in shares) | 700,000 | |||||||
Over-Allotment Option | Class A Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Issuance of stock (in shares) | 5,000,000 | |||||||
Director | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Amount of limit of dollar value of equity-based awards | $ | $ 750 | |||||||
Treasury Stock | Class B Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 3,170,034 | |||||||
2018 Equity Incentive Plan | Class B Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 74,592 | |||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 0.0357 | |||||||
2018 Equity Incentive Plan | Class A Common Stock | ||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||
Conversion of stock, shares issued (in shares) | 292,534 |
Earnings Per Share - Basic (Det
Earnings Per Share - Basic (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator | ||
Net income attributable to common shareholders | $ 43,121 | $ 50,791 |
Denominator | ||
Weighted average number of basic common shares outstanding (in shares) | 51,421,159 | 45,605,845 |
Net income per basic common share attributable to common stockholders (in dollars per share) | $ 0.84 | $ 1.11 |
Earnings Per Share - Diluted (D
Earnings Per Share - Diluted (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator | ||
Net income attributable to common shareholders | $ 43,121 | $ 50,791 |
Denominator | ||
Weighted average number of basic common shares outstanding (in shares) | 51,421,159 | 45,605,845 |
Effect of dilutive securities: | ||
Weighted average number of diluted common shares outstanding (in shares) | 51,427,220 | 45,919,648 |
Net income per diluted common share attributable to common stockholders (in dollars per share) | $ 0.84 | $ 1.11 |
Options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | 272,915 |
Restricted Stock | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 6,061 | 40,888 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Detail) - USD ($) | Feb. 23, 2018 | Sep. 30, 2019 | Aug. 31, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 400,000 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (in shares) | 126,000 | |||||
Exercises in period, weighted average (in dollars per share) | $ 0.04 | |||||
Proceeds from sale of shares | $ 5,000 | |||||
Compensation expense | 500,000 | $ 1,000,000 | ||||
Shares issued in excess of purchase price (in shares) | $ 500,000 | |||||
Grant date fair value (in dollars per share) | $ 7.78 | |||||
Unrecognized compensation expense | $ 0 | 0 | $ 0 | |||
Aggregate grant date fair value | 3,800,000 | $ 3,800,000 | ||||
Class A Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercises in period, weighted average (in dollars per share) | $ 0.0357 | |||||
Compensation expense | 700,000 | |||||
Class A Common Stock | Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (in shares) | 292,534 | |||||
Unrecognized compensation expense | $ 3,200,000 | $ 3,200,000 | ||||
Class B Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (in shares) | 74,592 | 768,984 | ||||
Exercises in period, weighted average (in dollars per share) | $ 5.70 | |||||
Treasury shares issued (in dollars per share) | $ 3.64 | |||||
Treasury stock (in shares) | 521,902 | |||||
Sale of stock (in dollars per share) | $ 13.17 | |||||
Options outstanding (in shares) | 247,082 | |||||
Exercise price recorded as additional paid-in capital | $ 4,400,000 | |||||
Tax withholding, share-based payment arrangement | $ 2,500,000 |
Provision for Income Taxes - Sc
Provision for Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Current | ||
U.S. Federal | $ 9,780 | $ 9,380 |
State | 1,132 | 1,626 |
Total current | 10,912 | 11,006 |
Deferred | ||
U.S. Federal | 2,203 | (1,003) |
State | 794 | 522 |
Total deferred | 2,997 | (481) |
Provision for income taxes | $ 13,909 | $ 10,525 |
Provision for Income Taxes - _2
Provision for Income Taxes - Schedule of Deferred Tax Asset and Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred tax assets | ||
Allowance for bad debt | $ 425 | $ 444 |
Amortization of finite-lived intangible assets | 487 | 499 |
