UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

⌧☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2021

◻☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-16501

Williams Industrial Services Group Inc.

(Exact name of registrant as specified in its charter)



Delaware		73-1541378
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 Crescent Centre Parkway, Suite 1240

Tucker, GA30084

(Address of principal executive offices) (Zip code)

~~(770)~~ (770) 879-4400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	WLMS	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	⌧	Smaller reporting company	⌧☒
Emerging growth company	◻☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻☐ No ⌧

As of ~~May 7,~~November 5, 2021, there were ~~25,896,001~~25,915,502 shares of common stock of Williams Industrial Services Group Inc. outstanding.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

Table of Contents


Part I—FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020 (unaudited)	3

Condensed Consolidated Statements of Operations for the Three Mand Nine Months~~onths~~ Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)	4

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)	5

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)	6

Condensed Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)	7

Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2123

Item 3. Quantitative and Qualitative Disclosures about Market Risk	2831

Item 4. Controls and Procedures	2831

Part II—OTHER INFORMATION

Item 1. Legal Proceedings	2831

Item 1A. Risk Factors	2932

Item 5. Other Information	32

Item 6. Exhibits	2933

SIGNATURES	3034

Table of Contents

Part I—FINANCIAL INFORMATION

Item 1.Financial Statements.

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

March 31, 2021

December 31, 2020
ASSETS




Current assets:

Cash and cash equivalents

$
5,444

$
8,716
Restricted cash

468

468
Accounts receivable, net of allowance of $333 and $351, respectively

29,258

27,549
Contract assets

12,528

7,969
Other current assets

6,461

6,457
Total current assets

54,159

51,159

Property, plant, and equipment, net

325

309
Goodwill

35,400

35,400
Intangible assets

12,500

12,500
Other long-term assets

5,833

5,712
Total assets

$
108,217

$
105,080

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$
5,373

$
6,210
Accrued compensation and benefits

21,760

15,800
Contract liabilities

1,978

2,529
Short-term borrowings

1,151

352
Current portion of long-term debt

1,050

1,050
Other current liabilities

6,837

7,170
Current liabilities of discontinued operations

339

342
Total current liabilities

38,488

33,453
Long-term debt, net

30,628

30,728
Deferred tax liabilities

2,427

2,440
Other long-term liabilities

1,871

2,098
Long-term liabilities of discontinued operations

4,499

4,466
Total liabilities

77,913

73,185
Commitments and contingencies (Note 10)

Stockholders’ equity:

Common stock, $0.01 par value, 170,000,000 shares authorized, and 26,365,169 and 25,926,333 shares issued, respectively, and 25,896,001 and 25,336,442 shares outstanding, respectively

260

256
Paid-in capital

90,372

90,292
Accumulated other comprehensive income

32

28
Accumulated deficit

(60,354)

(58,673)
Treasury stock, at par (469,168 and 589,891 common shares, respectively)

(6)

(8)
Total stockholders’ equity

30,304

31,895
Total liabilities and stockholders’ equity

$
108,217

$
105,080



(in thousands, except share data)	September 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	2,556	$	8,716
Restricted cash		468	��	468
Accounts receivable, net of allowance of $228 and $351, respectively		39,489		27,549
Contract assets		12,811		7,969
Other current assets		11,526		6,457
Total current assets		66,850		51,159

Property, plant and equipment, net		709		309
Goodwill		35,400		35,400
Intangible assets		12,500		12,500
Other long-term assets		5,687		5,712
Total assets	$	121,146	$	105,080

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,439	$	6,210
Accrued compensation and benefits		19,856		15,800
Contract liabilities		2,494		2,529
Short-term borrowings		4,672		352
Current portion of long-term debt		1,050		1,050
Other current liabilities		10,711		7,170
Current liabilities of discontinued operations		188		342
Total current liabilities		47,410		33,453
Long-term debt, net		30,428		30,728
Deferred tax liabilities		2,136		2,440
Other long-term liabilities		1,828		2,098
Long-term liabilities of discontinued operations		4,201		4,466
Total liabilities		86,003		73,185
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.01 par value, 170,000,000 shares authorized and 26,384,670 and 25,926,333 shares issued, respectively, and 25,915,502 and 25,336,442 shares outstanding, respectively		260		256
Paid-in capital		91,670		90,292
Accumulated other comprehensive income (loss)		(36)		28
Accumulated deficit		(56,745)		(58,673)
Treasury stock, at par (469,168 and 589,891 common shares, respectively)		(6)		(8)
Total stockholders’ equity		35,143		31,895
Total liabilities and stockholders’ equity	$	121,146	$	105,080

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended March 31,
(in thousands, except share and per share data)

2021

2020
Revenue

$
60,851

$
66,147
Cost of revenue

54,753

59,238

Gross profit

6,098

6,909

Selling and marketing expenses

211

138
General and administrative expenses

6,311

6,200
Depreciation and amortization expense

41

41
Total operating expenses

6,563

6,379

Operating income (loss)

(465)

530

Interest expense, net

1,293

1,533
Other income, net

(360)

(122)
Total other expense, net

933

1,411

Loss from continuing operations before income tax

(1,398)

(881)
Income tax expense

185

48
Loss from continuing operations

(1,583)

(929)

Loss from discontinued operations before income tax

(79)

(54)
Income tax expense

19

18
Loss from discontinued operations

(98)

(72)

Net loss

$
(1,681)

$
(1,001)

Basic loss per common share

Loss from continuing operations

$
(0.06)

$
(0.05)
Loss from discontinued operations

(0.01)

—
Basic loss per common share

$
(0.07)

$
(0.05)

Diluted loss per common share

Loss from continuing operations

$
(0.06)

$
(0.05)
Loss from discontinued operations

(0.01)

—
Diluted loss per common share

$
(0.07)

$
(0.05)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2021		2020		2021		2020
Revenue	$	73,351	$	66,240	$	225,773	$	204,936
Cost of revenue		66,590		57,582		203,561		180,014

Gross profit		6,761		8,658		22,212		24,922

Selling and marketing expenses		267		123		709		401
General and administrative expenses		4,248		5,827		16,931		17,413
Depreciation and amortization expense		50		46		137		144
Total operating expenses		4,565		5,996		17,777		17,958

Operating income		2,196		2,662		4,435		6,964

Interest expense, net		1,227		1,541		3,733		4,640
Other (income) expense, net		181		(316)		(1,411)		(937)
Total other expense, net		1,408		1,225		2,322		3,703

Income from continuing operations before income tax		788		1,437		2,113		3,261
Income tax (benefit) expense		(6)		321		256		565
Income from continuing operations		794		1,116		1,857		2,696

Income (loss) from discontinued operations before income tax		(34)		(66)		130		(222)
Income tax (benefit) expense		22		24		59		(56)
Income (loss) from discontinued operations		(56)		(90)		71		(166)

Net income	$	738	$	1,026	$	1,928	$	2,530

Basic earnings per common share
Income from continuing operations	$	0.03	$	0.04	$	0.07	$	0.12
Income (loss) from discontinued operations		0.00		0.00		0.00		(0.01)
Basic earnings per common share	$	0.03	$	0.04	$	0.07	$	0.11

Diluted earnings per common share
Income from continuing operations	$	0.03	$	0.04	$	0.07	$	0.11
Income (loss) from discontinued operations		0.00		0.00		0.00		0.00
Diluted earnings per common share	$	0.03	$	0.04	$	0.07	$	0.11

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS~~) (UNAUDITED)

Three Months Ended March 31,

(in thousands)

2021

2020

Net loss

$
(1,681)

$
(1,001)

Foreign currency translation adjustment

4

(258)

Comprehensive loss

$
(1,677)

$
(1,259)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Net income	$	738	$	1,026	$	1,928	$	2,530
Foreign currency translation adjustment		(98)		(34)		(64)		(288)
Comprehensive income	$	640	$	992	$	1,864	$	2,242

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Accumulated

Common Shares

Other

$0.01 Per Share

Paid-in

Comprehensive

Accumulated

Treasury Shares

(in thousands, except share data)

Shares


Amount


Capital


Income (Loss)

Deficit

Shares

Amount


Total
Balance, December 31, 2019

19,794,270

$
198

$
81,964

$
222

$
(60,211)

(737,075)

$
(9)

$
22,164
Issuance of common stock

5,384,615

54

6,478

—

—

—

—

6,532
Issuance of restricted stock units

423,341

—

—

—

—

80,207

1

1
Tax withholding on restricted stock units

—

—

(65)

—

—

(41,445)

—

(65)
Stock-based compensation

—

—

376

—

—

—

—

376
Foreign currency translation

—

—

—

(258)

—

—

—

(258)
Net loss

—

—

—

—

(1,001)

—

—

(1,001)
Balance, March 31, 2020

25,602,226

$
252

$
88,753

$
(36)

$
(61,212)

(698,313)

$
(8)

$
27,749


							Accumulated
	Common Shares						Other
	$0.01 Per Share				Paid-in		Comprehensive		Accumulated	Treasury Shares
(in thousands, except share data)	Shares		Amount		Capital		Income (Loss)		Deficit	Shares		Amount		Total
Balance, December 31, 2019	19,794,270	$	198	$	81,964	$	222	$	(60,211)	(737,075)	$	(9)	$	22,164
Issuance of common stock	5,384,615		54		6,478		—		—	—		—		6,532
Issuance of restricted stock units	423,341		—		—		—		—	80,207		1		1
Tax withholding on restricted stock units	—		—		(65)		—		—	(41,445)		—		(65)
Stock-based compensation	—		—		376		—		—	—		—		376
Foreign currency translation	—		—		—		(258)		—	—		—		(258)
Net loss	—		—		—		—		(1,001)	—		—		(1,001)
Balance, March 31, 2020	25,602,226	$	252	$	88,753	$	(36)	$	(61,212)	(698,313)	$	(8)	$	27,749
Issuance of common stock	—		4		(48)		—		—	—		—		(44)
Issuance of restricted stock units	407,315		—		—		—		—	138,221		1		1
Tax withholding on restricted stock units	(93,234)		—		(153)		—		—	(31,570)		(1)		(154)
Stock-based compensation	—		—		650		—		—	—		—		650
Foreign currency translation	—		—		—		4		—	—		—		4
Net income	—		—		—		—		2,505	—		—		2,505
Balance, June 30, 2020	25,916,307	$	256	$	89,202	$	(32)	$	(58,707)	(591,662)	$	(8)	$	30,711
Issuance of restricted stock units	10,026		—		—		—		—	4,788		—		—
Tax withholding on restricted stock units	—		—		(9)		—		—	(3,017)		—		(9)
Share-based compensation	—		—		389		—		—	—		—		389
Foreign currency translation	—		—		—		(34)		—	—		—		(34)
Net income	—		—		—		—		1,026	—		—		1,026
Balance, September 30, 2020	25,926,333	$	256	$	89,582	$	(66)	$	(57,681)	(589,891)	$	(8)	$	32,083

Accumulated

Common Shares

Other

$0.01 Per Share

Paid-in

Comprehensive

Accumulated

Treasury Shares

(in thousands, except share data)

Shares


Amount


Capital


Income (Loss)


Deficit

Shares


Amount


Total
Balance, December 31, 2020

25,926,333

$
256

$
90,292

$
28

$
(58,673)

(589,891)

$
(8)

$
31,895
Issuance of restricted stock units

438,836

4

—

—

—

120,723

2

6
Tax withholding on restricted stock units

—

—

(545)

—

—

—

—

(545)
Stock-based compensation

—

—

625

—

—

—

—

625
Foreign currency translation

—

—

—

4

—

—

—

4
Net loss

—

—

—

—

(1,681)

—

—

(1,681)
Balance, March 31, 2021

26,365,169

$
260

$
90,372

$
32

$
(60,354)

(469,168)

$
(6)

$
30,304


							Accumulated
	Common Shares						Other
	$0.01 Per Share				Paid-in		Comprehensive		Accumulated	Treasury Shares
(in thousands, except share data)	Shares		Amount		Capital		Income (Loss)		Deficit	Shares		Amount		Total
Balance, December 31, 2020	25,926,333	$	256	$	90,292	$	28	$	(58,673)	(589,891)	$	(8)	$	31,895
Issuance of restricted stock units	438,836		4		—		—		—	120,723		2		6
Tax withholding on restricted stock units	—		—		(545)		—		—	—		—		(545)
Stock-based compensation	—		—		625		—		—	—		—		625
Foreign currency translation	—		—		—		4		—	—		—		4
Net loss	—		—		—		—		(1,681)	—		—		(1,681)
Balance, March 31, 2021	26,365,169	$	260	$	90,372	$	32	$	(60,354)	(469,168)	$	(6)	$	30,304
Issuance of restricted stock units	19,501		—		—		—		—	—		—		—
Tax withholding on restricted stock units	—		—		40		—		—	—		—		40
Stock-based compensation	—		—		424		—		—	—		—		424
Foreign currency translation	—		—		—		30		—	—		—		30
Net income	—		—		—		—		2,871	—		—		2,871
Balance, June 30, 2021	26,384,670	$	260	$	90,836	$	62	$	(57,483)	(469,168)	$	(6)	$	33,669
Share-based compensation	—		—		834		—		—	—		—		834
Foreign currency translation	—		—		—		(98)		—	—		—		(98)
Net income	—		—		—		—		738	—		—		738
Balance, September 30, 2021	26,384,670	$	260	$	91,670	$	(36)	$	(56,745)	(469,168)	$	(6)	$	35,143

