What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-04-30 compared with 2020-10-30 · 76 added, 142 removed, 177 unchanged (55% of the section changed)

33 unchanged sentences

We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past.

Third quarter 2020 Recap and 2020 Outlook

In the quarter ended September 30, 2020, we recorded revenues of $189.4 million, of which $112.9 million was attributable to our marine segment and the remaining $76.5 million to our concrete segment.

First Quarter 2021 Recap and 2021 Outlook

In the quarter ended March 31, 2021, we recorded revenues of $153.3 million, of which $72.1 million was attributable to our marine segment and the remaining $81.2 million to our concrete segment.

In addition, we ended the quarter with a consolidated backlog of $364.8 million.

Our revenues in the quarter decreased by 8.0% as compared with the comparable prior year period and we recorded net income of $0.9 million, as compared with net income of $2.7 million in the comparable prior year period.

Looking toward the balance of 2020, the Company continues to focus on developing opportunities across the infrastructure, industrial, and building sectors through organic growth and greenfield expansion.

Looking toward the balance of 2021, the Company continues to focus on developing opportunities across the infrastructure, industrial, and building sectors through organic growth, greenfield expansion, and strategic acquisition opportunities.

The spread of COVID-19 has impacted the global economy, leaving supply chains disrupted.

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The amount and timing of such spending will be directly impacted by the duration of required efforts to contain COVID-19 and the severity of the negative impacts created by the virus and its effect on the economy.

Although little progress has been made to date and on a federal infrastructure bill concerns have recently arisen that the impact of the COVID-19 pandemic may further delay or reduce its scope, the Company will continue to track and monitor any developments on a federal infrastructure bill which could potentially create bid opportunities for the Company.

Although little progress has been made to date and on a federal infrastructure bill, the Company will continue to track and monitor any developments on a federal infrastructure bill which could potentially create bid opportunities for the Company.

Marine Segment

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We continue to see bid opportunities to help maintain and expand the infrastructure that facilitates the movement of goods and people on or over waterways.

However, we are closely monitoring the short and long-term cruise line capital expenditures as their current demand has been negatively impacted by COVID-19.

However, we have some concerns about the short-term outlook for and are closely monitoring the short and long-term cruise line capital expenditures as their current demand has been severely impacted by COVID-19.

Further, while we currently see bid opportunities from our private sector energy-related customers as they expand their marine facilities related to the storage, transportation and refining of domestically produced energy, we recognize that the timing of project awards may be impacted as a result of volatility of oil prices due to COIVD-19 related uncertainties.

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Opportunities from local port authorities will also remain over the long-term, many of which are related to the widened Panama Canal.

Additionally, bid opportunities related to coastal restoration funded through the Resource and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act (the “RESTORE Act”) may arise throughout 2020 and into 2021.

We believe our current equipment fleet will allow us to better meet market demand for projects from both our public and private customers.

In the long-term, we see positive trends in demands for our services in our end markets, including:

In the long-term, we see positive trends in demand for our services in our end markets, including:

● Continuing need to repair and improve degrading U.

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Additional demand for concrete services in our markets could be provided by work as part of a federal infrastructure bill.

In the long-term, we see positive trends in demands for our services in our end markets, including:

● Population growth in the state of Texas driven by corporate relocations;

● Continued investment in warehouse/distribution space in the Dallas-Fort Worth region;

● COVID-19 driven shift of populous moving from the inner cities to suburban areas;

● Nearly $7 billion of federal funding provided by the USACE in connection with disaster recovery in Texas;

● Potential opportunities related to the impending federal infrastructure bill.

Consolidated Results of Operations

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Given the typical duration of our contracts, which is generally less than a year, our backlog at any point in time usually represents only a portion of the revenue that we expect to realize during a twelve-month period.

We have not been adversely affected by contract cancellations or modifications in the past, although we may be in the future, especially in economically uncertain periods.

Consequently, backlog is not necessarily indicative of future results.

In addition to our backlog under contract, we also have a substantial number of projects in negotiation or pending award at any time.

We have not been adversely affected by contract cancellations or modifications in the past, we may be in the future, especially in economically uncertain periods.

Backlog as of the periods ended below are as follows (in millions):

September 30, 2020

June 30, 2020

March 31, 2021

1 unchanged sentence

September 30, 2020

June 30, 2020

March 31, 2020

Marine segment

Concrete segment

Previously reported backlog amounts have been adjusted in the accompanying table to correct for a clerical error in the underlying calculation file, as to which steps have been taken to prevent a recurrence.