State net operating loss | 1,330 | 1,695 |
Accrued insurance claims | 1,332 | 1,202 |
Total deferred tax assets, net | 3,574 | 3,840 |
Deferred tax liabilities | ||
Amortization of goodwill | (4,278) | (3,925) |
Property, plant and equipment | (9,525) | (7,162) |
Other | (78) | (63) |
Total deferred tax liabilities, net | 13,881 | 11,150 |
Net deferred tax assets (liabilities) | $ (10,307) | $ (7,310) |
Provision for Income Taxes - Ad
Provision for Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Contingency [Line Items] | ||
Deferred tax assets, gross | $ 3,574,000 | $ 3,840,000 |
Fuel tax credits | 300,000 | 300,000 |
Goodwill expected to be deductible to tax purposes | 19,000,000 | 14,900,000 |
Income tax benefit related to tax act | 4,600,000 | |
Permanent tax benefit | (2,300,000) | |
Amount resulting from deduction fair market value of options over exercise price | 1,400,000 | 1,400,000 |
Unrecognized tax benefits | 0 | 0 |
State | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | $ 31,600,000 | $ 38,300,000 |
Provision for Income Taxes - _3
Provision for Income Taxes - Schedule of Reconciliation of Deferred Tax Assets (Liabilities) (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Asset: Deferred income taxes, net | $ 1,173 | $ 1,580 |
Liability: Deferred income taxes, net | (11,480) | (8,890) |
Net deferred tax assets (liabilities) | $ 10,307 | $ 7,310 |
Provision for Income Taxes - _4
Provision for Income Taxes - Schedule of Effective Tax Rate Reconciliation (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision for income tax at federal statutory rate | $ 11,976 | $ 15,023 |
State income taxes | 1,521 | 1,622 |
Change in deferred federal income taxes due to Tax Act | 0 | (4,552) |
Permanent differences | 319 | (2,282) |
Other | 93 | 714 |
Provision for income taxes | $ 13,909 | $ 10,525 |
Employee Benefit Plans (Detail)
Employee Benefit Plans (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Retirement Benefits [Abstract] | ||
Defined contribution costs | $ 2.9 | $ 2.3 |
Related Parties - Additional In
Related Parties - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2017 | |
SunTx Capital Partners | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Payment to related party | $ 250 | ||||
H&K | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Payment to related party | $ 15 | ||||
Consideration Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | $ 1,000 | ||||
Accounts Payable Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | $ 1,000 | ||||
H&A | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related party | $ 500 | ||||
Other Current Assets | Consideration Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | $ 100 | ||||
Other Current Assets | Accounts Payable Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | 100 | ||||
Other Noncurrent Assets | Consideration Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | 700 | ||||
Other Noncurrent Assets | Accounts Payable Note Receivable | |||||
Related Party Transaction [Line Items] | |||||
Note receivable as consideration for sale of the wholly-owned subsidiary | $ 700 |
Related Parties - Schedule Of R
Related Parties - Schedule Of Related Party Transactions (Detail) - Affiliated Entity - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Purchaser of subsidiary | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | $ 0 | $ 0 |
Accounts Receivable (Payable) | 756 | 850 |
Disposed entity | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | 0 | 0 |
Accounts Receivable (Payable) | 846 | 937 |
Land Development Project | ||
Related Party Transaction [Line Items] | ||
Accounts Receivable (Payable) | 774 | 774 |
Subcontracting Services | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (19,491) | (13,245) |
Accounts Receivable (Payable) | (1,238) | (790) |
Construction Services | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | 5,936 | 1,753 |
Accounts Receivable (Payable) | 2,434 | 2,863 |
Island Pond | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (320) | (320) |
Accounts Receivable (Payable) | 0 | 0 |
