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Note 13 - Subsequent Events

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

13.

Subsequent Events

Business Combination

On October 5, 2021, the Company completed the acquisition of 100% of Park Environmental Equipment, LLC (“ParkUSA”) for a purchase price of approximately $87.4 million, net of cash acquired, and subject to a post-closing adjustment based on changes in net working capital. ParkUSA is a precast concrete and steel fabrication-based company that develops and manufactures water, wastewater, and environmental solutions. Operations have continued at ParkUSA’s three Texas manufacturing facilities located in San Antonio, Houston, and Ferris. The Company incurred transaction costs associated with this acquisition of $0.6 million and $0.8 million during the three and nine months ended September 30, 2021. These costs are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations. The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time since the acquisition date and the ongoing status of the valuation. Therefore, it is impracticable for the Company to provide the major classes of assets acquired and liabilities assumed and the pro forma results of operations related to this acquisition.

Credit Agreement

On October 22, 2021, the Company and its wholly-owned subsidiaries NWPC, LLC, Geneva Pipe and Precast Company, and ParkUSA, along with certain of the Company’s other wholly-owned subsidiaries, entered into an Incremental Amendment (“Incremental Amendment”) with Wells Fargo, as administrative agent and the lenders from time to time party thereto, including the initial sole lender, Wells Fargo, to exercise the option to increase the aggregate amount available under the Credit Agreement by $25 million. The Credit Agreement, as amended by the Incremental Amendment (together, the “Amended Credit Agreement”), provides for a revolving loan, swingline loan, and letters of credit in the aggregate amount of up to $125 million. As of October 22, 2021, the Company had $87.2 million in outstanding revolving loan borrowings under the Amended Credit Agreement, and additional borrowing capacity of approximately $36 million. The Amended Credit Agreement provides for the inclusion of historic earnings from ParkUSA in the consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) calculation and revises the Company’s covenant by increasing the minimum consolidated EBITDA that must be maintained to $31.5 million for the four consecutive fiscal quarters most recently ended, starting with the fourth quarter of 2021. In addition, the Amended Credit Agreement removes the covenant to maintain a minimum consolidated fixed charge coverage ratio.