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,
(in thousands)

2021

2020
Operating activities:

Net loss

$
(1,681)

$
(1,001)
Adjustments to reconcile net loss to net cash used in operating activities:

Net loss from discontinued operations

98

72
Deferred income tax provision (benefit)

(13)

33
Depreciation and amortization on plant, property, and equipment

41

41
Amortization of deferred financing costs

208

182
Amortization of debt discount

50

—
Bad debt expense

(18)

3
Stock-based compensation

715

472
Changes in operating assets and liabilities, net of businesses sold:

Accounts receivable

(1,634)

5,444
Contract assets

(4,410)

(9,413)
Other current assets

59

(2)
Other assets

(172)

(596)
Accounts payable

(859)

(3,122)
Accrued and other liabilities

5,112

4,230
Contract liabilities

(548)

701
Net cash used in operating activities, continuing operations

(3,052)

(2,956)
Net cash used in operating activities, discontinued operations

(69)

(83)
Net cash used in operating activities

(3,121)

(3,039)
Investing activities:

Purchase of property, plant, and equipment

(56)

(42)
Net cash used in investing activities

(56)

(42)
Financing activities:

Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation

(541)

(65)
Proceeds from issuance of common stock

—

6,532
Debt issuance costs

—

(442)
Proceeds from short-term borrowings

57,971

53,460
Repayments of short-term borrowings

(57,435)

(57,913)
Net cash provided by (used in) financing activities

(5)

1,572
Effect of exchange rate change on cash

(90)

(136)
Net change in cash, cash equivalents and restricted cash

(3,272)

(1,645)
Cash, cash equivalents and restricted cash, beginning of period

9,184

7,818
Cash, cash equivalents and restricted cash, end of period

$
5,912

$
6,173

Supplemental Disclosures:

Cash paid for interest

$
875

$
716
Cash paid for income taxes, net of refunds

$
1,066

$
—
Noncash amendment fee related to revolving credit facility

$
—

$
150


	Nine Months Ended September 30,
(in thousands)	2021		2020
Operating activities:
Net income	$	1,928	$	2,530
Adjustments to reconcile net income to net cash used in operating activities:
Net (income) loss from discontinued operations		(71)		166
Deferred income tax provision (benefit)		(304)		55
Depreciation and amortization on plant, property and equipment		137		144
Amortization of deferred financing costs		623		546
Amortization of debt discount		150		—
Gain on disposals of property, plant and equipment		—		(136)
Bad debt expense		(123)		19
Stock-based compensation		2,579		1,703
Changes in operating assets and liabilities, net of businesses sold:
Accounts receivable		(11,896)		(6,530)
Contract assets		(4,824)		(1,553)
Other current assets		(5,113)		(3,684)
Other assets		(214)		1,619
Accounts payable		2,121		(8,914)
Accrued and other liabilities		6,628		7,290
Contract liabilities		(39)		706
Net cash used in operating activities, continuing operations		(8,418)		(6,039)
Net cash used in operating activities, discontinued operations		(348)		(189)
Net cash used in operating activities		(8,766)		(6,228)
Investing activities:
Purchase of property, plant and equipment		(537)		(88)
Net cash used in investing activities		(537)		(88)
Financing activities:
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation		(501)		(227)
Proceeds from issuance of common stock		—		6,488
Debt issuance costs		—		(325)
Proceeds from short-term borrowings		208,421		172,616
Repayments of short-term borrowings		(204,101)		(175,158)
Repayments of long-term debt		(788)		(350)
Net cash provided by financing activities		3,031		3,044
Effect of exchange rate change on cash		112		(80)
Net change in cash, cash equivalents and restricted cash		(6,160)		(3,352)
Cash, cash equivalents and restricted cash, beginning of period		9,184		7,818
Cash, cash equivalents and restricted cash, end of period	$	3,024	$	4,466

Supplemental Disclosures:
Cash paid for interest	$	2,781	$	2,900
Cash paid for income taxes, net of refunds	$	1,841	$	—
Noncash amendment fee related to revolving credit facility	$	—	$	150

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1—BUSINESS AND BASIS OF PRESENTATION

Business

Williams Industrial Services Group Inc. (together with its wholly owned subsidiaries, “Williams,” the “Company,” “we,” “us” or “our,” unless the context indicates otherwise) was initially ~~incorporated~~formed in 1998 as GEEG Holdings, LLC, a Delaware limited liability company, and in 2001, changed its name to “Global Power Equipment Group Inc.,” ~~under the laws of the State of~~a Delaware corporation and became the successor to GEEG Holdings, ~~LLC, which was formed as a Delaware limited liability company in 1998.~~LLC. Effective June 29, 2018, the Company changed its name to Williams Industrial Services Group Inc. to better align its name with the Williams business, and the Company’s stock now trades on the NYSE American LLC ~~(the “NYSE American”)~~ under the ticker symbol “WLMS.” Williams has been safely helping plant owners and operators enhance asset value for more than 50 years. It provides a broad range of construction, maintenance, and support services to infrastructure customers in energy, power, and industrial end markets. The Company’s mission is to be the preferred provider of construction, maintenance, and specialty services through commitment to superior safety performance, focus on innovation, and dedication to delivering unsurpassed value to its customers.

Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) on a basis consistent with that used in the Annual Report on Form 10-K for the year ended December 31, 2020, filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2021 (the “2020 Report”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, including all normal recurring adjustments, necessary to present fairly the unaudited condensed consolidated balance sheets and statements of operations, comprehensive income, ~~(loss),~~ stockholders’ equity and cash flows for the periods indicated. All significant intercompany transactions have been eliminated. The December 31, 2020 unaudited condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed consolidated interim financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the 2020 Report. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for any interim period are not necessarily indicative of operations to be expected for the full year.

The Company reports on a fiscal quarter basis utilizing a “modified” 4-4-5 calendar (modified in that the fiscal year always begins on January 1 and ends on December 31). However, the Company has continued to label its quarterly information using a calendar convention. The effects of this practice are modest and only exist when comparing interim period results. The reporting periods and corresponding fiscal interim periods are as follows:



Reporting Interim Period	Fiscal Interim Period
	2021	2020
Three Months Ended March 31	January 1, 2021 to April 4, 2021	January 1, 2020 to March 29, 2020
Three Months Ended June 30	April 5, 2021 to July 4, 2021	March 30, 2020 to June 28, 2020
Three Months Ended September 30	July 5, 2021 to October 3, 2021	June 29, 2020 to September 27, 2020

Reporting Interim Period

Fiscal Interim Period

2021

2020
Three Months Ended March 31

January 1, 2021 to April 4, 2021

January 1, 2020 to March 29, 2020
Three Months Ended June 30

April 5, 2021 to July 4, 2021

March 30, 2020 to June 28, 2020
Three Months Ended September 30

July 5, 2021 to October 3, 2021

June 29, 2020 to September 27, 2020

Table of Contents

NOTE 2—RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes”, which simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in accounting for income taxes. The update is effective for annual periods beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company historically did not rely on the exceptions in computing the tax provision. The Company adopted the guidance as of January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's financial

~~Table of Contents~~

statements.

NOTE 3—LEASES

~~On January 1, 2019, the Company adopted ASU 2016-02 using the modified retrospective method, and accordingly, the new guidance was applied to leases that existed as of January 1, 2019.~~

The Company primarily leases office space and related equipment, as well as equipment, modular units and vehicles directly used in providing services to its customers. The Company’s leases have remaining lease terms of one to ten years. Most leases contain renewal options for varying periods, which are at the Company’s sole discretion and included in the expected lease term if they are reasonably certain of being exercised. In accordance with ASU 2016-02, the Company accounts for lease components, such as fixed payments including rent, real estate taxes, and insurance costs, separately from the non-lease components, such as common area maintenance costs.

In accordance with ASU 2016-02, for leases with terms greater than twelve months, the Company records the related right-of-use assets and lease liabilities at the present value of the fixed lease payments over the lease term at the lease commencement date. The Company uses its incremental borrowing rate to determine the present value of the lease as the rate implicit in the lease is typically not readily determinable.

Short-term leases (leases with an initial term of twelve months or less or leases that are cancelable by the lessee and lessor without significant penalties) are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used in delivering services to its customers. These leases are entered into at agreed upon hourly, daily, weekly, or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months.

On September 2, 2021, the Company made the decision to relocate its corporate headquarters to Atlanta, Georgia and entered into a ten-year lease agreement. The lease is not presented as a right-of-use asset and lease liability because the commencement date of the lease is not expected to occur until early 2022 after substantial completion of the leasehold improvements as defined in the lease agreement. The lease liability amounts to $3.5 million with a present value of $2.3 million over a ten-year term. If the Company defaults, the landlord has the right to use the security deposit for rent or other payments due to other damages, injury, expense or liability as defined in the lease agreement. Although the security deposit shall be deemed the property of the landlord, any remaining balance of the security deposit shall be returned by the landlord to the Company after termination of the lease as the Company’s obligations under the lease have been fulfilled.

The components of lease expense were as follows:

Three Months Ended March 31,
Lease Cost/(Sublease Income) (in thousands)

2021

2020
Operating lease cost

$
555

$
1,219
Short-term lease cost

620

835
Total lease cost

$
1,175

$
2,054


	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost (in thousands)	2021		2020		2021		2020
Operating lease cost	$	619	$	850	$	1,711	$	2,950
Short-term lease cost		1,051		505		2,484		1,972
Sublease income		(5)		—		(5)		—
Total lease cost	$	1,665	$	1,355	$	4,190	$	4,922

Lease cost related to finance leases was not significant for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020.

Table of Contents

Information related to the Company’s right-of-use assets and lease liabilities was as follows:

Lease Assets/Liabilities (in thousands)

Balance Sheet Classification

March 31, 2021

December 31, 2020
Lease Assets

Right-of-use assets

Other long-term assets

$
2,018

$
2,029

Lease Liabilities

Short-term lease liabilities

Other current liabilities

$
1,528

$
1,362
Long-term lease liabilities

Other long-term liabilities

802

1,011
Total lease liabilities

$
2,330

$
2,373


Lease Assets/Liabilities (in thousands)	Balance Sheet Classification	September 30, 2021		December 31, 2020
Lease Assets
Right-of-use assets	Other long-term assets	$	1,583	$	2,029

Lease Liabilities
Short-term lease liabilities	Other current liabilities	$	1,603	$	1,362
Long-term lease liabilities	Other long-term liabilities		673		1,011
Total lease liabilities		$	2,276	$	2,373

Supplemental information related to the Company’s leases was as follows:

Three Months Ended March 31,
(dollars in thousands)

2021

2020
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash used by operating leases

$
578

$
1,231
Right-of-use assets obtained in exchange for new operating lease liabilities

491

1,001
Weighted-average remaining lease term - operating leases

1.80 years

1.83 years
Weighted-average remaining lease term - finance leases

3.23 years

3.98 years
Weighted-average discount rate - operating leases

9%

9%
Weighted-average discount rate - finance leases

9%

9%


		Nine Months Ended September 30,
(dollars in thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used by operating leases	$	1,810	$	3,388
Right-of-use assets obtained in exchange for new operating lease liabilities		1,549		2,226
Weighted-average remaining lease term - operating leases		1.47 years		1.71 years
Weighted-average remaining lease term - finance leases		2.48 years		3.48 years
Weighted-average discount rate - operating leases		9%		9%
Weighted-average discount rate - finance leases		9%		9%

Total remaining lease payments under the Company’s operating and finance leases ~~are~~were as follows:

Operating Leases

Finance Leases
Three Months Ended March 31, 2021

(in thousands)
Remainder of 2021

$
1,438

$
4
2022

950

6
2023

207

6
2024

6

1
2025

3

-
Total lease payments

$
2,604

$
17
Less: interest

(291)

-
Present value of lease liabilities

$
2,313

$
17


	Operating Leases		Finance Leases

Nine Months Ended September 30,	(in thousands)
Remainder of 2021	$	582	$	2
2022		1,372		6
2023		360		6
2024		103		1
2025		3		—
Total lease payments	$	2,420	$	15
Less: interest		(159)		—
Present value of lease liabilities	$	2,261	$	15

NOTE 4—CHANGES IN BUSINESS

Discontinued Operations

Electrical Solutions

During the fourth quarter of 2017, the Company made the decision to exit and sell its Electrical Solutions segment (which was comprised solely of Koontz-Wagner Custom Controls Holdings LLC (“Koontz-Wagner”), a wholly owned subsidiary of the Company) in an effort to reduce the Company’s outstanding term debt. The Company determined that the decision to exit this segment met the definition of a discontinued operation. As a result, this segment has been presented as a discontinued operation for all periods presented.

Table of Contents

On July 11, 2018, Koontz-Wagner filed a voluntary petition for relief under Chapter 7 of Title 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Texas. The filing was for Koontz-Wagner only, not for the Company as a whole, and was completely separate and distinct from the Williams business and operations. As a result of the July 11, 2018 bankruptcy of Koontz-Wagner, the Company recorded a pension withdrawal liability of $2.9 million related to Koontz-Wagner’s International Brotherhood of Electrical Workers Local Union 1392 (“IBEW”) multi-employer pension plan.