Vehicles | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (1,491) | (1,149) |
Accounts Receivable (Payable) | 0 | 0 |
Consulting Services | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (265) | (272) |
Accounts Receivable (Payable) | 0 | 0 |
Legal Services | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | 0 | (58) |
Accounts Receivable (Payable) | 0 | 0 |
H&K | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (78) | (84) |
Accounts Receivable (Payable) | 0 | 0 |
H&A | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | 0 | (61) |
Accounts Receivable (Payable) | 0 | 0 |
SunTx | ||
Related Party Transaction [Line Items] | ||
Revenue Earned (Expense Incurred) | (1,252) | (1,457) |
Accounts Receivable (Payable) | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 2 Months Ended | 12 Months Ended | |
Dec. 13, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease, expense | $ 9,400,000 | $ 11,200,000 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Assumed debt | 30,000,000 | ||
Letters of credit outstanding | $ 10,900,000 | $ 11,800,000 | |
Subsequent Event | |||
Debt Instrument [Line Items] | |||
Operating lease, payments | $ 10,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Rental Payments (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 6,537 |
2021 | 3,043 |
2022 | 1,041 |
2023 | 351 |
2024 | 255 |
Thereafter | 58 |
Total | $ 11,285 |
Joint Venture (Detail)
Joint Venture (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Nov. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Partnership interest | 50.00% | 50.00% | |
Investment in subsidiaries | $ 496 | $ 1,659 | |
Equity in net income of subsidiaries | $ 1,337 | $ 1,259 |
Settlement Agreement (Detail)
Settlement Agreement (Detail) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Apr. 19, 2018USD ($)installment | |
Loss Contingencies [Line Items] | |||
Settlement income | $ 0 | $ 14,803 | |
Other current assets | 13,144 | 14,137 | |
Settlement Agreement | |||
Loss Contingencies [Line Items] | |||
Aggregate net payments to be received | $ 15,700 | ||
Number of equal installments payable | installment | 4 | ||
Settlement income | $ 14,800 | ||
Installment payments received | 7,900 | ||
Other current assets | $ 7,800 |
Condensed Financial Statement_3
Condensed Financial Statements of Registrant - Balance Sheet (Detail) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 | May 08, 2018 | Sep. 30, 2017 |
ASSETS | ||||
Cash and cash equivalents | $ 80,619 | $ 99,137 | ||
Investment in subsidiaries | 496 | 1,659 | ||
Total current assets | 279,966 | 267,455 | ||
Property, plant and equipment | 205,870 | 178,692 | ||
Total assets | 531,769 | 496,310 | ||
Current liabilities: | ||||
Treasury stock purchase obligation | 0 | 569 | ||
Total current liabilities | 128,173 | 134,541 | ||
Long-term liabilities: | ||||
Total long-term liabilities | 60,046 | 62,300 | ||
Total liabilities | 188,219 | 196,841 | ||
Stockholders’ Equity | ||||
Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2019 and September 30, 2018 and no shares issued and outstanding | 0 | 0 | ||
Additional paid-in capital | 243,452 | 242,493 | ||
Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 | (15,603) | (15,603) | ||
Retained earnings | 115,646 | 72,525 | ||
Total stockholders’ equity | 343,550 | 299,469 | $ 152,181 | |
Total liabilities and stockholders’ equity | $ 531,769 | $ 496,310 | ||
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 stock, shares issued (in shares) | 42,387,571 | |||
Common stock, shares outstanding (in shares) | 39,464,619 | 11,250,000 | ||
Class A Common Stock | ||||
Stockholders’ Equity | ||||
Common stock, value | $ 33 | $ 12 | ||
Total stockholders’ equity | $ 33 | $ 12 | 0 | |
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) | 32,597,736 | 11,950,000 | ||
Common stock, shares outstanding (in shares) | 32,597,736 | 11,950,000 | 9,000,000 | |
Class B Common Stock | ||||
Stockholders’ Equity | ||||
Common stock, value | $ 22 | $ 42 | ||
Total stockholders’ equity | $ 22 | $ 42 | $ 0 | |
