Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that material information that we are required to disclose in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that information that we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d -15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Under guidelines established by the SEC, companies are allowed to exclude acquisitions from their first assessment of internal control over financial reporting following the date of the acquisition. Management excluded the fiscal year 2022 acquisitions of King Asphalt, Inc., which was completed on October 1, 2021, and Southern Asphalt, Inc., which was completed on August 1, 2022, from the assessment of the effectiveness of internal control over financial reporting. Total assets of 7% at September 30, 2022 (excluding goodwill which was included within the scope of our assessment) and revenue and net income of 6% and 3%, respectively, for the fiscal year ended September 30, 2022, were excluded from management's assessment at September 30, 2022. King Asphalt, Inc. and Southern Asphalt, Inc. will be included in management's assessment of the effectiveness of internal controls over financial reporting as of September 30, 2023.
Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of September 30, 2022.
Attestation Report of Registered Public Accounting Firm
The effectiveness of our internal control over financial reporting as of September 30, 2022 has been audited by RSM US LLP, our independent registered public accounting firm, who also audited our consolidated financial statements included in this report, as stated in their reports which appear with our accompanying consolidated financial statements.
Changes in Internal Control Over Financial Reporting
The Company is in the process of integrating King Asphalt, Inc. and Southern Asphalt, Inc. into its operations and internal control processes, and will include these acquisitions in its assessment of internal controls in fiscal year 2023. Other than related to the King Asphalt Inc. and Southern Asphalt, Inc. acquisitions, there were no changes in our internal control over financial reporting during the twelve months ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this Item is incorporated by reference to the proxy statement for the 2023 annual meeting of stockholders of the Company to be filed by the Company with the SEC under the Exchange Act (the “2023 Proxy Statement”). The Company intends to file the 2023 Proxy Statement in January 2023, and in any event within 120 days after September 30, 2022.
Item 11. Executive Compensation.
The information required by this Item is incorporated by reference to the 2023 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item is incorporated by reference to the 2023 Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item is incorporated by reference to the 2023 Proxy Statement.
Item 14. Principal Accountant Fees and Services.
The information required by this Item is incorporated by reference to the 2023 Proxy Statement.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) Documents Filed as Part of this Report.
(1) Financial Statements.
The consolidated financial statements of Construction Partners, Inc. and its subsidiaries and the parent-only financial statements of Construction Partners, Inc. included herein at Item 8 are as follows:
• Reports of Independent Registered Public Accounting Firm — RSM US LLP
• Consolidated Balance Sheets as of September 30, 2022 and 2021
• Consolidated Statements of Comprehensive Income for the fiscal years ended September 30, 2022, 2021, and 2020
• Consolidated Statements of Changes in Stockholders’ Equity for the fiscal years ended September 30, 2022, 2021, and 2020
• Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2022, 2021, and 2020
• Notes to Consolidated Financial Statements
• Parent Company Only Condensed Balance Sheets as of September 30, 2022 and 2021
• Parent Company Only Condensed Statements of Comprehensive Income for the fiscal years ended September 30, 2022, 2021, and 2020
• Parent Company Only Condensed Statements of Cash Flows for the fiscal years ended September 30, 2022, 2021, and 2020
• Note to Condensed Financial Statements of Parent Company
(2) Financial Statement Schedules .
The financial statement schedules required to be included pursuant to this Item are not included herein because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto, which are incorporated by reference at Item 15(a)(1) above.
(3) Exhibits .
The exhibits to this report are listed in the exhibit index below.
(b) Description of Exhibits.
