Construction Partners Inc

NASDAQ:ROAD

Earnings Call Transcript 2020-Q4

[Operator]

Greetings and welcome to the Construction Partners’ Fourth Quarter Fiscal Year 2020 Results Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Rick Black, Investor Relations for Construction Partners. Thank you. You may begin.

[Rick Black, Investor Relations]

Thank you, operator and good morning everyone. We appreciate you joining us for the Construction Partners conference call to review fourth quarter and fiscal year 2020 results. This call is also being webcast and can be accessed through the audio link on the Events and Presentations page of the Investor Relations section of constructionpartners.net. Information recorded on this call speaks only as of today, December 11, 2020. So, please be advised that any time-sensitive information may no longer be accurate as of the date of any replay.

I would also like to remind you that the statements made in today’s discussion that are not historical facts, including statements or expectations or future events or future financial performance are considered forward-looking statements made pursuant to the Safe Harbor provision act of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today’s call that by their nature are uncertain and outside of the company’s control. Actual results may differ materially. Please refer to the earnings press release that was issued this morning for our disclosures on forward-looking statements. These factors as well as other risks and uncertainties are described in detail in the company’s filings with the Securities and Exchange Commission. Management will refer to non-GAAP measures today, including adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings press release. Construction Partners assumes no obligation to publicly update or revise any forward-looking statements.

And now I would like to turn the call over to Construction Partners’ CEO, Charles Owens. Charles?

[Charles Owens, Chief Executive Officer]

Thank you, Rick and good morning everyone. With me on the call today are Jule Smith, our Chief Operating Officer; Alan Palmer, our Chief Financial Officer; and Ned Fleming, our Executive Chairman.

We are pleased with our strong fiscal 2020 profitability. These results were driven primarily by disciplined project productivity and building, effective utilization of crews and equipment, vertically integrated synergies and lower cost of fuel. While we faced challenges in 2020 primarily from the global pandemic, I am extremely proud of our organization’s response and our people focused culture during this time of the year. As an essential business, during this pandemic, our leadership team, managers and employees adapted and overcame many challenges, while continuing to execute on our strategy and deliver great results.

Heading into fiscal year 2021, our organization is well-positioned for organic and acquisitive growth. We see strength in state funding programs across our geographic footprint, where the demand for road repairs and maintenance work remains constant. Over the past 10 months, we have acquired 13 hot-mix asphalt plants and we now operate 46 hot-mix asphalt plants company-wide. In addition, we continue to have many conversations, both in our existing states and adjacent states regarding future acquisition opportunities. From a federal infrastructure funding perspective, we remain optimistic that a new bill could get passed in 2021. We are confident that our nation’s infrastructure will continue to be a primary focus for our country to improve and maintain the safety of the traveling public and economic development.

Beyond these positive external factors, we are also very pleased with the transition over the past several months with the promotion of Jule Smith to Chief Operating Officer. As a former owner, Jule led our Fred Smith Company subsidiary for nearly a decade before becoming COO. He is now effectively driving the continued development of the organization and overseeing day-to-day operations. He has also taken a lead in executing our recent acquisitions and their successful integration into the CPI organization. It is clear that Jule’s leadership, experience and vision are positively impacting our current company. Finally, based on our current backlog in near-term visibility of the business, we are pleased with our outlook for fiscal 2021, which indicates strong growth for CPI in the coming year. Before turning the call over to Jule, I’d like to thank our leadership team and approximately 2,500 employees for their commitment, dedication and hard work that enables us to successfully execute our strategy.

I will now turn the call over to Jule to talk about our recent acquisitions and to comment on operations. Jule?

[Jule Smith, Chief Operating Officer]

Thank you, Charles. Good morning, everyone. The operations of our business are doing well. And we finished our fiscal year with great project work productivity across our markets and states. I want to thank all of our employees for their dedication to staying safe in their hard work. As an essential business, we have continued to operate through the COVID-19 pandemic without significant delays. The flexibility of our employees and the effectiveness of our safety protocols have helped us to manage the pandemic-related challenges in our day-to-day operations.