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) | 22,106,961 | |||
Common stock, shares outstanding (in shares) | 19,184,009 | |||
Construction Partners Inc | ||||
ASSETS | ||||
Cash and cash equivalents | $ 31,610 | $ 53,352 | ||
Investment in subsidiaries | 313,277 | 247,944 | ||
Due from subsidiaries | 1,020 | 545 | ||
Other assets | 551 | 1,226 | ||
Total current assets | 346,458 | 303,067 | ||
Property, plant and equipment | 606 | 131 | ||
Total assets | 347,064 | 303,198 | ||
Current liabilities: | ||||
Treasury stock purchase obligation | 0 | 569 | ||
Due to subsidiaries | 400 | 800 | ||
Other current liabilities | 1,231 | 183 | ||
Total current liabilities | 1,631 | 1,552 | ||
Long-term liabilities: | ||||
Due to subsidiaries | 1,883 | 2,177 | ||
Total long-term liabilities | 1,883 | 2,177 | ||
Total liabilities | 3,514 | 3,729 | ||
Stockholders’ Equity | ||||
Preferred stock, par value $0.001; 10,000,000 shares authorized at September 30, 2019 and September 30, 2018 and no shares issued and outstanding | 0 | 0 | ||
Additional paid-in capital | 243,452 | 242,493 | ||
Treasury stock, at cost, 2,922,952 shares of Class B common stock, par value $0.001 | (15,603) | (15,603) | ||
Retained earnings | 115,646 | 72,525 | ||
Total stockholders’ equity | 343,550 | 299,469 | ||
Total liabilities and stockholders’ equity | $ 347,064 | $ 303,198 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Construction Partners Inc | Class A Common Stock | ||||
Stockholders’ Equity | ||||
Common stock, value | $ 33 | $ 12 | ||
Construction Partners Inc | Class B Common Stock | ||||
Stockholders’ Equity | ||||
Common stock, value | $ 22 | $ 42 |
Condensed Financial Statement_4
Condensed Financial Statements of Registrant - Income Statement (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Equity in net income of subsidiaries | $ 1,337 | $ 1,259 |
Equity-based compensation expense | (400) | |
General and administrative expenses | (62,724) | (55,303) |
Interest income, net | (1,861) | (1,270) |
Income before provision for income taxes and earnings from investment in joint venture | 55,693 | 60,057 |
Income tax benefit | (13,909) | (10,525) |
Net income | $ 43,121 | $ 50,791 |
Net income per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.84 | $ 1.11 |
Diluted (in dollars per share) | $ 0.84 | $ 1.11 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 51,421,159 | 45,605,845 |
Diluted (in shares) | 51,427,220 | 45,919,648 |
Construction Partners Inc | ||
Condensed Financial Statements, Captions [Line Items] | ||
Equity in net income of subsidiaries | $ 45,631 | $ 51,515 |
Equity-based compensation expense | (957) | (975) |
General and administrative expenses | (3,369) | (1,542) |
Interest income, net | 373 | 72 |
Income before provision for income taxes and earnings from investment in joint venture | 41,678 | 49,070 |
Income tax benefit | 1,443 | 1,721 |
Net income | $ 43,121 | $ 50,791 |
Net income per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.84 | $ 1,110 |
Diluted (in dollars per share) | $ 0.84 | $ 1,110 |
Weighted average number of common shares outstanding: | ||
Diluted (in shares) | 51,427,220 | 45,919,648 |
Condensed Financial Statement_5
Condensed Financial Statements of Registrant - Cash Flow Statement (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 43,121 | $ 50,791 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Amortization of deferred debt issuance costs | 109 | 94 |
Equity-based compensation expense | 957 | 975 |
Equity in net income of subsidiaries | (1,337) | (1,259) |
Changes in operating assets and liabilities: | ||
Other current assets | 993 | (8,886) |
Net cash provided by operating activities, net of acquisitions | 55,274 | 66,121 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (42,479) | (42,804) |
Net cash used in investing activities | (60,225) | (89,592) |
Cash flows from financing activities: | ||
Payment of treasury stock purchase obligation | (569) | (2,569) |
Proceeds from initial public offering of Class A common stock, net of offering costs | 0 | 98,009 |
