struction Partners(ROAD) - 2019 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section details the company's unaudited financial statements and management's analysis of financial condition Item 1. Financial Statements This section presents the unaudited consolidated financial statements and detailed notes for the periods ended June 30, 2019 Consolidated Balance Sheets This section summarizes the company's financial position, detailing assets, liabilities, and equity Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Cash and cash equivalents | $59,648 | $99,137 | | Total current assets | $259,002 | $267,455 | | Property, plant and equipment, net | $201,712 | $178,692 | | Total assets | $509,024 | $496,310 | | Total current liabilities | $131,375 | $134,541 | | Total liabilities | $182,841 | $196,841 | | Total stockholders' equity | $326,183 | $299,469 | - Total assets increased by $12.7 million (2.6%) from September 30, 2018, to June 30, 2019, primarily driven by an increase in property, plant and equipment, net[10] - Cash and cash equivalents decreased by $39.5 million (39.8%) from September 30, 2018, to June 30, 2019[10] Consolidated Statements of Income This section presents the company's revenues, gross profit, operating income, and net income for specified periods Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $227,290 | $195,075 | $545,921 | $464,395 | | Gross profit | $38,092 | $29,469 | $79,021 | $66,016 | | Operating income | $22,182 | $14,767 | $34,936 | $41,364 | | Net income | $17,202 | $13,403 | $26,568 | $35,647 | | Basic EPS | $0.33 | $0.29 | $0.52 | $0.82 | | Diluted EPS | $0.33 | $0.29 | $0.52 | $0.81 | - Revenues increased by 16.5% for the three months ended June 30, 2019, and by 17.6% for the nine months ended June 30, 2019, compared to the respective prior year periods[13] - Net income increased by 28.3% for the three months ended June 30, 2019, but decreased by 25.5% for the nine months ended June 30, 2019, primarily due to a significant settlement income recognized in the prior nine-month period[13] Consolidated Statements of Stockholders' Equity This section details changes in stockholders' equity, including common stock, additional paid-in capital, and retained earnings Consolidated Stockholders' Equity Highlights (in thousands, except share data) | Metric | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Class A Common Stock (shares) | 32,442,545 | 11,950,000 | | Class B Common Stock (shares) | 22,162,369 | 42,387,571 | | Additional Paid-in Capital | $242,639 | $242,493 | | Retained Earnings | $99,093 | $72,525 | | Total Stockholders' Equity | $326,183 | $299,469 | - Total stockholders' equity increased by $26.7 million from September 30, 2018, to June 30, 2019, primarily due to net income and equity-based compensation expense[15] - Significant changes include the conversion of 20,225,202 Class B common stock shares to Class A common stock during the three months ended June 30, 2019[15] Consolidated Statements of Cash Flows This section outlines the company's cash flows from operating, investing, and financing activities for specified periods Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $17,963 | $23,660 | | Net cash used in investing activities | $(46,348) | $(82,290) | | Net cash (used in) provided by financing activities | $(11,104) | $106,266 | | Net change in cash and cash equivalents | $(39,489) | $47,636 | | Cash and cash equivalents, End of period | $59,648 | $75,183 | - Net cash provided by operating activities decreased by $5.7 million for the nine months ended June 30, 2019, compared to the prior year, primarily due to a decrease in net income and changes in operating assets and liabilities[17] - Net cash used in investing activities decreased by $35.9 million, mainly due to lower business acquisition costs in 2019 compared to 2018[17] - Net cash used in financing activities in 2019 contrasts sharply with cash provided in 2018, which included $98.0 million from the IPO and $22.0 million from term loan borrowings[17] Notes to Consolidated Financial Statements (unaudited) This section provides detailed explanations of significant accounting policies and financial disclosures Note 1 - General This note describes Construction Partners, Inc.'s business, operations, and the seasonal nature of its activities - Construction Partners, Inc. is a leading infrastructure and road construction company operating in Alabama, Florida, Georgia, North Carolina, and South Carolina, providing site development, paving, utility and drainage systems, and construction materials[19] - The company's business is seasonal, with warmer and drier weather in the third and fourth fiscal quarters typically leading to higher activity and revenues, while