Now, let’s take a look at the demand and funding for our services. Overall, in the states where we currently operate, demand remains strong for the road repair and maintenance projects that comprise the public side of our business. State budgets and gas tax collections are stabilizing. We currently view potential 2021 upside in infrastructure spending in Florida, Alabama and North Carolina while we expect Georgia to remain relatively flat. In North Carolina, as we discussed in the past, the DOT has overcome its spending issues and has now resumed project lettings and is returning to a normal program. In addition, the state passed a new law that requires a high percentage of the DOT budget to be spent on maintenance of their current infrastructure. Commercial work throughout our states has remained constant and we do not currently see downward pressure or pullback on project bidding in the private market.

Lastly, I would like to provide an update on acquisitions. In Florida, we are very pleased with the hot-mix asphalt plants we acquired in fiscal 2020 and the synergies provided by market concentration in the parts of the state where we currently operate. In the past 2 months, we have also completed three strategic acquisitions in North Carolina, adding 11 hot-mix asphalt plants, further expanding our footprint in several growth oriented markets. And as Charles mentioned, we continue to have conversation throughout our existing states and some adjacent states with potential acquisition candidates. Our leadership team is actively working on identifying and engaging with companies that fit well with our future growth plans.

I would now like to turn the call over to Alan to discuss our financial results.

[Alan Palmer, Chief Financial Officer]

Thank you, Jule and good morning everyone. I want to start by highlighting our key performance metrics in the fiscal 2020 results. Compared to the fiscal 2019, revenue was $785.7 million, 0.3%. Gross profit was $122.2 million, up 50 basis points. Net income was $40.3 million compared to $43.1 million last year. Our adjusted EBITDA was $98.4 million, up 6.6% and our adjusted EBITDA margin was 12.5%, up 70 basis points.

Although the pandemic has been challenging for everyone, we have adapted to necessary protocols. Our managers, crews and corporate support all did a great job of managing our business, while we continued to work, grow our company and maintain margins. We also managed through the downward pressure on top line revenue, especially in the second half of the year that resulted from less book and burn high revenue projects that typically occur in the second half of each year.

Importantly, while the competitive bidding environment was quite aggressive, we maintained our focus while project work margin rather than trying to achieve increased revenue at a detriment to margin. In the last few weeks of the fourth quarter, we also experienced higher than usual weather-related delays due to a continuous line of hurricanes and storms in the states where we operate. From a profitability perspective during the quarter, we benefited from lower diesel cost and pricing at our liquid asphalt terminal. We also increased our self-perform work during the quarter, where we use our own crews to do work with typically subcontract out and we experienced less overtime cost. All of these factors led to solid margins that expanded year-over-year.

Turning now to the balance sheet at September 30, we had $148.3 million of cash and $39.3 million of availability under our existing revolving credit facility after the reduction for outstanding letters of credit. As of the end of the quarter, our debt to trailing 12 months EBITDA ratio was 1.08. This liquidity provides financial flexibility in today’s uncertain economic environment and provides capital for potential future acquisitions allowing us to respond quickly to growth opportunities when they arise. Cash provided by operating activities was $105.2 million for the 12 months ended September 30, 2020 compared to $55.3 million for the same period last year. Capital expenditures for fiscal 2020 were $41.1 million, excluding expenditures of $11.5 million in the first quarter of this fiscal year to purchase equipment previously subject to operating leases. Project backlog at September 30, 2020 was $608.1 million compared to $531.6 million at September 30, 2019. Approximately, 90% of the backlog will be completed in fiscal year 2021. This does not include any backlog for the three recent acquisitions.

Turning now to our outlook for fiscal year 2021, we project revenue of $950 million to $1 billion, net income of $42 million to $46.5 million, and adjusted EBITDA of $109 million to $118 million. Approximately, half of the revenue increase for 2021 is coming from acquisitions and approximately half of the revenue increase comes from organic growth in fiscal year 2020. In summary, we are pleased with fiscal 2020 results in the organization’s resilience and rapid responses despite the many challenges we faced in this new world. We look forward to fiscal 2021 as we plan to continue to grow the company.

I will now turn the call over to our Executive Chairman, Ned Fleming. Ned?

[Ned Fleming, Executive Chairman]

Thank you, Alan. Before we open the call to your question, I would like to make a few comments about the outstanding performance by all of our leaders, managers and all the employees at CPI. The team successfully adapted to the challenges 2020 presented and continued to manage the business for growth and profitability, while simultaneously building backlog for 2021. In addition, the recent acquisitions demonstrate CPI’s continued strategic focus as the premier consolidator in a very fragmented industry.