Proceeds from sale of stock | 3 | 5 |
Net cash (used in) provided by financing activities | (13,567) | 95,061 |
Net change in cash and cash equivalents | (18,518) | 71,590 |
Cash and cash equivalents: | ||
Beginning of period | 99,137 | 27,547 |
End of period | 80,619 | 99,137 |
Construction Partners Inc | ||
Cash flows from operating activities: | ||
Net income | 43,121 | 50,791 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Amortization of deferred debt issuance costs | 6 | 6 |
Equity-based compensation expense | 957 | 975 |
Equity in net income of subsidiaries | (45,631) | (51,515) |
Changes in operating assets and liabilities: | ||
Other current assets | 675 | 969 |
Other liabilities | 1,049 | (3,369) |
Net cash provided by operating activities, net of acquisitions | 177 | (2,143) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (475) | (131) |
Investment in subsidiary | (19,703) | (34,155) |
Net cash used in investing activities | (20,178) | (34,286) |
Cash flows from financing activities: | ||
Change in amounts due to (from) subsidiaries, net | (1,175) | (6,994) |
Payment of treasury stock purchase obligation | (569) | (2,569) |
Proceeds from initial public offering of Class A common stock, net of offering costs | 0 | 98,009 |
Proceeds from sale of stock | 3 | 5 |
Net cash (used in) provided by financing activities | (1,741) | 88,451 |
Net change in cash and cash equivalents | (21,742) | 52,022 |
Cash and cash equivalents: | ||
Beginning of period | 53,352 | 1,330 |
End of period | $ 31,610 | $ 53,352 |
Subsequent Events (Detail)
Subsequent Events (Detail) - USD ($) | Oct. 21, 2019 | Oct. 18, 2019 | Oct. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | May 15, 2018 | Sep. 30, 2017 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||||||||
Long-term debt | $ 50,263,000 | $ 50,263,000 | $ 63,264,000 | ||||||
Goodwill | 38,546,000 | 38,546,000 | 32,919,000 | $ 30,600,000 | |||||
BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum borrowing capacity | 10,000,000 | 10,000,000 | |||||||
Subsequent Event | BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum borrowing capacity | $ 54,700,000 | ||||||||
Annual maintenance fee | $ 600 | ||||||||
Percentage of fee for issuing letter of credit | 0.20% | ||||||||
Interest Rate Swap | |||||||||
Subsequent Event [Line Items] | |||||||||
Notional amount | $ 11,000,000 | $ 25,000,000 | |||||||
Line of Credit | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum borrowing capacity | 30,000,000 | 30,000,000 | |||||||
Line of Credit | BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Long-term debt | 5,000,000 | 5,000,000 | 5,000,000 | ||||||
Line of Credit | Subsequent Event | BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Long-term debt | 10,000,000 | ||||||||
Senior Notes | BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Long-term debt | 44,700,000 | 44,700,000 | 57,300,000 | ||||||
Interest rate, percentage | 3.01% | ||||||||
Senior Notes | Interest Rate Swap | |||||||||
Subsequent Event [Line Items] | |||||||||
Notional amount | $ 21,500,000 | $ 21,500,000 | $ 28,700,000 | ||||||
Senior Notes | Interest Rate Swap | Subsequent Event | BBVA Credit Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Notional amount | $ 5,900,000 | ||||||||
Interest rate, percentage | 1.58% | ||||||||
Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Issuance of stock (in shares) | 292,534 | 9,350,000 | |||||||
Class A Common Stock | Over-Allotment Option | |||||||||
Subsequent Event [Line Items] | |||||||||
Issuance of stock (in shares) | 5,000,000 | ||||||||
Class A Common Stock | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Share price (in dollars per share) | $ 14.25 | ||||||||
Class A Common Stock | Subsequent Event | Over-Allotment Option | |||||||||
Subsequent Event [Line Items] | |||||||||
Issuance of stock (in shares) | 750,000 | ||||||||
HMA Manufacturing Plant And Paving Company | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Cash payment to acquire business | $ 17,300,000 | ||||||||
Goodwill | $ 6,900,000 |