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FOLEY PRODUCTS COMPANY, LLC

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE NINE-MONTH PERIOD ENDED

SEPTEMBER 30, 2025 AND 2024

TABLE OF CONTENTS

 

Consolidated Financial Statements:
Consolidated Balance Sheets (unaudited)			1
Consolidated Statements of Income (unaudited)			2
Consolidated Statements of Member’s Equity (unaudited)			3
Consolidated Statements of Cash Flows (unaudited)			4
Notes to the Consolidated Financial Statements (unaudited)			5

FOLEY PRODUCTS COMPANY, LLC

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30,

UNAUDITED

 

		September 30, 2025				September 30, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	74,250,064			$	46,082,837
Receivables, net			72,846,063				63,559,678
Inventories			36,254,152				32,430,185
Other current assets			1,518,945				1,066,900
Total current assets			184,869,224				143,139,600
NON-CURRENT ASSETS:
Property, plant and equipment, net			118,699,785				115,806,125
Operating lease right-of-use assets, net			4,109,003				4,051,410
Goodwill, net			13,185,432				15,000,281
Intangible assets, net			3,106,474				3,345,432
Other non-current assets			180,533				139,533
Total non-current assets			139,281,227				138,342,781
Total assets		$	324,150,451			$	281,482,381
LIABILITIES AND MEMBER’S EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable		$	13,747,077			$	13,100,615
Other current liabilities			6,147,042				7,322,425
Operating lease liabilities, current			313,625				287,899
Finance lease liabilities, current			47,919				51,164
Long-term debt, current			3,700,000				3,700,000
Total current liabilities			23,955,663				24,462,103
NON-CURRENT LIABILITIES
Operating lease liabilities, non-current			3,907,439				3,807,219
Finance lease liabilities, non-current			33,586				81,505
Other non-current liabilities			342,003				417,812
Long-term debt, net of current maturities			233,388,662				252,232,423
Total non-current liabilities			237,671,690				256,538,959
Total liabilities			261,627,353				281,001,062
MEMBER’S EQUITY
Total member’s equity			62,523,098				481,319
Total liabilities and member’s equity		$	324,150,451			$	281,482,381

See Notes to the Consolidated Financial Statements (Unaudited)

 

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FOLEY PRODUCTS COMPANY, LLC

CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE-MONTHS ENDED SEPTEMBER 30,

UNAUDITED

 

		September 30, 2025				September 30, 2024
Net sales		$	327,035,654			$	301,572,914
Cost of sales			184,504,367				161,884,740
Gross profit on sales			142,531,287				139,688,174
Operating expenses:
Selling, general & administrative expenses			23,509,025				21,406,394
Depreciation & amortization			1,540,357				1,545,213
Total operating expenses			25,049,382				22,951,607
Net operating income			117,481,905				116,736,567
Other income (loss):
Interest expense			(17,395,585	)			(22,214,869	)
Other income, net			289,157				423,781
Total other loss, net			(17,106,428	)			(21,791,088	)
Net income		$	100,375,477			$	94,945,479

See Notes to the Consolidated Financial Statements (Unaudited)

 

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FOLEY PRODUCTS COMPANY, LLC

CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY

UNAUDITED

 

		Total Member’s Equity / (Deficit)
Balance, December 31, 2023		$	(46,696,010	)
Net income			94,945,479
Share-based compensation expense			2,163,722
Distributions			(49,931,872	)
Balance, September 30, 2024		$	481,319
Balance, December 31, 2024		$	11,686,589
Share-based compensation expense			2,163,722
Net income			100,375,477
Distributions			(51,702,690	)
Balance, September 30, 2025		$	62,523,098

See Notes to the Consolidated Financial Statements (Unaudited)

 

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FOLEY PRODUCTS COMPANY, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTHS ENDED SEPTEMBER 30,

UNAUDITED

 