the first and second quarters have lower activity due to adverse weather[21] Note 2 - Significant Accounting Policies This note outlines the company's key accounting principles, including revenue recognition and financial statement preparation - The consolidated financial statements are prepared in conformity with GAAP, requiring management estimates for revenue recognition, goodwill, allowance for doubtful accounts, and other items[23] - The Company has elected to opt out of the extended transition period for complying with new or revised financial accounting standards as an 'emerging growth company,' meaning it adopts new standards at the effective date for non-emerging growth public companies[26] - Revenues from construction projects are recognized over time using the percentage-of-completion method (cost-to-cost), while revenues from material sales are recognized at a point in time when control transfers to the customer[36][40][44] Revenue Concentration by Customer Type | Customer Type | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Private | $66,207 | $56,293 | $166,193 | $148,525 | | Public | $161,083 | $138,782 | $379,728 | $315,870 | Revenue Concentration by Department of Transportation | Department | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Alabama Department of Transportation | 15.4% | 17.0% | 12.9% | 14.8% | | North Carolina Department of Transportation | 13.9% | 14.8% | 13.4% | 13.5% | Note 3 - Accounting Standards This note details the adoption and impact of new accounting standards, including ASC 606 and ASU No. 2017-01 - The Company adopted ASC 606 (Revenue from Contracts with Customers) on October 1, 2018, using the modified retrospective approach, which did not result in a material cumulative adjustment to retained earnings[50] - The adoption of ASC 606 had a minor impact on the Consolidated Balance Sheet and Statements of Income for the periods presented, with net income for the nine months ended June 30, 2019, decreasing by $87 thousand[51] - The Company adopted ASU No. 2017-01 (Business Combinations) for its fiscal year beginning October 1, 2018, refining the definition of a business for acquisitions[52] - ASU No. 2016-02 (Leases, Topic 842) becomes effective for the Company on October 1, 2019, requiring lessees to present right-of-use assets and lease liabilities on the balance sheet, with the impact currently being evaluated[53] Note 4 - Business Acquisitions This note provides details on recent business acquisitions, including the Florida HMA business and the Scruggs Company - On February 26, 2019, the Company acquired an HMA and ready-mix concrete business in Okeechobee, Florida, for $8.9 million in cash, expanding its geographic presence and recording $4.0 million in goodwill[54][56][57] - The Florida acquisition's results of operations were not material to the consolidated financial statements for the three or nine months ended June 30, 2019[58] - The Scruggs Company acquisition (May 15, 2018) contributed $18.5 million in revenue and $2.3 million in net income for the three months ended June 30, 2019, and $53.2 million in revenue and $5.2 million in net income for the nine months ended June 30, 2019[61] Note 5 - Contracts Receivable Including Retainage, net This note details the composition and changes in contracts receivable, including retainage and allowance for doubtful accounts Contracts Receivable Including Retainage, net (in thousands) | Metric | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Contracts receivable | $117,046 | $104,541 | | Retainage | $19,182 | $16,848 | | Allowance for doubtful accounts | $(1,519) | $(1,098) | | Contracts receivable including retainage, net | $134,709 | $120,291 | - Contracts receivable including retainage, net, increased by $14.4 million (12.0%) from September 30, 2018, to June 30, 2019[63] Note 6 - Costs and Estimated Earnings on Uncompleted Contracts This note presents costs, estimated earnings, and billings on uncompleted contracts, reflecting project progress Costs and Estimated Earnings on Uncompleted Contracts (in thousands) | Metric | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Costs on uncompleted contracts | $913,628 | $743,322 | | Estimated earnings to date | $123,914 | $95,155 | | Billings to date | $(1,055,843) | $(867,881) | | Net billings in excess of costs and estimated earnings | $(18,301) | $(29,404) | - The Company had approximately $522 million in aggregate transaction price for unsatisfied or partially unsatisfied performance obligations at June 30, 2019, with $201 million expected to be earned in the remainder of fiscal year 2019 and $321 million thereafter[64] Note 7 - Property, Plant and Equipment This note details the company's property, plant, and equipment, including