As the company moves into 2021, we are very pleased with Jule’s transition in the COO role. His leadership, vision and operational experience are invaluable to our organization and are essential to our continued consolidation and growth. The future is brighter now for CPI than at any point in our company’s history. The company is well positioned both organizationally and financially. And we are confident about the opportunity to continue to consolidate within our 5 states and possibly move to new states. As evidenced by the 2021 outlook, we are also extremely bullish about organic growth opportunities with this proven strategy.

With that, we will now take questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Andrew Wittmann with Baird. Please proceed with your question. Mr. Wittmann, your line is live.

[Andrew Wittmann, Baird]

I apologize for that. Thanks for taking my questions, guys and good morning.

[Charles Owens, Chief Executive Officer]

Good morning.

[Andrew Wittmann, Baird]

I wanted to ask a couple of these questions here. I guess I am just going to kind of play dumb a little bit, but the revenues were light of what we expected, but the profit margins were really, really great. You guys talked about lower diesel prices self perform and less over time, I guess that second one of greater self performance where my question really resides? And with the margins as good as they were, it kind of suggests that like maybe you should keep doing more of whatever you did, including maybe self-perform. So, again, can you just talk about how much of a benefit that was in the quarter if you can continue to do that and if you choose not to, which has never been the company’s strategy in the past, why not do that?

[Charles Owens, Chief Executive Officer]

Yes, Andy, this year because in some of our markets, we did not have as much work to do as we typically would in the third and fourth quarter, then we chose on some of those projects to utilize our own crews to self-perform. Typically, we try to staff for 12 months, but in the summer, the second half of the year, you often have surges where you have got more work than your crews and equipment can do. And so we use subcontractors to do some of that work and we just find generally it’s not efficient to staff for peaks all year round and we don’t – we have got a stable workforce. We don’t want to be hiring and laying off people. So, this year because of the lower volume of work that we had in a number of our markets, North Carolina being very specific when some of the work that subcontractors to do that we also do we just chose to have their people not be working in hours to be working. And when you do that, whatever their profit margin was in that subcontracted work, we capture it, but it’s really not efficient with some of the seasonality that we have to have permanent crews that in the first 6 months of the year are not being able to get in full work weeks, because you just got a lot lower volume.

[Andrew Wittmann, Baird]

That makes sense. I knew there had to be an explanation. So, thank you for that. I guess for my follow-up question. I wanted to ask about the ‘21 guidance in particular and then we heard you clearly here that half of the growth year-over-year is organic the other half is from acquisitions. But specific to the acquisitions portion of the revenue growth, I was wondering if there was any inclusion of acquisitions that maybe have not been yet announced publicly in that guidance or if the guidance includes only deals that have been announced publicly at this point?

[Charles Owens, Chief Executive Officer]

Yes, good question. I mean, we have always followed the pattern of when we provide our guidance at any point in time whether it’s the beginning of the year or the updated guidance that we include in our basic guidance or say the midpoint of our guidance. That’s going to be for things that we know as far as what markets we are in and also what we see as far as the future for backlog that we are going to book and burn. So, if you take this year’s guidance, the 50:50 applies to that guidance, the upside of that guidance, the higher revenue would be other growth from either Greenfields, acquisitions or higher than what we currently anticipate organic growth. The downside, on the lower side was the acquisitions we have made or the markets that we are already in, organic markets don’t get quite the organic growth that we think they will. So, they are no unknown acquisitions built into the basic guidance, but on the upside, any one of the three levers for growth that we talked about Greenfields acquisitions or higher than anticipated organic growth could push us to that upside.

[Andrew Wittmann, Baird]

Okay, that’s helpful. Thanks, guys. Have a good day.

[Charles Owens, Chief Executive Officer]

Thank you, Andy.

[Operator]

Thank you. Our next question comes from the line of Josh Wilson with Raymond James. Please proceed with your question.

[Josh Wilson, Raymond James]

Thanks. Good morning, gentlemen. Congrats on the quarter.

[Charles Owens, Chief Executive Officer]

Thank you.

