Climate Change Data

Environmental Metrics

Environmental Achievements

• Developed and patented the first counter flow drum mix technology, resulting in a cleaner and more efficient process.
• Engaged in product engineering and development efforts to further develop more energy-efficient and environmentally compatible systems.

Climate Goals & Targets

Environmental Challenges

• Continued weak domestic road-building activity.
• Decline in Canadian sales as the Canadian government’s infrastructure spend under the “Building Canada” plan nears completion.
• Economic downturn resulting in reduced purchasing within the Company’s served markets.
• Reduced demand due to adverse weather conditions.

Mitigation Strategies

• Aggressive actions to conserve cash, right-size its operations and cost structure.
• Adjustments to workforce, reduced purchases of raw materials and reductions in selling, general, and administrative expenses.
• Reviewing internal processes to identify inefficiencies and cost reduction opportunities.
• Scrutinizing relationships with external suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• More energy-efficient and environmentally compatible systems
• Cost-effective, non-fossil fuels, biomass (bagasse, municipal solid waste, sludge and wood waste), refuse-derived fuel, coal and coal mixtures, the economical recycling of old asphalt and new designs of environmentally compatible asphalt plants

Environmental Metrics

Social Achievements

• Maintained steady workforce of highly skilled employees
• Investing in new designs of equipment to broaden product lines and retain technological leadership

Climate Goals & Targets

Environmental Challenges

• Uncertainty of under-funded Highway Trust Fund resulting in declined purchases of large capital goods
• Seasonal nature of the business (slowdown during summer and fall months)
• Highly competitive markets
• Fluctuations in steel and oil prices
• Shortage of qualified workers

Mitigation Strategies

• Continued efforts to operate more efficiently and reduce cost structure
• Expanding efforts to increase export sales, broaden product lines, and pursue suitable acquisitions
• Aggressive actions to conserve cash, right-size operations and cost structure
• Reviewing internal processes to identify inefficiencies and cost reduction opportunities
• Scrutinizing relationships with external suppliers

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• More energy-efficient and environmentally compatible systems
• Cost-effective, non-fossil fuels
• Biomass utilization
• Economical recycling of old asphalt
• New designs of environmentally compatible asphalt plants
• Higher efficiency combustion systems

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Seasonal slowdown in the third and fourth quarters due to the nature of the highway construction industry.
• Fluctuations in market prices for raw materials such as steel.
• Dependence on one customer for a significant portion of revenue (15% in fiscal 2015).
• Compliance with extensive environmental laws and regulations.
• Potential for substantial liability for product defects.
• Competition in the industry.
• Quarterly fluctuations in operating results.

Mitigation Strategies

• Aggressive actions to conserve cash, right-size operations, and reduce costs (including workforce adjustments and expense reductions).
• Reviewing internal processes to identify inefficiencies and cost reduction opportunities.
• Scrutinizing relationships with external suppliers to ensure high-quality materials and services at competitive costs.
• Maintaining product liability coverage.
• Continual efforts to maintain and improve product performance, availability, and dependability; competitively price products; and provide superior customer support and service.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Challenges

• Rising gas and oil prices, increasing steel prices and shortage of qualified workers.
• Seasonal and cyclical nature of the markets served.
• Level of government funding for highway construction in the United States and Canada.
• Dependence on one customer for a significant portion of its revenue.
• Potential difficulties with future acquisitions.
• Seasonal and cyclical demand for products.
• Risks associated with marketable securities.
• Quarterly fluctuations of operating results.
• Difficulty attracting and retaining key personnel.
• Potential intellectual property infringement.
• Potential product liability.
• Compliance with environmental laws and regulations.
• Loss of raw materials suppliers or increase in prices.
• Significant government regulations.
• Concentration of control by management.
• Issuance of preferred stock.
• Indemnification of directors and executive officers.
• Competition.
• Fluctuations in stock price.