additions, disposals, and depreciation expense Property, Plant and Equipment, net (in thousands) | Category | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Construction equipment | $217,662 | $190,420 | | Asphalt plants | $82,855 | $79,563 | | Land and improvements | $34,888 | $29,624 | | Total property, plant and equipment, net | $201,712 | $178,692 | - Property, plant and equipment, net, increased by $23.0 million (12.9%) from September 30, 2018, to June 30, 2019[65] - The Company acquired a liquid asphalt terminal in Panama City, Florida, for $10.8 million in cash on February 28, 2019, accounted for as an asset acquisition[65] - Depreciation, depletion, and amortization expense increased to $22.1 million for the nine months ended June 30, 2019, from $17.6 million in the prior year[66] Note 8 - Equity This note describes the company's equity structure, including common stock reclassification and restricted share awards - The Company completed an IPO and reclassification of common stock on April 23, 2018, establishing a dual-class common stock structure (Class A and Class B)[68] - During the three months ended June 30, 2019, 20,225,202 shares of Class B common stock were converted to Class A common stock[73] - The Company awarded 267,343 restricted shares of Class A common stock to non-employee directors during the three months ended June 30, 2019, under the Equity Incentive Plan[74] Note 9 - Debt This note details the company's long-term debt, including the Compass Term Loan and Revolving Credit Facility Long-term Debt (in thousands) | Metric | June 30, 2019 | September 30, 2018 | | :----------------------------------- | :------------ | :----------------- | | Compass Term Loan | $46,500 | $57,300 | | Compass Revolving Credit Facility | $5,000 | $5,000 | | Total long-term debt | $52,161 | $63,264 | | Long-term debt, net of current maturities | $37,096 | $48,115 | - Long-term debt, net of current maturities, decreased by $11.0 million (22.9%) from September 30, 2018, to June 30, 2019[76] Note 10 - Earnings Per Share This note presents the calculation of basic and diluted earnings per share, reflecting net income and share changes Basic and Diluted EPS (in thousands, except per share amounts) | Metric | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to common stockholders | $17,202 | $13,403 | $26,568 | $35,647 | | Basic EPS | $0.33 | $0.29 | $0.52 | $0.82 | | Diluted EPS | $0.33 | $0.29 | $0.52 | $0.81 | - Basic and diluted EPS increased for the three months ended June 30, 2019, but decreased for the nine months ended June 30, 2019, compared to the prior year, reflecting changes in net income and weighted average shares outstanding[79] Note 11 - Provision for Income Taxes This note explains the company's provision for income taxes and the factors influencing its effective tax rate Effective Tax Rates | Period | Effective Tax Rate | | :----------------------------------- | :----------------- | | 3 Months Ended June 30, 2019 | 22.3% | | 3 Months Ended June 30, 2018 | 9.5% | | 9 Months Ended June 30, 2019 | 23.3% | | 9 Months Ended June 30, 2018 | 13.1% | - The effective tax rate increased significantly for both the three and nine months ended June 30, 2019, compared to 2018, primarily because the prior year benefited from a tax credit related to the Tax Cuts and Jobs Act[83][84] Note 12 - Related Parties This note discloses transactions with related parties, including subcontracting services and management fees - The Company engages in various transactions with related parties, including subcontracting services, construction services, vehicle rentals/purchases, consulting, and management fees to SunTx[86] Related Party Transactions (in thousands) | Transaction Type | 3 Months Ended June 30, 2019 | 9 Months Ended June 30, 2019 | Accounts Receivable (Payable) June 30, 2019 | | :----------------------------------- | :--------------------------- | :--------------------------- | :------------------------------------------ | | Subcontracting Services (expense) | $(7,195) | $(13,561) | $(1,724) | | Construction Services (revenue) | $1,609 | $2,783 | $4,350 | | SunTx Management fees (expense) | $(316) | $(957) | $0 | Note 13 - Settlement Agreement This note details the pre-tax gain recognized from a settlement agreement and related payment installments - The Company recognized a pre-tax gain of $14.8 million during the nine months ended June 30, 2018, from a settlement agreement related to a business interruption event[89] - The first installment of $3.9 million was received in January 2019, with future payments of $7.9 million (current) and $3.7 million (non-current) reflected on the balance sheet at June 30, 2019[89] Note 14 - Equity-Based Compensation This note describes