Accordingly, reported backlog has been reduced by $17.6 million, $13.8 million and $10.0 million for the periods ended March 31, 2020, December 31, 2019 and September 30, 2019, respectively.

The recent trends of declining backlog, reflect headwinds created by the COVID-19 pandemic in certain end market sectors and uncertainty around the US elections.

We, however, remain optimistic in our end-markets and in the opportunities that are emerging across our various market places as evidenced by the $1.1 billion of quoted bids outstanding, of which $108 million we are the apparent low bidder on or have been awarded contracts subsequent to the end of the third quarter of 2020.

Three months ended September 30, 2020, compared with three months ended September 30, 2019

Three months ended September 30,

A previously reported backlog amount has been adjusted in the accompanying table to correct for a clerical error in the underlying calculation file, as to which steps have been taken to prevent a recurrence.

Accordingly, reported backlog has been reduced by $17.6 million for the period ended March 31, 2020.

The recent trend of declining backlog is due in significant part to headwinds created by the COVID-19 pandemic in certain end market sectors.

We, however, remain optimistic in our end-markets and in the opportunities that are emerging

across our various market places as evidenced by the $1.9 billion of quoted bids outstanding at quarter end, of which $134 million we are the apparent low bidder on or have been awarded contracts subsequent to the end of the quarter ended March 31, 2021.

These estimates are subject to fluctuations based upon the scope of services to be provided, as well as factors affecting the time required to complete the project.

Backlog is not necessarily indicative of future results.

In addition to our backlog under contract, we also have a substantial number of projects in negotiation or pending award at any given time.

Three months ended March 31, 2021, compared with three months ended March 31, 2020

Three months ended March 31,

(dollar amounts in thousands)

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Contract Revenues.

Contract revenues for the three months ended September 30, 2020 of $189.4 million decreased 5.0% as compared to $199.5 million in the prior year period.

The decrease was primarily driven by a decrease in production volume in the concrete segment due to tropical weather in Texas in the last few weeks of the current year quarter.

Gross Profit.

Gross profit was $22.5 million for the three months ended September 30, 2020, compared to $20.9 million in the prior year period, an increase of $1.6 million or 7.7%.

Gross profit in the third quarter was 11.9% of total contract revenues as compared to 10.5% in the prior year period.

The increase in gross profit dollars and percentage was primarily driven by project execution related margin expansion in both segments and better labor utilization in the marine segment.

Selling, General and Administrative Expense.

Selling, general and administrative ("SG&A") expenses were $15.3 million for the three months ended September 30, 2020 compared to $14.6 million in the prior year period, an increase of $0.7 million, or 4.7%.

As a percentage of total contract revenues, SG&A expenses increased from 7.3% to 8.1%.

The increase in SG&A dollars and percentage were primarily attributable to the full ratable accrual of the annual incentive compensation plan during the current year period compared to zero accrual during the comparable 2019 period.

Gain on Disposal of Assets, net.

During the three months ended September 30, 2020, we realized $3.5 million of net gains on sales of assets and $2.9 million of net gains on insurance recoveries.

There were no such material net gains realized during the prior year comparative period.

Other Income, net of Expense.

Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.

See Note 11 for additional discussion of the amended syndicated credit agreement, also known as the Seventh Amendment, executed in June 2020.

Income Tax Expense.

We recorded tax expense of $0.3 million in the three months ended September 30, 2020, compared to tax expense of $0.5 million in the prior year period.

Our effective tax rate for the three months ended September 30, 2020 was 2.5%, which differs from the federal statutory rate of 21% primarily due to movement in the valuation allowance to offset foreign tax credits and net operating loss carryforwards, foreign taxes, state income taxes and the non-deductibility of certain permanent items.

Nine months ended September 30, 2020, compared with nine months ended September 30, 2019

Nine months ended September 30,

(dollar amounts in thousands)

Contract revenues

Cost of contract revenues

Selling, general and administrative expenses

Amortization of intangible assets

Gain on disposal of assets, net

Operating income (loss) from operations

Other (expense) income:

Interest income

Interest expense

Other expense, net

Income (loss) before income taxes

Income tax expense

Net income (loss)

Contract Revenues.

Contract revenues for the nine months ended September 30, 2020 of $539.8 million increased approximately 6.1% as compared to $508.6 million in the prior year period.

The increase was primarily attributable to the higher volume of work in both the marine and concrete segments.

Additionally, the execution on a few large projects in both segments increased year over year results.

