−Removed: Other than the additional risk factor below, there have not been any material changes from the risk factors previously disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
−Removed: In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, which could materially affect our business, financial condition or future results.
−Removed: Our Amended Credit Agreement imposes new restrictions on our liquidity, requires us to maintain significant levels of unrestricted cash and requires us to generate certain increasing levels of EBITDA over the next three quarters.
−Removed: During a “Covenant Relief Period” commencing May 4, 2021 and ending on the date on which the Company provides a compliance certificate for the quarter ending March 31, 2022:
−Removed: • No revolving loans will be made under the credit facility.
−Removed: • If any new letters of credit are issued during the Covenant Relief Period, the Company will be required to provide cash collateral equal to 50% of the face value of the letter of credit (or 105% of the face value of the letter of credit if the aggregate amount of letters of credit outstanding exceed $100 million).
−Removed: • At all times prior to July 1, 2021, the Company will be required to maintain at least $50.0 million of unrestricted cash.
−Removed: Beginning July 1, 2021, and during the remainder of the Covenant Relief Period, the Company will be required to maintain at least $60.0 million of unrestricted cash at all times.
−Removed: The requirement to maintain unrestricted cash is in addition to any cash collateral which would be required for any new letters of credit.
−Removed: In addition to these provisions, the Amended Credit Agreement requires the Company to generate Covenant EBITDA of at least:
−Removed: • $2.5 million for the fiscal quarter ending June 30, 2021;
−Removed: • $8.0 million for the six months ending September 30, 2021;
−Removed: • $16.5 million for the nine months ending December 31, 2021.
−Removed: Cash and cash equivalents on hand at March 31, 2021 totaled $73.8 million.
−Removed: Management believes it has sufficient cash on hand and will generate sufficient cash from operations to fund the business.
−Removed: However, there is risk that it will be unable to maintain the required levels of unrestricted cash and generate the required levels of Covenant EBITDA under the Amended Credit Agreement or obtain additional covenant relief under the Amended Credit Agreement.
−Removed: In addition, there is risk that the Company will be unable to comply with the Leverage Ratio and FCCR financial covenants in the Credit Agreement upon expiration of the Covenant Relief Period.
+Added: We have amended the following Risk Factor that appeared in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
+Added: This amended Risk Factor should be considered along with the other Risk Factors that appeared in our Annual Report for the fiscal year ended June 30, 2021.
+Added: Except as set forth below, there have been no material changes to the risk factors involving us from those previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
+Added: The COVID-19 pandemic has adversely affected our business and operations.
+Added: The COVID-19 pandemic has adversely affected our business and operations and the business and operations of our customers.
+Added: We have experienced unpredictable reductions in demand for our services.
+Added: In response to the COVID-19 pandemic, companies within the oil and natural gas and other industries (including our customers) have announced spending cuts and/or project delays which, in turn, have resulted in decreased awards of new contracts or adjustments, reductions, suspensions or cancellations of existing contracts.
+Added: Such continued delays have impacted our business, results of operations and financial condition.
+Added: The ongoing pandemic has also resulted in disruptions to labor and global supply chains, which have led to labor shortages and higher prices for some of the materials we need to run our business, including, but not limited to, structural steel, steel piping, rebar, valves, copper, and delivery freight.
+Added: We have been proactive with managing our workforce and procurement processes to help reduce the impacts of labor shortages and rising materials prices on our business and to help ensure we continue to have the labor and materials we need available.
+Added: However, rising prices and the potential for labor and materials shortages have created additional risk into bidding and executing work profitably.
+Added: On September 9, 2021, President Biden announced a proposed new rule requiring all employers with at least 100 employees to require that their employees be fully vaccinated or tested weekly.
+Added: On November 4, 2021, the U.S.
+Added: Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an emergency regulation to carry out this mandate, which is expected to take effect on January 4, 2022.
+Added: As a company with more than 100 employees, we are subject to the OSHA regulation concerning COVID-19 vaccination.
+Added: At this time, it is not possible to predict with certainty the exact impact that the new regulation will have on us or on our workforce.
+Added: The proposed new regulation may result in employee attrition and difficulty securing future labor needs which could have an adverse effect on our business, results of operations and/or cash flows.
+Added: Because the duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing and difficult to predict, the impact on our business, financial condition and results of operations remains uncertain.
+Added: While we expect the COVID-19 pandemic to have an adverse effect on our business, financial condition, liquidity, cash flow and results of operations, we are unable to predict the extent, nature or duration of these impacts at this time.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.