the company's equity-based compensation, including restricted share awards to non-employee directors - During the three and nine months ended June 30, 2019, the Company awarded 267,343 restricted shares of Class A common stock to non-employee directors, with an aggregate grant date fair value of $3.4 million[90] - Compensation expense of $0.1 million was recorded for these grants during both the three and nine months ended June 30, 2019[91] Note 15 - Subsequent Events This note reports significant events occurring after the balance sheet date, including acquisitions and stock conversions - On July 12, 2019, the Company acquired an HMA manufacturing plant and paving company near Gadsden, Alabama, for $5.0 million in cash, expecting geographic synergies[92][94] - The Alabama acquisition resulted in $2.4 million of goodwill, deductible for income tax purposes[95] - Subsequent to June 30, 2019, a stockholder converted 125,000 shares of Class B common stock to Class A common stock, bringing outstanding Class A shares to 32,567,545 and Class B to 19,114,417[96] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial performance, condition, liquidity, and market risks Overview This section introduces Construction Partners, Inc. as a civil infrastructure company specializing in transportation networks - Construction Partners, Inc. is a fast-growing civil infrastructure company specializing in transportation networks, providing construction products and services for public and private projects in the southeastern United States[98] - Public projects, funded by federal, state, and local governments, represent a significant and historically stable portion of the company's work, alongside services for private commercial and residential developments[99][100] How We Assess Performance of Our Business This section explains how the company evaluates its business performance, focusing on revenues, gross profit, and Adjusted EBITDA - Revenues are primarily derived from construction services (recognized over time using percentage-of-completion) and material sales (recognized at point of transfer)[101] - Gross profit is affected by commodity prices (liquid asphalt, diesel fuel), with public contracts often including price adjustment provisions to mitigate this risk[103] - Adjusted EBITDA is a key non-GAAP performance indicator, representing net income adjusted for interest, taxes, depreciation, amortization, equity-based compensation, and certain management fees, and excluding settlement income[108] Adjusted EBITDA Reconciliation (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 9 Months Ended June 30, 2019 | 9 Months Ended June 30, 2018 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $17,202 | $13,403 | $26,568 | $35,647 | | Adjusted EBITDA | $31,279 | $22,678 | $59,958 | $47,205 | | Adjusted EBITDA Margin | 13.8% | 11.6% | 11.0% | 10.2% | Results of Operations This section analyzes the company's financial results for the three and nine months ended June 30, 2019, compared to prior periods Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018 This section compares the company's financial performance for the three months ended June 30, 2019 and 2018 Financial Performance (3 Months Ended June 30, in thousands, except percentages) | Metric | 2019 (Dollars) | 2019 (% of Revenues) | 2018 (Dollars) | 2018 (% of Revenues) | Change ($) | Change (%) | | :----------------------------------- | :------------- | :------------------- | :------------- | :------------------- | :--------- | :--------- | | Revenues | $227,290 | 100.0% | $195,075 | 100.0% | $32,215 | 16.5% | | Gross profit | $38,092 | 16.8% | $29,469 | 15.1% | $8,623 | 29.3% | | Operating income | $22,182 | 9.8% | $14,767 | 7.6% | $7,415 | 50.2% | | Net income | $17,202 | 7.6% | $13,403 | 6.9% | $3,799 | 28.3% | | Adjusted EBITDA | $31,279 | 13.8% | $22,678 | 11.6% | $8,601 | 37.9% | - Revenue growth of 16.5% was driven by increased demand in existing markets ($21.3 million) and contributions from recent acquisitions ($10.9 million)[113] - Gross profit margin improved to 16.8% from 15.1% due to increased HMA production and equipment utilization, leading to better fixed cost absorption[114] - Net income increased by 28.3%, primarily due to higher gross profit, despite increased general and administrative expenses and a higher effective tax rate[119] Nine Months Ended June 30, 2019 Compared to Nine Months Ended June 30, 2018 This section compares the company's financial performance for the nine months ended June 30, 2019 and 2018 Financial Performance (9 Months Ended June 30, in thousands, except percentages) | Metric | 2019 (Dollars) | 2019 (% of Revenues) | 2018 (Dollars) | 2018 (% of Revenues) | Change ($) | Change (%) | | :----------------------------------- | :------------- | :------------------- | :------------- | :------------------- | :--------- | :--------- | | Revenues | $545,921 | 100.0% | $464,395 | 100.0% | $81,526 | 17.6% | | Gross profit | $79,021 | 14.5% | $66,016 | 14.2% | $13,005 | 19.7% | | Operating income | $34,936 | 6.3% | $41,364 | 8.9% | $(6,428) | (15.5)% | | Net income | $26,568 | 4.9% | $35,647 | 7.7% | $(9,079) | (25.5)% | | Adjusted EBITDA | $59,958 | 11.0% | $47,205 | 10.2% | $12,753 | 27.0% | - Revenue increased by 17.6%, with $34.9 million from existing markets and $46.6 million from acquisitions[122] - Net income decreased by 25.5% primarily due to the $10.6 million settlement income (net of tax) recognized in the prior year, higher G&A expenses, and an increased effective tax rate[128] - Adjusted EBITDA increased by 27.0% to $60.0 million, driven by higher gross profit and depreciation, depletion, and amortization, partially offset by increased G&A expenses[129] Inflation and Price Changes This section discusses the impact of inflation and the company's strategies for managing commodity price changes - Inflation had an immaterial impact on results for the nine months ended June 30, 2019 and 2018, due to low inflation and the Company's ability to recover increasing costs through higher prices and escalator clauses in public contracts[130] Liquidity and Capital Resources This section examines the company's cash flows, debt, capital requirements, and sources of liquidity Cash Flows Analysis This section provides a summary analysis of the company's cash flows from operating, investing, and financing activities Cash Flow Summary (9 Months Ended June 30, in thousands) | Cash Flow Type | 2019 | 2018 | | :------------- | :---------- | :---------- | | Operating | $17,963 | $23,660 | | Investing | $(46,348) | $(82,290) | | Financing | $(11,104) | $106,266 | | Net Change | $(39,489) | $47,636 | Operating Activities This section details cash flows generated from or used in the company's primary business operations - Cash provided by operating activities decreased by $5.7 million to $18.0 million for the nine months ended June 30, 2019, primarily due to lower net income and a reduction in changes in operating assets and liabilities[132] - Changes in operating assets and liabilities included a $28.9 million increase in contracts receivable and an $11.0 million decrease in other assets due to settlement income recognition and payments[133] Investing Activities This section details cash flows related to the acquisition and disposal of long-term assets and business acquisitions - Cash used in investing activities decreased by $35.9 million to $46.3 million, mainly due to lower business acquisition costs in 2019 ($8.9 million) compared to 2018 ($51.3 million)[134] - The acquisition of liquid asphalt terminal assets for $10.9 million and a $2.2 million distribution from a joint venture also impacted investing cash flows[134] Financing Activities This section details cash flows related to debt, equity, and other financing transactions - Cash used in financing activities was $11.1 million for the nine months ended June 30, 2019, a significant change from $106.3 million provided in 2018, which included IPO proceeds and term loan borrowings[135] Compass Credit Agreement This section describes the company's credit agreement, including term loan, revolving facility, and debt covenants - The Company maintains a Compass Credit Agreement with a $72.0 million term loan and a $30.0 million revolving credit facility, maturing on July 1, 2022[136] - At June 30, 2019, the interest rate on outstanding borrowings was 4.402%, and the Company had $14.4 million available under the revolving credit facility[138] - The Company uses interest rate swap agreements to hedge against interest rate changes, with an aggregate notional value of $23.3 million at June 30, 2019[138] - The Company was in compliance with all debt covenants at June 30, 2019, with a fixed charge coverage ratio of 1.55 to 1.00 and a consolidated leverage ratio of 0.74 to 1.00[139] Capital Requirements and Sources of Liquidity This section outlines the company's capital expenditure plans and its funding sources for operations and growth - Capital expenditures were $31.7 million for the nine months ended June 30, 2019, with an expectation of $39.0 million to $42.0 million for the full fiscal year 2019[140] - The Company relies on cash on hand, operating cash flow, and available credit facilities to fund operations and growth, believing these sources will be sufficient for at least the next twelve months[143] Commodity Price Risk This section discusses the company's exposure to commodity price fluctuations and its mitigation strategies - The Company is