Contract revenues for the three months ended March 31, 2021 of $153.3 million decreased $13.3 million or 8.0% as compared to $166.6 million in the prior year period.

The decrease was primarily driven by severe winter weather that shut down most of Texas for seven to ten days in the 2021 period and the timing and mix of projects in the marine segment in the prior period.

Gross Profit.

Gross profit was $63.0 million for the nine months ended September 30, 2020, compared to $45.0 million in the prior year period, an increase of $18.0 million or 40.2%.

Gross profit in the nine months ended September 30, 2020 was 11.7% of total contract revenues as compared to 8.8% in the prior year period.

The increase in gross profit dollars and percentage were primarily driven by revenue and margin expansion as the result of improved fixed and labor related cost recovery.

Gross profit was $15.5 million for the three months ended March 31, 2021, compared to $19.8 million in the prior year period, a decrease of $4.3 million or 21.8%.

Gross profit in the first quarter was 10.1% of total contract revenues as compared to 11.9% in the prior year period.

The decrease in gross profit dollars and percentage was primarily driven by decreased equipment and labor utilization as the result of the aforementioned winter weather delays.

Selling, General and Administrative Expense.

Selling, general and administrative ("SG&A") expenses were $47.7 million for the nine months ended September 30, 2020 compared to $44.7 million in the prior year period, an increase of $3.0 million, or 6.7%.

As a percentage of total contract revenues, SG&A expenses increased from 8.7% to 8.8%.

The increase in SG&A dollars and percentage were primarily attributable to the full ratable

accrual of the incentive compensation plan in the 2020 period compared to zero accrual during the comparable 2019 period.

Selling, general and administrative ("SG&A") expenses were $14.6 million for the three months ended March 31, 2021 compared to $15.9 million in the prior year period.

As a percentage of total contract revenues, SG&A expenses remained flat.

The decrease in SG&A dollars was driven in part by reduced business development, based on timing of project pursuits, and travel related costs in the current year period.

Gain on Disposal of Assets, net.

During the nine months ended September 30, 2020, we realized $4.8 million of net gains on sales of assets and $2.9 million of net gains on insurance recoveries.

This compared to realizing $1.2 million of net gains on the assets we sold during the 2019 comparative period.

During the three months ended March 31, 2021 and 2020, we realized $1.6 million and $1.0 million, respectively, of net gains on disposal of assets.

Other Income, net of Expense.

Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.

See Note 11 for additional discussion of the amended syndicated credit agreement, also known as the Seventh Amendment, executed in June 2020.

Income Tax Expense.

We recorded tax expense of $1.7 million in the nine months ended September 30, 2020, compared to tax expense of $0.9 million in the prior year period.

Our effective tax rate for the nine months ended September 30, 2020 was 9.1%, which differs from the federal statutory rate of 21% primarily due to movement in the valuation allowance to offset foreign tax credits and net operating loss carryforwards, foreign taxes, state income taxes and the non-deductibility of certain permanent items.

We recorded tax expense of $0.2 million in the three months ended March 31, 2021, compared to tax expense of $0.4 million in the prior year period.

Our effective tax rate for the three months ended March 31, 2021 was 13.9%, which differs from the federal statutory rate of 21% primarily due to the movement in the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.

Segment Results

The following table sets forth, for the periods indicated, statements of operations data by segment, segment revenues as a percentage of consolidated revenues and segment operating (loss) income as a percentage of segment revenues:

Three months ended September 30, 2020 compared with three months ended September 30, 2019

Three months ended September 30,

(dollar amounts in thousands)

Contract revenues

Marine segment

Public sector

Private sector

Marine segment total

Concrete segment

Public sector

Private sector

Concrete segment total

Operating income

Marine segment

Concrete segment

Marine Segment

Revenues for our marine segment for the three months ended September 30, 2020 were $112.9 million compared to $107.4 million for the three months ended September 30, 2019, an increase of $5.5 million, or 5.1%.

The increase was primarily attributable to the higher volume of work in the marine segment.

Additionally, the execution on a few large projects boosted year over year results.

Operating income for our marine segment for the three months ended September 30, 2020 was $9.0 million, compared to $4.9 million for the three months ended September 30, 2019, an increase of $4.1 million.

This increase in operating income was primarily due to an increase in net gains on disposal of assets of $6.1 million.

Such gains were derived from a combination of asset sales and insurance recovery proceeds.

Excluding the increase related to the net gain on disposal of assets, net operating income for our marine segment for the three months ended September 30, 2020 was $2.7 million compared to $4.7 million for the comparative prior year quarter, a decrease of $2.0 million.