After an arbitration process, on May 12, 2021, an arbitrator concluded that the IBEW used an incorrect per hour contribution rate in calculating the Company’s pension withdrawal liability, which resulted in the Company overpaying. The arbitrator directed IBEW to refund all overpayments, with interest, to the Company and to redetermine the Company’s payments going forward using the proper contribution rate. Accordingly, the Company’s overall pension withdrawal liability decreased by approximately $0.2 million. The pension liability is expected to be satisfied by annual cash payments of $0.3 million each, paid in quarterly installments, through 2038. The Company recorded a gain on disposal of approximately $0.2 million in the nine months ended September 30, 2021 to reduce its previously recorded estimated withdrawal liability to the new amount.

Mechanical Solutions

During the third quarter of 2017, the Company made the decision to exit and sell substantially all of the operating assets and

~~Table of Contents~~

liabilities of its Mechanical Solutions segment and determined that the decision to exit this segment met the definition of a discontinued operation. As a result, this segment has been presented as a discontinued operation for all periods presented.

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company did not have any assets related to its Electrical Solutions’ and Mechanical Solutions’ discontinued operations. The following table presents a reconciliation of the carrying amounts of major classes of liabilities of Electrical Solutions’ and Mechanical Solutions’ discontinued operations:

(in thousands)

March 31, 2021

December 31, 2020
Liabilities:

Other current liabilities

$
339

$
342
Current liabilities of discontinued operations

339

342
Liability for pension obligation

2,689

2,670
Liability for uncertain tax positions

1,810

1,796
Long-term liabilities of discontinued operations

4,499

4,466
Total liabilities of discontinued operations

$
4,838

$
4,808



(in thousands)	September 30, 2021		December 31, 2020
Liabilities:
Current liabilities of discontinued operations	$	188	$	342
Liability for pension obligation		2,347		2,670
Liability for uncertain tax positions		1,854		1,796
Long-term liabilities of discontinued operations		4,201		4,466
Total liabilities of discontinued operations	$	4,389	$	4,808

The following table presents a reconciliation of the major classes of line items constituting the net income (loss) from discontinued operations. In accordance with GAAP, the amounts in the table below do not include an allocation of corporate overhead.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
General and administrative expenses	$	5	$	14	$	39	$	20
Loss (gain) on disposal - Electrical Solutions		(17)		—		(245)		45
Interest expense		46		52		76		157
Income (loss) from discontinued operations before income tax		(34)		(66)		130		(222)
Income tax expense (benefit)		22		24		59		(56)
Income (loss) from discontinued operations	$	(56)	$	(90)	$	71	$	(166)

Three Months Ended March 31,
(in thousands)

2021

2020
General and administrative expenses

$
28

$
1
Interest expense

51

53
Loss from discontinued operations before income tax

(79)

(54)
Income tax expense

19

18
Loss from discontinued operations

$
(98)

$
(72)

Table of Contents

NOTE 5—REVENUE

Disaggregation of Revenue

The Company’s contracts generally include a single performance obligation for which revenue is recognized over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. For cost-plus contracts, the Company recognizes revenue when services are performed and contractually billable based upon the hours incurred and agreed-upon hourly rates. Revenue on fixed-price contracts is recognized and invoiced over time using the cost-to-cost percentage-of-completion method. To the extent a contract is deemed to have multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The Company does not adjust the price of the contract for the effects of a significant financing component. Change orders are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. The Company believes these methods of revenue recognition most accurately reflect the economics of the transactions with its customers.

The Company’s contracts may include several types of variable consideration, including change orders, rate true-up provisions, retainage, claims, incentives, penalties, and liquidated damages. The Company estimates the amount of revenue to be recognized on variable consideration using estimation methods that best predict the amount of consideration to which the Company expects to be entitled. The Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available. The Company updates its estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. In circumstances where the Company cannot reasonably determine the outcome of a contract, it recognizes revenue over time as the work is performed, but only to the extent of recoverable costs incurred (i.e. zero margin). A loss provision is recorded for the amount of any estimated unrecoverable costs in excess of total estimated revenue on a contract as soon as the Company becomes aware. The Company generally provides a limited warranty for a term of two years or less following completion of services performed under its contracts. Historically, warranty claims have not resulted in material costs incurred.

Disaggregated revenue by type of contract was as follows:


	Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020		2021		2020
Cost-plus reimbursement contracts	$	55,593	$	60,296	$	63,363	$	57,123	$	201,027	$	182,689
Fixed-price contracts		5,258		5,851		9,988		9,117		24,746		22,247
Total	$	60,851	$	66,147	$	73,351	$	66,240	$	225,773	$	204,936

Disaggregated revenue by the geographic area where the work was performed was as follows:

Three Months Ended March 31,
(in thousands)

2021

2020
United States

$
51,190

$
57,647
Canada

9,661

8,500
Total

$
60,851

$
66,147


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
United States	$	64,379	$	57,984	$	197,287	$	178,447
Canada		8,972		8,256		28,486		26,489
Total	$	73,351	$	66,240	$	225,773	$	204,936

1112

Table of Contents

Contract Balances

The Company enters into contracts that allow for periodic billings over the contract term that are dependent upon specific advance billing terms, as services are provided, or as milestone billings based on completion of certain phases of work. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported in the Company’s unaudited condensed consolidated balance sheets as contract assets. Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date are reported in the Company’s unaudited condensed consolidated balance sheets as contract liabilities. At any point in time, each project in process could have either contract assets or contract liabilities.

The following table provides information about contract assets and contract liabilities from contracts with customers:

Three Months Ended March 31,
(in thousands)

2021

2020
Costs incurred on uncompleted contracts

$
54,753

$
59,238
Earnings recognized on uncompleted contracts

6,098

6,909
Total

60,851

66,147
Less—billings to date

(50,301)

(53,146)
Net

$
10,550

$
13,001
Contract assets

$
12,528

$
16,401
Contract liabilities

(1,978)

(3,400)
Net

$
10,550

$
13,001


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Costs incurred on uncompleted contracts	$	66,590	$	57,582	$	203,561	$	180,014
Earnings recognized on uncompleted contracts		6,761		8,658		22,212		24,922
Total		73,351		66,240		225,773		204,936
Less—billings to date		(63,034)		(60,850)		(215,456)		(199,546)
Net	$	10,317	$	5,390	$	10,317	$	5,390
Contract assets	$	12,811	$	8,795	$	12,811	$	8,795
Contract liabilities		(2,494)		(3,405)		(2,494)		(3,405)
Net	$	10,317	$	5,390	$	10,317	$	5,390

For the three and nine months ended ~~March 31,~~September 30, 2021, the Company recognized revenue of approximately ~~$1.0~~$1.1 million and $2.2 million, respectively, on approximately $2.5 million that was included in the corresponding contract liability balance aton December 31, 2020.

Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of ~~March 31,~~September 30, 2021:

(in thousands)

Remainder of 2021

2022

2023

Thereafter

Total
Remaining performance obligations

$
151,856

$
99,215

$
75,616

$
133,863

$
460,550


(in thousands)	Remainder of 2021		2022		2023		Thereafter		Total
Remaining performance obligations	$	73,416	$	133,826	$	95,098	$	370,166	$	672,506

NOTE 6—EARNINGS ~~(LOSS)~~ PER SHARE

As of ~~March 31,~~September 30, 2021, the Company’s ~~25,896,001~~25,915,502 shares outstanding included 215,956 shares of contingently issued but unvested restricted stock. As of ~~March 31,~~September 30, 2020, the Company’s ~~24,903,913~~25,336,442 shares outstanding included 550,857 shares of contingently issued but unvested restricted stock. Restricted stock is excluded from the calculation of basic weighted average shares outstanding, but its impact, if dilutive, is included in the calculation of diluted weighted average shares outstanding.

Basic earnings ~~(loss)~~ per common share are calculated by dividing net ~~(loss)~~ income by the weighted average common shares outstanding during the period. Diluted earnings ~~(loss)~~ per common share are based on the weighted average common shares outstanding during the period, adjusted for the potential dilutive effect of common shares that would be issued upon the vesting and release of restricted stock awards and units and stock options, if any.

1213

Table of Contents

Basic and diluted earnings ~~(loss)~~ per common share from continuing operations were calculated as follows:

Three Months Ended March 31,
(in thousands, except share data)

2021

2020
Income (loss) from continuing operations

$
(1,583)

$
(929)

Basic earnings (loss) per common share:

Weighted average common shares outstanding

24,933,894

20,347,661

Basic earnings (loss) per common share

$
(0.06)

$
(0.05)

Diluted earnings (loss) per common share:

Weighted average diluted common shares outstanding

24,933,894

20,347,661

Diluted earnings (loss) per common share

$
(0.06)

$
(0.05)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2021		2020		2021		2020
Income from continuing operations	$	794	$	1,116	$	1,857	$	2,696

Basic earnings per common share:
Weighted average common shares outstanding		25,699,545		24,689,337		25,306,130		23,304,059

Basic earnings per common share	$	0.03	$	0.04	$	0.07	$	0.12

Diluted earnings per common share:
Weighted average common shares outstanding		25,699,545		24,689,337		25,306,130		23,304,059

Dilutive effect:
Unvested portion of restricted stock units and awards		807,030		494,969		791,570		532,739
Weighted average diluted common shares outstanding		26,506,575		25,184,306		26,097,700		23,836,798

Diluted earnings per common share	$	0.03	$	0.04	$	0.07	$	0.11

The weighted average number of shares outstanding used in the computation of basic and diluted earnings per common share does not include the effect of the following potential outstanding common stock. The effects of the potentially outstanding service-based restricted stock and restricted stock unit awards were not included in the calculation of diluted earnings per common share because the effect would have been anti-dilutive. The effects of the potentially outstanding performance- and market-based restricted stock unit awards were not included in the calculation of diluted earnings per common share because the performance and/or market conditions had not been satisfied as of ~~March 31,~~September 30, 2021 and 2020.

Three Months Ended March 31,

2021

2020
Unvested service-based restricted stock and restricted stock unit awards
1,476,645

1,188,564
Unvested performance- and market-based restricted stock unit awards
1,023,740

550,016


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Unvested service-based restricted stock and restricted stock unit awards	16,666	391,601	—	262,705
Unvested performance- and market-based restricted stock unit awards	833,111	1,585,703	833,111	1,585,703

NOTE 7—INCOME TAXES

The effective income tax expense rate for continuing operations for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 was as follows:

Three Months Ended March 31,

2021

2020
Effective income tax rate for continuing operations

(13.28)%

(5.40)%


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2021	2020	2021	2020
Income tax (benefit) expenses	($6)	$321	$256	$565
Effective income tax rate for continuing operations	-0.8%	22.3%	12.1%	17.3%

The effective income tax rate differs from the statutory federal income tax rate of 21% primarily because of the partial valuation allowances recorded on the Company’s deferred tax assets and the Canadian income tax provision.

For the three months ended ~~March 31,~~September 30, 2021, the Company recorded income tax ~~expense~~benefit from continuing operations of ~~$0.2~~$0.01 million, or ~~(13.3)~~(0.8)% of pretax ~~loss~~income from continuing operations, compared with income tax expense from continuing operations of ~~less than $0.1~~$0.3 million, or ~~(5.4)%~~22.3% of pretax ~~loss~~income from continuing operations, in the ~~same~~corresponding period ~~for~~of 2020. For the nine months ended September 30, 2021, the Company recorded income tax expense from continuing operations of $0.3 million, or 12.1% of pretax income from continuing operations, compared with income tax expense from continuing operations of $0.6 million, or 17.3% of pretax income from continuing operations, in the corresponding period of 2020.

The ~~increase~~decrease in income tax provision from continuing operations for the three months ended ~~March~~September 30, 2021, compared with the corresponding period in 2020 was primarily the result of the $0.3 million increase in U.S. deferred tax assets net of a partial valuation allowance, and the $0.05 million decrease in the income tax provision as a result of the year-over-year fluctuation in Canadian pre-tax book income. The $0.3 million U.S. deferred tax asset increase is attributable to the increase in

Table of Contents

indefinite lived assets, both the net operating loss and the Section 163(j) interest addback. The increase was primarily driven by a $0.8 million favorable tax adjustment related to the Koontz-Wagner bankruptcy estate distribution in the third quarter of 2021, and a $0.6 million favorable tax adjustment as the Company is expecting to pay off half of the payroll tax deferred, under the CARES Act (as defined below), by the end of December 31, 2021.

The Company’s net deferred balance was primarily composed of indefinite lived deferred tax liabilities attributable to goodwill and trade names, and indefinite lived deferred tax assets related to the post 2017 net operating losses and the Section 163(j) interest addback. A full valuation allowance was applied to most of the remaining deferred balances. The indefinite lived deferred tax assets enabled the release of the valuation allowance to the extent that it can offset the indefinite lived deferred tax liabilities. Because all indefinite lived deferred tax liabilities are part of continued operations, and the release of valuation allowance is attributable to the future taxable income related to these deferred tax liabilities, the entire valuation allowance released was recorded in continuing operations according to ASC 740-20-45-3. As a result, the favorable tax adjustment related to the Koontz-Wagner bankruptcy estate distribution (arising from the discontinued operation), has been reported as continuing operations. As of September 30, 2021, the Company had $2.1 million net deferred tax liabilities, mainly composed of $12.3 million indefinite lived deferred tax liabilities attributable to goodwill and trade names, partially offset by $6.9 million indefinite lived deferred tax assets attributable to post 2017 net operating losses and $3.1 million indefinite lived deferred tax assets attributable to Section 163(j) interest addback.