exposed to commodity price risk for liquid asphalt and energy resources, which it manages by pricing costs into contracts and utilizing escalator provisions in most public contracts[144] Interest Rate Risk This section addresses the company's exposure to interest rate changes on variable-rate debt and hedging strategies - The Company is exposed to interest rate risk on LIBOR-based floating rate borrowings under the Compass Credit Agreement and uses interest rate swap agreements to hedge against these changes[145] - At June 30, 2019, $51.5 million of variable rate borrowings were outstanding; a hypothetical 1% change in borrowing rates would result in a $0.5 million change in annual interest expense, absent swap agreements[146] Off-Balance Sheet Arrangements This section confirms the absence of material off-balance sheet arrangements impacting financial condition - The Company enters into operating leases for property and equipment but currently has no other off-balance sheet arrangements with a material effect on its financial condition or results of operations[147] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item states that as a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Construction Partners, Inc. is not required to provide the information called for by this Item[148] Item 4. Controls and Procedures This item discusses the effectiveness of disclosure controls and procedures, noting material weaknesses in internal controls - Management concluded that disclosure controls and procedures were not effective at the reasonable assurance level as of June 30, 2019, due to material weaknesses in internal control over financial reporting[150] - Material weaknesses relate to the design and operation of information technology general controls and overall closing and financial reporting controls, stemming from historical operation as a private company with limited resources[151] - Remediation efforts include hiring additional accounting staff, engaging third-party assistance, improving financial period close processes, and formalizing business processes and internal control documentation[152] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal and risk factors Item 1. Legal Proceedings This item details routine litigation and government inquiries, assessing their potential impact on financial condition - The Company is subject to routine litigation and government inquiries, including workers' compensation, employment-related disputes, and liability issues[156] - In February 2019, the Company paid a $115,000 fine and submitted an engineering plan in response to an ADEM consent order regarding discharges into wetlands at its Lambert, Alabama mining site[157] Item 1A. Risk Factors This item refers to the comprehensive discussion of risk factors in the company's Annual Report on Form 10-K - Readers should refer to the 'Risk Factors' section in the Company's 2018 Form 10-K for a comprehensive discussion of factors that could materially affect the business, financial condition, or future operating results[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item confirms no unregistered equity sales and consistent use of IPO proceeds - The Company did not sell any unregistered equity securities during the reporting period[159] - There has been no material change in the Company's planned use of proceeds from the Initial Public Offering of Class A common stock, which occurred in May 2018[160] Item 3. Defaults Upon Senior Securities This item reports that the company had no defaults upon senior securities during the reporting period - The Company reported no defaults upon senior securities[162] Item 4. Mine Safety Disclosures This item indicates that mine safety disclosures are provided in Exhibit 95.1 of the Quarterly Report - Mine safety disclosures are included in Exhibit 95.1 of this Quarterly Report on Form 10-Q[163] Item 5. Other Information This item confirms that no other information is required or reported under this section - No other information is reported under this item[165] Item 6. Exhibits This item lists all exhibits filed as part of the Form 10-Q, including organizational documents and certifications - The exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, Form of Class A Common Stock Certificate, Registration Rights Agreement, First Amendment to the 2018 Equity Incentive Plan, various certifications, Mine Safety Disclosures, and XBRL documents[166] SIGNATURES This section confirms the official signing of the report by the company's President and CEO and Executive VP and CFO - The report was signed by Charles E. Owens, President and Chief Executive Officer, and R. Alan Palmer, Executive Vice President and Chief Financial Officer, on August 9, 2019[170][171]