Mitigation Strategies

• Investing in product engineering and development.
• Delivering high-quality products and superior service.
• Reviewing internal processes to identify inefficiencies and cost-reduction opportunities.
• Scrutinizing relationships with external suppliers.
• Maintaining product liability coverage.
• Maintaining adequate supplies of raw materials from alternate sources.
• Maintaining officer’s and director’s liability insurance coverage.
• Adjusting prices to account for inflation.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Rising oil prices, volatile steel prices and shortage of qualified workers.
• Market conditions could limit the Company’s ability to raise selling prices to offset increases in material and labor costs.
• The business is affected by the level of government funding for highway construction in the United States and Canada.
• Federal funding allocated to infrastructure may be decreased in the future.
• In fiscal years 2017, 2016 and 2015, the Company depended on one customer for a significant portion of its revenue.
• Demand for the Company’s products is cyclical in nature.
• The Company may encounter difficulties with future acquisitions.
• If the Company is unable to attract and retain key personnel, its business could be adversely affected.
• The Company may be required to defend its intellectual property against infringement or against infringement claims of others.
• The Company may be subject to substantial liability for its products.
• The Company is subject to extensive environmental laws and regulations, and the costs related to compliance with, or the Company’s failure to comply with, existing or future laws and regulations, could adversely affect the business and results of operations.
• The loss of one or more of the Company’s raw materials suppliers could cause production delays.
• The Company is subject to significant government regulations.
• The Company’s management has effective voting control.
• The issuance of preferred stock may impede a change of control or may be dilutive to existing shareholders.
• Competition could reduce revenue from the Company’s products and services and cause it to lose market share.
• The Company’s quarterly operating results are likely to fluctuate, which may decrease its stock price.

Mitigation Strategies

• The Company believes its strategy of continuing to invest in product engineering and development and its focus on delivering the highest quality products and superior service will strengthen the Company’s market position.
• The Company continues to review its internal processes to identify inefficiencies and cost-reduction opportunities.
• The Company will continue to scrutinize its relationships with external suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.
• The Company currently maintains product liability coverage, which it believes is adequate for the continued operation of its business
• The Company believes it has the design and manufacturing capability to meet all industry or governmental agency standards that may apply to its product lines

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Volatile steel prices and shortage of qualified workers.
• Decreases in industry spending could have a material adverse effect upon demand for the Company’s products and negatively impact its business, financial condition, results of operations and the market price of its common stock.
• The Company’s business, results of operations financial condition, cash flows, and the stock price of its common stock can be adversely affected by pandemics or other public health emergencies, such as the recent outbreak of COVID-19.
• Increasing scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices may expose us to new or additional risks.

Mitigation Strategies

• The Company continues to review its internal processes to identify inefficiencies and cost-reduction opportunities.
• The Company will continue to scrutinize its relationships with suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.
• Management is actively monitoring the situation on the Company’s financial condition, operations, suppliers, industry, customers, and workforce.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Fluctuations in the price of carbon steel, a significant cost and material used in manufacturing.
• Significant increase in the price of liquid asphalt could decrease demand for hot mix asphalt paving materials.
• Increases in oil prices drive up the cost of gasoline and diesel, resulting in increased freight costs.
• Increasing scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices.

Mitigation Strategies

• The Company monitors the prices it charges for its products and services on an ongoing basis and has been able to adjust its prices to take into account future changes in the rate of inflation.
• Where possible, the Company will pass increased freight costs on to its customers.
• The Company continues to review its internal processes to identify inefficiencies and cost-reduction opportunities.
• The Company will continue to scrutinize its relationships with suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Higher manufacturing costs associated with wages, steel, and OEM purchased parts.
• Fluctuations in the market prices for raw materials, such as steel.
• Significant increase in the price of liquid asphalt could decrease demand for hot mix asphalt paving materials and certain of the Company’s products.
• Increases in oil prices also drive up the cost of gasoline and diesel, which results in increased freight costs.

Mitigation Strategies

• The Company continues to review its internal processes to identify inefficiencies and cost-reduction opportunities.
• The Company will continue to scrutinize its relationships with suppliers to ensure it is achieving the highest quality materials and services at the most competitive cost.
• Where possible, the Company will pass increased freight costs on to its customers.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increasing scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices may expose us to new or additional risks.

Supply Chain Management

Climate-Related Risks & Opportunities