		September 30, 2025				September 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	100,375,477			$	94,945,479
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization expense			10,705,492				10,347,040
Gain on disposal of property, plant and equipment			(43,870	)			(21,624	)
Amortization of debt discount and issuance costs			1,560,929				1,560,929
Share-based compensation expense			2,163,722				2,163,722
Recoveries for expected credit losses			—				(449,073	)
Changes in:
Accounts receivable			(20,822,225	)			(15,744,027	)
Inventories			(6,437,974	)			2,749,254
Accounts payable			3,231,707				5,164,642
Other current assets / liabilities			(432,177	)			(658,527	)
Other changes in long-term assets / liabilities			(80,560	)			(48,805	)
Total adjustments			(10,154,957	)			5,063,531
Net cash provided by operating activities			90,220,521				100,009,010
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property and equipment			45,152				21,264
Acquisition of property and equipment			(14,896,819	)			(8,534,578	)
Net cash used in investing activities			(14,851,667	)			(8,513,314	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan			(20,000,000	)			(17,775,000	)
Principal payment of financing leases			(37,944	)			(1,838	)
Distributions paid			(51,702,692	)			(49,931,872	)
Net cash used in by financing activities			(71,740,636	)			(67,708,710	)
Net increase in cash and cash equivalents			3,628,218				23,786,986
Cash and cash equivalents at beginning of period			70,621,846				22,295,851
Cash and cash equivalents at end of period		$	74,250,064			$	46,082,837
SUPPLEMENTAL DISCLOSURES:
Cash interest paid		$	(17,159,795	)		$	(21,046,013	)

See Notes to the Consolidated Financial Statements (Unaudited)

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 1: Nature of Operations

The primary business of Foley Products Company, LLC (the “Company”), headquartered in Newnan, Georgia, is the manufacture and sale of concrete pipe and precast products in the United States.

NOTE 2: Summary of Significant Accounting Policies

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its sole subsidiary Spartan Concrete, Inc. which was acquired in 2023 as more fully described in Note 3.

Use of Estimates – The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) which requires management to make estimates that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management estimates, judgments, and assumptions are continually evaluated based on available information and experience; however, actual amounts could differ from those estimates. Estimates are used for, but not limited to, useful lives of property and equipment, commitments and contingencies, valuation and impairment of goodwill and intangibles, sales returns and allowances, and inventory valuation.

Cash and Cash Equivalents – Cash and cash equivalents include cash on hand and amounts on deposit with banks. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair Value Measurements – The guidance for fair value measurements establishes the authoritative definition for fair value, sets out a framework for measuring fair value and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are either directly or indirectly observable.

Level 3: Unobservable inputs developed using the Company’s estimates and assumptions which reflect those that market participants would use.

Accounts Receivable – Accounts receivable are uncollateralized customer obligations due under normal trade terms generally requiring payment within 30 days from the invoice date. The Company determines its allowance for expected credit losses by considering a number of factors including the length of time trade accounts receivable are past due, application of the specific identification method, the customer’s current ability to pay its obligation to the Company, the Company’s previous loss history, and the condition of the industry and general economy as a whole.

Concentration of Credit Risk – The Company sells concrete products to customers primarily operating in the construction industry and located in the United States. The Company’s credit losses are provided for in the financial statements and have consistently been within management’s expectations. Other financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. Such amounts may exceed federally insured limits. The Company reduces credit risk by depositing its cash with major credit worthy financial institutions within the United States. To date, the Company has not experienced any losses on its cash deposits. As of September 30, 2025, and September 30, 2024, no one customer held a concentration in total receivables. No single customer held a concentration in revenue in either period presented.

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

Inventories – Inventories are stated at the lower of cost or net realizable value, with cost being determined by the first-in, first-out method, including allowances for obsolescence.

Property, plant, and equipment – Property, plant and equipment are stated at cost, or fair market value if acquired through acquisition. Major renewals and betterments are charged to the property accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are charged to operations. The Company follows the policy of providing for depreciation by charging against income amounts sufficient to amortize the cost of property and equipment over their estimated useful lives. Depreciation is computed on the straight-line method principally as follows: 15-40 years for land improvements, buildings and improvements and 3-20 years for equipment.

Construction in progress is recorded at cost, and includes site development costs, development costs, and acquisition costs of the property under construction.