Concrete Segment

Revenues for our concrete segment for the three months ended September 30, 2020 were $76.6 million compared to $92.1 million for the three months ended September 30, 2019, a decrease of $15.5 million, or 16.9%.

This decrease in revenue was primarily driven by a decrease in production volume due to tropical weather in Texas in the last few weeks of the current year quarter.

Operating income for our concrete segment for the three months ended September 30, 2020 was $4.1 million, compared to $1.2 million for the three months ended September 30, 2019, an increase of $2.9 million.

This increase in operating income was primarily due to improved recovery of equipment and labor related project costs.

Nine months ended September 30, 2020 compared with nine months ended September 30, 2019

Nine months ended September 30,

Three months ended March 31, 2021 compared with three months ended March 31, 2020.

Three months ended March 31,

(dollar amounts in thousands)

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Marine Segment

Revenues for our marine segment for the nine months ended September 30, 2020 were $290.5 million compared to $257.9 million for the nine months ended September 30, 2019, an increase of $32.6 million, or 12.7%.

This increase is primarily attributable to execution on the larger volume of work in our backlog and significant uninstalled material purchases in the current year period which gross up revenue and costs when purchased but only contribute to gross margin as they are installed.

Operating income for our marine segment for the nine months ended September 30, 2020 was $12.4 million, compared to an operating loss of $1.6 million for the nine months ended September 30, 2019, an increase of $14.0 million.

This increase in operating income included $6.5M of net gains on disposal of assets.

Excluding the increase in net gains on disposal of assets, net operating income for our marine segment for the nine months ended September 30, 2020 was $5.2 million compared to an operating loss of $2.3 million for the nine months ended September 30, 2019, an increase of $7.5 million.

This increase in operating income was primarily due to

improved project execution and cost recovery as well as the completion of several projects with lower margin in the prior year period.

Revenues for our marine segment for the three months ended March 31, 2021 were $72.1 million compared to $85.9 million for the three months ended March 31, 2020, a decrease of $13.8 million, or 16.1%.

The decrease was primarily attributable to the Texas winter storm and the timing and mix of projects.

Operating loss for our marine segment for the three months ended March 31, 2021 was less than $0.1 million, compared to operating income of $2.9 million for the three months ended March 31, 2020, a decrease of $2.9

This decrease in operating income was primarily due to the decrease in revenue, decreased equipment utilization and an increase in insurance premiums.

Concrete Segment

Revenues for our concrete segment for the nine months ended September 30, 2020 were $249.2 million compared to $250.7 million for the nine months ended September 30, 2019, a decrease of $1.5 million, or 0.6%.

Operating income for our concrete segment for the nine months ended September 30, 2020 was $9.1 million, compared to operating income of $1.1 million for the nine months ended September 30, 2019, an increase of $8.0 million.

This increase in operating income was primarily due to the improvement in man-hours per cubic yard production, and increased recovery of project related costs such as labor and equipment.

Revenues for our concrete segment for the three months ended March 31, 2021 were $81.2 million compared to $80.7 million for the three months ended March 31, 2021, an increase of $0.5 million, or 0.6%.

This increase in revenue was primarily driven by an increase in production volume.

Operating income for our concrete segment for the three months ended March 31, 2021 was $2.1 million, compared to $1.5 million for the three months ended March 31, 2020, an increase of $0.6 million, or 36.7%.

This increase in operating income was primarily due to an increase in effective project labor management.

Liquidity and Capital Resources

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Changes in working capital are normal within our business given the varying mix in size, scope and timing of delivery of our projects.

At September 30, 2020, our working capital was $56.8 million, as compared with $62.2 million at December 31, 2019.

As of September 30, 2020, we had unrestricted cash on hand of $2.7 million.

Our borrowing capacity at September 30, 2020 was approximately $57.9 million.

At March 31, 2021, our working capital was $60.7 million, as compared with $54.8 million at December 31, 2020.

As of March 31, 2021, we had unrestricted cash on hand of $4.6 million.

Our borrowing capacity at March 31, 2021 was approximately $68.3 million.

We expect to meet our future internal liquidity and working capital needs and maintain or replace our equipment fleet through capital expenditure purchases, leases and major repairs, from funds generated by our operating activities for at least the next 12 months.

We believe our cash position is adequate for our general business requirements discussed above and to service our debt.