[Josh Wilson, Raymond James]

Couple of items for me also on the acquisition front. First, could you quantify what the acquired sales were in the September quarter you just reported?

[Charles Owens, Chief Executive Officer]

It would have been approximately $13 million as I think through September, it was $33.8 million and through – excuse me through June it’s $33.8 million, now it’s $49.6 million.

[Josh Wilson, Raymond James]

And then as we think about the contribution of the new acquisitions given that they are in North Carolina, which has been a more pressured market both from a volume and margin perspective, should we assume that their EBITDA contribution is below fleet average and that maybe your ultimate expectations for these businesses are higher than what might be reflected in the ‘21 guidance, because they might be more depressed from that environment?

[Charles Owens, Chief Executive Officer]

Yes. I mean, it’s a good question. I mean, as we say every time, we build our guidance from the ground up in all 46 markets, the new acquisitions that we made, both the people at Fred Smith and the management at those companies have just put that together. As you know, recalls here in North Carolina, that’s been a very tight market. The DOT did not let any really resurfacing projects for the last 18 months. So while we have seen that recover starting in October and I think Jule talked about that some in his remarks, typically, when that pipe opens back up, it’s very competitive on those jobs that are being bid in those first few months, but we see a more normalized margin in that whole market, not just the acquisitions, but our existing markets in that state, more in the spring when the work gets back to a more normal letting size – so but those acquisitions had some backlog when we acquired them and while it’s not in our September 30 numbers, we have taken that into consideration and putting together our overall guidance.

[Josh Wilson, Raymond James]

Then if I could just squeeze in one more housekeeping item given the cadence of letting, are you still expecting the normal 40:60 seasonality or is that going to be different this year because of the letting differences?

[Charles Owens, Chief Executive Officer]

No. Our budget as it currently stands is just about back on target with a 40:60. This current year was more 42:58, but next year, quarter wise it should return to the 40:60 cadence.

[Josh Wilson, Raymond James]

Thanks. I will get back in queue.

[Charles Owens, Chief Executive Officer]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Michael Feniger with Bank of America. Please proceed with your question.

[Michael Feniger, Bank of America]

Hey, guys. Thank you for taking my questions. Just I was hoping you kind of breakdown the buckets of the margin guidance of obviously you guys had a great year of margin in 2020. I am sure 2021 there is a bit of conservatism, but some of you kind of breakdown the buckets of why the guide was seeing a decline in margins. Is it like you are referring to more subcontracting out? Is it diesel prices? Is the acquisition mixing it down just hoping we could get a feel for what are the big reasons? Why we see the margins kind of have a great 2020 and then come back down a little bit in 2021?

[Charles Owens, Chief Executive Officer]

Yes, good question, Michael. I mean, in 2020, as we have said, starting in our Q3 and then we said in our revised guidance that we put out for this year, we have benefited from the dropping prices in petroleum products, primarily diesel and the price of liquid asphalt. And when we gave our fourth quarter, original fourth quarter or full year updated guidance, at the end of the third quarter, we were beginning to see diesel and liquid rise. But that rise stopped and it actually dropped a little bit and we have benefited from that. The way I like to say it is in 2020, we had a little bit of a tailwind from dropping prices. It’s not so much that it’s that significant, but it is a little bit of a tailwind in 2021, we have seen since the end of September significant increase in the price of crude. We have already seen our diesel prices going up, our liquid asphalt prices going up. We don’t see with the vaccines coming online that that’s going to change. So, while we pass along a lot of those calls and we have got indexes, there is always a little headwind. So, if you take the lack of tailwind or the tailwind we had this year and the headwind we are going to have next year, the amount there, yes, probably 40 to 50 basis points in margin. So, that’s a large part of that margin difference is between having a little bit of tailwind and a little bit of headwind. And then when we do the higher volumes, just like we said, with the subcontracting the higher percentage of the work, that’s going to be a little bit of margin that we are going to get to subcontractors that we got this year and then certainly historically, we have always had acquisitions that come in, that generally don’t have the same margin profile that we do and the fact that as someone mentioned earlier that these are in North Carolina, where there are some particular dynamics that we have got to work through. That’s part of what’s doing that.