Acquisitions – The Company allocates the cost of an acquired business to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. The Company generally allocates the purchase price based on either the income or the market approach, utilizing prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets or liabilities, as well as historical experience. Any remaining cost in excess of the identifiable tangible and intangible net assets acquired is recorded as goodwill.

The Company has elected to apply the private company accounting alternative for intangible assets as developed by the Private Company Council (“PCC”) and outlined in Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-18, Accounting for Identifiable Intangible Assets in a Business Combination, which allows the Company to not separately recognize and measure at fair value: (a) customer-related intangibles (unless they are capable of being sold or licensed independent from the other assets of the acquired business) and (b) noncompetition agreements.

Goodwill – Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. The Company has elected to apply the private company accounting alternative for goodwill as developed by the PCC and outlined in ASU 2014-2, Accounting for Goodwill, which allows goodwill to be amortized on a straight-line basis over the shorter of 10-years or the estimated useful life. The Company evaluates goodwill for impairment only if a triggering event occurred during the period, and upon the occurrence of a triggering event, the Company performs a qualitative assessment to determine whether a quantitative test is necessary. For the nine-month period ended September 30, 2025, and 2024 there was no impairment of goodwill.

Intangible Assets – Intangible assets consist primarily of patents and trademarks. The Company has elected to apply the private company accounting alternative for non-compete, customer relationships and certain other acquired intangibles and recorded them as a component of goodwill and did not recognize them in the purchase price allocation process. The Company considers all its intangible assets to have finite lives and are being amortized on the straight-line basis over the estimated lives of the respective assets and evaluated for impairment when an event or change in circumstances occurs that warrants such a review.

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

Sales Revenues – The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized in accordance with a five-step revenue model, as follows:

 

(i)

identify the contract with the customer.

 

(ii)

identify the performance obligations in the contract.

 

(iii)

determine the transaction price.

 

(iv)

allocate the transaction price to the performance obligations.

 

(v)

recognize revenue when the entity satisfies each performance obligation.

The Company recognizes revenues when the requisite performance obligation has been met, that is, when the Company transfers control of its products to customers, which depending on the terms of the underlying contract, is generally upon delivery. The Company’s contracts are short-term in nature, generally not exceeding 12 months, with payment terms varying by the type and location of products or services offered; however, the period between invoicing and when payment is due is not significant.

Sales Taxes – Taxes imposed on sales by the states in which the Company operates are offset against sales, and the net amount is reported in revenue.

Shipping and Handling Costs – The Company recognized shipping and handling costs of $31,056,502 and $27,458,673 in cost of sales in the statements of income for the nine-month period ended September 30, 2025, and 2024, respectively.

Advertising – Advertising costs are expensed as incurred. The Company recognized $5,530 and $1,740 of advertising costs in the statements of income for the nine-month period ended September 30, 2025, and 2024, respectively.

Share-Based Compensation – The Company accounts for share-based compensation under ASC 718, Stock Compensation (“ASC 718”). ASC 718 addresses the accounting for transactions in which an entity obtains services in share-based payment transactions and requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company ratably expenses, over the vesting period, the fair value of the award at the date of grant. Please see further discussion in Note 14.

Derivatives - The Company’s derivative financial instruments are accounted for under the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). In accordance with ASC 815, the Company measures all derivatives at fair value and recognizes them in the consolidated balance sheet as an asset or liability, depending on the Company’s rights or obligations under the applicable derivative contract.

As further described in Note 10, on the date the derivative instrument was entered into, the Company did not designate the derivative as a hedge. Changes in the fair value of a derivative that is not designated as a hedge are recorded in Interest Expense.

Income Taxes – The Company qualifies as a disregarded entity for federal and state income tax purposes. Therefore, no provision for current or deferred income taxes has been included in the accompanying consolidated financial statements since each member’s share of income or loss is reported on their respective income tax returns.

US GAAP requires management to evaluate positions taken by the Company and recognize a tax liability if the Company has taken an uncertain tax position that more likely than not would not be sustained upon examination by the Internal Revenue Service or state or local taxing authorities. Management has analyzed the tax positions taken by the Company and has concluded that as of September 30, 2025, and 2024, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the consolidated financial statements. The Company is subject to routine audits by taxing jurisdictions.