The following exhibits are filed or furnished with this report, as applicable, or incorporated by reference:
Exhibit
Number Description
3.1
Amended and Restated Certificate of Incorporation of Construction Partners, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 27, 2018)
3.2
Amended and Restated By - L aws of Construction Partners, Inc. (incorporated by reference to Exhibit 3. 1 to the Current Report on Form 8-K (File No. 001-38479 ) filed on November 9, 2022 )
4.1
Form of Class A Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 23, 2018)
4.2
Registration Rights Agreement, dated June 8, 2007, by and among Construction Partners, Inc. (f/k/a SunTx CPI Growth Company, Inc.) and certain security holders party thereto (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 6, 2018)
4.3 *
Description of Construction Partners, Inc.’s Class A common stock
10.1†
Form of Indemnification Agreement, by and between Construction Partners, Inc. and each of its directors and executive officers (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 23, 2018)
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Exhibit
Number Description
10.2
Third Amended and Restated Credit Agreement, dated as of June 30, 2022, by and among Construction Partners, Inc. and each of its wholly owned subsidiaries, as borrowers, PNC Bank, National Association, as administrative agent and lender, PNC Capital Markets LLC, as joint lead arranger and sole bookrunner, Regions Bank and BofA Securities, Inc., each as a joint arranger, and certain other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on June 30 , 202 2 )
10.3†
Form of Employment Agreement, dated April 1, 2020, by and between Construction Partners, Inc. and certain executive officers (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on April 3, 2020)
10.3A†
Amendment to Employment Agreement, effective as of October 1, 2020, by and between Construction Partners, Inc. and Fred J. Smith, III (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on October 2, 2020)
10.3B†
Second Amendment to Employment Agreement, effective as of May 5, 2021, by and between Construction Partners, Inc. and Fred J. Smith, III (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on May 7, 2021)
10.4†
Construction Partners, Inc. 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 23, 2018)
10.4A†
First Amendment to the Construction Partners, Inc. 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-38479) filed on August 9, 2019)
10.4B†
Form of Restricted Stock Award under the Construction Partners, Inc. 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 6, 2018)
10.4C†
Form of Performance Stock Unit Award Agreement under the Construction Partners, Inc. 2018 Equity Incentive Plan ( Revenue Gro wth Rate and ROCE Vesting Criteria) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on January 5, 2022)
10.4D†
Form of Performance Stock Unit Award Agreement under the Construction Partners, Inc. 2018 Equity Incentive Plan (Revenue Growth Rate and Adjusted EBITD A Margin Vesting Criteria) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38479) filed on November 9 , 2022)
10.5
Management Services Agreement, dated October 1, 2006, by and between Construction Partners Holdings, Inc. (f/k/a Construction Partners, Inc.) and SunTx Capital Management Corp. (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 6, 2018)
10.5A
Amendment to Management Services Agreement, dated October 1, 2013, by and between Construction Partners Holdings, Inc. (f/k/a Construction Partners, Inc.) and SunTx Capital Management Corp. (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-1 (File No. 333-224174) filed on April 6, 2018)
14.1
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K (File No. 001-38479) filed on December 14, 2018)
21.1*
List of Significant Subsidiaries of Construction Partners, Inc.
23.1*
Consent of RSM US LLP
31.1*
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1**
Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
95.1*
Mine Safety Disclosures
101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
104* Cover Page Interactive Data File (embedded within the Inline XBRL document)
† Management contract, compensatory plan or arrangement.
* Filed herewith.
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Exhibit
Number Description
** Furnished herewith.
*** Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request. Certain confidential information has been excluded pursuant to Item 601 (b)(10)(iv) of Regulation S-K. Such excluded information is not material and is the type that the registrant treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 22nd day of November, 2022.
CONSTRUCTION PARTNERS, INC.
By: /s/ Fred J. Smith, III
Fred J. Smith, III
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name and Signature Title Date
/s/ Fred J. Smith, III President, Chief Executive Officer and Director November 22, 2022
Fred J. Smith, III (Principal Executive Officer)
/s/ R. Alan Palmer Executive Vice President and Chief Financial Officer November 22, 2022
R. Alan Palmer (Principal Financial Officer)
/s/ Todd K. Andrews Chief Accounting Officer November 22, 2022
Todd K. Andrews (Principal Accounting Officer)
/s/ Ned N. Fleming, III Executive Chairman of the Board November 22, 2022
Ned N. Fleming, III
/s/ Charles E. Owens Vice Chairman of the Board November 22, 2022
Charles E. Owens
/s/ Craig Jennings Director November 22, 2022
Craig Jennings
/s/ Mark R. Matteson Director November 22, 2022
Mark R. Matteson
/s/ Michael H. McKay Director November 22, 2022
Michael H. McKay
/s/ Stefan L. Shaffer Director November 22, 2022
Stefan L. Shaffer
/s/ Noreen E. Skelly Director November 22, 2022
Noreen E. Skelly
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