[Michael Feniger, Bank of America]

Yes, got it. And you guys mentioned before, I mean, there seems like there is some hopeful consensus on infrastructure on the federal side, what are you assuming that can get passed this year, hopefully you kind of talk about that what you guys are kind of hoping for within the next 12 months on the federal side?

[Charles Owens, Chief Executive Officer]

From a federal side, as you know, there has always been discussions, been a very bipartisan conversation. In fact the Senate side, basically, has put a proposal on the table with a 28% increase in the house has put one on 42% increase. So, we feel very confident in 2021 that this will, something will happen in 2021 to – we look forward to expecting they will, but nothing has baked in the deal because who knows how long it could take to get everything taken care of, but we are very optimistic that something is going to take place to get the economy rolling again. And even though the traffic has been down, the areas we operate in, the traffic count has kind of come back and we are seeing tax receipts come in strong. So in that markets but when you hear about all over the country, there is a lot of weakness in the receipts coming in. So, we anticipate that this is a good mechanism to get the economy rolling again. And there is something that I think both parties can agree on. And because it is a major asset of our country to make sure the traveling public is out there traveling safely and it’s a huge economic development engine.

[Michael Feniger, Bank of America]

Makes sense. If I could just squeeze one last one in, I think in your comments, you guys were talking about the acquisition of the pipeline. I heard you guys mentioned adjacent states? So, are you guys looking to maybe expand outside of those 5 core states? It would be great and if you guys could kind of flush that out? Thank you.

[Jule Smith, Chief Operating Officer]

Yes. We are always having conversations in the Southeast and we continue to have that not only in the states that we are currently in, but in states within our footprint, adjacent to where we are currently. And so those are ongoing conversations that we are having and we will continue to have.

[Charles Owens, Chief Executive Officer]

And Michael, this is Charles. Just adding to that just like Jule said that we are having conversations inside the markets we are in and outside the markets, we have been very pleased in the way we have grown the company in the footprint and we still have plenty of opportunities. But as we look out there, just a very large number of just excellent candidates out there this looking at different options of exit strategies for retirement and family issues and things like that. And – but there is a lot of companies adjacent that said we are – we have had some conversations with and they are some excellent companies with excellent opportunities one day in these other markets.

[Operator]

Thank you. Our next question comes from the line of Stanley Elliott with Stifel. Please proceed with your question.

[Stanley Elliott, Stifel]

Hey, good morning everyone. Thank you all for taking the question. You talked about the M&A, it sounds like there is a fair amount of capacity, fair amount of activity going on, what is the capacity that you potentially could see into next year? And then I am curious if maybe you would be willing to be maybe a little more aggressive than what you would historically, if there are changes in the tax codes and things like that, that are looking at some of these family businesses to look at other options?

[Charles Owens, Chief Executive Officer]

Well, there is – as we have always said, there is plenty of opportunities. We are going to try to speed up our pace. We are going to take this growth as very profitable TAC growth and we are not going to get out over our skis and we have a lot of opportunities. And we are really going to just take care of each one of these one at a time and handle them. And we have got opportunities in all of the states that we operate in. And the great thing is that we have a management team and each one of our companies in our IP and are counting that we can fully integrate these acquisitions as they come on and doing these deals, the seller is the one that’s in control of the deals, because it’s their company and they know what their goals are and they know how they want their company and their employees to end up when they leave the company. And so, it’s always – that’s why it’s always interested in good to have several targets out there to be talking to, because the sellers sometime they don’t all come together at the same time and has worked out very well for us. And so we don’t see anything that’s going to go different than what our normal business is, we are a growth company and we are going to grow by organic growth in Greenfield and acquisitive growth – and acquisitive growth is a very, very key part of our growth strategy and we will continue to execute when the timing is right and the culture is right.

[Alan Palmer, Chief Financial Officer]

Yes, Stanley, this is Alan. The comment I made on an ideal world, we made four acquisitions in the last, I guess, 9 to 10 months. In a perfect world, we would have done 1 every 3 months. But as Charles said, the sellers are more of the determinant of when those close and when they are ready to actually sell their company, I think we have demonstrated with 3 of those 4, being in the last 60 or 75 days that we can close them. We have got plenty of capacity to close them quickly if those opportunities present themselves. And as Charles said, that’s why we have a lot of conversations going on at any one time and our flexibility to be able to close quickly when they are ready to sell makes us one of the preferred buyers out there, because we can keep it confidential and that’s very important to these family-owned businesses and we can close when they are ready to.

