| Related Parties |
Related Parties
On December 31, 2017, the Company sold a wholly owned subsidiary to an immediate family member of a Senior Vice President of the Company ("Purchaser of subsidiary") in consideration for a note receivable in the amount of $1.0 million, which approximated the net book value of the disposed entity. In connection with this transaction, the Company also received a note receivable from the disposed entity ("Disposed entity") on December 31, 2017 in the amount of $0.9 million representing certain accounts payable of the disposed subsidiary that were paid by the Company. At September 30, 2018, $0.8 million and $0.9 million, respectively, was reflected on the Company’s Consolidated Balance Sheet representing the remaining balances on the consideration note receivable and accounts payable note receivable. Principal and interest payments are scheduled to be made in periodic installments from January 2018 through December 2023.
From time to time, the Company conducts business with the following related parties:
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On January 30, 2015, a subsidiary of the Company entered into a master services subcontract with Austin Trucking, LLC (“Austin Trucking”), an entity owned by an immediate family member of a Senior Vice President of the Company. Pursuant to the agreement, Austin Trucking performs subcontract work for the subsidiary of the Company, including trucking services. |
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From time to time, a subsidiary of the Company provides construction services to various companies owned by a family member of a Senior Vice President of the Company ("Construction Services"). |
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For periodic corporate events, the Company charters a boat from Deep South Adventures, LLC, which is owned by a Senior Vice President of the Company. |
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On June 1, 2014, the Company entered into an access agreement with Island Pond Corporate Services, LLC (“Island Pond”) regarding certain property owned by the Chairman of the Company's Board of Directors who is also the Managing Partner of SunTx. Pursuant to the access agreement, Island Pond grants the Company the non-exclusive right to use certain land located in Baker County, Georgia for the purposes of business development. |
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The Company rents vehicles from an entity owned by a family member of a Senior Vice President of the Company ("Vehicle Rentals"). The vehicles are rented on a month-to-month basis. |
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Family members of a Senior Vice President of the Company provide consulting services to a subsidiary of the Company ("Consulting Services"). |
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A law firm owned by a family member of a Senior Vice President of the Company provides legal services to a subsidiary of the Company ("Legal Services"). |
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A subsidiary of the Company leases office space for its Dothan, Alabama office from H&K, Ltd. (“H&K”), an entity partially owned by a Senior Vice President of the Company. The office space is leased through early 2020. Under the lease agreement, the Company pays a fixed minimum rent per month. |
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A subsidiary of the Company leased office space for its Montgomery, Alabama office from H&A Properties LLC (“H&A”), an entity partially owned by two Senior Vice Presidents of the Company. Under the lease agreement, the Company paid a fixed minimum rent per month. In September 2018, the subsidiary purchased this office from H&A for $0.5 million.
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A company owned by an immediate family member of a Senior Vice President of the Company provides subcontracting services to a subsidiary of the Company ("Subcontracting Services") |
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The Company is party to a management services agreement with SunTx, under which the Company pays $0.25 million per fiscal quarter and reimburses certain travel expenses.
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The following table presents revenues earned and expenses incurred by the Company during the fiscal years ended September 30, 2018 and September 30, 2017, and accounts receivable and accounts payable balances at September 30, 2018 and 2017, related to transactions with the related parties described above (in millions):
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Revenue Earned (Expense Incurred) |
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Accounts Receivable (Payable) |
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For the Fiscal Year Ended September 30, |
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September 30, |
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2018 |
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2017 |
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2018 |
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2017 |
Purchaser of subsidiary |
$ |
— |
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$ |
— |
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$ |
0.9 |
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$ |
— |
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Disposed entity |
$ |
— |
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$ |
— |
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$ |
0.8 |
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$ |
— |
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Austin Trucking |
$ |
(13.0 |
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(1) |
$ |
(11.8 |
) |
(1) |
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$ |
(0.8 |
) |
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$ |
(1.0 |
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Construction Services |
$ |
1.8 |
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$ |
6.3 |
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$ |
2.9 |
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$ |
5.3 |
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Deep South Adventures, LLC |
$ |
— |
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(2) |
$ |
(0.3 |
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(2) |
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$ |
— |
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$ |
— |
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Island Pond |
$ |
(0.3 |
) |
(2) |
$ |
(0.3 |
) |
(2) |
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$ |
— |
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$ |
— |
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Vehicle Rentals |
$ |
(1.2 |
) |
(2) |
$ |
(1.2 |
) |
(2) |
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$ |
— |
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$ |
— |
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Consulting Services |
$ |
(0.3 |
) |
(2) |
$ |
(0.2 |
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(2) |
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$ |
— |
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$ |
— |
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Legal Services |
$ |
(0.1 |
) |
(2) |
$ |
(0.3 |
) |
(2) |
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$ |
— |
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$ |
— |
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H&K |
$ |
(0.1 |
) |
(2) |
$ |
(0.1 |
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(2) |
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$ |
— |
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$ |
— |
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H&A |
$ |
(0.1 |
) |
(2) |
$ |
(0.1 |
) |
(2) |
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$ |
— |
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$ |
— |
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Subcontracting Services |
$ |
(0.2 |
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(1) |
$ |
— |
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(1) |
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$ |
(0.1 |
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$ |
— |
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SunTx |
$ |
(1.5 |
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(2) |
$ |
(1.3 |
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(2) |
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$ |
— |
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$ |
— |
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(1) Cost is reflected as cost of revenues on the Company's Consolidated Statements of Income
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(2) Cost is reflected as general and administrative expenses on the Company's Consolidated Statements of Income
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