The decrease in income tax provision from continuing operations for the nine months ended September 30, 2021 compared with the corresponding period in 2020 was primarily the result of a ~~$0.2~~$0.4 million increase in the U.S. deferred tax assets net of partial valuation allowance, as the Company’s indefinite lived intangible assets have been fully amortized for tax purposes as of year-end 2020, partially offset by a $0.1 million increase in the Canadian ~~income~~ tax ~~provision recorded during the three months ended March 31, 2021.~~provision.

As of December 31, 2020, the Company had $220.6 million of federal net operating loss carryforwards, $191.3 million which will expire between 2026 and 2037, and state operating loss carryforwards of $271.9 million, with the majority expiring between 2021 and 2040. Additionally, the Company had $5.2 million of foreign operating loss carryforwards that will expire in 2040, along with $4.5 million in foreign tax credit carryforwards expiring between 2021 and 2030.

Under the Internal Revenue Code, the amount of and the benefits from net operating loss and tax credit carryforwards may be limited or permanently impaired in certain circumstances. In addition, under the Tax Cuts and Jobs Act, the amount of post 2017 net operating losses that the Company is permitted to deduct in any taxable year is limited to 80% of its taxable income in such year, where taxable income is determined without regard to the net operating loss deduction itself. The Tax Cuts and Jobs Act also generally eliminated the ability to carry back any net operating loss to prior taxable years, while allowing post 2017 unused net operating losses to be carried forward indefinitely.

~~Table of Contents~~

~~As of March 31,~~September 30, 2021 and 2020, the Company would have needed to generate approximately ~~$273.8~~$270.4 million and ~~$269.2~~$268.5 million, respectively, of future taxable income in order to realize its deferred tax assets.

The Company’s foreign subsidiaries may generate earnings that are not subject to U.S. income taxes so long as they are permanently reinvested in its operations outside of the U.S. ~~Pursuant~~pursuant to ASC ~~740-30, undistributed~~740-30. Undistributed earnings of foreign subsidiaries that are no longer permanently reinvested would become subject to deferred income taxes.

As of ~~March 31,~~September 30, 2021, the Company’s Canadian subsidiary had approximately ~~$6.5~~$8.3 million in Canadian currency in undistributed earnings. The Company’s management asserts that all of the undistributed earnings will be reinvested in the Canadian subsidiary based on the following facts presented at the time of preparing the financial statements: (1) the Company’s domestic operations are not in need of working capital from the foreign subsidiary, and any temporary intercompany payable with the Canadian subsidiary will be repaid within one year from the end of the corporation’s tax year in which the indebtedness arises; (2) the Canadian subsidiary has not declared dividends since its inception in 2018, and management is not expecting the Canadian subsidiary to declare dividends in the foreseeable future; and (3) the Company’s management has developed a strategic growth initiative to pursue nuclear plant maintenance, modifications, and construction in Canada for the long-term. Therefore, the accrual of deferred tax liability with respect to the Company’s outside basis difference in its investment in Canada is not needed pursuant to the APB 23 exception.

As of ~~March 31,~~September 30, 2021 and 2020, the Company provided for a total liability of ~~$2.9~~$3.0 million and $2.8 million, respectively, of which $1.9 million for ~~both periods, $1.8~~the period ended September 30, 2021, compared to $1.7 million for the corresponding period in 2020, related to discontinued operations, for unrecognized tax benefits related to various federal, foreign and state income tax matters, which were included in long-term ~~deferred~~ liabilities of discontinued operations and other long-term liabilities. If recognized, the entire amount of the liability would affect the effective tax rate. As of ~~March 31,~~September 30, 2021, the Company accrued approximately ~~$1.5~~$1.4 million, of which $0.8 million related to discontinued operations, in both other long-term liabilities of discontinued operations and other long-term liabilities for potential payment of interest and penalties related to uncertain income tax positions.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The Company has incorporated the impact of the CARES Act to the tax provision. In addition, the Company deferred payments of federal employer payroll taxes of approximately $4.9 million (recorded within accrued compensation and benefits on the consolidated balance sheet), as permitted by the CARES Act. The first half of the deferred amounts will be paid by December 2021, and the second half by December 2022.

Table of Contents

NOTE 8—DEBT

As of ~~March 31,~~September 30, 2021, the Company was in compliance with all debt covenants. ~~Considering~~Due to the ~~potential effects of~~continued volatility caused by the COVID-19 pandemic, the Company cannot provide any assurance that the assumptions used to estimate its liquidity requirements will remain ~~accurate due to the unprecedented nature and the unpredictability of the COVID-19 global pandemic.~~accurate. As a consequence, the Company’s estimates of the ~~duration~~effects of the pandemic and ~~its~~their impact on the Company’s future earnings and cash flows could change and have a material impact on its results of operations and financial condition, including negatively affecting the Company’s ability to remain in compliance with its debt covenants.

The following table provides information about the Company’s debt, net of unamortized deferred financing costs:

(in thousands)

March 31, 2021

December 31, 2020
Revolving credit facility

$
1,151

$
352
Term loan, current portion of long-term debt

1,050

1,050
Current debt

$
2,201

$
1,402

Term loan, noncurrent portion of long-term debt

$
33,688

$
33,950
Debt discount from refinancing to new loan

(941)

(991)
Unamortized deferred financing costs

(2,119)

(2,231)
Long-term debt, net

$
30,628

$
30,728

Total debt, net

$
32,829

$
32,130


(in thousands)	September 30, 2021		December 31, 2020
Revolving credit facility	$	4,672	$	352
Term loan, current portion of long-term debt		1,050		1,050
Current debt	$	5,722	$	1,402

Term loan, noncurrent portion of long-term debt	$	33,163	$	33,950
Unamortized debt discount from refinancing to new loan		(841)		(991)
Unamortized deferred financing costs		(1,894)		(2,231)
Long-term debt, net	$	30,428	$	30,728

Total debt, net	$	36,150	$	32,130

Debt Refinancing

On December 16, 2020 (the “Closing Date”), the Company and certain of its subsidiaries refinanced and replaced its revolving credit facility with MidCap Financial Trust (the “Prior ABL”) and its four-year $35.0 million term loan facility with Centre

~~Table of Contents~~

Lane Partners, LLC and entered into (i) the Term Loan Agreement (as defined below), which provided for senior secured term loan facilities in an aggregate principal amount of up to $50.0 million (collectively, the “Term Loan”), consisting of a $35.0 million closing date term loan facility (the “Closing Date Term Loan”) and up to $15.0 million of borrowings under a delayed draw facility (the “Delayed Draw Term Loan Facility”) with EICF Agent LLC, as agent, and CION Investment Corporation, as a lender and a co-lead arranger, and the other lenders party thereto; and (ii) a senior secured asset-based revolving line of credit of up to $30.0 million (the “Revolving Credit Facility”) with ~~PNC.~~PNC Bank, National Association (“PNC”). As of ~~March 31,~~September 30, 2021, the Company had ~~$1.2~~$4.7 million outstanding under the Revolving Credit Facility and ~~$34.7~~$34.2 million outstanding (including both the noncurrent and current portion of the Term Loan) under the Term Loan. The Term Loan Agreement provides for an interest rate of 9.0% (or 8.5% if the Total Leverage Ratio (as defined in the Term Loan Agreement) is less than 2.50:1) plus the London Interbank Offered Rate (“LIBOR”) (with a minimum rate of 1.0%) per year.

The Revolving Credit Facility

On the Closing Date, the Company and certain of its subsidiaries (the “Revolving Loan Borrowers”) entered into the Revolving Credit and Security Agreement with PNC, as agent for the lenders, and the lenders party thereto (the “Revolving Credit Agreement”), which provides for the Revolving Credit Facility. As part of the Revolving Credit Facility, the Company may access a letter of credit sublimit in an amount up to $2.0 million, a swing loan sublimit in an aggregate principal amount of up to $3.0 million, and a Canadian dollar sublimit in an aggregate principal amount of up to $5.0 million. The Revolving Credit Facility matures on December 16, 2025.

Borrowings under the Revolving Credit Facility bear interest, at the Company’s election, at either (1) the base commercial lending rate of PNC, as publicly announced, plus 1.25%, payable in cash on a monthly basis, (2) the 30, 60 or 90 day LIBOR rate, subject to a minimum LIBOR floor of 1.00%, plus 2.25%, payable in cash on the last day of each interest period, or (3) with respect to Canadian dollar loans, the Canadian Dollar Offered Rate (“CDOR”), subject to a minimum CDOR rate of 1.00%, payable in cash on a monthly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable. The Revolving Credit Agreement also includes customary replacement provisions in the event of the discontinuation of LIBOR.

The Revolving Loan Borrowers’ Obligations (as defined in the Revolving Credit Agreement) are guaranteed by certain of the Company’s material, wholly-owned subsidiaries, subject to customary exceptions (the “Revolving Loan Guarantors” and, together with the Revolving Loan Borrowers, the “Revolving Loan Credit Parties”). The Revolving Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Revolving Loan Credit Parties’ accounts

Table of Contents

and a second-priority security interest in substantially all other assets of the Revolving Loan Credit Parties, subject to the terms of the Intercreditor Agreement between PNC and EICF Agent LLC, as the Revolving Loan Agent and the Term Loan Agent, respectively (as each such term is defined in the Intercreditor Agreement), as described below (the “Intercreditor Agreement”).

The Revolving Loan Borrowers may from time to time voluntarily prepay outstanding amounts, plus any accrued but unpaid interest on the aggregate amount being prepaid, under the Revolving Credit Facility, in whole or in part. There is no0 required minimum prepayment amount. If at any time the amount outstanding under the Revolving Credit Agreement exceeds the borrowing base, or any sublimit, in effect at such time, the excess amount will be immediately due and payable. Subject to the Intercreditor Agreement, the Revolving Credit Agreement also requires mandatory prepayment of outstanding amounts in the event the Revolving Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the recovery of any proceeds from certain specified arbitration proceedings.

The Revolving Credit Agreement provides for a customary unused line fee equal to 0.25% per year on the unused portion of the Revolving Credit Facility, which is payable on a quarterly basis, and a collateral monitoring fee of $2,500, which is payable on a monthly basis. The Revolving Credit Agreement also provides for an early termination fee (the “Early Termination Fee”), payable to the revolving lenders thereunder upon (1) any acceleration of the Obligations and termination of the Revolving Credit Agreement and the obligation of the revolving lenders to make advances thereunder following the occurrence of an Event of Default (as defined in the Revolving Credit Agreement), or (2) any other termination of the Revolving Credit Agreement and the obligation of revolving lenders to make advances thereunder for any reason (the “Early Termination Date”). The Early Termination Fee is calculated as follows: if the Early Termination Date occurs on or prior to the first anniversary of the Closing Date, the Early Termination Fee will be 2.00% of the Revolving Credit Facility; and if prepayment occurs after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, the Early Termination Fee will be 1.00% of the Revolving Credit Facility. While any letter of credit is outstanding under the Revolving Credit Facility, the Revolving Loan Borrowers must pay a letter of credit fronting fee at a rate equal to 0.25% per year, payable quarterly, in addition to any other customary fees required by the issuer of the letter of credit.

~~Table of Contents~~

The Revolving Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Revolving Credit Agreement also requires the Revolving Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a springing minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Revolving Credit Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Term Loan Agreement ~~(as defined below)~~ or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the revolving lenders may, among other things, declare all Obligations outstanding under the Revolving Credit Facility to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Revolving Credit Agreement.

EICF Agent LLC, as the Term Loan Agent, and PNC, as the Revolving Loan Agent, entered into an Intercreditor Agreement, dated as of the Closing Date, to which the Term Loan Credit Parties (as defined below) and Revolving Loan Credit Parties consented. The Intercreditor Agreement, among other things, specifies the relative lien priorities of the Term Loan Agent and Revolving Loan Agent in the relevant collateral, and contains customary provisions regarding, among other things, the rights of the Term Loan Agent and Revolving Loan Agent to take enforcement actions against the relevant collateral and certain limitations on amending the documentation governing each of the Term Loan and Revolving Credit Facility.

Table of Contents

The Term Loan

On the Closing Date, the Company and certain of its subsidiaries (the “Term Loan Borrowers”) entered into the Term Loan, Guarantee and Security Agreement with EICF Agent LLC, as agent for the lenders, CION Investment Corporation, as a lender and co-lead arranger, and the other lenders party thereto (the “Term Loan Agreement”), which provides for the Term Loan. The Closing Date Term Loan was fully drawn on the Closing Date, while the Delayed Draw Term Loan Facility is available upon the satisfaction of certain conditions precedent for up to 18 months following the Closing Date. The Term Loan matures on December 16, 2025.

Borrowings under the Term Loan Agreement bear interest at LIBOR, plus a margin of 8.50% (if the Total Leverage Ratio (as defined in the Term Loan Agreement) is less than 2.50:1) or 9.00% per year (if the Total Leverage Ratio is greater than or equal to 2.50:1), subject to a minimum LIBOR floor of 1.00%, payable in cash on a quarterly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable. The Term Loan Agreement also includes customary replacement provisions in the event of the discontinuation of LIBOR.