[Stanley Elliott, Stifel]

Great. And then hypothetically, let’s assume we do get a new highway bill in the first quarter, first half of ‘21, when do you start to see that in your numbers? Is that 12 months? Is it 18 months? Is it sooner than that? Any color would be great?

[Alan Palmer, Chief Financial Officer]

I mean, typically, if you use the states which have – and our states have raised taxes in the last few years generally from the time it’s enacted, not when it’s passed, because it maybe a delayed enactment, but typically from the time it’s enacted, it’s about 6 months before they start letting projects. Now, the good thing for us is that usually the early projects are maintenance and repair projects. So, those end up on the front end and those are usually quick start projects. But I would say conservatively before it starts showing up in our revenue numbers, it’s probably about 9 months.

[Stanley Elliott, Stifel]

Perfect, guys. Thank you very much. Happy holidays.

[Alan Palmer, Chief Financial Officer]

Thank you. You too.

[Charles Owens, Chief Executive Officer]

Thanks, Stanley.

[Operator]

Thank you. Our next question comes from line of Adam Thalhimer with Thompson Davis. Please proceed with your question.

[Adam Thalhimer, Thompson Davis]

Hey, good morning, guys. Congrats on the strong quarter and strong outlook. Hey, can we start with private construction trends kind of broadly what you are seeing in your states?

[Jule Smith, Chief Operating Officer]

Adam, this is Jule. Yes, we continue to see strong activity in our markets throughout our states in the private markets and lots of projects to bid on. And we monitor that closely, but right now, the economy seems to continue to have a lot of private market activity.

[Adam Thalhimer, Thompson Davis]

Does it feel like that’s more housing related than commercial or are you seeing in both, Jule?

[Jule Smith, Chief Operating Officer]

Well, we are seeing both. I think, obviously, the low interest rates, the housing market is clearly strong, but with a strong housing market, the commercial activity follows that. We are also seeing a lot of warehouse projects with just the growth in online shopping there is just a lot of demand for warehouse space and industrial development. So, it’s really several different things that are making up the private market right now.

[Charles Owens, Chief Executive Officer]

And Adam, part of that’s being driven like Jule says, with the really the changing economy and how people get goods and so the warehouses look, we are also seeing because we are in the southeast, there is a lot of relocation of both businesses and people to these areas, because they are not wanting to get quarantined in places where they can’t get out and enjoy things. So we are just seeing a lot of notices of companies that are relocating to more open areas, offices that are being designed and built that are going to accommodate may become more of a norm than an exception of what we had this year where people have can still work in the site, so.

[Adam Thalhimer, Thompson Davis]

Okay, good. I think that’s consistent. And then one for you, Alan, I wanted to ask about 2021 cash flow expectations, free cash flow?

[Alan Palmer, Chief Financial Officer]

Yes. Well, basically, our outlook as far as depreciation – I mean, excuse me, as far as capital expenditures in 2020 we cutback on our capital expenditures when the pandemic hit and cut a substantial amount out. So, our CapEx for next year, our maintenance CapEx is going to be probably 20 or 30 basis points higher than normal. We say that normally it’s about 3.25% to 3.75% of our revenue, they will be a little bit higher than that, what we have got budgeted is about 3.9% of revenue. And part of that’s due to catching up. It’s also typically when we make acquisitions, their fleet is not going to be quite as up-to-date as ours is. So we are going to have some additional capital expenditures kind of get it up to what we want. So, those – since we are replacing items, even though it’s in an acquisition, we treat that as maintenance CapEx. And then with the growth that we see organically for next year and the fact that we held off on some of that growth CapEx that we have cut out of 2020, I think our – we are going to be probably around 1%, just over a tad over 1% of our revenue. So, overall 2021 will be right around 5% total CapEx for the year.

[Adam Thalhimer, Thompson Davis]

Okay. Any idea how working capital might swing with – and that’s pretty good organic revenue growth?