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

Leases – Leases are recognized under ASC 842, Leases (“ASC 842”). The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. All leases greater than 12 months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. The Company also elected the practical expedient to use the risk-free rate in determining the present value of our lease liabilities as allowed under ASU 2021-09, Discount Rate for Lessees That Are Not Public Business Entities. Please see further discussion in Note 12.

NOTE 3: Receivables, Net

Components of receivables, net are as follows:

 

		September 30, 2025				September 30, 2024
Trade receivables		$	73,213,999			$	64,398,338
Other receivables			32,064				10,413
Total receivables			73,246,063				64,408,751
Less: Allowance for expected credit losses			(400,000	)			(849,073	)
Receivables, net		$	72,846,063			$	63,559,678

NOTE 4: Inventories

Components of inventories are as follows:

 

		September 30, 2025				September 30, 2024
Finished products		$	19,906,187			$	17,205,284
Purchased products for resale			2,082,982				2,408,093
Raw materials			14,264,983				12,816,808
Inventories		$	36,254,152			$	32,430,185

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 5: Property, Plant and Equipment, Net

Components of property, plant and equipment are as follows:

 

		September 30, 2025				September 30, 2024
Land and land improvements		$	47,981,623			$	46,253,147
Buildings and improvements			43,504,875				44,515,341
Equipment			105,895,981				98,667,339
Construction-in-progress			11,735,027				5,258,566
Financing lease right-of-use assets			5,465,624				5,489,441
Total property, plant and equipment			214,583,130				200,183,834
Less: accumulated depreciation & amortization			(95,883,345	)			(84,377,709	)
Net property, plant and equipment		$	118,699,785			$	115,806,125

For the nine-month period ended September 30, 2025, and 2024, the Company recognized depreciation expense related to property, plant and equipment of $9,165,136 and $8,806,684, respectively. For the nine-month period ended September 30, 2025, and 2024, $9,165,136 and $8,801,827, respectively, are recorded in cost of sales with the remainder recorded in depreciation & amortization in the statements of income.

NOTE 6: Goodwill

Components of goodwill, net are as follows:

 

		September 30, 2025				September 30, 2024
Goodwill			18,148,492				18,148,492
Less: Accumulated amortization			(4,963,060	)			(3,148,211	)
Goodwill, net		$	13,185,432			$	15,000,281

For the nine-month period ended September 30, 2025, and 2024, the Company recognized amortization expense related to goodwill of $1,361,137 and $1,361,137, respectively, in the statements of income.

Future expected amortization of goodwill as of September 30, 2025, is as follows:

 

2025 (Remainder)		$	453,712
2026			1,814,849
2027			1,814,849
2028			1,814,849
2029			1,814,849
Thereafter			5,472,324
Total		$	13,185,432

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 7: Intangible assets, net

Components of intangible assets, net are as follows:

 

		September 30, 2025				September 30, 2024
Intangible assets		$	3,584,392			$	3,584,392
Less: Accumulated amortization			(477,918	)			(238,960	)
Intangible assets, net		$	3,106,474			$	3,345,432

On September 21, 2023, the Company acquired from Pre-con Products the entire worldwide rights, title, and interest in and to the covered intellectual property of StormPrism^™ with related patents and trademarks. StormPrism^™ is an innovative underground stormwater storage system. It provides a way to store large volumes of captured stormwater underground in a more efficient and safe manner than other products in the market. The intangible assets acquired are valued based on a $3,000,000 upfront payment and the net present value of annual $100,000 future payments through 2030. The net present value of payments due in 2025 of $96,370 are recorded under other current liabilities, and the net present value of payments due in 2026 to 2030 of $342,003 are recorded under other non-current liabilities.

For the nine-month period ended September 30, 2025, and 2024, the Company recognized amortization expense related to intangible assets of $179,219 and $179,219, respectively, in the statements of income.

Future expected amortization of intangible assets as of September 30, 2025, is as follows:

 

2025 (Remainder)		$	59,740
2026			238,959
2027			238,959
2028			238,959
2029			238,959
Thereafter			2,090,898
Total		$	3,106,474

NOTE 8: Related-Party Transactions

Fees were paid to The Concrete Company (“TCC”) by the Company during the nine-month period ended September 30, 2025, and 2024 in the amount of $1,143,421 and $1,168,755, respectively, which represents the management services utilized by the Company and provided by TCC under a management services agreement.

The Company carries out transactions with TCC and various entities under common control of TCC in the normal course of business. During the nine-month period ended September 30, 2025, and 2024, the Company made payments for purchases of inventories and services from affiliates under common control of $427,797and $519,364, respectively.

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 9: Long-Term Debt

Long-term debt is summarized as follows:

 

		September 30, 2025				September 30, 2024
Term loan		$	243,852,688			$	264,777,688
Less:
Current maturities			(3,700,000	)			(3,700,000	)
Unamortized debt discount and issuance costs			(6,764,026	)			(8,845,265	)
Long-term debt, net of current maturities		$	233,388,662			$	252,232,423

On December 29, 2021, the Company entered into a term loan (the “Term Loan”) with a bank, collateralized with certain assets. The Term Loan requires quarterly principal payments of $925,000 and monthly interest-only payments at 4.90% plus the Secured Overnight Financing Rate (SOFR) (4.30% at September 30, 2025, and 5.33% at September 30, 2024). The Term Loan matures on December 29, 2028.

On October 9, 2024, the Company entered into an interest rate cap agreement with a notional amount of $100,000,000 of Term Loan debt which limits SOFR to 4.00%. The termination date is December 31, 2026. For the nine-month period ended September 30, 2025, the Company did not record any mark-to-market adjustments as they were immaterial.

The effective interest rates at September 30, 2025, and 2024 were 9.20% and 10.23%, respectively.

On December 29, 2021, the Company also entered into a $35 million revolving credit facility agreement with a bank (the “Revolver”), which carries interest at 4.90% plus SOFR and is payable quarterly once incurred. The full amount of the Revolver was available for use as of September 30, 2025, and 2024. The Company pays a commitment fee of 0.5% on the unused portion of the Revolver. Interest is payable quarterly as incurred. The Revolver is secured by the assets of the Company and matures December 29, 2026.

The Term Loan and the Revolver agreements are subject to certain financial covenants, and as of September 30, 2025, the Company was in compliance with those covenants.

Maturities of long-term debt are as follows:

 

2025 (Remainder)		$	925,000
2026			3,700,000
2027			3,700,000
2028			235,527,688
Total		$	243,852,688

Debt discount and issuance costs consists of:

 

		September 30, 2025				September 30, 2024
Debt discount and issuance costs		$	14,557,225			$	14,557,225
Less: Accumuated amortization			(7,793,199	)			(5,711,960	)
Unamortized debt discount and issuance costs, net		$	6,764,026			$	8,845,265

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 10: Commitments and Contingencies

The Company is subject to various claims and lawsuits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of these matters will not have a material effect on the consolidated financial statements of the Company.

NOTE 11: Leases

Leases are categorized at their commencement date, which is the date the Company takes possession or control of the underlying asset, and it determines if an arrangement is a lease at inception of the contract, as either financing or operating. The Company has both operating and finance leases for buildings, land, and equipment.

Lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised.

The following table presents supplemental balance sheet information related to leases:

 

Operating Leases		2025				2024
Right-of-use asset - operating		$	4,109,003			$	4,051,410
Current operating lease liabilities			313,625				287,899
Noncurrent operating lease liabilities			3,907,441				3,807,219
Total operating lease liabilities		$	4,221,066			$	4,095,118
Financing Leases		2025				2024
Right-of-use asset - financing		$	5,465,624			$	5,489,441
Right-of-use asset - accumulated amortization			(2,295,897	)			(1,770,909	)
Total right-of-use asset - financing			3,169,727				3,718,532
Current financing lease liabilities			47,919				51,164
Non-current financing lease liabilities			33,586				81,505
Total financing lease liabilities		$	81,505			$	132,669

The following table presents the weighted average remaining lease term and discount rate:

 

Operating Leases		2025				2024
Weighted average remaining lease term (years)			15.2				15.4
Weighted average discount rate			3.1	%			2.9	%
Financing Leases		2025				2024
Weighted average remaining lease term (years)			27.8				27.5
Weighted average discount rate			4.2	%			4.1	%