The following table provides information regarding our cash flows and our capital expenditures for the three and nine months ended September 30, 2020 and 2019:

The following table provides information regarding our cash flows and our capital expenditures for the three months ended March 31, 2021 and 2020:

Three months ended

Nine months ended

September 30,

Net income (loss)

Adjustments to remove non-cash and non-operating items

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Change in operating assets and liabilities (working capital)

Cash flows provided by (used in) operating activities

Cash flows used in investing activities

Cash flows (used in) provided by financing activities

Cash flows provided by operating activities

Cash flows provided by (used in) investing activities

Cash flows used in financing activities

Capital expenditures (included in investing activities above)

Operating Activities.

During the three months ended September 30, 2020, we generated approximately $5.3 million in cash from our operating activities.

The net cash inflow is comprised of $13.3 million of cash inflows

from net income, after adjusting for non-cash items, partially offset by $8.0 million of cash outflows related to changes in net working capital.

The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $19.7 million outflow pursuant to the relative timing and significance of project progression and billings during the period and a $1.4 million decrease in operating lease liabilities during the period, partially offset by a $13.1 million inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities during the period.

During the nine months ended September 30, 2020, we generated approximately $38.4 million in cash from our operating activities.

The net cash inflow is comprised of $35.9 million of cash inflows from net income, after adjusting for non-cash items and $2.5 million of cash inflows related to changes in net working capital.

The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $15.9 million inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities and $0.3 million of inflows related to other working capital changes, partially offset by a $9.6 million outflow pursuant to the relative timing and significance of project progression and billings during the period and a $4.1 million decrease in operating lease liabilities during the period.

During the three months ended March 31, 2021, we generated approximately $9.1 million in cash from our operating activities.

The net cash inflow is comprised of $7.8 million of cash inflows from net income, after adjusting for non-cash items and $1.3 million of cash inflows related to changes in net working

The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $10.5 million inflow pursuant to the relative timing and significance of project progression and billings during the period and a $0.3 million inflow from other working capital items, partially offset by a $8.3 million outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period and a $1.2 million decrease in operating lease liabilities during the period.

Investing Activities.

Capital asset additions and betterments to our fleet were $4.4 million in the three months ended September 30, 2020, as compared with $4.9 million in the three months ended September 30, 2019.

Capital asset additions and betterments to our fleet were $9.4 million in the nine months ended September 30, 2020, as compared with $13.0 million in the nine months ended September 30, 2019.

Capital asset additions and betterments to our fleet were $1.6 million in the three months ended March 31, 2021, as compared with $2.8 million in the three months ended March 31, 2020.

The changes are primarily a result of the timing of purchase of capital assets.

Financing Activities.

During the three months ended September 30, 2020, we drew down $5.0 million from our revolving line of credit and repaid $13.0 million on our revolving line of credit, as well as made the regularly scheduled debt payments on the term loan of $1.1 million and an additional principal paydown of $2.6 million with proceeds from the sale of equipment.

During the nine months ended September 30, 2020, we drew down $10.0 million from our revolving line of credit.

Additionally, we repaid $36.0 million on our revolving line of credit, as well as made the regularly scheduled debt payment on the term loan of $2.6 million and an additional principal paydown of $2.6 million with proceeds from the sale of equipment.

During the three months ended March 31, 2021, we drew down $5.0 million from our revolving line of credit and repaid $10 million on our revolving line of credit, as well as made the regularly scheduled debt payments on the term loan of $1.2 million.

Sources of Capital

The Company entered into an amended syndicated credit agreement (the “Credit Agreement” also known as the “Fourth Amendment”) on July 31, 2018, with Regions Bank, as administrative agent and collateral agent, and the following co-syndication agents:

We entered into an amended syndicated credit agreement (the “Credit Agreement” also known as the “Fourth Amendment”) on July 31, 2018, with Regions Bank, as administrative agent and collateral agent, and the following co-syndication agents:

Bank of America, N.A., BOKF, NA dba Bank of Texas, KeyBank National Association, NBH Bank, IBERIABANK, Trustmark National Bank, First Tennessee Bank NA, and Branch Baking and Trust Company.

The primary purpose of the Credit Agreement was to provide the Company with greater flexibility as it provides for the calculation of Adjusted EBITDA that adds back various project specific costs.

Additionally, the Company executed the Fifth Amendment during March 2019, which was made

effective as of December 31, 2018, executed the Sixth Amendment during May 2019 and executed the Seventh Amendment during June 2020.

Additionally, we executed the Fifth Amendment during March 2019, which was made effective as of December 31, 2018, executed the Sixth Amendment during May 2019, executed the Seventh Amendment during June 2020 and executed the Eighth Amendment during October 2020.