[Alan Palmer, Chief Financial Officer]

Yes. As I have said before, some of that is timing of when we close out the year, this year, I think I mentioned in my comments that the last couple of weeks of our fiscal year, where we have a lot of inclement weather. So, that really helps when your revenue at the end of the quarter kind of is where you fall short. It helps your cash flow in that quarter. But I think that we should be able to have cash flow from operations similar to what we have had – we have been the last in ‘19 and when we had the – we added the asphalt terminal, we had a huge inventory we had to build and things like that, but a lot of that’s behind us. We have said before during the pandemic, the DOTs have done a great job of making sure that we are getting paid timely and we have gone through some issues where they will kind of because of some outsourcing they were doing in ‘18 and ‘19 that got us slowed down some payments, but I think we should have a very strong cash flow from operations in 2021 like we did in 2020.

[Adam Thalhimer, Thompson Davis]

Great. Okay. Thanks, guys. Good luck.

[Alan Palmer, Chief Financial Officer]

Alright. Thank you.

[Operator]

Thank you. Our next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question.

[Brent Thielman, D.A. Davidson]

Hey, thanks. Congrats on a great quarter. Great finish to the year.

[Alan Palmer, Chief Financial Officer]

Thank you, Brent.

[Charles Owens, Chief Executive Officer]

Thank you, Brent.

[Brent Thielman, D.A. Davidson]

Hey, Alan. You guys have completed a couple of deals since the end of the quarter. Is there anyway you can provide the cumulative value for those deals, just trying to get a kind of a pro forma sense for cash and debt since September?

[Alan Palmer, Chief Financial Officer]

Well, we did not incur any debt to acquire them. So, we did not – we had sufficient cash to do that. And so there was no – our debt to EBITDA on a pro forma would have gone down. And then the cash for those would have been in the trying to think of someone who happens so quickly, in the $50 million to $60 million range of cash that we spent for them. That would be before inventories, I just speak from hard assets and goodwill.

[Brent Thielman, D.A. Davidson]

Okay, okay. And then are you guys still able to find deals in the multiple ranges you have historically talked about kind of this mid to upper single-digit range? I wonder how the pandemic and funding uncertainty layer on top of that what’s been going on in North Carolina, how that’s impacted expectations out there?

[Alan Palmer, Chief Financial Officer]

I mean, it really hasn’t changed how we bought companies. We get fair market value appraisals of the property, plant and equipment. We look at their historicals as far as what kind of potential there is in the market and based on the goodwill that we pay on top of the fair market value owned by us. So, it really hasn’t changed. I mean, as far as a multiple of trailing EBITDA it’s still in that 4.5x to 5.5x trailing EBITDA with about 30%, 35% of the total purchase price being goodwill. It really is not affected directly by what’s going on economically or in these cases in North Carolina. These are very well run companies just like we were able to pivot and do some good things even during the pandemic, they are good managers that know how to manage their backlog and keep the business going. And so we really weren’t taking advantage of some kind of big downturn because of the letting situation. So, really just pretty much the same.

[Brent Thielman, D.A. Davidson]

Okay, okay. And then one more, Jule, you talked about, the four core markets in the Alabama, Florida, North Carolina makes sense they should see a probably pickup here in ‘21, Georgia has been a really strong market, it seems like here in 2020. Is the comment that, that market might be flat just a function of the fact that’s been so strong this year is there anything more to that?

[Alan Palmer, Chief Financial Officer]

Well, when we look at it, we look at the markets that we are in. And so we are looking at it from the ground up. And the ones we have got in Georgia may not have been the ones that saw some of the big dollars that you might have seen. So we are not really basing it on what the state as a whole is doing. We are seeing what projects they are going to be letting in our particular markets and those profit centers, one of those 46, the ones are in Georgia at the end of the day, we add up what each of those comes to and for us, we are seeing that those markets are going to be flat. So, there is differences throughout those – throughout the state and I don’t know what all is going in, in Georgia, but I do know in our markets, we have not seen a huge increase in the number of projects that are available to be in.

[Brent Thielman, D.A. Davidson]

Okay. Okay, I appreciate it. Thanks, guys.

[Operator]

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back over to management for any final remarks.

[Charles Owens, Chief Executive Officer]

Okay, thank you very much. This is Charles. And I just want to thank you all for your time and your patience and thank you so much for those questions. And we were just excited to give you good answers on those and I just want to wish everyone a safe and prosperous new year.

[Operator]

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.