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

The Company recognized lease costs in the statements of income for the nine-month period ended September 30, 2025 and 2024, respectively as follows:

 

Operating Lease Costs		2025				2024
Operating lease costs		$	328,097			$	304,856
Financing Lease Costs		2025				2024
Amortization		$	411,078			$	426,059
Interest on lease liabilities		$	3,037			$	4,464

The following table presents future undiscounted lease payments for the Company’s operating and finance lease liabilities as of September 30, 2025:

 

		Operating Leases				Financing Leases
2025		$	108,703			$	13,250
2026			441,844				46,171
2027			446,960				20,673
2028			348,994				4,598
2029			340,068				—
Thereafter			3,718,538				—
Total future lease payments		$	5,405,106			$	84,692
Less: imputed interest			(1,184,041	)			(3,187	)
Present value of right-of-use lease liabilities		$	4,221,066			$	81,505

The following table presents supplemental cash flow and other information related to leases for the nine-month period ended:

 

Operating Leases		2025				2024
Cash flows from operating activities:
Operating leases - noncash lease expense		$	259,033			$	281,994
Operating leases - change in lease liabilities		$	(246,625	)		$	(274,389	)
Financing Leases		2025				2024
Cash flows from operating activities:
Financing leases - amortization of right-of- use asset		$	411,078			$	426,059
Cash flows from financing activities:
Principal payments on financing leases		$	(37,944	)		$	(1,838	)
Non Cash Disclosures		2025				2024
Right-of-use assets obtained in exchange for new operating lease liabilities		$	372,572			$	—
Right-of-use assets obtained in exchange for new financing lease liabilities		$	—			$	20,893

 

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FOLEY PRODUCTS COMPANY, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD

ENDED SEPTEMBER 30, 2025 AND 2024

UNAUDITED

 

NOTE 12: Employee Benefit Plan

The Company’s 401(k) retirement plan covering substantially all of its employees. Employees are fully vested in Company contributions after 3 years of service. The Company matches 50% of employee contributions each plan year up to a maximum of 8%. Approximately $684,000 and $442,000 was expensed for the Company’s contributions during the nine-month period ended September 30, 2025, and 2024, respectively, and is included in general and administrative expenses in the accompanying statements of income.

NOTE 13: Member’s Equity

The Company is solely owned by FPC HoldCo, LLC (“FPCH”), which was set up on December 28, 2021, as the Company’s sole Member. The membership interests of FPCH are divided into three classes of units denominated as common, preferred, and incentive units as defined in FPCH’s operating agreement (“Common Members”, “Preferred Members”, “Incentive Members”, respectively). Common and preferred units represent a voting equity interest in FPCH. Incentive units are non-voting.

Certain members of management are included in a profits interest program of FPCH and awarded incentive units. 50% of the units vest over a five-year period. The other 50% vest upon a change in control. The Company previously determined that the fair value of the units awarded prior to 2023 and the related compensation expense is immaterial.

Certain members of management who joined in 2023 were awarded incentive units. For most of the units, 75% vest over a five-year period and the other 25% vest upon a change in control. The Company has estimated the fair value of those units on a non-marketable, minority interest basis using Level II inputs. For the nine-month period ended September 30, 2025, and 2024, the Company recognized share-based compensation expense related to these awards of $2,163,722 and $2,163,722, respectively, in the statements of income.

Earnings are distributed as determined by the Board of Directors, as defined by and pursuant to the Company’s operating agreement.

NOTE 14: Subsequent Events

The Company has evaluated all transactions that may qualify for subsequent event disclosure through November 5, 2025, which is the date the consolidated financial statements are available to be issued.

The Company announced on October 16, 2025 that it entered into a definitive agreement to be acquired by Commercial Metals Company (“CMC”). The transaction has been approved by the boards of directors of CMC and the Company. The closing of the transaction is expected to occur in a timely manner following customary regulatory review and is subject to customary closing conditions.

No other significant subsequent events have been identified that would require adjustment of or disclosure in the accompanying consolidated financial statements.

 

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