Quarterly report pursuant to Section 13 or 15(d)

Significant Accounting Policies (Policies)

Significant Accounting Policies (Policies)
9 Months Ended
Jul. 31, 2019
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
Basis of presentation
The accompanying Unaudited Consolidated Financial Statements have been prepared, without audit, in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do
include all information and footnotes required by GAAP for complete financial statements. The enclosed statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company at
July 31, 2019
and for all periods presented. 
As a result of the Business Combination, the Company is the acquirer for accounting purposes and CPH is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes the Company’s financial performance into
distinct periods, the period up to the Closing Date (labeled “Predecessor”) and the period including and after that date (labeled “Successor”).
The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired.
Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. See Note
 – Business Combinations for a discussion of the estimated fair values of assets and liabilities recorded in connection with the Company’s acquisition of CPH.
As a result of the application of the acquisition method of accounting as of the Closing Date of the Business Combination, the accompanying Consolidated Financial Statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are therefore,
comparable. These statements should be read in conjunction with the Predecessor’s Consolidated Financial Statements and Notes thereto as of
October 31, 2018
and for the years ended
October 31, 2018,
included as
in the Company’s Form
-K/A (Amendment
) filed with the SEC on
January 29, 2019
The historical financial information of Industrea prior to the Business Combination (a special purpose acquisition company, or “SPAC”) has
been reflected in the Predecessor financial statements as these historical amounts have been determined to be
useful information to a user of the financial statements. SPACs deposit the proceeds from their initial public offerings into a segregated trust account until a business combination occurs, where such funds are then used to pay consideration for the acquiree and/or to pay stockholders who elect to redeem their shares of common stock in connection with the business combination. The operations of a SPAC, until the closing of a business combination, other than income from the trust account investments and transaction expenses, are nominal. Accordingly,
other activity in the Company was reported for periods prior to
December 6, 2018
besides CPH’s operations as Predecessor.
Consolidation, Policy [Policy Text Block]
Principles of consolidation
The Successor Consolidated Financial Statements include all amounts of the Company and its subsidiaries. The Predecessor Consolidated Financial Statements include all amounts of CPH and its subsidiaries. All intercompany balances and transactions have been eliminated.
Use of Estimates, Policy [Policy Text Block]
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates include accrued sales and use taxes, the liability for incurred but unreported claims under various partially self-insured polices, allowance for doubtful accounts, goodwill impairment analysis, valuation of share based compensation and accounting for business combinations. Actual results
differ from those estimates, and such differences
be material to the Company’s consolidated financial statements.
Accounts Receivable [Policy Text Block]
Trade receivables are carried at the original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Generally, the Company does
require collateral for their accounts receivable; however, the Company
file statutory liens or take other appropriate legal action when necessary on construction projects when problems arise. A trade receivable is considered to be past due if any portion of the receivable balance is outstanding for more than
days. The Company does
charge interest on past-due trade receivables.
Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. As of
July 31, 2019
October 31, 2018,
the allowance for doubtful accounts was
million and
million, respectively. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received.
Inventory, Policy [Policy Text Block]
Inventory consists primarily of replacement parts for concrete pumping equipment. Inventories are stated at the lower of cost (
-out method) or net realizable value. The Company evaluates inventory and records an allowance for obsolete and slow-moving inventory to account for cost adjustments to net realizable value. Based on management’s analysis,
allowance for obsolete and slow-moving inventory was required as of
July 31, 2019
October 31, 2018.
Fair Value of Financial Instruments, Policy [Policy Text Block]
Fair Value Measurements
The Financial Accounting Standard Board’s (the "FASB") standard on fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
This standard establishes
levels of inputs that
be used to measure fair value:
– Quoted prices in active markets for identical assets or liabilities.
– Observable inputs other than Level
prices such as quoted prices for similar assets or liabilities.
– Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
Debt, Policy [Policy Text Block]
Deferred financing costs
Deferred financing costs representing
-party, non-lender debt issuance costs are deferred and amortized using the effective interest rate method over the term of the related long-term-debt agreement, and the straight-line method for the revolving credit agreement.
Debt issuance costs related to term loans are reflected as a direct deduction from the carrying amount of the long-term debt liability that is included in long term debt, net of discount for deferred financing costs in the accompanying consolidated balance sheet. Debt issuance costs related to revolving credit facilities are capitalized and reflected in deferred financing in the accompanying consolidated balance sheet.
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]
In accordance with ASC Topic
Intangibles–Goodwill and Other (“ASC
), the Company’s evaluates goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets
be recoverable. The Company uses a
-step process to assess the realizability of goodwill. The
step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value,
further testing is required. If a qualitative assessment indicates it is more likely than
that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative
step where the fair value of a reporting unit is calculated based on weighted income and market-based approaches. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded,
to exceed the carrying amount of goodwill in the reporting unit.
The Company elected to bypass the qualitative assessment during the
quarter, as a result of the stock price of the Company declining substantially.  The drop in the Company’s stock price was determined to qualify as triggering event requiring a step
goodwill impairment analysis in accordance with ASU
Intangibles — Goodwill and Other (ASC
): Simplifying the Test for Goodwill Impairment (“ASU
  Refer to the Note
for further discussion.
Property, Plant and Equipment, Policy [Policy Text Block]
Property, plant and equipment
Property, plant and equipment are recorded at acquired cost (or their estimated fair value when acquired through a business combination) less accumulated depreciation. Expenditures for additions and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred; however, maintenance and repairs that improve or extend the life of existing assets are capitalized. The carrying amount of assets disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal. Gains or losses from property and equipment disposals are recognized in the year of disposal. Property, plant and equipment is depreciated using the straight line method over the following estimated useful lives:
in years
Buildings and improvements
15 to 40
Capital lease assets—buildings
Furniture and office equipment
2 to 7
Machinery and equipment
3 to 25
Transportation equipment
3 to 7
Capital lease assets are depreciated over the estimated useful life of the asset.
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]
Intangible assets
Intangible assets are recorded at cost or their estimated fair value when acquired through a business combination less accumulated amortization (if finite-lived).
Intangible assets with finite lives, except for customer relationships, are amortized on a straight-line basis over their estimated useful lives. Customer relationships are amortized on an accelerated basis over their estimated useful lives. Intangible assets with indefinite lives are
amortized but are subject to annual reviews for impairment.
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]
Impairment of long-lived assets
Property, Plant and Equipment
) requires other long-lived assets to be evaluated for impairment when indicators of impairment are present. If indicators are present, assets are grouped to the lowest level for which identifiable cash flows are largely independent of other asset groups and cash flows are estimated for each asset group over the remaining estimated life of each asset group. If the undiscounted cash flows estimated to be generated by those assets are less than the asset’s carrying amount, impairment is recognized in the amount of the excess of the carrying value over the fair value.
indicators of impairment were identified as of
July 31, 2019.
Revenue [Policy Text Block]
Revenue recognition
The Company generates revenues primarily from concrete pumping services in both the U.S. and the U.K. Additionally, revenues are generated from the Company’s waste management business which consists of service fees charged to customers for the delivery of our pans and containers and the disposal of the concrete waste material.
The Company recognizes revenue from these businesses when all of the following criteria are met: (a) persuasive evidence of an arrangement exists, (b) the service has been performed or delivery has occurred, (c) the price is fixed or determinable, and (d) collectability is reasonably assured. The Company’s delivery terms for replacement part sales are FOB shipping point.
The Company imposes and collects sales taxes concurrent with its revenue-producing transactions with customers and remits those taxes to the various governmental authorities as prescribed by the taxing jurisdictions in which it operates. The Company presents such taxes in its consolidated statement of income on a net basis. 
Share-based Payment Arrangement [Policy Text Block]
Stock-based compensation
The Company follows ASC
Compensation—Stock Compensation
), which requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards made to employees and directors. The value of the vested portion of the award is recognized as expense in the consolidated statement of income over the requisite service periods when applicable. Compensation expense for all share-based awards is recognized using the straight-line method. The Company will account for forfeitures as they occur in accordance with the early adoption of ASU
Compensation—Stock Compensation (ASC
): Improvements to Employee Share-Based Payment Accounting
Income Tax, Policy [Policy Text Block]
Income taxes
The Company complies with ASC
Income Taxes
, which requires a liability approach to financial reporting for income taxes.
The Company computes deferred income tax assets and liabilities annually for differences between the financial statements and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than
that some portion or all of the deferred tax assets will
be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, carryback opportunities, and tax planning strategies in making the assessment. Income tax expense includes both the current income taxes payable or refundable and the change during the period in the deferred tax assets and liabilities. The tax benefit from an uncertain tax position is only recognized in the consolidated balance sheet if the tax position is more likely than
to be sustained upon an examination.
Camfaud files income tax returns in the U.K. Camfaud’s national statutes are generally open for
year following the statutory filing period.
Foreign Currency Transactions and Translations Policy [Policy Text Block]
Foreign currency translation
The functional currency of Camfaud is the Pound Sterling ("GBP"). The assets and liabilities of the foreign subsidiaries are translated into U.S. Dollars using the period end exchange rates, and the consolidated statement of income are translated at the average rate for the period. The resulting translation adjustments are recorded as a component of comprehensive income on the consolidated statement of comprehensive income and accumulated in other comprehensive income. The functional currency of our other subsidiaries is the U.S. Dollar.
Business Combinations Policy [Policy Text Block]
Business combinations
The Company applies the principles provided in ASC
Business Combinations
), when a business is acquired. Tangible and intangible assets acquired and liabilities assumed are recorded at fair value and goodwill is recognized for any differences between the price of the acquisition and the fair value determination. The Company estimates all purchase costs and other related transactions on the acquisition date. Transaction costs for the acquisitions are expensed as incurred in accordance with ASC
Concentration Risk, Credit Risk, Policy [Policy Text Block]
As of
July 31, 2019
October 31, 2018,
there were
significant vendors that the Company relied upon to purchase concrete pumping boom equipment. However, should the need arise, there are alternate vendors who can provide concrete pumping boom equipment.
Cash balances held at financial institutions
at times, be in excess of federally insured limits. It is management’s belief that the Company places its temporary cash balances in high-credit quality financial institutions.
The Company’s customer base is dispersed across the United States and U.K. The Company performs ongoing evaluations of its customers’ financial condition and requires
collateral to support credit sales. During the Predecessor and Successor periods described above,
customer represented
 percent or more of sales or trade receivables.