The Term Loan Borrowers’ Obligations (as defined in the Term Loan Agreement) are guaranteed by certain of the Company’s material, wholly-owned subsidiaries, subject to customary exceptions (the “Term Loan Guarantors” and, together with the Term Loan Borrowers, the “Term Loan Credit Parties”). The Term Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Term Loan Credit Parties’ assets, as well as a second-priority security interest on the Term Loan Credit Parties’ accounts receivable and inventory, subject to the Intercreditor Agreement.

Subject to certain conditions, the Term Loan Borrowers may voluntarily prepay the Term Loan on any Payment Date (as defined in the Term Loan Agreement), in whole or in part, in a minimum amount of $1.0 million of the outstanding principal amount, plus a prepayment fee (the “Prepayment Fee”), calculated as follows: if prepayment occurs prior to the first anniversary of the Closing Date, the Prepayment Fee will be 3.00% of the principal amount being prepaid; if prepayment occurs on or after the first anniversary of the Closing Date and prior to the second anniversary of the Closing Date, the Prepayment Fee will be 2.00% of the principal amount being prepaid; and if prepayment occurs on or after the second anniversary of the Closing Date and prior to the third anniversary of the Closing Date, the Prepayment Fee will be 1.00% of the principal amount being prepaid.

Subject to certain exceptions, within 120 days of the end of each calendar year, beginning with the year ending December 31, 2021, the Term Loan Borrowers must prepay the Obligations in an amount equal to (1) (i) if the Total Leverage Ratio is greater than 3:00:1:00, 50.0% of Excess Cash Flow (as defined in the Term Loan Agreement) or (ii) if the Total Leverage Ratio is equal to or less than 3:00:1:00 and greater than 2:00:1:00, 25.0% of Excess Cash Flow, less (2) all voluntary prepayments made on the Term Loan during such calendar year; provided that, so long as no default or event of default has occurred and is continuing or would result therefrom, no such prepayment will be required unless Excess Cash Flow for such calendar year

~~Table of Contents~~

equals or exceeds $0.5 million. The Term Loan Agreement also requires mandatory prepayment of certain amounts in the event the Term Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the receipt of extraordinary receipts (with certain exclusions), plus, in certain instances, the applicable Prepayment Fee, calculated as set forth above.

The Term Loan Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Term Loan Agreement also requires the Term Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Term Loan Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Revolving Credit Agreement or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the Term Loan lenders may, among other things, declare all Obligations to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Term Loan Agreement.

Table of Contents

Letters of Credit and Bonds

In line with industry practice, the Company is often required to provide letters of credit and payment and performance surety bonds to customers. These letters of credit and bonds provide credit support and security for the customer if the Company fails to perform its obligations under the applicable contract with such customer.

The Revolving Credit Facility provides for a letter of credit sublimit in an amount up to $2.0 million. As of ~~March 31,~~September 30, 2021, ~~there were no~~the Company had $0.5 million letters of credit outstanding under this ~~sublimit. As of March 31, 2021, the Company had $0.5~~sublimit and $0.4 million cash collateralized standby letters of credit outstanding pursuant to its prior revolving credit facility with Wells Fargo Bank, National Association. There were no0 amounts drawn upon these letters of credit as of ~~March 31,~~September 30, 2021.

In addition, as of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company had outstanding payment and performance surety bonds of ~~$50.0~~$67.1 million and $31.0 million, respectively.

Deferred Financing Costs

Deferred financing costs are amortized over the terms of the related debt facilities using the straight-line method. The following table summarizes the amortization of deferred financing costs related to the Company's debt facilities and recognized in interest expense on the unaudited condensed consolidated statements of operations:

Three Months Ended March 31,
(in thousands)

2021

2020
Term loan

$
113

$
110
Revolving credit facility

95

72
Total

$
208

$
182


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Term loan	$	112	$	110	$	337	$	330
Revolving credit facility		96		72		286		217
Total	$	208	$	182	$	623	$	547

The following table summarizes unamortized deferred financing costs included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)

Location

March 31, 2021

December 31, 2020
Term loan

Long-term debt, net

$
2,119

$
2,231
Revolving credit facility

Other long-term assets

1,794

1,890
Total

$
3,913

$
4,121


(in thousands)	Location	September 30, 2021		December 31, 2020
Term loan	Long-term debt, net	$	1,894	$	2,231
Revolving credit facility	Other long-term assets		1,604		1,890
Total		$	3,498	$	4,121

~~Table of Contents~~

NOTE 9—FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

ASC 820–Fair Value Measurement defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in the active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The Company’s financial instruments as of ~~March 31,~~September 30, 2021 and December 31, 2020 consisted primarily of cash and cash equivalents, restricted cash, receivables, payables, and debt instruments. The carrying values of these financial instruments approximate their respective fair values, as they are either short-term in nature or carry interest rates that are periodically adjusted to market rates.

NOTE 10—COMMITMENTS AND CONTINGENCIES

Litigation and Claims

The Company is from ~~time to time~~time-to-time party to various lawsuits, including personal injury claims and other proceedings that arise in the ordinary course of its business. With respect to all such lawsuits, claims and proceedings, the Company records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that the resolution of any currently pending lawsuits, claims and proceedings, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any

Table of Contents

currently pending lawsuits, claims and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case.

The Company completed a bankruptcy filing of its Koontz-Wagner subsidiary on July 11, 2018. This could require the Company to incur legal fees and other expenses related to liabilities from this bankruptcy filing. While the Company does not anticipate these liabilities will have a material adverse effect on its results of operations, cash flows and financial position, and although the statute of limitations has run on certain claims that the Chapter 7 Trustee for the Koontz-Wagner estate might assert, there can be no assurance of the outcome. The filing was for Koontz-Wagner only, not for the Company as a whole, and was completely separate and distinct from the Williams business and operations. For additional information, please refer to “Note 4—Changes in Business” to the unaudited condensed consolidated financial statements.

The acquiror of certain assets from a former operating unit of the Company has been named as a defendant in an asbestos personal injury lawsuit and has submitted a claim for indemnification and tendered defense of the matter to the Company. The Company has assumed defense of the matter subject to a reservation of rights and objection to the claim for indemnification. Neither the Company nor its predecessors ever mined, manufactured, produced, or distributed asbestos fiber, the material that allegedly caused the injury underlying this action. The Company does not expect that this claim will have a material adverse effect on its financial position, results of operations or liquidity. Moreover, during 2012, the Company secured insurance coverage that will help to reimburse the defense costs and potential indemnity obligations of its former operating unit relating to these claims. The Company intends to vigorously defend all currently active actions, and it does not anticipate that ~~any of these actions~~this action will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any legal action cannot be predicted and, therefore, there can be no assurance that this will be the case.

~~Insurance:~~Insurance

The Company maintains insurance coverage for most insurable aspects of its business and operations. The Company’s insurance programs, including, but not limited to, health, general liability, and workers’ compensation, have varying coverage limits depending upon the type of insurance. For the three and nine months ended ~~March 31,~~September 30, 2021, insurance expense, including insurance premiums related to the excess claim coverage and claims incurred for continuing operations, was ~~$0.7 million.~~$0.3 million and $1.5 million, respectively.

The Company’s consolidated balance sheets include amounts representing its probable estimated liability related to insurance-related claims that are known and have been asserted against the Company, and for insurance-related claims that are believed to have been incurred but had not yet been reported as of ~~March 31,~~September 30, 2021. As of ~~March 31,~~September 30, 2021, the Company provided ~~$0.5~~$0.4 million cash collateralized in letters of credit and $0.6 million of non-depleting cash collateral as security for possible general liability and workers’ compensation claims.

~~Table of Contents~~

Executive ~~Severance:~~ ~~At March 31,~~Severance

On September 30, 2021, the Company had outstanding severance arrangements with officers and senior management. The Company’s maximum commitment under all such arrangements, which would apply if the employees covered by these arrangements were each terminated without cause, was ~~$2.7~~$2.8 million ~~at December 31, 2020.~~on September 30, 2021.

NOTE 11—STOCK-BASED COMPENSATION PLANS

During the first ~~three~~nine months of 2021, the Company granted 164,388 service-based restricted stock awards under the 2015 Equity Incentive Plan, as amended and restated on May 12, 2020 (the “2015 Plan”), at a grant date fair value of $3.29 per share, to its non-employee directors, which vest in full on February 4, 2022.

During the first ~~three~~nine months of 2021, the Company granted 307,616 service-based restricted stock units under the 2021 long-term incentive (“LTI”) program and the 2015 Plan at a grant date fair value of $3.48 per share. These service-based restricted stock units could be paid in cash or shares at the election of the Compensation Committee of the Board of Directors and shall vest in full on March 31, 2024.

During the first ~~three~~nine months of 2021, the Company also granted performance-based awards under the 2021 LTI program and the 2015 Plan with an aggregate cash value of approximately $2.2 million, which could be paid in cash or shares at the election of the Compensation Committee of the Board of Directors. The 2021 performance-based awards have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in

Table of Contents

awards earned at 200% of the target. The annual achievement levels are averaged over the three-year performance period and the earned amounts, if any, vest on March 31, 2024. The Company includes these cash-based awards in other current liabilities on the consolidated balance sheet, effective as of April 2021.

In addition, during the first nine months of 2021, the Company granted service-based restricted stock units and performance-based restricted stock units to 2 employees. On May 17, 2021, the Company granted 37,500 service-based restricted stock units and performance-based restricted stock units covering a target number of 37,500, and a maximum number of 75,000, shares of common stock, as an inducement award outside of the 2015 Plan at a grant date fair value of $5.00 per share. The service-based restricted stock units vest in full on May 17, 2022 and the earned amounts of the performance-based restricted stock units, if any, vest on March 31, 2024. The performance-based awards have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. On June 15, 2021, the Company granted 41,666 service-based restricted stock units and performance-based restricted stock units covering a target number of 33,334, and a maximum number of 66,668, shares of common stock under the 2015 Plan at a grant date fair value of $6.27 per share. These awards may be paid in cash or shares at the election of the Compensation Committee of the Board of Directors. The ~~annual achievement levels are averaged over~~service-based restricted stock units vested with respect to 25,000 shares of common stock on the ~~three-year performance period and the earned amounts, if any,~~date of grant (June 15, 2021), while 8,333 will vest on March 31, ~~2024. These are cash-based~~2022 and 8,333 will vest on March 31, 2023. The earned amounts of the performance-based restricted stock units, if any, will vest on March 31, 2023 and have two annual performance periods (fiscal years 2021 and 2022), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The initial expense for the 25,000 units that ~~will be included in other current liabilities on~~vested at the ~~consolidated balance sheet beginning in April 2021.~~grant date of June 15, 2021 was $0.2 million.

During the first ~~three~~nine months of 2020, the Company granted 580,312 service-based restricted stock units and 1,178,213 performance-based restricted stock units under the 2020 LTI program and the 2015 Plan, at a grant date fair value of $1.22 per share, which could be paid in cash or shares at the election of the Compensation Committee of the Board of Directors. The service-based restricted stock units vest in equal annual installments over a period of three years. The 2020 performance-based awards have three annual performance periods (fiscal years 2020, 2021 and 2022), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The annual achievement levels are averaged over the three-year performance period and the earned amounts, if any, vest on March 31, 2023. The three-year average payout level for each performance objective replaces the actual payout level for any fiscal year where the actual payout is less than the three-year average.

The Company previously granted (i) performance-based restricted stock units under the 2016 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $5.50 for 30 consecutive trading days prior to August 5, 2021, (ii) performance-based restricted stock units under the 2017 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $6.00 for 30 consecutive trading days prior to March 31, 2021 (pursuant to an extension from the initial vesting date of March 31, 2020, which extension was approved by the Compensation Committee in February 2020), and (iii) performance-based restricted stock units under the 2018 LTI program, which were scheduled to vest if the Company achieved a per share stock price of at least $5.00 for any period of 30 consecutive trading days prior to June 30, 2021 (collectively, the “LTI Performance Awards”). On March 5, 2021, the Compensation Committee of the Board of Directors extended the performance period for each of the LTI Performance Awards to December 31, 2022. In accordance towith ASC Topic 718, “Compensation—Stock Compensation” (“ASC 718”), the Company conducted a lattice valuation model in order to revalue the market price for the LTI Performance Awards at the March 5, 2021 modification date. The 2018 LTI program met the market objective by achieving a per share stock price of $5.00 for 30 consecutive days, and approximately 261,463 shares will vest for recipients remaining employed through December 31, 2022. The modification ~~will result~~resulted in an approximately $0.8 million incremental cost, ~~being~~which will be expensed over a twenty-month period starting in April 2021.

During the first ~~three~~nine months of 2021, the Compensation Committee of the Board of Directors approved modifying the 2020 performance-based awards granted in 2020. This modification resulted in the adjustment of the 2021 and 2022 performance goals; in addition, the three-year average payout level for each performance objective will replace the actual payout level for any fiscal year (including, without limitation, 2020) where the actual payout is less than the three-year average. As of ~~March 31,~~September 30, 2021, the payout would be 549,181 at threshold, 1,098,362 at target, and 2,196,724 at maximum. The grant price was adjusted from $1.22 per share to $3.49 share per the modification date of March 5, 2021.

During the first ~~three~~nine months of 2021, the Compensation Committee approved modifying the 2019 performance-based restricted stock unit awards. The performance goal for 2020 was year-end backlog performance expressed in margin dollars. Because of

Table of Contents

COVID-19, the Company’s ability to book backlog in the normal course was impaired during 2020, particularly in

~~Table of Contents~~

Florida, New York, and Canada and with respect to new customers. As a result, the Compensation Committee authorized an adjustment to the 2020 performance results to add $51.9 million of orders to December 31, 2020 backlog that were booked in early 2021 but delayed due to the impact of the COVID-19 pandemic, which resulted in a payout of 156,014 shares under the 2015 Plan.

While the majority of restricted stock units and awards were granted as equity, in accordance with ASC 718, the Company has two cash-based plans that are classified as a liability. Stock-based compensation expense for the three months ended ~~March 31,~~September 30, 2021 and 2020 was ~~$0.7~~$1.1 million and ~~$0.5~~$0.6 million, respectively, and for the nine months ended September 30, 2021 and 2020 was $2.6 million and $1.7 million, respectively, and was included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

NOTE 12—OTHER SUPPLEMENTARY INFORMATION

The following table summarizes other current assets included on the Company's unaudited condensed consolidated balance sheets:


(in thousands)	September 30, 2021		December 31, 2020
Sales tax receivable - Canada	$	4,245	$	2,097
Unamortized commercial insurance premiums		3,321		1,903
Prepaid expenses		1,354		432
Letters of credit		883		474
Cash collateral on commercial insurance claims		595		585
Surety bond		500		45
Workers' compensation refund		-		265
Prepaid health insurance premiums		-		207
Other short-term assets		628		449
Total	$	11,526	$	6,457

The following table summarizes other current liabilities included on the Company's unaudited condensed consolidated balance sheets:


(in thousands)	September 30, 2021		December 31, 2020
Sales tax payable - Canada	$	4,601	$	2,372
Accrued job costs		2,985		1,081
Short-term lease liability		1,603		1,362
Accrued stock compensation - liability		1,082		387
Accrued workers' compensation and general liabilities		304		506
Other accrued expenses		136		1,462
Total	$	10,711	$	7,170

2022

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q and its exhibits contain or incorporate by reference various forward-looking statements that express a belief, expectation or intention or are otherwise not statements of historical fact. Forward-looking statements generally use forward-looking words, such as “may,” “will,” “could,” “should,” “would,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other words that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. Investors should not place undue reliance on any of these forward-looking statements. Except as required by law, we undertake no obligation to further update any such statements, or the risk factors described in our 2020 Report under the heading “Part I—Item 1A. Risk Factors,” to reflect new information, the occurrence of future events or circumstances or otherwise. The forward-looking statements in this Form 10-Q do not constitute guarantees or promises of future performance. Forward-looking statements may include information concerning the following, among other items:

●

our level of indebtedness;

●

our ability to make interest and principal payments on our debt and satisfy the financial and other covenants contained in our debt facilities, as well as our ability to engage in certain transactions and activities due to limitations and covenants contained in such facilities;

●

our ability to generate sufficient cash resources to continue funding operations, including investments in working capital required to support growth-related commitments that we make to our customers, and the possibility that we may be unable to obtain any additional funding as needed or incur losses from operations in the future;

●

exposure to market risks from changes in interest rates, including changes to or replacement of the LIBOR;

●

failure to maintain effective internal control over financial reporting and disclosure controls and procedures in the future;

●

our ability to attract and retain qualified personnel, skilled workers, and key ~~officers;~~officers, including the potential impact of the federal COVID-19 vaccination mandate, or any mandates imposed by our customers, on our ability to recruit and retain employees;

●

failure to successfully implement or realize our business strategies, plans and objectives of management, and liquidity, operating and growth initiatives and opportunities, including our expansion into international markets and our ability to identify potential candidates for, and consummate, acquisition, disposition, or investment transactions;

●

the loss of one or more of our significant customers;

●

our competitive position;

●

market outlook and trends in our industry, including the possibility of reduced investment in, or increased regulation of, nuclear power plants and declines in public infrastructure construction and reductions in government funding, including funding by state and local agencies;

●

the failure of the U.S. Congress to pass infrastructure-related legislation benefiting our end markets;

●

costs exceeding estimates we use to set fixed-price contracts;

●

harm to our reputation or profitability due to, among other things, internal operational issues, poor subcontractor performances or subcontractor insolvency;

●

potential insolvency or financial distress of third parties, including our customers and suppliers;

●

our contract backlog and related amounts to be recognized as revenue;

●

our ability to maintain our safety record, the risks of potential liability and adequacy of insurance;

●

adverse changes in our relationships with suppliers, vendors, and ~~subcontractors;~~subcontractors, including increases in cost, disruption of supply or shortage of labor, freight, equipment or supplies, including as a result of the COVID-19 pandemic;

●

compliance with environmental, health, safety and other related laws and ~~regulations;~~regulations, including those related to climate change;

●

limitations or modifications to indemnification regulations of the U.S. or Canada;

●

our expected financial condition, future cash flows, results of operations and future capital and other expenditures;

●

the impact of general economic conditions, including inflation, the current economic disruption and any recession resulting from the COVID-19 pandemic;

●

the impact of the COVID-19 pandemic on our business, results of operations, financial condition, and cash flows, including global supply chain disruptions and the potential for additional COVID-19 cases to occur at our active or future job sites, as ~~has~~previously occurred at our Plant Vogtle site in Georgia, which potentially could impact cost and labor availability;

Table of Contents

●

information technology vulnerabilities and cyberattacks on our networks;

●

our failure to comply with applicable laws and regulations, including, but not limited to, those relating to privacy and anti-bribery;

●

our participation in multiemployer pension plans;

~~Table of Contents~~

●

the impact of any disruptions resulting from the expiration of collective bargaining agreements;

●

the impact of natural disasters and other severe catastrophic events (such as the ongoing COVID-19 pandemic);

●

the impact of changes in tax regulations and laws, including future income tax payments and utilization of net operating loss and foreign tax credit carryforwards;

●

volatility of the market price for our common stock;

●

our ability to maintain our stock exchange listing;

●

the effects of anti-takeover provisions in our organizational documents and Delaware law;

●

the impact of future offerings or sales of our common stock on the market price of such stock;

●

expected outcomes of legal or regulatory proceedings and their anticipated effects on our results of operations; and

●

any other statements regarding future growth, future cash needs, future operations, business plans and future financial results.

These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors, including unpredictable or unanticipated factors that we have not discussed in this Form 10-Q. In addition, some of these risks, uncertainties and other factors have been, and may further be, exacerbated by the COVID-19 pandemic. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by the forward-looking statements.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. Investors should consider the areas of risk and uncertainty described above, as well as those discussed in the 2020 Report under the heading “Part I—Item 1A. Risk Factors” and in this Form 10-Q under the heading “Part II—Item 1A. Risk Factors.” Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and we caution investors not to rely upon them unduly.

The following discussion provides an analysis of the results of continuing operations, an overview of our liquidity and capital resources and other items related to our business. Unless otherwise specified, the financial information and discussion in this Form 10-Q are as of and for the three and nine months ended ~~March 31,~~September 30, 2021 and are based on our continuing operations; they exclude any results of our discontinued operations. Please refer to “Note 4—Changes in Business” to the unaudited condensed consolidated financial statements included in this Form 10-Q for additional information on our discontinued operations.

This discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in this Form 10-Q and our audited consolidated financial statements and notes thereto included in the 2020 Report.

Backlog

The services we provide are typically carried out under construction contracts, long-term maintenance contracts and master service agreements. Total backlog represents the dollar amount of revenue expected to be recorded in the future for work performed under awarded contracts.

Revenue estimates included in our backlog can be subject to change as a result of project accelerations, cancellations or delays due to various factors, including, but not limited to, the customer’s budgetary constraints and adverse weather. These factors can also cause revenue amounts to be recognized in different periods and at levels other than those originally projected. Additional work that is not identified under the original contract is added to our estimated backlog when we reach an agreement with the customer as to the scope and pricing of that additional work. Backlog is reduced as work is performed and revenue is recognized, or upon cancellation.

Table of Contents

Backlog is not a measure defined by GAAP, and our methodology for determining backlog may vary from the methodology used by other companies in determining their backlog amounts. Backlog may not be indicative of future operating results and projects in our backlog may be cancelled, modified, or otherwise altered by our customers. We utilize our calculation of backlog to assist in measuring aggregate awards under existing contractual relationships with our customers. We believe our backlog disclosures will assist investors in better understanding this estimate of the services to be performed pursuant to awards by our customers under existing contractual relationships.

~~Table of Contents~~

The following tables summarize our backlog:


(in thousands)	March 31, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Cost plus	$	410,396	$	430,694	$	604,323	$	430,694
Lump sum		50,154		13,156		68,183		13,156
Total	$	460,550	$	443,850	$	672,506	$	443,850


(in thousands)	Three Months Ended March 31, 2021		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Backlog - beginning of period	$	443,850	$	664,357	$	443,850
New awards		37,241		76,774		376,228
Adjustments and cancellations, net		40,310		4,726		78,201
Revenue recognized		(60,851)		(73,351)		(225,773)
Backlog - end of period	$	460,550	$	672,506	$	672,506

Total backlog as of ~~March 31,~~September 30, 2021 was ~~$460.6~~$672.5 million, compared with $443.9 million aton December 31, ~~2020. The~~2020, an increase of $228.7 million, which was primarily driven by our decommissioning work, which accounted for $224.6 million of the increase. Our fossil and wastewater markets also contributed to a $28.3 million increase in ~~backlog was due to the award of several new contracts, driven~~backlog. These increases were partially offset by a ~~construction project for a wastewater treatment plant.~~reduction in our nuclear market backlog of $29.4 million. We estimate that approximately ~~$182.4~~$207.4 million, or ~~39.6%~~30.8% of total backlog ~~at March 31,~~on September 30, 2021, will be converted to revenue within the next twelve ~~months.~~months and $73.4 million, or 10.9% of total backlog, will be converted to revenue within the remainder of the fiscal year. As of December 31, 2020, we estimated that approximately $165.3 million, or 37.2% of total backlog, would convert to revenue in 2021.

Results of Operations

The Company continues to monitor several factors that may cause actual results of operations and financial results to differ from our historical results or current expectations. These factors include: inflationary ~~and~~pressures, the political environment, work delays on projects and supplies, labor shortages and rising labor costs, new laws, regulations and guidelines, new project requirements, and the impact of the COVID-19 pandemic, including the consequences of governmental and other measures designed to prevent the spread of the virus, including the potential impact of applicable vaccine mandates on our labor supply and future results of operations, as well as any impact of such mandates on our customers, the continued sporadic outbreaks of COVID-19 cases and the ongoing spread of the new COVID-19 variants, the impact of COVID-19 vaccines, including the speed at which they, or related “boosters,” are approved, disseminated and widely adopted, and their effectiveness against COVID-19 and its evolving strains, ~~some of which may be more transmissible or virulent than the initial variant,~~ and the ultimate duration and scope of the pandemic. These and other factors could affect the Company’s operational results and cause them to not be comparable to those of the same period in previous years. For instance, the effects of the COVID-19 pandemic led the Company to implement enhanced safety standards and processes on a project in Georgia that experienced COVID-19 cases on site and caused work delays on projects in New York due to specific state, local, municipal and customer mandated stay-at-home orders and new project requirements that were established to protect workers and the general public. Additionally, during the third quarter of 2020, we experienced a delay in a nuclear project and an outage cycle in Louisiana and have experienced a slow-down in business development activities and bid opportunities, particularly on the eastern shore of the Lake Huron area in Ontario, Canada due to COVID-19. Although the majority of stay-at-home orders were phased-out by the end of the second quarter of 2020, we are still experiencing impacts associated with the COVID-19 project specific protocols. While the Company has not yet experienced a material negative impact on its operational results, these project specific requirements are expected to remain in place for the foreseeable future, which will continue to impact project schedules and workflow going forward.

In addition, federal and state governments have increased spending as part of efforts to mitigate the impact of COVID-19 on the economy. The amount and timing of such spending will be directly impacted by the duration of required efforts to contain COVID-19 and the severity of the negative impacts created by the virus and its effect on the economy. Any recovery from the COVID-19 pandemic and related economic impact may also be slowed or reversed by a number of factors, including any widespread resurgence in COVID-19 infections. The results presented in this Form 10-Q are not necessarily indicative of future operating results.

2325

Table of Contents

The following summary and discussion of our results of operations is based on our continuing operations and excludes any results of our discontinued operations:


	Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020		2021		2020
Revenue	$	60,851	$	66,147	$	73,351	$	66,240	$	225,773	$	204,936
Cost of revenue		54,753		59,238		66,590		57,582		203,561		180,014
Gross profit		6,098		6,909		6,761		8,658		22,212		24,922

Selling and marketing expenses		211		138		267		123		709		401
General and administrative expenses		6,311		6,200		4,248		5,827		16,931		17,413
Depreciation and amortization expense		41		41		50		46		137		144
Total operating expenses		6,563		6,379		4,565		5,996		17,777		17,958

Operating (loss) income		(465)		530
Operating income						2,196		2,662		4,435		6,964

Interest expense, net		1,293		1,533		1,227		1,541		3,733		4,640
Other income, net		(360)		(122)
Loss from continuing operations before income tax		(1,398)		(881)
Other expense (income), net						181		(316)		(1,411)		(937)
Income from continuing operations before income tax						788		1,437		2,113		3,261
Income tax expense		185		48		(6)		321		256		565
Loss from continuing operations	$	(1,583)	$	(929)
Income from continuing operations					$	794	$	1,116	$	1,857	$	2,696

Revenue for the three months ended ~~March 31,~~September 30, 2021 ~~decreased $5.3~~increased $7.1 million, or 8.0%, compared with the corresponding period in 2020. This decrease was primarily related to reduced construction activities at Plant Vogtle, which accounted for $15.4 million of the decline. This reduction was partially offset by $3.8 million in new project awards and increased volume in our decommissioning business, $2.1 million of growth of maintenance activities at several other nuclear sites, and $1.4 million for preparation of a nuclear outage. Additionally, the Canadian nuclear market contributed $1.2 million of incremental revenue. We also experienced a $1.1 million increase in our energy delivery business as we continue to diversify the end markets we serve.

Gross profit for the three months ended March 31, 2021 decreased by $0.8 million, or 11.7%, compared with the corresponding period in 2020, while gross margin declined to 10.0% from 10.4%. The decrease in gross profit reflected lower volume in our domestic nuclear markets offset in part by increased volume in our decommissioning and energy delivery markets. The decrease in gross margin reflected the change in our revenue profile as our decommissioning business expanded and we experienced reduced volume at Plant Vogtle.

Operating income for the three months ended March 31, 2021 decreased by $1.0 million to an operating loss of $0.5 million compared with operating income of $0.5 million in the corresponding period of 2020, due to a decrease in gross profit and increased operating expenses primarily resulting from higher selling and marketing expenses related to our business development activities.

~~General and Administrative Expenses~~

Three Months Ended March 31,
($ in thousands)

2021

2020
Employee-related expenses

$
3,532

$
2,872
Stock-based compensation expense

715

471
Professional fees

910

1,295
Other expenses

1,154

1,562
Total

$
6,311

$
6,200

~~Total general and administrative expenses for the three months ended March 31, 2021 increased $0.1 million, or 1.8%~~10.7%, compared with the corresponding period in 2020. The increase was ~~largely~~ driven primarily by our growth in the decommissioning market of $8.6 million. In addition, our volume increased ~~salaries and benefits of $0.7 million and an increase~~ in ~~stock-based compensation of $0.2 million, due to achievement of compensation incentives specifically focused on~~ the ~~achievement of financial targets.~~fossil fuel markets by $3.7 million. These increases were partially offset by ~~a decrease~~reduced volume in the nuclear and industrial markets of ~~$0.4~~$2.5 million ~~in professional fees,~~ and ~~a decrease of $0.4~~$2.6 million, ~~of other expenses due to reduction in travel and meals,~~respectively.

Revenue for the nine months ended September 30, 2021 increased $20.8 million, or 10.2%, compared with the corresponding period in 2020. The increase was primarily driven by our growth in the decommissioning market of $19.1 million, and the timing of a planned utility outage related to our long-term maintenance and modification contract of $18.3 million. In addition, our volume increased in the fossil fuel market by $10.8 million. These increases were partially offset by reduced volume in the nuclear market of $27.4 million.

Gross profit for the three months ended September 30, 2021 decreased $1.9 million, or 21.9%, compared with the corresponding period in 2020. The decrease was primarily driven by cost overruns on uncompleted fixed price projects in the industrial markets we serve in Florida. We also incurred start-up costs associated with our expansion in the northeast transportation and distribution of natural gas during the three months ended September 31, 2021. The decrease was partially offset by growth in the decommissioning market accounting for a greater portion of revenue compared to the corresponding period in 2020. Our decommissioning projects have a lower gross margin profile compared to other services we provide.

2426

Table of Contents

Gross profit for the nine months ended September 30, 2021 decreased $2.7 million, or 10.9%, compared with the corresponding period in 2020. The decrease was primarily driven by cost overruns on uncompleted fixed price projects in the industrial markets we serve in Florida. The decrease was partially offset by growth in the decommissioning market and the timing of a planned utility outage related to our long-term maintenance and modification contract, each of which has a lower gross margin profile compared to other services we perform and accounted for a greater portion of revenue compared to the corresponding period in 2020.

Operating income for the three months ended September 30, 2021 decreased $0.5 million compared with the corresponding period in 2020, due primarily to the decrease in gross profit of $1.9 million. This was partially offset by a decrease of $1.4 million in operating expenses, driven by lower general and administrative costs.

Operating income for the nine months ended September 30, 2021 decreased $2.5 million compared with the corresponding period in 2020, due primarily to the decrease in gross profit of $2.7 million. This was partially offset by a decrease of $0.2 million in operating expenses, driven by lower general and administrative costs.

General and Administrative Expenses

Three Months Ended September 30,

Nine Months Ended September 30,
($ in thousands)

2021

2020

2021

2020
Employee-related expenses

$
1,946

$
3,111

$
8,916

$
8,835
Stock-based compensation expense

1,119

614

2,579

1,702
Professional fees

(10)

843

1,876

3,088
Other expenses

1,193

1,259

3,560

3,788
Total

$
4,248

$
5,827

$
16,931

$
17,413

Total general and administrative expenses for the three months ended September 30, 2021 decreased by $1.6 million, or 27.1%, compared with the corresponding period in 2020. Employee related costs decreased by $1.2 million due to cost reductions in a short term incentive program, which was partially offset by growth in headcount. Professional fees decreased by $0.9 million resulting from a claim recovery on previously incurred expenses. These decreases were partially offset by an increase in stock-based compensation expense of $0.5 million, driven by additional restricted stock units granted in 2021.
Total general and administrative expenses for the nine months ended September 30, 2021 decreased by $0.5 million, or 2.8%, compared with the corresponding period in 2020. The decrease was primarily driven by decreases of $1.2 million and $0.2 million, respectively, in professional fees and other expenses resulting from a claim recovery on previously incurred expenses and cost reduction initiatives. These decreases were partially offset by increases of $0.1 million in employee related costs and $0.9 million in stock-based compensation expenses due to accelerated vesting of a restricted stock award and a new grant of restricted stock units.

Total Other (Income) Expense, Net

Three Months Ended March 31,
($ in thousands)

2021

2020
Interest (income) expense, net

$
1,293

$
1,533
Other (income) expense, net

(360)

(122)
Total

$
933

$
1,411


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2021		2020		2021		2020
Interest expense, net	$	1,227	$	1,541	$	3,733	$	4,640
Other (income) expense, net		181		(316)		(1,411)		(937)
Total	$	1,408	$	1,225	$	2,322	$	3,703

Total other expense, net, for the three months ended ~~March 31,~~September 30, 2021 increased $0.2 million, or 14.9%, compared with the corresponding period in 2020. The increase was primarily due to the recognition of a $0.4 million impairment charge related to a sublease, partially offset by $0.2 million reduction in interest expense due to refinancing our debt in December 2020, compared with the corresponding period in 2020.

Total other expense, net, for the nine months ended September 30, 2021 decreased ~~$0.5~~$1.4 million, or ~~33.9%~~37.3%, compared with the corresponding period in 2020. The decrease was primarily due to receipt of a ~~$0.2~~$1.0 million distribution from the assets of a former subsidiary related to a previous intercompany receivable that we recognized as a loss in 2018, coupled with a $1.0 million decrease in interest expense ~~resulting from lower interest rates due~~and fees related to the refinancing of our debt in ~~December 2020~~2020. These decreases were partially offset by a $0.3 million reduction in joint venture earnings due to lower volume as construction activities for Plant Vogtle Units 3 and 4 move closer to completion, and a ~~$0.2~~$0.4 million ~~increase in other income resulting from recognizing an exchange net gain rather than an exchange net loss in Canada,~~impairment charge related to a sublease, compared with the corresponding period in 2020.

Table of Contents

Income Tax Expense


	Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2021		2020		2021		2020		2021		2020
Income tax expense	$	185	$	48
Income tax (benefit) expense					$	(6)	$	321	$	256	$	565

Income tax expense for the interim periods is based on estimates of the effective tax rate for the entire fiscal year. The effective income tax rate is based upon the estimated income during the calendar year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable quarterly periods for settlements of tax audits or assessments and the resolution or identification of tax position uncertainties.

For the three months ended ~~March 31,~~September 30, 2021, we recorded income tax ~~expense~~benefit from continuing operations of ~~$0.2~~$0.01 million, or ~~(13.3)~~(0.8)% of pretax ~~loss~~income from continuing operations, compared with income tax expense from continuing operations of ~~less than $0.1~~$0.3 million, or ~~(5.4)%~~22.3% of pretax ~~loss~~income from continuing operations, in the corresponding period of 2020. For the nine months ended September 30, 2021, we recorded income tax expense from continuing operations of $0.3 million, or 12.1% of pretax income from continuing operations, compared with income tax expense from continuing operations of $0.6 million, or 17.3% of pretax income from continuing operations, in the corresponding period of 2020.

The difference between our effective tax rate and the federal statutory tax rate for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 is primarily related to the ~~current year~~ Canadian income tax provision and the partial valuation allowance recorded on our U.S. deferred tax assets.

The ~~increase~~decrease in income tax provision from continuing operations for the three months ended ~~March 31,~~September 30, 2021 compared towith the corresponding period in 2020, was primarily the result of the $0.3 million increase in the U.S. deferred tax assets net of a ~~$0.2~~partial valuation allowance, and the $0.05 million decrease in the income tax provision due to the year-over-year fluctuation in the pre-tax Canadian book income.

The decrease in income tax provision from continuing operations for the nine months ended September 30, 2021 compared with the corresponding period in 2020 was primarily the result of the $0.4 million increase in the U.S. deferred tax assets net of the partial valuation allowance as the Company’s indefinite lived intangible assets have been fully amortized for tax purposes as of year-end 2020, partially offset by the $0.1 million increase in the Canadian income tax ~~provision recorded during the three months ended March 31, 2021.~~provision.

Tax Cuts and Jobs Acts of 2017

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, making significant changes to the Internal Revenue Code. Such changes include, but are not limited to, a U.S. federal corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.

Due to changes in interpretations and assumptions, and future guidance that may be issued and actions we may take in response to the Tax Cuts and Jobs Act, the ultimate impact of the Tax Cuts and Jobs Act may change in future periods. The Tax Cuts and Jobs Act is highly complex, and we will continue to assess the impact of certain aspects of the Tax Cuts and Jobs Act. For additional information, please refer to “Note 7—Income Taxes” to the consolidated financial statements included in this Form 10-Q.

Discontinued Operations

See “Note 4—Changes in Business” to the unaudited condensed consolidated financial statements included in this Form 10-Q for information regarding discontinued operations.

Liquidity and Capital Resources

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, our principal sources of liquidity were borrowings under the Revolving Credit Facility and effective management of our working capital. Our principal uses of cash were to pay for customer contract-related material, labor and subcontract labor, operating expenses, and interest expense on the Term Loan and the Revolving Credit

~~Table of Contents~~

Facility. See discussion in “Note 8—Debt” to the unaudited condensed consolidated financial statements included in this Form 10-Q for additional information about the Term Loan and the Revolving Credit Facility.

Table of Contents

Net Cash Flows

Our net consolidated cash flows, including cash flows related to discontinued operations, consisted of the following:


	Three Months Ended March 31,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Cash flows provided by (used in):
Operating activities	$	(3,121)	$	(3,039)	$	(8,765)	$	(6,228)
Investing activities		(56)		(42)		(537)		(88)
Financing activities		(5)		1,572		3,031		3,044
Effect of exchange rate changes on cash		(90)		(136)		111		(80)
Net change in cash, cash equivalents and restricted cash	$	(3,272)	$	(1,645)	$	(6,160)	$	(3,352)

Cash and Cash Equivalents

As of ~~March 31,~~September 30, 2021, our operating unrestricted cash and cash equivalents decreased by ~~$3.3~~$6.2 million to ~~$5.4~~$2.6 million from $8.7 million as of December 31, 2020. As of ~~March 31,~~September 30, 2021, ~~$4.9~~$1.0 million of operating cash was held in U.S. bank accounts and ~~$0.5~~$1.6 million was held in ~~Canada.~~Canadian bank accounts. Total liquidity (the sum of unrestricted cash and availability under the Revolving Credit Facility) was ~~$16.9~~$21.7 million ~~at the end~~as of ~~the first quarter~~September 30, 2021. The decreased liquidity is primarily driven by more cash used towards cost of ~~2021.~~sales resulting in greater revenue and an increase in accounts receivable and contract assets. This is part of normal operations as our accounts receivable and contract assets will convert to customer receipts and is expected to be a temporary reduction in liquidity.

Operating Activities

Cash flows from operating activities result primarily from earnings sources and are affected by changes in operating assets and liabilities, which consist primarily of working capital balances related to our projects. For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, cash used in operating activities totaled ~~$3.1~~$8.8 million, ~~a period over period net~~an increase in cash used of ~~$0.1~~$2.6 million compared to the corresponding period in ~~2020. The increase in cash used was the result of a period over period increase in net loss of $0.7 million,~~2020, primarily due to an increase in accounts receivable of ~~$7.1~~$5.4 million, an increase in contract assets of $3.3 million, an increase in other current assets and other assets of $3.3 million, a decrease in contract liabilities of $0.7 million and a decrease in net income of $0.6 million. This increase in cash used was partially offset by an increase in accounts payable and accrued liabilities of $10.4 million and an increase in ~~contract liabilities~~non-cash stock-based compensation of $1.2 million. These changes were partially offset by cash provided by a period over period decrease in contract assets of $5.0 million, an increase in accounts payable of $2.3 million, an increase in accrued and other liabilities of $0.9 ~~million, and a decrease in other assets of $0.4~~ million.

Investing Activities

~~Cash flows from investing activities were insignificant for~~For the ~~three~~nine months ended ~~March 31, 2021, consistent with the corresponding period in 2020.~~

~~Financing Activities~~

~~For the three months ended March 31,~~September 30, 2021, net cash used ~~in financing~~for investing activities ~~was~~increased $0.4 million compared to the nine months ended September 30, 2020, primarily due to ~~cash used~~an increase in ~~connection with~~investment in operating equipment primarily related to our ~~stock-based awards for payments for statutory taxes of $0.5 million, partially offset by~~water and wastewater projects.

Financing Activities

For the nine months ended September 30, 2021, net cash provided ~~from~~by financing activities of $3.0 million was primarily composed of cash provided by our borrowings under the Revolving Credit Facility exceeding our repayments from customer cash receipts by $4.3 million, which was partially offset by cash used in connection with our stock-based awards for payments of statutory taxes of $0.5 ~~million.~~million and a $0.8 million principal payment we made on the Term Loan.

During the ~~first three~~nine months ended September 30, 2020, net cash provided by financing activities of ~~2020,~~$3.0 million was primarily composed of the proceeds from the successful completion of our subscription rights offering in the first quarter of 2020, pursuant to which we received net proceeds of $6.5 million and issued 5,384,615 shares of our common ~~stock,~~stock. This was partially offset by net cash used by repayments ~~from~~of customer cash receipts under ~~the~~our Prior ABL exceeding our borrowings by ~~$4.5 million.~~$2.5 million, and a $0.4 million principal payment coupled with $0.3 million debt issuance costs related to our prior term loan facility with Centre Lane Partners, LLC.

Effect of Exchange Rate Changes on Cash

For both the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020, the effect of Canadian foreign exchange rate changes on our cash balances was not material.

2629

Table of Contents

Dividends

We have not declared dividends since the first quarter of 2015 and do not anticipate declaring dividends in the near term. As of ~~March 31,~~September 30, 2021, the terms of the Term Loan and Revolving Credit Facility restricted our ability to pay dividends. In addition, the timing and amounts of any dividends would be subject to determination and approval by our Board of Directors.

Liquidity Outlook

Overall, we expect liquidity to continue to improve through the remainder of 2021 as a result of refinancing our debt with terms that reflect improving operational performance and expected increased net profits. However, we may experience periodic short-term constraints on our liquidity as a result of the cash flow requirements of specific projects. A high percentage of our cost of service comes from weekly craft labor payrolls, and the lag between incurrence of those payrolls and the subsequent collection of the resulting customer billings results in negative cash flows for that time period. Although we utilize the Revolving Credit Facility to address those time period negative cash flows, contract terms restricting customer invoicing frequency, delays in customer payments, and underlying surety bonds negatively impact our available borrowing base.

We believe that we have sufficient resources to satisfy the remainder of our 2021 working capital requirements as we successfully refinanced and replaced our prior credit facilities with new credit facilities to better accommodate our growth initiatives as we pass our restructuring phase and move to implement our future growth initiatives.

While we have been adversely affected by the COVID-19 pandemic, we currently cannot predict the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows, as such impact is dependent on future developments, including the duration and severity of the pandemic and the related length of its impact on the global economy, which remain uncertain and cannot be predicted at this time. In April 2020, the Company experienced a temporary suspension ~~for~~of projects in New York which required a phased reopening that resulted in the job sites being fully functional by the beginning of June 2020. In addition, there was an increase in COVID-19 cases at Plant Vogtle in July 2020, which resulted in the Company working with customers, clients, and job site leadership to provide more strategic focus and resources towards implementing enhanced safety protocols to fight the spread of the COVID-19 virus. ~~Although, during~~During the third quarter of 2020, the Company was informed of delays ~~for~~in a nuclear project and outage cycle in Louisiana and experienced a slow-down in business development activities and bid opportunities, particularly on the eastern shore of the Lake Huron area in Ontario, Canada, due to COVID-19, these developments did not materially impact our cash and the deployment of our capital resources during 2020. We have seen a decrease in new business development based on restrictions on travel and in-person meetings, and stricter safety guidelines, coupled with decreased spending related to market uncertainty due to COVID-19. Any recovery from the COVID-19 pandemic and related economic impact may also be slowed or reversed by a number of factors, including the continued sporadic outbreaks of COVID-19 cases, the ongoing spread of new COVID-19 variants and the impact of COVID-19 vaccines, including the speed at which they are approved, disseminated and widely adopted and their effectiveness against COVID-19 and its evolving strains, ~~some~~as well as the potential impact of ~~which may be more transmissible or virulent than~~ the ~~initial variant, or additional widespread resurgences in COVID-19 infections.~~federal vaccination mandate, on our labor supply and future results of operations, as well as any impact of applicable vaccine mandates on our customers. Management will continue to closely monitor conditions using the data available and will draw on the expertise of health officials, including the latest recommendations from the Centers for Disease Control and Prevention and the on-site medical professionals. Our liquidity, as well as our ability to satisfy our working capital requirements, may be adversely affected to some degree by the COVID-19 pandemic. We currently believe that the impact of COVID-19 will not negatively impact our ability to comply with the covenants under our existing credit facilities. However, we cannot provide any assurance that the assumptions used to estimate our liquidity requirements will remain accurate due to the unprecedented nature and the unpredictability of the COVID-19 global pandemic and its potential impact on us and our customer base. As a consequence, our estimates of the duration and severity of the pandemic and its impact on our future earnings and cash flows could change and have a material impact on our results of operations and financial condition. In addition, even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the pandemic’s global economic impact, including any recession that has occurred or may occur in the future. In the event that we are unable to address potential liquidity shortfalls in the future, management will need to seek additional funding, which may not be available on reasonable terms, if at all.

Off-Balance Sheet Transactions

Our liquidity is currently not dependent on the use of off-balance sheet transactions but, in line with industry practice, we are often required to provide payment and performance surety bonds to customers and may be required to provide letters of credit. If performance assurances are extended to customers, generally our maximum potential exposure is limited in the contract with our customers. We frequently obtain similar performance assurances from third-party vendors and subcontractors for work performed in the ordinary course of contract execution. However, the total costs of a project could exceed our original cost

2730

Table of Contents

estimates, and we could experience reduced gross profit or possibly a loss for a given project. In some cases, if we fail to meet certain performance standards, we may be subject to contractual liquidated damages.

As of ~~March 31,~~September 30, 2021, we had a contingent liability for issued and outstanding standby letters of credit, generally issued to secure performance on customer contracts. As of ~~March 31,~~September 30, 2021, we had $0.5 million outstanding letters of credit under the Revolving Credit Facility sublimit and $0.4 million of outstanding cash collateralized standby letters of credit pursuant to a prior revolving credit facility with Wells Fargo Bank, National Association, and there were no amounts drawn upon these letters of credit. In addition, as of ~~March 31,~~September 30, 2021, we had outstanding surety bonds of ~~$50.0~~$67.1 million. Our subsidiaries also provide financial guarantees for certain contractual obligations in the ordinary course of business.

Critical Accounting Policies and Use of Estimates

There have been no material changes to our critical accounting policies as set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2020 Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are not required to provide the information required under this item.

Item 4. Controls and Procedures.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s management, under the supervision of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of that date, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

Under the applicable SEC rules, management is required to evaluate any changes in internal control over financial reporting that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

While we continue to implement design enhancements to our internal control procedures, ~~we believe~~ there were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by ~~Rules~~Rule 13a-15(d) ~~or 15d-15(d)~~ under the Exchange Act during the ~~first~~third quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition, as a smaller reporting company and non-accelerated filer, the Company currently is not subject to the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act. However, as a result of our public float as of the last business day of the second quarter of 2021, the Company met the requirements to become an accelerated filer for the fiscal year ending December 31, 2022 and will become subject to the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act when filing the Annual Report on Form 10-K for the year ending December 31, 2021.

Part II—OTHER INFORMATION

~~Item 1.~~

Item 1. Legal Proceedings.

The information included under “Litigation and Claims” in “~~Note~~“Note 10—Commitments and ~~Contingencies~~”Contingencies” to the unaudited condensed consolidated financial statements in this Form 10-Q is incorporated by reference into this Item.

2831

Table of Contents

Item 1A.

Risk Factors.

Our business faces significant risks and uncertainties. Certain important factors may have a material adverse effect on our business prospects, financial condition, and results of operations, and you should carefully consider them. There have not been any material changes to our risk factors from those reported in our 2020 Report, except as set forth below, although some of those risk factors have been, and may further be, exacerbated by the impact of the COVID-19 pandemic. The disclosure of any risk factor should not be interpreted to imply that the risk has not already materialized.

The new rules concerning mandatory COVID-19 vaccinations could have a material adverse impact on our business and results of operations.

On September 9, 2021, President Biden announced a proposed new rule that would require all employers with at least 100 employees to ensure that their employees are fully vaccinated or require unvaccinated workers to get a negative test at least once a week. On November 4, 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an emergency regulation to carry out this mandate, which requires covered employers to comply with the vaccine mandate beginning with January 4, 2022 or face substantial penalties for non-compliance. As a company with more than 100 employees, we are subject to the OSHA regulation concerning COVID-19 vaccination. We may also be impacted by President Biden’s September 9, 2021 executive order requiring certain COVID-19 precautions for government contractors and their subcontractors, including mandatory employee vaccination (subject to medical and religious exemptions). At this time, it is not possible to predict with certainty the exact impact that the new OSHA regulation or the requirements for government contractors and their subcontractors will have on us or on our workforce, but they could result in increased costs, labor disruptions or employee attrition. If we lose employees, it may be difficult in the current competitive labor market to find replacement employees, which could have an adverse effect on future revenues and costs. In addition, additional uncertainty could be caused by ongoing legal challenges to the OSHA standard and the vaccine mandate for federal contractors, which leads to uncertainty about the potential timing of when or if these mandates might actually take effect, as well as uncertainty regarding competing and potentially conflicting laws and regulations, such as the recent executive order issued by the governor of Texas prohibiting vaccine mandates. Accordingly, the new OSHA regulation, or any other vaccine mandate applicable to us, could have a material adverse effect on our business and results of operations.

Item 5. Other Information

The Company entered into an employment agreement with Damien Vassall on November 15, 2021, in connection with his appointment as Vice President, Chief Financial Officer. The employment agreement provides for an initial term of one year with automatic one-year renewals unless written notice of non-renewal is delivered by either party at least 90 days prior to the expiration of the then-current term. The agreement provides Mr. Vassall with an annual base salary of $275,000 and a short-term incentive (“STI”) opportunity of 50% of his annual salary.

If the Company terminates Mr. Vassall’s employment other than for disability or cause (including by reason of not renewing the term), or if he resigns for good reason (as those terms are defined in the agreement), then, provided that he signs and does not revoke a release of claims, he would be entitled to (i) continued base salary for one year, (ii) subsidized health insurance premiums for one year, (iii) the STI earned for the prior year, if not paid, and (iv) if terminated on or after April 1, a pro-rated STI based on actual results. If, however, the termination occurs within 90 days before, or two years after, a change in control of the Company, then the Company would pay or provide to Mr. Vassall the following additional benefits: (i) his target STI for the year in which the termination occurs (in lieu of the pro-rated bonus described above), and (ii) his then-outstanding equity incentive awards would become vested in full (without pro-ration), with any specified performance objectives deemed to be satisfied at the “target” level. The Company would pay lower amounts of severance benefits if Mr. Vassall’s employment were terminated due to death or disability. The employment agreement contains standard restrictive covenants in favor of the Company.

Table of Contents

Item 6.

Exhibits.

Exhibit		Description
10.1*		~~Form of Time-Based Unit~~Employment Agreement, ~~(March 31, 2021).~~dated November 15, 2021 between the Company and Damien Vassall.♦
10.2*		~~Form of Performance-Based Award Agreement (March 31, 2021).♦~~
10.3*		~~Form of Restricted Shares Award Agreement (February 4, 2021).♦~~
31.1		Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.♦
31.2		Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.♦
32.1		Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2		Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
~~101.INS~~101		~~XBRL Instance Document♦~~The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.♦
~~101.SCH~~104		Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Schema Document♦~~
~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document♦~~
~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document♦~~
~~101.LAB~~		~~XBRL Taxonomy Extension Labels Linkbase Document♦~~
~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document♦~~and contained in Exhibit 101).♦

♦ Filed herewith.

*Indicates a management contract or compensatory plan or arrangement.

~~♦ Filed herewith.~~

2933

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	WILLIAMS INDUSTRIAL SERVICES GROUP INC.

Date: ~~May 19,~~November 17, 2021	By:	/s/ ~~Randall R. Lay~~Damien a Vassall
		~~Randall R. Lay~~Damien A. Vassall
		~~Senior~~ Vice President, ~~and~~ Chief Financial Officer (Duly authorized officer and principal financial and accounting officer of the registrant)

3034


	Three Months Ended March 31,
Lease Cost/(Sublease Income) (in thousands)	2021		2020
Operating lease cost	$	555	$	1,219
Short-term lease cost		620		835
Total lease cost	$	1,175	$	2,054