The Credit Agreement, which may be amended from time to time, provides for borrowings under a revolving line of credit and a term loan (together, the “Credit Facility”).

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The Credit Facility matures on July 31, 2023.

We entered into a new syndicated credit agreement (the “364-Day Revolving Credit Facility”) on June 8, 2020 with Regions Bank, as administrative agent and collateral agent, and the following co-syndication agents:

Bank of America, N.A.

and BOKF, NA dba Bank of Texas.

Concurrent with this the Company executed an amendment to the Credit Agreement with its existing lenders (“also known as the “Seventh Amendment”) for the sole intent and outcome of executing the 364-Day Revolving Credit Facility.

The Company has a maximum borrowing availability under the 364-Day Revolving Credit Facility of $20.0 million.

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The commitment fee, which is due quarterly in arrears, is equal to the Applicable Margin of the actual daily amount by which the Aggregate Revolving Commitments exceeds the Total Revolving Outstanding.

We have not made any borrowings under 364-Day Revolving Credit Facility.

Effective, October 9, 2020, the Company entered into an amendment (the "Eighth Amendment") to its syndicated credit agreement (the "Credit Agreement"

, with Regions Bank, as Administrative Agent and Collateral Agent and Bank of America, N.A., BOKF, NA dba Bank of Texas, Iberiabank, NBH Bank, Truist Bank, and Trustmark National Bank, as Lenders.

The Eighth Amendment provides for administrative revisions to the Credit Agreement, including changes to repayment requirements for involuntary asset dispositions and changes to the timing of repayment for voluntary asset dispositions.

See Note 11 in the Notes to the Financial Statements (of this Form 10-Q) for further discussion on the Company’s Debt.

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The Company believes that its cash position and available borrowings together with cash flow from its operations is adequate for general business requirements and to service its debt.

The Company was in compliance with all financial covenants as of September 30, 2020.

The Company was in compliance with all financial covenants as of March 31, 2021.

Derivative Financial Instruments

2 unchanged sentences

On December 6, 2018, the Company entered into a sixth receive-variable, pay-fixed interest rate swap to hedge the variability of interest payments.

The sixth swap began with a notional amount of $27.0 million on July 31, 2020 and hedges the variability in the interest payments on the aggregate scheduled principal amount of the Regions Term Loan outstanding.

The sixth swap began with a notional amount of $27.0 million on July 31, 2020 and hedges the variability in the interest

payments on the aggregate scheduled principal amount of the Regions Term Loan outstanding.

The sixth swap is scheduled to expire on July 31, 2023.

1 unchanged sentence

Gains and losses from hedge ineffectiveness are recognized in current earnings.

The change in fair market value of the swaps for the comparative periods ended September 30, 2020 and September 30, 2019, as reflected in accumulated other comprehensive loss in the Condensed Consolidated Statements of Stockholders’ Equity, is approximately $0.8 million and $1.2 million.

The fair market value of the swaps as of September 30, 2020 is reflected as a liability of $1.8 million on the Condensed Consolidated Balance Sheets.

The change in fair market value of the swaps for the comparative periods ended March 31, 2021 and March 31, 2020, as reflected in accumulated other comprehensive loss in the Condensed Consolidated Statements of Stockholders’ Equity, is approximately $(0.2) million and $1.0 million.

The fair market value of the swaps as of March 31, 2021 is reflected as a liability of $1.4 million on the Condensed Consolidated Balance Sheets.

See Note 8 for more information regarding the fair value of the Company’s derivative instruments.

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The Company recorded a liability for the amounts received, will continue to depreciate the non-land portion of the asset, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease term.

Concurrently with the sale, the Company

paid $18.2 million as an additional principal payment towards the Term loan portion of the Company’s Credit Facility, consistent with terms of the Sixth Amendment.

Concurrently with the sale, the Company paid $18.2 million as an additional principal payment towards the Term loan portion of the Company’s Credit Facility, consistent with terms of the Sixth Amendment.

Bonding Capacity

1 unchanged sentence

Our ability to obtain surety bonds depends on our capitalization, working capital, past performance and external factors, including the capacity of the overall surety market.

At September 30, 2020, the capacity under our current bonding arrangement was at least $500 million, with approximately $230 million of projects being bonded.

At March 31, 2021, the capacity under our current bonding arrangement was at least $500 million, with approximately $170 million of projects being bonded.

We believe our strong balance sheet and working capital position will allow us to continue to access our bonding capacity.

3 unchanged sentences

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis