Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 1-13011 | ||
Entity Registrant Name | Comfort Systems USA, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 76-0526487 | ||
Entity Address, Address Line One | 675 Bering Drive | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77057 | ||
City Area Code | 713 | ||
Local Phone Number | 830-9600 | ||
Title of 12(b) Security | Common Stock, $.01 par value | ||
Trading Symbol | FIX | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,450 | ||
Entity Common Stock, Shares Outstanding | 36,185,179 | ||
Entity Central Index Key | 0001035983 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 54,896 | $ 50,788 |
Billed accounts receivable, less allowance for credit losses of $9,087 and $6,907, respectively | 619,544 | 619,037 |
Unbilled accounts receivable, less allowance for credit losses of $784 and $0, respectively | 45,596 | 55,542 |
Other receivables, less allowance for credit losses of $759 and $0, respectively | 44,212 | 37,632 |
Inventories | 13,472 | 10,053 |
Prepaid expenses and other | 15,510 | 14,396 |
Costs and estimated earnings in excess of billings, less allowance for credit losses of $79 and $0, respectively | 18,622 | 2,736 |
Total current assets | 811,852 | 790,184 |
PROPERTY AND EQUIPMENT, NET | 117,206 | 109,796 |
LEASE RIGHT-OF-USE ASSET | 94,727 | 84,073 |
GOODWILL | 464,392 | 332,447 |
IDENTIFIABLE INTANGIBLE ASSETS, NET | 231,807 | 159,974 |
DEFERRED TAX ASSETS | 29,401 | 21,923 |
OTHER NONCURRENT ASSETS | 7,970 | 6,615 |
Total assets | 1,757,355 | 1,505,012 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 20,817 | |
Accounts payable | 204,145 | 196,195 |
Accrued compensation and benefits | 121,864 | 102,891 |
Billings in excess of costs and estimated earnings | 226,237 | 166,918 |
Accrued self-insurance | 49,166 | 39,546 |
Other current liabilities | 91,492 | 81,630 |
Total current liabilities | 692,904 | 607,997 |
LONG-TERM DEBT, NET | 235,733 | 205,318 |
LEASE LIABILITIES | 80,576 | 72,697 |
DEFERRED TAX LIABILITIES | 1,339 | 1,425 |
OTHER LONG-TERM LIABILITIES | 50,374 | 32,271 |
Total liabilities | 1,060,926 | 919,708 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $.01 par, 5,000,000 shares authorized, none issued and outstanding | ||
Common stock, $.01 par, 102,969,912 shares authorized, 41,123,365 and 41,123,365 shares issued, respectively | 411 | 411 |
Treasury stock, at cost, 4,935,186 and 4,465,448 shares, respectively | (129,243) | (103,960) |
Additional paid-in capital | 322,451 | 320,168 |
Retained earnings | 502,810 | 368,685 |
Total stockholders' equity | 696,429 | 585,304 |
Total liabilities and stockholders' equity | $ 1,757,355 | $ 1,505,012 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Billed accounts receivable, allowance for credit losses (in dollars) | $ 9,087 | $ 6,907 |
Unbilled accounts receivable, allowance for credit losses (in dollars) | 784 | 0 |
Other receivables, allowance for credit losses (In dollars) | 759 | 0 |
Costs and estimated earnings in excess of billings, allowance for credit losses | $ 79 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 102,969,912 | 102,969,912 |
Common stock, shares issued | 41,123,365 | 41,123,365 |
Treasury stock, shares | 4,935,186 | 4,465,448 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
REVENUE | $ 2,856,659 | $ 2,615,277 | $ 2,182,879 |
COST OF SERVICES | 2,309,676 | 2,113,334 | 1,736,600 |
Gross profit | 546,983 | 501,943 | 446,279 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 357,777 | 340,005 | 296,986 |
GAIN ON SALE OF ASSETS | (1,445) | (1,701) | (945) |
Operating income | 190,651 | 163,639 | 150,238 |
OTHER INCOME (EXPENSE): | |||
Interest income | 103 | 224 | 73 |
Interest expense | (8,385) | (9,317) | (3,710) |
Changes in the fair value of contingent earn-out obligations | 9,119 | (2,991) | (2,066) |
Other | 52 | 187 | 4,141 |
Other income (expense) | 889 | (11,897) | (1,562) |
INCOME BEFORE INCOME TAXES | 191,540 | 151,742 | 148,676 |
PROVISION FOR INCOME TAXES | 41,401 | 37,418 | 35,773 |
NET INCOME | $ 150,139 | $ 114,324 | $ 112,903 |
INCOME PER SHARE: | |||
Basic (in shares) | $ 4.11 | $ 3.10 | $ 3.03 |
Diluted (in shares) | $ 4.09 | $ 3.08 | $ 3 |
SHARES USED IN COMPUTING INCOME PER SHARE: | |||
Basic (in shares) | 36,542 | 36,854 | 37,202 |
Diluted (in shares) | 36,738 | 37,131 | 37,592 |
DIVIDENDS PER SHARE (in dollars per share) | $ 0.425 | $ 0.395 | $ 0.330 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Total |
BALANCE at Dec. 31, 2017 | $ 411 | $ (63,519) | $ 312,784 | $ 168,269 | $ 417,945 | ||
BALANCE (in shares) at Dec. 31, 2017 | 41,123,365 | ||||||
BALANCE (in shares) at Dec. 31, 2017 | (3,936,291) | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 112,903 | 112,903 | |||||
Issuance of Stock: | |||||||
Issuance of shares for options exercised | $ 3,618 | (513) | 3,105 | ||||
Issuance of shares for options exercised (in shares) | 206,875 | ||||||
Issuance of restricted stock & performance stock | $ 2,227 | (4) | 2,223 | ||||
Issuance of restricted stock & performance stock (in shares) | 129,569 | ||||||
Shares received in lieu of tax withholding payment on vested restricted stock | $ (1,540) | (1,540) | |||||
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | (36,967) | ||||||
Stock-based compensation | 4,212 | 4,212 | |||||
Dividends | (12,268) | (12,268) | |||||
Share repurchase | $ (28,533) | (28,533) | |||||
Share repurchase (in shares) | (592,839) | ||||||
BALANCE at Dec. 31, 2018 | $ 411 | $ (87,747) | 316,479 | 268,904 | 498,047 | ||
BALANCE (in shares) at Dec. 31, 2018 | 41,123,365 | ||||||
BALANCE (in shares) at Dec. 31, 2018 | (4,229,653) | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 114,324 | 114,324 | |||||
Issuance of Stock: | |||||||
Issuance of shares for options exercised | $ 2,532 | (182) | 2,350 | ||||
Issuance of shares for options exercised (in shares) | 114,125 | ||||||
Issuance of restricted stock & performance stock | $ 2,303 | (297) | 2,006 | ||||
Issuance of restricted stock & performance stock (in shares) | 107,606 | ||||||
Shares received in lieu of tax withholding payment on vested restricted stock | $ (1,498) | (1,498) | |||||
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | (28,586) | ||||||
Stock-based compensation | 4,168 | 4,168 | |||||
Dividends | (14,543) | (14,543) | |||||
Share repurchase | $ (19,550) | (19,550) | |||||
Share repurchase (in shares) | (428,940) | ||||||
BALANCE at Dec. 31, 2019 | $ 411 | $ (103,960) | 320,168 | 368,685 | $ 585,304 | ||
BALANCE (in shares) at Dec. 31, 2019 | 41,123,365 | 41,123,365 | |||||
BALANCE (in shares) at Dec. 31, 2019 | (4,465,448) | 4,465,448 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 150,139 | $ 150,139 | |||||
Issuance of Stock: | |||||||
Issuance of shares for options exercised | $ 2,811 | (667) | 2,144 | ||||
Issuance of shares for options exercised (in shares) | 113,731 | ||||||
Issuance of restricted stock & performance stock | $ 3,102 | (1,247) | 1,855 | ||||
Issuance of restricted stock & performance stock (in shares) | 128,889 | ||||||
Shares received in lieu of tax withholding payment on vested restricted stock | $ (1,076) | (1,076) | |||||
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | (27,724) | ||||||
Stock-based compensation | 4,197 | 4,197 | |||||
Dividends | (15,499) | (15,499) | |||||
Share repurchase | $ (30,120) | (30,120) | |||||
Share repurchase (in shares) | (684,634) | ||||||
BALANCE at Dec. 31, 2020 | $ (515) | $ (515) | $ 411 | $ (129,243) | $ 322,451 | $ 502,810 | $ 696,429 |
BALANCE (in shares) at Dec. 31, 2020 | 41,123,365 | 41,123,365 | |||||
BALANCE (in shares) at Dec. 31, 2020 | (4,935,186) | 4,935,186 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 150,139 | $ 114,324 | $ 112,903 |
Adjustments to reconcile net income to net cash provided by operating activities- | |||
Amortization of identifiable intangible assets | 32,698 | 27,082 | 20,089 |
Depreciation expense | 27,931 | 24,490 | 22,600 |
Change in right-of-use assets | 16,692 | 16,887 | |
Bad debt expense | 5,253 | 2,978 | 3,562 |
Deferred tax provision (benefit) | (7,953) | (4,251) | 4,456 |
Amortization of debt financing costs | 544 | 387 | 383 |
Gain on sale of assets | (1,445) | (1,701) | (945) |
Changes in the fair value of contingent earn-out obligations | (9,119) | 2,991 | 2,066 |
Stock-based compensation | 6,934 | 5,878 | 7,161 |
(Increase) decrease in- | |||
Receivables, net | 38,486 | (49,508) | (68,621) |
Inventories | (1,457) | 2,366 | (1,538) |
Prepaid expenses and other current assets | (4,855) | (15,519) | 519 |
Costs and estimated earnings in excess of billings and unbilled accounts receivable | 2,706 | (4,312) | (14,444) |
Other noncurrent assets | (1,373) | (735) | (114) |
Increase (decrease) in- | |||
Accounts payable and accrued liabilities | 11,087 | 31,046 | 47,871 |
Billings in excess of costs and estimated earnings | 19,434 | 4,376 | 16,786 |
Other long-term liabilities | 808 | (14,751) | (5,544) |
Net cash provided by operating activities | 286,510 | 142,028 | 147,190 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (24,131) | (31,750) | (27,268) |
Proceeds from sales of property and equipment | 2,270 | 2,159 | 1,698 |
Proceeds from sale of business | 1,611 | ||
Cash paid for acquisitions, net of cash acquired | (185,941) | (196,470) | (70,140) |
Net cash used in investing activities | (207,802) | (224,450) | (95,710) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility | 268,000 | 356,000 | 124,000 |
Payments on revolving credit facility | (226,000) | (228,000) | (119,000) |
Payments on term loan | (15,000) | ||
Payments on other debt | (46,534) | (3,784) | (1,127) |
Debt financing costs | (1,405) | (844) | |
Payments of dividends to stockholders | (15,499) | (14,543) | (12,268) |
Share repurchase | (30,120) | (19,550) | (28,533) |
Shares received in lieu of tax withholding | (1,076) | (1,498) | (1,540) |
Proceeds from exercise of options | 2,144 | 2,350 | 3,105 |
Deferred acquisition payments | (650) | (637) | (750) |
Payments for contingent consideration arrangements | (9,865) | (1,343) | (5,445) |
Net cash provided by (used in) financing activities | (74,600) | 87,590 | (42,402) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 4,108 | 5,168 | 9,078 |
CASH AND CASH EQUIVALENTS, beginning of period | 50,788 | 45,620 | 36,542 |
CASH AND CASH EQUIVALENTS, end of period | $ 54,896 | $ 50,788 | $ 45,620 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2020 | |
Business and Organization | |
Business and Organization | 1. Business and Organization Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive mechanical and electrical contracting services, which principally includes heating, ventilation and air conditioning (“HVAC”), plumbing, electrical, piping and controls, as well as off-site construction, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. Approximately 46.7% of our consolidated 2020 revenue is attributable to installation of systems in newly constructed facilities, with the remaining 53.3% attributable to maintenance, repair and replacement services. The terms “Comfort Systems,” “we,” “us,” or the “Company,” refer to Comfort Systems USA, Inc. or Comfort Systems USA, Inc. and its consolidated subsidiaries, as appropriate in the context. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. All significant intercompany accounts and transactions have been eliminated. Certain amounts in prior periods may have been reclassified to conform to the current period presentation. The effects of the reclassifications were not material to the consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, self-insurance accruals, deferred tax assets, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing. Cash Flow Information We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash paid (in thousands) for: Year Ended December 31, 2020 2019 2018 Interest $ 7,684 $ 8,817 $ 3,743 Income taxes, net of refunds $ 51,286 $ 45,288 $ 33,401 Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The standard requires companies to consider historical experiences, current market conditions and reasonable and supportable forecasts in the measurement of expected credit losses. The standard requires us to accrue higher credit losses on financial assets compared to the legacy guidance on various items, such as contract assets and current receivables. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. We adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326),” on January 1, 2020, and the impact was not material to our overall financial statements. The adoption of ASU No. 2016-13 resulted in an increase in Allowance for Credit Losses of $0.7 million, an increase to Deferred Tax Assets of $0.2 million and an impact of $0.5 million to Retained Earnings. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removes certain disclosure requirements including the valuation processes for Level 3 fair value measurements, the policy for timing of transfers between levels and the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The standard requires certain additional disclosures for public entities, including disclosure of the changes in unrealized gains and losses included in Other Comprehensive Income for Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Certain amendments, including the amendment on changes in unrealized gains and losses and the range and weighted average of significant unobservable inputs, should be applied prospectively while other amendments should be applied retrospectively to all periods presented upon their effective date. We have modified our fair value disclosures to conform with the requirements of ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,” which we adopted on January 1, 2020. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within that year. Early adoption is permitted. We do not expect our adoption of this standard on January 1, 2021 to have a material impact on our consolidated financial statements. Revenue Recognition We recognize revenue over time for all of our services as we perform them because (i) control continuously transfers to that customer as work progresses, and (ii) we have the right to bill the customer as costs are incurred. The customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to the Company. For the reasons listed above, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost to cost measure of progress for our contracts, as it best depicts the transfer of assets to the customer that occurs as we incur costs on our contracts. Under the cost to cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue, including estimated fees or profits, is recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. For a small portion of our business in which our services are delivered in the form of service maintenance agreements for existing systems to be repaired and maintained, as opposed to constructed, our performance obligation is to maintain the customer’s mechanical system for a specific period of time. Similar to jobs, we recognize revenue over time; however, for service maintenance agreements in which the full cost to provide services may not be known, we generally use an input method to recognize revenue, which is based on the amount of time we have provided our services out of the total time we have been contracted to perform those services. Our revenue recognition policy is further discussed in Note 3 “Revenue from Contracts with Customers.” Accounts Receivable and Allowance for Credit Losses We are required to estimate and record the expected credit losses over the contractual life of our financial assets measured at amortized cost, including billed and unbilled accounts receivable, other receivables and costs and estimated earnings in excess of billings. Accounts receivable include amounts from work completed in which we have billed or have an unconditional right to bill our customers. Our trade receivables are contractually due in less than a year. We estimate our credit losses using a loss-rate method for each of our identified portfolio segments. Our portfolio segments are construction, service and other. While our construction and service financial assets are often with the same subset of customers and industries, our construction financial assets will generally have a lower loss-rate than service financial assets due to lien rights, which we are more likely to have on construction jobs. These lien rights result in lower credit loss expenses on average compared to receivables that do not have lien rights. Financial assets classified as “other” include receivables that are not related to our core revenue producing activities, such as receivables related to our acquisition activity from former owners, our vendor rebate program or receivables for estimated losses in excess of our insurance deductible, which are accrued with a corresponding accrued insurance liability. Loss rates for our portfolios are based on numerous factors, including our history of credit loss expense by portfolio, the financial strength of our customers and counterparties in each portfolio, the aging of our receivables, our expectation of likelihood of payment, macroeconomic trends in the U.S. and the current and forecasted non-residential construction market trends in the U.S. In addition to the loss-rate calculations discussed above, we also record allowance for credit losses for specific receivables that are deemed to have a higher risk profile than the rest of the respective pool of receivables, such as concerns about a specific customer going bankrupt and no longer being able to pay the receivables due to us. Starting in March 2020, we experienced negative impacts to our business due to the disruption caused by Coronavirus Disease 2019 (“COVID-19”). In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The Company considered the impact of COVID-19 on the assumptions and estimates used to determine the results reported and asset valuations as of December 31, 2020. During the year ended December 31, 2020, we increased our loss rates and increased our specific reserves primarily due to the economic disruption caused by COVID-19, which is reflected in our bad debt expense in the current year. This increase was primarily, but not exclusively, due to concern over collectability of receivables from customers more directly impacted by COVID-19. Activity in our allowance for credit losses consisted of the following (in thousands): Year Ended December 31, 2020 Service Construction Other Total Balance at beginning of year $ 3,192 $ 3,400 $ 315 $ 6,907 Impact of new accounting standard 310 331 54 695 Bad debt expense (benefit) 2,566 2,697 (10) 5,253 Deductions for uncollectible receivables written off, net of recoveries (1,431) (735) — (2,166) Credit allowance of acquired companies on the acquisition date — 335 — 335 Reclass to other current liabilities — — (315) (315) Balance at December 31, 2020 $ 4,637 $ 6,028 $ 44 $ 10,709 Year Ended December 31, 2019 Balance at beginning of year $ 5,898 Bad debt expense (benefit) 2,978 Deductions for uncollectible receivables written off, net of recoveries (3,924) Credit allowance of acquired companies on the acquisition date 1,955 Balance at December 31, 2019 $ 6,907 Inventories Inventories consist of parts and supplies that we purchase and hold for use in the ordinary course of business and are stated at the lower of cost or net realizable value using the average-cost method. Property and Equipment Property and equipment are stated at cost, and depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the expected life of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated over the remaining useful life of the equipment. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in “Gain on sale of assets” in the Statement of Operations. Recoverability of Goodwill and Identifiable Intangible Assets Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. When the carrying value of a given reporting unit exceeds its fair value, a goodwill impairment loss is recorded for this difference, not to exceed the carrying amount of goodwill. The requirements for assessing whether goodwill has been impaired involve market-based information. This information, and its use in assessing goodwill, entails some degree of subjective assessment. We perform our annual impairment testing as of October 1, and any impairment charges resulting from this process are reported in the fourth quarter. We segregate our operations into reporting units based on the degree of operating and financial independence of each unit and our related management of them. We perform our annual goodwill impairment testing at the reporting unit level. We perform a goodwill impairment review for each of our operating units, as we have determined that each of our operating units are reporting units. In the evaluation of goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If, after completing such assessment, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then there is no need to perform any further testing. If we conclude otherwise, or if we elect to perform a quantitative assessment, then we calculate the fair value of the reporting unit and compare the fair value with the carrying value of the reporting unit. We estimate the fair value of the reporting unit based on a market approach and an income approach, which utilizes discounted future cash flows. Assumptions critical to the fair value estimates under the discounted cash flow model include discount rates, cash flow projections, projected long-term growth rates and the determination of terminal values. The market approach utilizes market multiples of invested capital from comparable publicly traded companies (“public company approach”). The market multiples from invested capital include revenue, book equity plus debt and earnings before interest, provision for income taxes, depreciation and amortization (“EBITDA”). We amortize identifiable intangible assets with finite lives over their useful lives. Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances or their useful lives. Long-Lived Assets Long-lived assets are comprised principally of goodwill, identifiable intangible assets, property and equipment, and deferred tax assets. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of these assets may not be recoverable. We use estimates of future income from operations and cash flows, as well as other economic and business factors, to assess the recoverability of these assets. Acquisitions We recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition. Contingent Consideration Contingent Assets and Liabilities Self-Insurance Liabilities We are substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer-developing risks—workers’ compensation, auto liability and general liability—are reviewed by a third-party actuary quarterly. Our self-insurance arrangements are further discussed in Note 13 “Commitments and Contingencies.” Warranty Costs We typically warrant labor for the first year after installation on new MEP systems that we build and install, and we pass through to the customer manufacturers’ warranties on equipment. We generally warrant labor for thirty days after servicing existing MEP systems. A reserve for warranty costs is estimated and recorded based upon the historical level of warranty claims and management’s estimate of future costs. Income Taxes We conduct business throughout the United States in virtually all fifty states. Our effective tax rate changes based upon our relative profitability, or lack thereof, in states with varying tax rates and rules. In addition, discrete items such as tax law changes, judgments and legal structures can impact our effective tax rate. These items can also include the tax treatment for impairment of goodwill and other intangible assets, changes in fair value of acquisition-related assets and liabilities, tax reserves for uncertain tax positions and accounting for losses associated with underperforming operations. Income taxes are provided for under the liability method, which takes into account differences between financial statement treatment and tax treatment of certain transactions. Deferred taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more-likely-than-not some portion or all of the deferred tax assets will not be realized. We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we must consider whether it is more-likely-than-not some portion, or all, of the deferred tax assets will not be realized. We consider all available evidence, both positive and negative, in determining whether a valuation allowance is required. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence. Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are supportable, we believe that certain positions may be disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes. To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component in provision for income taxes in our Consolidated Statements of Operations. Concentrations of Credit Risk We provide services in a broad range of geographic regions. Our credit risk primarily consists of receivables from a variety of customers including general contractors, property owners and developers, and commercial and industrial companies. We are subject to potential credit risk related to changes in business and economic factors throughout the United States within the nonresidential construction industry. However, we are entitled to payment for work performed and have certain lien rights related to that work. Further, we believe that our contract acceptance, billing and collection policies are adequate to manage potential credit risk. We regularly review our accounts receivable and estimate an allowance for uncollectible amounts. We have a diverse customer base, with our top customer representing 5% of consolidated 2020 revenue. Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, interest rate swaps, life insurance policies, notes to former owners, a revolving credit facility and a term loan. We believe that the carrying values of these instruments on the accompanying Balance Sheets approximate their fair values. Insurance Recovery We recorded a $4.8 million gain in the fourth quarter of 2019 due to insurance proceeds we received in the fourth quarter related to the ransomware incident that occurred in April 2019. Approximately $1.6 million of the gain was recorded as a reduction in SG&A, and the remainder was recorded as a reduction in Cost of Services expense. These proceeds related to recoverable costs that were primarily incurred prior to the fourth quarter in 2019. We do not expect any additional insurance proceeds or other recoveries related to the ransomware incident. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customers | |
Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Sales-based taxes are excluded from revenue. We provide mechanical and electrical contracting services. Our mechanical segment principally includes HVAC, plumbing, piping and controls, as well as off‑ site construction, monitoring and fire protection. Our electrical segment includes installation and servicing of electrical systems. We install, maintain, repair and replace products and systems throughout the United States. All of our revenue is recognized over time as we deliver goods and services to our customers. Revenue can be earned based on an agreed upon fixed price or based on actual costs incurred marked up at an agreed upon percentage. For fixed price agreements, we use the percentage of completion method of accounting under which contract revenue recognizable at any time during the life of a contract is determined by multiplying expected total contract revenue by the percentage of contract costs incurred at any time to total estimated contract costs. More specifically, as part of the negotiation and bidding process to obtain installation contracts, we estimate our contract costs, which include all direct materials, labor and subcontract costs and indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. These contract costs are included in our results of operations under the caption “Cost of Services.” Then, as we perform under those contracts, we measure costs incurred, compare them to total estimated costs to complete the contract and recognize a corresponding proportion of contract revenue. Labor costs are considered to be incurred as the work is performed. Subcontractor labor is recognized as the work is performed. Non‑labor project costs consist of purchased equipment, prefabricated materials and other materials. Purchased equipment on our projects is substantially produced to job specifications and is a value-added element to our work. The costs are considered to be incurred when title is transferred to us, which typically is upon delivery to the work site. Prefabricated materials, such as ductwork and piping, are generally performed at our shops and recognized as contract costs when fabricated for the unique specifications of the job. Other materials costs are generally recorded when delivered to the work site. This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments and judgments. We account for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. We consider the start of a project to be when the above criteria have been met and we either have written authorization from the customer to proceed or an executed contract. Selling, marketing and estimation costs incurred in relation to selling contracts are expensed as incurred. On rare occasions, we may incur significant expenses related to selling a contract that we only incurred because we sold that contract. If this occurs, we capitalize that cost and amortize it on a percentage of completion basis over the life of the contract. We do not currently have any capitalized selling, marketing, or estimation costs on our Balance Sheet and did not incur any impairment loss in the current year. We generally do not incur significant incremental costs related to obtaining or fulfilling a contract prior to the start of a project. On rare occasions, when significant pre-contract costs are incurred, they are capitalized and amortized on a percentage of completion basis over the life of the contract. We do not currently have any capitalized obtainment or fulfillment costs on our Balance Sheet and did not incur any impairment loss on such costs in the current year. Project contracts typically provide for a schedule of billings or invoices to the customer based on our job-to-date percentage of completion of specific tasks inherent in the fulfillment of our performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in our Statement of Operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in our Balance Sheet under the caption “Costs and estimated earnings in excess of billings.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in our Balance Sheet under the caption “Billings in excess of costs and estimated earnings.” Contracts in progress are as follows (in thousands): December 31, 2020 2019 Costs incurred on contracts in progress $ 3,103,580 $ 2,518,581 Estimated earnings, net of losses 548,435 405,891 Less—Billings to date (3,813,171) (3,033,112) Less—Unbilled accounts receivable (45,596) (55,542) Less—Unbilled accounts receivable credit allowance (784) — $ (207,536) $ (164,182) Costs and estimated earnings in excess of billings $ 18,622 $ 2,736 Plus—Costs and estimated earnings in excess of billings credit allowance 79 — Billings in excess of costs and estimated earnings (226,237) (166,918) $ (207,536) $ (164,182) Accounts receivable include amounts billed to customers under retention or retainage provisions in construction contracts. Such provisions are standard in our industry and usually allow for a small portion of progress billings or the contract price to be withheld by the customer until after we have completed work on the project, typically for a period of six months. Based on our experience with similar contracts in recent years, the majority of our billings for such retention balances at each Balance Sheet date are finalized and collected within the subsequent year. Retention balances at December 31, 2020 and 2019 were $124.1 million and $111.7 million, respectively, and are included in accounts receivable. Accounts payable at December 31, 2020 and 2019 included $22.2 million and $15.8 million of retainage under terms of contracts with subcontractors, respectively. The majority of the retention balances at each Balance Sheet date are finalized and paid within the subsequent year. The percentage of completion method of accounting is also affected by changes in job performance, job conditions, and final contract settlements. These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. The effects of these revisions are recognized in the period in which revisions are determined. When such revisions lead to a conclusion that a loss will be recognized on a contract, the full amount of the estimated ultimate loss is recognized in the period such conclusion is reached, regardless of the percentage of completion of the contract. Revisions to project costs and conditions can give rise to change orders under which there is an agreement between the customer and us that the customer pays an additional or reduced contract price. Revisions can also result in claims we might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer. Except in certain circumstances, we do not recognize revenue or margin based on change orders or claims until they have been agreed upon with the customer. The amount of revenue associated with unapproved change orders and claims was immaterial for the year ended December 31, 2020. Variations from estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation via additional customer payments. We typically invoice our customers with payment terms of net due in 30 days. It is common in the construction industry for a contract to specify more lenient payment terms allowing the customer 45 30 A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To determine the proper revenue recognition method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one performance obligation and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract, in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In such cases, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized, customer-specific solution, and, in these cases, we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. We recognize revenue over time for all of our services as we perform them because (i) control continuously transfers to that customer as work progresses, and (ii) we have the right to bill the customer as costs are incurred. The customer typically controls the work in process, as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to the Company. For the reasons listed above, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost to cost measure of progress for our contracts, as it best depicts the transfer of assets to the customer that occurs as we incur costs on our contracts. Under the cost to cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue, including estimated fees or profits, is recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. In our mechanical segment, for a small portion of our business in which our services are delivered in the form of service maintenance agreements for existing systems to be repaired and maintained, as opposed to constructed, our performance obligation is to maintain the customer’s mechanical system for a specific period of time. Similar to jobs, we recognize revenue over time; however, for service maintenance agreements in which the full cost to provide services may not be known, we generally use an input method to recognize revenue, which is based on the amount of time we have provided our services out of the total time we have been contracted to perform those services. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion (the process described below in more detail) is complex, subject to many variables and requires significant judgment. The consideration to which we are entitled on our long-term contracts may include both fixed and variable amounts. Variable amounts can either increase or decrease the transaction price. A common example of variable amounts that can either increase or decrease contract value are pending change orders that represent contract modifications for which a change in scope has been authorized or acknowledged by our customer, but the final adjustment to contract price is yet to be negotiated. Other examples of positive variable revenue include amounts awarded upon achievement of certain performance metrics, program milestones or cost of completion date targets and can be based upon customer discretion. Variable amounts can result in a deduction from contract revenue if we fail to meet stated performance requirements, such as complying with the construction schedule. Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing performance obligation(s). The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis. We have a Company-wide policy requiring periodic review of the Estimate at Completion in which management reviews the progress and execution of our performance obligations and estimated remaining obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include management's judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables. Based on this analysis, any adjustments to revenue, cost of services, and the related impact to operating income are recognized as necessary in the quarter when they become known. These adjustments may result from positive program performance if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities and may result in an increase in operating income during the performance of individual performance obligations. Likewise, if we determine we will not be successful in mitigating these risks or realizing related opportunities, these adjustments may result in a decrease in operating income. Changes in estimates of revenue, cost of services and the related impact to operating income are recognized quarterly on a cumulative catchup basis, meaning we recognize in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For projects in which estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. The Company typically does not incur any returns, refunds, or similar obligations after the completion of the performance obligation since any deficiencies are corrected during the course of the work or are included as a modification to revenue. The Company does offer an industry standard warranty on our work, which is most commonly for a one-year period. The vendors providing the equipment and materials are responsible for any failures in their product unless installed incorrectly. We include an estimated amount to cover estimated warranty expense in our Cost of Services and record a liability on our Balance Sheet to cover our current estimated outstanding warranty obligations. During the years ended December 31, 2020 and December 31, 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material. Disaggregation of Revenue Our consolidated 2020 revenue was derived from contracts to provide service activities in the mechanical and electrical services segments we serve. Refer to Note 16 “Segment Information” for additional information on our reportable segments. We disaggregate our revenue from contracts with customers by activity, customer type and service provided, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the following tables (dollars in thousands): Year Ended December 31, Revenue by Service Provided 2020 2019 2018 Mechanical Services $ 2,413,016 84.5 % $ 2,251,560 86.1 % $ 2,176,223 99.7 % Electrical Services 443,643 15.5 % 363,717 13.9 % 6,656 0.3 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % Year Ended December 31, Revenue by Type of Customer 2020 2019 2018 Industrial $ 1,112,075 38.9 % $ 886,668 33.9 % $ 596,557 27.3 % Education 487,922 17.1 % 412,318 15.8 % 391,937 18.0 % Office Buildings 319,426 11.2 % 348,640 13.3 % 288,090 13.2 % Healthcare 371,105 13.0 % 358,155 13.7 % 319,958 14.7 % Government 163,717 5.7 % 162,507 6.2 % 143,958 6.6 % Retail, Restaurants and Entertainment 239,541 8.4 % 248,083 9.5 % 225,348 10.3 % Multi-Family and Residential 86,799 3.0 % 104,693 4.0 % 136,075 6.2 % Other 76,074 2.7 % 94,213 3.6 % 80,956 3.7 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % Year Ended December 31, Revenue by Activity Type 2020 2019 2018 New Construction $ 1,333,739 46.7 % $ 1,201,122 45.9 % $ 829,978 38.0 % Existing Building Construction 910,807 31.9 % 793,159 30.3 % 796,946 36.5 % Service Projects 241,402 8.4 % 231,228 8.9 % 206,506 9.5 % Service Calls, Maintenance and Monitoring 370,711 13.0 % 389,768 14.9 % 349,449 16.0 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % Contract Assets and Liabilities Contract assets include unbilled amounts typically resulting from sales under long term contracts when the cost to cost method of revenue recognition is used, revenue recognized exceeds the amount billed to the customer and right to payment is conditional, subject to completing a milestone, such as a phase of the project. Contract assets are generally classified as current. Contract liabilities consist of advance payments and billings in excess of revenue recognized. Our contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period. We classify advance payments and billings in excess of revenue recognized as current. It is very unusual for us to have advanced payments with a term of greater than one year; therefore, our contract assets and liabilities are usually all current. If we have advanced payments with a term greater than one year, the noncurrent portion of advanced payments would be included in other long-term liabilities in our consolidated Balance Sheets. Year Ended December 31, Year Ended December 31, 2020 2019 Contract Contract Contract Contract Assets Liabilities Assets Liabilities Balance at beginning of period $ 2,736 $ 166,918 $ 10,213 $ 130,986 Change due to acquisitions / disposals 9,509 39,885 6,573 31,556 Change related to credit allowance (79) — — — Other changes in the period 6,456 19,434 (14,050) 4,376 Balance at end of period $ 18,622 $ 226,237 $ 2,736 $ 166,918 During the years ended December 31, 2020 and 2019, we recognized revenue of $165.8 million and $126.7 million related to our contract liabilities at January 1, 2020 and January 1, 2019, respectively. We did not have any impairment losses recognized on our receivables or contract assets in 2020 and 2019. Remaining Performance Obligations Remaining construction performance obligations represent the remaining transaction price of firm orders for which work has not been performed and exclude unexercised contract options. As of December 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $1.51 billion. The Company expects to recognize revenue on approximately 80-85% of the remaining performance obligations over the next 12 months , with the remaining recognized thereafter. Our service maintenance agreements are generally one-year renewable agreements. We have adopted the practical expedient that allows us to not include service maintenance contracts with a term of less than one year; therefore, we do not report unfulfilled performance obligations for service maintenance agreements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements Interest Rate Risk Management and Derivative Instruments In April 2020, we entered into interest rate swap agreements to reduce our exposure to variable interest rates on our term loan and revolving credit facility. The notional amount covered by these interest rate swaps was $130.0 million as of December 31, 2020 and decreases to $80.0 million by November 30, 2021 until the termination date of September 30, 2022. We use derivative instruments to manage exposure to market risk, including interest rate risk. All of our current derivatives are designated and accounted for as economic hedges. Unsettled amounts under our economic hedges are recorded on the Balance Sheet at fair value in “Other Receivables” or “Other Current Liabilities.” Gains and losses on our interest rate swaps are recorded on the Income Statement in “Interest Expense.” For the year ended December 31, 2020, we recognized a net loss of $0.3 million related to our interest rate swaps. We currently do not have any derivatives that are accounted for as hedges under ASC 815. Fair Value Measurement We classify and disclose assets and liabilities carried at fair value in one of the following three categories: ● Level 1—quoted prices in active markets for identical assets and liabilities; ● Level 2—observable market-based inputs or unobservable inputs that are corroborated by market data; and ● Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of December 31, 2020 and 2019 (in thousands): Fair Value Measurements at December 31, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 54,896 $ — $ — $ 54,896 Life insurance—cash surrender value $ — $ 5,420 $ — $ 5,420 Contingent earn-out obligations $ — $ — $ 25,979 $ 25,979 Interest rate swap liability $ — $ 42 $ — $ 42 Fair Value Measurements at December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 50,788 $ — $ — $ 50,788 Life insurance—cash surrender value $ — $ 3,905 $ — $ 3,905 Contingent earn-out obligations $ — $ — $ 28,497 $ 28,497 Cash and cash equivalents consist primarily of highly rated money market funds at a variety of well-known institutions with original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity. The Company’s outstanding term loan held by third-party financial institutions is carried at cost, adjusted for debt issuance costs. The Company’s term loan is not publicly traded and the carrying amount approximates fair value as the loan accrues interest at a variable rate. The carrying value of our borrowings associated with the Revolving Credit Facility approximate its fair value due to the variable rate on such debt. We have life insurance policies covering 86 employees with a combined face value of $61.7 million. The policies are invested in several investment vehicles, and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance. The cash surrender value of these policies was $5.4 million as of December 31, 2020 and $3.9 million as of December 31, 2019. These assets are included in “Other Noncurrent Assets” in our consolidated Balance Sheets. We value contingent earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. Significant unobservable inputs that could impact the fair value measurement include our weighted average cost of capital and the forecasted level of operating income for each earn-out measurement. As of December 31, 2020, cash flows were discounted using a weighted average cost of capital ranging from 9.5% - 17.0%. The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands): December 31, 2020 2019 Balance at beginning of year $ 28,497 $ 7,375 Issuances 16,715 19,500 Settlements (10,114) (1,369) Adjustments to fair value (9,119) 2,991 Balance at end of year $ 25,979 $ 28,497 The fair value for our interest rate swaps is based upon inputs corroborated by observable market data with similar tenors, which are considered Level 2 inputs. The Company’s outstanding term loan held by third-party financial institutions is carried at cost, adjusted for debt issuance costs. The Company’s term loan is not publicly traded and the carrying amount approximates fair value as the loan accrues interest at a variable rate. The carrying value of our borrowings associated with the revolving credit facility approximate its fair value due to the variable rate on such debt. We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. No goodwill or other intangible asset impairments were recorded during the years ended December 31, 2020, 2019 and 2018. We did not recognize any other impairments on those assets required to be measured at fair value on a nonrecurring basis. See Note 6 “Goodwill and Identifiable Intangible Assets, Net” for further discussion. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Acquisitions | |
Acquisitions | 5. Acquisitions TAS Energy Inc. Acquisition On April 1, 2020, we consummated a merger through which TAS Energy Inc. (“TAS”) became a wholly owned subsidiary of the Company. TAS is headquartered in Houston, Texas, and is a leading engineering, design and construction provider of modular construction systems serving the technology, power and industrial sectors. As a result of the acquisition, TAS is a wholly owned subsidiary of the Company reported in our mechanical services segment. Revenue attributable to TAS was $106.4 million for the nine months from the acquisition date. The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands): Consideration transferred: Cash paid at closing $ 105,950 Working capital adjustment 40,455 Notes issued to former owners 14,000 Estimated fair value of contingent earn-out payments 9,100 $ 169,505 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 47,460 Billed and unbilled accounts receivable 18,702 Other current assets 15,634 Other long-term assets 1,556 Property and equipment 7,709 Goodwill 72,788 Identifiable intangible assets 53,400 Lease right-of-use asset 19,736 Accounts payable (16,453) Billings in excess of costs and estimated earnings (24,196) Current lease liabilities (2,337) Accrued expenses and other current liabilities (4,109) Long-term lease liabilities (17,398) Other long-term liabilities (2,987) $ 169,505 The allocation of the purchase price to the assets acquired and liabilities assumed is preliminary and, therefore, subject to change pending the completion of the final valuation of intangible assets and accrued liabilities. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recognized as a result of the TAS acquisition is not deductible for tax purposes. In estimating the fair value of the acquired intangible assets, we utilized the valuation methodology determined to be the most appropriate for the individual intangible asset. In order to estimate the fair value of the backlog and customer relationships, we utilized an excess earnings methodology, which consisted of the projected cash flows attributable to these assets discounted to present value using a risk-adjusted discount rate that represented the required rate of return. The trade name value was determined based on the relief-from-royalty method, which applies a royalty rate to the revenue stream attributable to this asset, and the resulting royalty payment is tax effected and discounted to present value. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The primary assumptions used were generally based upon the present value of anticipated cash flows discounted at rates ranging from 15% - 23.5 %. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class. As a result of the TAS acquisition, we acquired $53.2 million of federal net operating loss (“NOL”) carryforwards and $6.5 million of state NOL carryforwards. Our ability to utilize these NOL carryforwards to reduce taxable income in future years is subject to significant limitations under Section 382 of the Internal Revenue Code (the “Code”) due to the ownership change in TAS on April 1, 2020. While we expect to fully utilize the federal NOL carryforwards before they begin to expire in 2031, a full valuation allowance was recorded against virtually all of the state NOL carryforwards. We do not believe it is more-likely-than-not that TAS will have sufficient revenue-generating operations in those states in the future. The acquired intangible assets include the following (dollars in thousands): Valuation Method Estimated Useful Life Estimated Fair Value Backlog Excess earnings 1 year $ 5,200 Trade Name Relief-from-royalty 25 years 8,200 Customer Relationships Excess earnings 10 years 40,000 Total $ 53,400 The contingent earn-out obligation is associated with the achievement of specified earnings milestones over a 27-month period, and the range of estimated milestone payments is from $1 million to $8 million. We determined the initial fair value of the contingent earn-out obligation based on the Monte Carlo Simulation method, which represents a Level 3 measurement. Cash flows were discounted using a 17.7% discount rate, which we believe is appropriate and representative of a market participant assumption. Subsequent to the acquisition date, the contingent earn-out obligation is re-measured at fair value each reporting period. Changes in the estimated fair value of the contingent payments subsequent to the acquisition date are recognized immediately in earnings. T E C Industrial Construction and Maintenance Acquisition On December 31, 2020, we consummated an acquisition of all outstanding equity interests of Tennessee Electric Company, Inc. dba TEC Industrial Maintenance and Construction (“T E C”). T E C is headquartered in Kingsport, Tennessee, and provides multidisciplined construction and industrial services, including electrical, mechanical and other plant services, primarily in Tennessee and surrounding states. As a result of the acquisition, T E C is a wholly owned subsidiary of the Company reported in our electrical services segment. T E C did not contribute to our revenue in 2020. The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands): Consideration transferred: Cash paid at closing $ 73,000 Working capital adjustment 2,006 Notes issued to former owners 7,000 Estimated fair value of contingent earn-out payments 7,560 $ 89,566 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 4 Billed and unbilled accounts receivable 13,660 Costs in excess of billings 2,040 Other current assets 108 Other long-term assets 53 Property and equipment 912 Goodwill 44,431 Identifiable intangible assets 37,200 Lease right-of-use asset 1,234 Accounts payable (4,123) Billings in excess of costs and estimated earnings (2,838) Current lease liabilities (175) Accrued expenses and other current liabilities (1,881) Long-term lease liabilities (1,059) $ 89,566 The allocation of the purchase price to the assets acquired and liabilities assumed is preliminary and, therefore, subject to change pending the completion of the final valuation of identifiable assets acquired and liabilities assumed. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. All of the goodwill recognized as a result of the T E C acquisition is tax deductible. In estimating the fair value of the acquired intangible assets, we utilized the valuation methodology determined to be the most appropriate for the individual intangible asset. In order to estimate the fair value of the backlog and customer relationships, we utilized an excess earnings methodology, which consisted of the projected cash flows attributable to these assets discounted to present value using a risk-adjusted discount rate that represented the required rate of return. The trade name value was determined based on the relief-from-royalty method, which applies a royalty rate to the revenue stream attributable to this asset, and the resulting royalty payment is tax effected and discounted to present value. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The primary assumptions used were generally based upon the present value of anticipated cash flows discounted at rates ranging from 14% - 15%. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class. The acquired intangible assets include the following (dollars in thousands): Valuation Estimated Estimated Method Useful Life Fair Value Backlog Excess earnings 2 years $ 7,200 Trade Name Relief-from-royalty 20 years 5,800 Customer Relationships Excess earnings 9 years 24,200 Total $ 37,200 The contingent earn-out obligation is associated with the achievement of specified earnings milestones over a three year period, and the range of estimated milestone payments is from less than $1 million to $5 million. We determined the initial fair value of the contingent earn-out obligation based on the Monte Carlo Simulation method, which represents a Level 3 measurement. Cash flows were discounted using a 12.9 % discount rate, which we believe is appropriate and representative of a market participant assumption. Subsequent to the acquisition date, the contingent earn-out obligation is re-measured at fair value each reporting period. Changes in the estimated fair value of the contingent payments subsequent to the acquisition date are recognized immediately in earnings. Other Acquisitions In addition to the TAS and T E C acquisitions, we completed the acquisition of an electrical contractor in North Carolina in the first quarter of 2020 with a total purchase price of $41.6 million. This acquisition is reported in our electrical services segment. In the second quarter of 2019, we acquired all of the issued and outstanding stock of Walker TX Holding Company, LLC and each of its wholly owned subsidiaries (collectively “Walker”) for $235.4 million of which $187.0 million was allocated to goodwill and identifiable intangible assets. The total purchase price included $178.0 million in cash, $25.0 million in notes payable to former owners, a $20.5 million advance to former owners, a $19.5 million contingent earn-out obligation and a $0.2 million tax equalization payment, offset by a $7.8 million working capital adjustment. Walker is a full-service electrical contracting and network infrastructure engineering business serving commercial and industrial clients with headquarters in Irving, Texas, and operations throughout the state of Texas. As a result of the acquisition, Walker is a wholly owned subsidiary of the Company reported in our electrical services segment. In addition to the Walker acquisition, we completed two additional acquisitions in 2019 which were “tucked-in” with existing operations. The total purchase price for these additional acquisitions, including earn-outs, was $2.6 million. The results of operations of acquisitions are included in our consolidated financial statements from their respective acquisition dates. Our consolidated Balance Sheet includes preliminary allocations of the purchase price to the assets acquired and liabilities assumed for the applicable acquisitions pending the completion of the final valuation of intangible assets and accrued liabilities. Excluding the Walker and TAS acquisitions, the acquisitions completed in 2020 and the prior year were not material, individually or in the aggregate. Additional contingent purchase price (“earn-out”) has been or will be paid if certain acquisitions achieve predetermined profitability targets. Such earn-outs, when they are not subject to the continued employment of the sellers, are estimated as of the purchase date and included as part of the consideration paid for the acquisition. If we have an earn-out under which continued employment is a condition to receipt of payment, then the earn-out is recorded as compensation expense over the period earned. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Identifiable Intangible Assets, Net | |
Goodwill and Identifiable Intangible Assets, Net | 6. Goodwill and Identifiable Intangible Assets, Net Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Mechanical Services Electrical Services Segment Segment Total Balance at December 31, 2018 $ 235,182 $ — $ 235,182 Acquisitions and purchase price adjustments (See Note 5) 579 96,686 97,265 Impact of segment reorganization (1,101) 1,101 — Balance at December 31, 2019 234,660 97,787 332,447 Acquisitions and purchase price adjustments (See Note 5) 72,788 59,157 131,945 Balance at December 31, 2020 $ 307,448 $ 156,944 $ 464,392 The aggregate goodwill balance as of December 31, 2020 and 2019 includes $116.6 million of accumulated impairment charges, all of which relate to the mechanical services segment. We perform our annual impairment testing on October 1, or more frequently, if events and circumstances indicate impairment may have occurred. As discussed in Note 2, “Summary of Significant Accounting Policies,” we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying value. During our annual impairment testing on October 1, 2019, we performed a quantitative assessment where the fair value of each reporting unit was estimated using a discounted cash flow model combined with a market valuation approach. We assigned a weighting of 50% to the discounted cash flow analysis and 50% to the public company approach for the year ended December 31, 2019. Based on this assessment, we concluded that the fair value of each of the reporting units was greater than its carrying value. The calculated fair values for the majority of the Company’s reporting units that have goodwill were significantly in excess (all greater than 80%) of the respective reporting unit’s carrying value, while two reporting units that were recently acquired had calculated fair values in excess of carrying value of at least 27%. During our annual impairment testing on October 1, 2020, we performed a qualitative assessment for all of our reporting units except one, which considered various factors, including changes in the carrying value of the reporting unit, forecasted operating results, long-term growth rates and discount rates. Additionally, we considered qualitative key events and circumstances (i.e. macroeconomic environment, industry and market specific conditions, cost factors and events specific to the reporting unit, etc.). Based on this assessment, we concluded that it was more likely than not that the fair value of each of the reporting units was greater than its carrying value. Accordingly, no further testing was required. For Walker, we performed a step 1 quantitative assessment and the calculated fair value exceeded the carrying value by 24%. As a result of uncertainty caused by COVID-19 and Walker’s smaller excess of fair value percentage, this reporting unit is more susceptible to impairment risk from additional adverse changes in its operating environment, including micro- and macroeconomic environment conditions that could negatively impact them. Such adverse changes could include worsening economic conditions in the locations or markets they primarily serve, whether due to COVID-19 or other events and conditions. As of December 31, 2020, Walker had a goodwill balance of $96.8 million. There are significant inherent uncertainties and management judgment involved in estimating the fair value of each reporting unit. While we believe we have made reasonable estimates and assumptions to estimate the fair value of our reporting units, it is possible that a material change could occur. If actual results are not consistent with our current estimates and assumptions, or the current economic outlook worsens, goodwill impairment charges may be recorded in future periods. Identifiable Intangible Assets, Net Identifiable intangible assets consist of the following (dollars in thousands): Weighted-Average December 31, 2020 December 31, 2019 Remaining Useful Lives Gross Book Accumulated Gross Book Accumulated in Years Value Amortization Value Amortization Customer Relationships 8.0 $ 255,692 $ (103,919) $ 183,061 $ (80,813) Backlog 2.0 19,800 (12,600) 7,400 (6,388) Trade Names 20.5 91,495 (18,661) 71,995 (15,281) Total 11.7 $ 366,987 $ (135,180) $ 262,456 $ (102,482) The amounts attributable to customer relationships and tradenames are amortized to “Selling, General and Administrative Expenses” based upon the estimated consumption of their economic benefits, or a straight-line method over periods from one As of December 31, 2020, future amortization expense of identifiable intangible assets was as follows (in thousands): Year ended December 31— 2021 $ 32,344 2022 27,412 2023 23,514 2024 22,164 2025 19,977 Thereafter 106,396 Total $ 231,807 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment Property and equipment consist of the following (dollars in thousands): Estimated Useful Lives December 31, in Years 2020 2019 Land — $ 7,167 $ 6,206 Transportation equipment 1 - 7 113,802 106,972 Machinery and equipment 1 - 20 43,386 35,575 Computer and telephone equipment 1 - 10 23,215 20,744 Buildings and leasehold improvements 1 - 40 69,683 62,301 Furniture and fixtures 1 - 17 5,861 5,244 Construction in progress — 1,294 2,123 264,408 239,165 Less—Accumulated depreciation (147,202) (129,369) Property and equipment, net $ 117,206 $ 109,796 Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $27.9 million, $24.5 million and $22.6 million, respectively. |
Detail of Other Current Liabili
Detail of Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Detail of Other Current Liabilities | |
Detail of Other Current Liabilities | 8. Detail of Other Current Liabilities Other current liabilities consist of the following (in thousands): December 31, 2020 2019 Accrued warranty costs $ 8,914 $ 7,452 Current lease liability 16,586 14,016 Accrued job losses 2,151 2,226 Accrued sales and use tax 3,731 2,938 Deferred revenue 4,559 5,506 Liabilities due to former owners 10,280 11,219 Other current liabilities 45,271 38,273 $ 91,492 $ 81,630 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Debt Obligations | |
Debt Obligations | 9. Debt Obligations Debt obligations consist of the following (in thousands): December 31, 2020 2019 Revolving credit facility $ 70,000 $ 28,000 Term loan 135,000 150,000 Notes to former owners 31,000 48,483 Total principal amount 236,000 226,483 Less—unamortized debt issuance costs (267) (348) Total debt, net of unamortized debt issuance costs 235,733 226,135 Less—current portion — (20,817) Total long-term portion of debt, net $ 235,733 $ 205,318 At December 31, 2020, future principal payments of debt are as follows (in thousands): Year ended December 31— 2021 $ — 2022 23,000 2023 34,000 2024 26,500 2025 152,500 Thereafter — $ 236,000 Interest expense included the following primary elements (in thousands): Year Ended December 31, 2020 2019 2018 Interest expense on notes to former owners $ 1,354 $ 1,531 $ 642 Interest expense on borrowings and unused commitment fees 5,319 6,887 2,211 Interest expense on interest rate swaps 338 — — Letter of credit fees 830 512 474 Amortization of debt financing costs 544 387 383 Total $ 8,385 $ 9,317 $ 3,710 Revolving Credit Facility and Term Loan In December 2019, we amended our senior credit facility (the “Facility”) provided by a syndicate of banks, increasing our borrowing capacity from $400.0 million to $600.0 million. As amended, the Facility is composed of a revolving credit line in the amount of $450.0 million and a $150.0 million term loan, and the Facility also provides for a $150.0 million accordion or increase option for the revolving portion of the Facility. As of December 31, 2020, the Facility capacity was $585.0 million as the term loan was paid down by $15.0 million since the inception of the Facility. The amended Facility also includes a sublimit of up to $160.0 million issuable in the form of letters of credit. The Facility expires in January 2025 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. In 2019, we incurred approximately $1.4 million in financing and professional costs in connection with an amendment to the Facility which are being amortized over the remaining term of the Facility. Of this amount, $0.4 million is attributable to the term loan and is being amortized using the effective interest method. The remaining $1.0 million is attributable to the revolving credit line, which combined with the previous unamortized costs of $1.3 million, is being amortized over the remaining term of the Facility on a straight-line basis as a non-cash charge to interest expense. For the term loan, we are required to make quarterly payments increasing over time from 1.25% to 3.75% of the original aggregate principal amount of the term loan, with the balance due in January 2025. As of December 31, 2020, we had $135.0 million principal outstanding on the term loan, $70.0 million of outstanding borrowings on the revolving credit facility, $49.5 million in letters of credit outstanding and $330.5 million of credit available. Collateral A common practice in our industry is the posting of payment and performance bonds with customers. These bonds are offered by financial institutions known as sureties and provide assurance to the customer that in the event we encounter significant financial or operational difficulties, the surety will arrange for the completion of our contractual obligations and for the payment of our vendors on the projects subject to the bonds. In cooperation with our lenders, we granted our sureties a first lien on assets such as receivables, costs and estimated earnings in excess of billings, and equipment specifically identifiable to projects for which bonds are outstanding, as collateral for potential obligations under bonds. As of December 31, 2020, the book value of these assets was approximately $167.8 million. Covenants and Restrictions The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply. Covenant compliance is assessed as of each quarter end. Credit Facility Adjusted EBITDA is defined under the Facility for financial covenant purposes as net earnings for the four quarters ending as of any given quarterly covenant compliance measurement date, plus the corresponding amounts for (a) interest expense; (b) provision for income taxes; (c) depreciation and amortization; (d) stock compensation; (e) other non-cash charges; and (f) pre-acquisition results of acquired companies. The following is a reconciliation of Credit Facility Adjusted EBITDA to net income for 2020 (in thousands): Net income $ 150,139 Provision for income taxes 41,401 Interest expense, net 8,282 Depreciation and amortization expense 60,629 Stock-based compensation 6,934 Pre-acquisition results of acquired companies, as defined under the Facility 18,511 Credit Facility Adjusted EBITDA $ 285,896 The Facility’s principal financial covenants include: Total Leverage Ratio— Fixed Charge Coverage Ratio— Other Restrictions— While the Facility’s financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility’s leverage ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted by the lenders. We were in compliance with all of our financial covenants as of December 31, 2020. Interest Rates and Fees There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. Additional margins are then added to these two rates. Under the Base Rate Loan Option, the interest rate is determined based on the highest of the Federal Funds Rate plus 0.5%, the prime lending rate offered by Wells Fargo Bank, N.A. or the one-month Eurodollar Rate plus 1.00%. Under the Eurodollar Rate Loan Option, the interest rate is determined based on the one- to six-month Eurodollar Rate. The Eurodollar Rate corresponds very closely to rates described in various general business media sources as the London Interbank Offered Rate or “LIBOR.” Additional margins are then added to these rates. The additional margins are determined based on the ratio of our Consolidated Total Indebtedness as of a given quarter end to our “Credit Facility Adjusted EBITDA,” which shall mean Consolidated EBITDA as such term is defined in the credit agreement, for the twelve months ending as of that quarter end. The interest rates under the Facility are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. For illustrative purposes, the following are the respective market rates as of December 31, 2020 relating to interest options under the Facility: Base Rate Loan Option: Federal Funds Rate plus 0.50% 0.59% Wells Fargo Bank, N.A. Prime Rate 3.25% One-month LIBOR plus 1.00% 1.14% Eurodollar Rate Loan Option: One-month LIBOR 0.14% Six-month LIBOR 0.26% Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs. We have also occasionally used letters of credit to guarantee performance under our contracts and to ensure payment to our subcontractors and vendors under those contracts. Our lenders issue such letters of credit through the Facility. A letter of credit commits the lenders to pay specified amounts to the holder of the letter of credit if the holder demonstrates that we have failed to perform specified actions. If this were to occur, we would be required to reimburse the lenders for amounts they fund to honor the letter of credit holder’s claim. Absent a claim, there is no payment or reserving of funds by us in connection with a letter of credit. However, because a claim on a letter of credit would require immediate reimbursement by us to our lenders, letters of credit are treated as a use of facility capacity just the same as actual borrowings. We have never had a claim made against a letter of credit that resulted in payments by a lender or by us and believe such claim is unlikely in the foreseeable future. Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. Letter of credit fees and commitment fees are based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA. Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA Less than 1.00 1.00 to 1.75 1.75 to 2.50 2.50 or greater Additional Per Annum Interest Margin Added Under: Base Rate Loan Option 0.25 % 0.50 % 0.75 % 1.00 % Eurodollar Rate Loan Option 1.25 % 1.50 % 1.75 % 2.00 % Letter of credit fees 1.25 % 1.50 % 1.75 % 2.00 % Commitment fees on any portion of the Revolving Loan capacity not in use for borrowings or letters of credit at any given time 0.20 % 0.25 % 0.30 % 0.35 % The weighted average interest rate applicable to the borrowings under the revolving credit facility was approximately 1.4% as of December 31, 2020. The weighted average interest rate applicable to the term loan was approximately 1.4% as of December 31, 2020. Notes to Former Owners As part of the consideration used to acquire four companies, we have outstanding notes to the former owners. Together, these notes had an outstanding balance of $31.0 million as of December 31, 2020. In conjunction with the acquisition of T E C in the fourth quarter of 2020, we issued a promissory note to former owners with an outstanding balance of $7.0 million as of December 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 2.5%. The principal is due in December 2023. In conjunction with the acquisition of TAS in the second quarter of 2020, we issued a promissory note to former owners with an outstanding balance of $8.0 million as of December 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 3.5%. The principal is due in April 2022. In conjunction with the acquisition of the electrical contractor in North Carolina in the first quarter of 2020, we issued a promissory note to former owners with an outstanding balance of $6.0 million as of December 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 3.0%. The principal is due in installments in February 2023 and February 2024. In conjunction with the Walker acquisition in the second quarter of 2019, we issued a promissory note to former owners with an outstanding balance of $10.0 million as of December 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 4.0%. The remaining principal is due in April 2023. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 10. Leases We lease certain facilities, vehicles and equipment under noncancelable operating leases. The most significant portion of these noncancelable operating leases are for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. We account for lease components separately from the non-lease components. We have certain leases with variable payments based on an index as well as some short-term leases on equipment and facilities. Variable lease expense and short-term lease expense were not material to our financial statements and aggregated to $7.7 million in 2020 and $8.4 million in 2019. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate as of December 31, 2020 and 2019 was 4.2% and 3.9%, respectively. We recognize lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Lease expense for the years ended December 31, 2020, 2019 and 2018 was $28.2 million, $24.8 million and $23.4 million, respectively. The lease terms generally range from three A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the years ended December 31, 2020, 2019 and 2018 was approximately $4.2 million, $3.7 million and $4.8 million, respectively. If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions, we rent or sublease certain real estate assets that we no longer use to third parties. The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands): December 31, 2020 December 31, 2019 Lease right-of-use assets $ 94,727 $ 84,073 Lease liabilities: Other current liabilities $ 16,586 $ 14,016 Long-term lease liabilities 80,576 72,697 Total lease liabilities $ 97,162 $ 86,713 The maturities of lease liabilities as of December 31, 2020 are as follows (in thousands): Year ending December 31— 2021 $ 20,254 2022 17,004 2023 14,727 2024 13,221 2025 12,108 Thereafter 36,645 Total Lease Payments 113,959 Less—Present Value Discount (16,797) Present Value of Lease Liabilities $ 97,162 Supplemental information related to leases was as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 20,443 $ 16,895 Lease right-of-use assets obtained in exchange for lease liabilities $ 27,346 $ 26,811 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Provision for Income Taxes Our provision for income taxes relating to continuing operations consists of the following (in thousands): December 31, 2020 2019 2018 Current tax provision— Federal $ 36,556 $ 33,281 $ 22,728 State and Puerto Rico 12,798 8,388 8,589 Total current 49,354 41,669 31,317 Deferred tax provision (benefit)— Federal (5,483) (3,750) 4,347 State and Puerto Rico (2,470) (501) 109 Total deferred (7,953) (4,251) 4,456 Provision for income taxes $ 41,401 $ 37,418 $ 35,773 The provision for income taxes for the years ended December 31, 2020, 2019 and 2018 resulted in effective tax rates on continuing operations of 21.6%, 24.7% and 24.1%, respectively. The reasons for the differences between these effective tax rates and the federal statutory rates are as follows (in thousands): December 31, 2020 2019 2018 Federal statutory rate of— 21 % 21 % 21 % Income taxes at the federal statutory rate $ 40,223 $ 31,866 $ 31,222 Increases (decreases) resulting from— Net state income taxes 8,406 6,644 7,470 Valuation allowances (254) (279) (2,852) Net unrecognized tax benefits 18,557 7,338 (15) Nondeductible expenses 2,470 2,180 1,926 R&D tax credit (26,133) (4,569) (2,726) 179D deduction (1,062) (5,126) — Net operating loss carryforwards — — 2,225 Stock-based compensation deductions (426) (714) (1,293) Other (380) 78 (184) Provision for income taxes $ 41,401 $ 37,418 $ 35,773 Our provision for income taxes was reduced by $2.8 million in the first quarter of 2018 due to a reduction in unrecognized tax benefits from the filing of a federal income tax automatic accounting method change application. In the third quarter of 2019, we filed an amended federal return for 2015 to claim the credit for increasing research activities (the “R&D tax credit”) and recorded a $4.6 million tax benefit that was fully offset by an addition to unrecognized tax benefits. We previously filed an amended federal return for 2014 to claim the R&D tax credit during 2018 and recorded a $2.7 million tax benefit that was also fully offset by an addition to unrecognized tax benefits. These $7.3 million of tax benefits were fully offset by additions to unrecognized tax benefits due to the uncertainty of the outcome from examinations opened by the Internal Revenue Service (the “IRS”). As a result, the R&D tax credit claimed had no impact on our effective tax rates. During 2018, we dissolved our Puerto Rican subsidiary and thus wrote-off the remaining $2.2 million of net operating loss (“NOL”) carryforwards and related valuation allowance. The dissolution of our Puerto Rican subsidiary did not have an impact on our 2018 effective tax rate. For the year ended December 31, 2019, our provision for income taxes was reduced by $2.2 million due to benefits from the filing, and expected filing, of amended returns to claim the energy efficient commercial buildings deduction (the “179D deduction”) allocated to us. Deferred Tax Assets (Liabilities) Significant components of the deferred tax assets and deferred tax liabilities as reflected on the balance sheets are as follows (in thousands): Year Ended December 31, 2020 2019 Deferred tax assets— Accounts receivable and allowance for credit losses $ 2,186 $ 1,660 Stock-based compensation 2,791 2,561 Accrued liabilities and expenses 39,761 25,569 Lease liabilities 22,768 20,873 Net operating loss carryforwards 12,127 2,750 Intangible assets — 7,988 Other 627 525 Subtotal 80,260 61,926 Valuation allowances (514) (369) Total deferred tax assets 79,746 61,557 Deferred tax liabilities— Property and equipment (13,877) (11,286) Lease right-of-use asset (22,715) (20,873) Long-term contracts (609) (876) Intangible assets (242) — Goodwill (11,615) (6,020) Other (2,626) (2,004) Total deferred tax liabilities (51,684) (41,059) Net deferred tax assets $ 28,062 $ 20,498 The deferred tax assets and liabilities reflected above are included in the consolidated balance sheets as follows (in thousands): December 31, 2020 2019 Deferred tax assets $ 29,401 $ 21,923 Deferred tax liabilities $ 1,339 $ 1,425 As of December 31, 2020, we had $9.4 million of deferred tax assets related to $44.9 million of federal NOL carryforwards as a result of the TAS acquisition. If not used, such carryforwards will begin to expire in 2031. We also had $2.7 million of deferred tax assets related to $46.2 million of state NOL carryforwards, including carryforwards acquired from TAS. The state NOL carryforwards will expire in varying amounts between the years 2021 and 2040. Valuation allowances of $0.5 million have been recorded against certain of the state NOL carryforwards. The $2.2 million of deferred tax assets for state NOL carryforwards, net of valuation allowances, reflects our conclusion that it is more-likely-than-not these assets will be realized based upon expected future earnings in certain of our subsidiaries. Pursuant to Section 382 of the Code, utilization of our federal NOL carryforwards is subject to annual limitations due to the ownership change in TAS. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. We regularly update our assessment of the realizability of our deferred tax assets, in particular, those related to state NOL carryforwards. A return to profitability in our subsidiaries with valuation allowances would result in a release of a portion of the valuation allowances relating to realizable deferred tax assets. A sustained period of profitability could cause a change in our judgment of any remaining deferred tax assets. If that were to occur, then it is likely that we would reverse some or all of the remaining valuation allowances. Liabilities for Uncertain Tax Positions A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 10,199 $ 2,966 $ 8,929 Additions based on tax positions related to current year — — — Additions based on tax positions related to prior years 26,858 7,473 2,726 Reductions for tax positions related to prior years — (240) (8,689) Reductions for settlements with tax authorities (8,301) — — Balance at end of year $ 28,756 $ 10,199 $ 2,966 We are subject to taxation in the United States and various state jurisdictions. During 2019, the IRS commenced an examination of our amended federal returns for 2014 and 2015. The IRS completed its examination and issued an RAR allowing our refund claims in full, which was reviewed and approved by the JCT during the third quarter of 2020. As a result, our unrecognized tax benefits were reduced by $8.3 million. In late January 2021, we received notification from the IRS that our federal returns for 2017 and 2018 were selected for examination. The completion of this IRS examination could impact our future results of operations and financial condition. State income tax returns are generally subject to examination for a period of three to four years after filing the returns. However, the state impact of any federal audit adjustments and/or amendments remains subject to examination by various states for up to one year after formal notification to the states. We generally remain open to examination by various state tax authorities for the 2016 tax year forward. As of December 31, 2020, we did not have any state audits underway that would have a material impact on our financial position or results of operations. We believe it is reasonably possible that a reduction of up to $28.8 million in unrecognized tax benefits could occur within the next twelve months. Any reduction in our unrecognized tax benefits, due to the future recognition of those tax benefits, would affect our effective tax rates. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | 12. Employee Benefit Plans We and certain of our subsidiaries sponsor various retirement plans for most full-time and some part-time employees. These plans primarily consist of defined contribution plans. The defined contribution plans generally provide for contributions up to 2.5% of covered employees’ salaries or wages. These contributions totaled $16.3 million in 2020, $14.2 million in 2019 and $10.8 million in 2018. Of these amounts, approximately $0.5 million and $0.3 million were payable to the plans at December 31, 2020 and 2019, respectively. Certain of our subsidiaries also participate or have participated in various multi-employer pension plans for the benefit of employees who are union members. As of December 31, 2020 and 2019, we had 6 and 7, respectively, who were union members. There were no contributions made to multi-employer pension plans in 2020, 2019 or 2018. The data available from administrators of other multi-employer pension plans is not sufficient to determine the accumulated benefit obligations, nor the net assets attributable to the multi-employer plans in which our employees participate or previously participated. Certain individuals at one of our operating units are entitled to receive fixed annual payments that reach a maximum amount, as specified in the related agreements, for a 15 year period following retirement or, in some cases, the attainment of 65 years of age. We recognize the unfunded status of the plan as a non-current liability in our Consolidated Balance Sheet. Benefits vest 50% after ten years of service, 75% after fifteen years of service and are fully vested after 20 years of service. We had an unfunded benefit liability of $4.0 million and $4.1 million recorded as of December 31, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Claims and Lawsuits We are subject to certain legal and regulatory claims, including lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in the accompanying consolidated financial statements. While we cannot predict the outcome of these proceedings, in management’s opinion and based on reports of counsel, any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results, cash flows or financial condition, after giving effect to provisions already recorded. We are in a dispute with a customer regarding the outcome of a completed project and also regarding the obligation to perform subcontract work under two executed letters of intent for subsequent projects that we believe are not enforceable. The customer is claiming approximately $15 million in damages related to performance of the original project as well as excess costs to perform the work that was subject to the letters of intent. We are claiming approximately $9 million composed of unpaid amounts under the completed contract as well as costs and inefficiencies that we suffered. We have a lien on the project, and this matter is currently scheduled for arbitration in the second quarter of 2021 with a likely decision in the following months. As of December 31, 2020, we recorded an accrual for this matter based on our analysis of likely outcomes related to this dispute; however, it is possible that the ultimate outcome and associated costs will deviate from our estimates and that, in the event of an unexpectedly adverse outcome, we may experience additional costs and expenses in future periods. Surety Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay subcontractors and vendors who provided goods or services under a contract, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the surety for any expenses or outlays it incurs. To date, we are not aware of any losses to our sureties in connection with bonds the sureties have posted on our behalf, and do not expect such losses to be incurred in the foreseeable future. Current market conditions for surety markets and bonding capacity are adequate with acceptable terms and conditions. Historically, approximately 15% to 25% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or changes in the sureties’ assessment of our operating and financial risk could cause the sureties to decline to issue bonds for our work. If that were to occur, the alternatives include doing more business that does not require bonds, posting other forms of collateral for project performance such as letters of credit or cash, and seeking bonding capacity from other sureties. We would likely also encounter concerns from customers, suppliers and other market participants as to our creditworthiness. While we believe our general operating and financial characteristics would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term. Self-Insurance We are substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer-developing risks, such as workers’ compensation, auto liability and general liability, are reviewed by a third-party actuary quarterly. Our self-insurance arrangements as of December 31, 2020 were as follows: Workers’ Compensation— Employer’s Liability— General Liability— Auto Liability— Employee Medical— each plan Our $132.5 million of aggregate excess loss coverage above applicable per-incident deductibles represents one policy limit that applies to all lines of risk; we do not have a separate $132.5 million of excess loss coverage for each of general liability, employer’s liability and auto liability. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 14. Stockholders’ Equity 2012 Equity Incentive Plan In May 2012, our stockholders approved our 2012 Equity Incentive Plan (the “2012 Plan”), which provides for the granting of incentive or non-qualified stock options, stock appreciation rights, restricted or deferred stock, dividend equivalents or other incentive awards to directors, employees, or consultants. The number of shares authorized and reserved for issuance under the 2012 Plan is 5.1 million shares. As of December 31, 2020, there were 2.9 million shares available for issuance under this plan; however, following adoption of the 2017 Plan (described below), no additional shares will be issued under the 2012 Plan. The 2012 Plan will expire in May 2022. 2017 Omnibus Incentive Plan In May 2017, our stockholders approved our 2017 Omnibus Incentive Plan (the “2017 Plan”), which provides for the granting of incentive or non-qualified stock options, stock appreciation rights, restricted or deferred stock, dividend equivalents or other incentive awards to directors, employees, or consultants. The number of shares authorized and reserved for issuance under the 2017 Plan is 2.9 million shares. As of December 31, 2020, there were 2.0 million shares available for issuance under this plan. The 2017 Plan will expire in May 2027. Additionally, we have outstanding stock options, stock awards and stock units that were issued under other plans, and no further grants may be made under those plans. Share Repurchase Program On March 29, 2007, our Board of Directors approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On December 8, 2020, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.7 million shares. Since the inception of the repurchase program, the Board has approved 10.3 million shares to be repurchased. As of December 31, 2020, we have repurchased a cumulative total of 9.3 million shares at an average price of $19.63 per share under the repurchase program. The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the twelve months ended December 31, 2020, we repurchased 0.7 million shares for approximately $30.1 million at an average price of $43.99 per share. Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed considering the dilutive effect of stock options, restricted stock, restricted stock units and performance stock units. The vesting of unvested contingently issuable performance stock units is based on the achievement of certain earnings per share targets and total shareholder return. These shares are considered contingently issuable shares for purposes of calculating diluted earnings per share. These shares are not included in the diluted earnings per share denominator until the performance criteria are met, if it is assumed that the end of the reporting period was the end of the contingency period. Unvested restricted stock, restricted stock units and performance stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock, restricted stock units and performance stock units are included in basic earnings per share weighted outstanding from the vesting date. There were less than 0.1 million anti-dilutive stock options excluded from the calculation of diluted EPS for the years ended December 31, 2020, 2019 and 2018, respectively. The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands): Year Ended December 31, 2020 2019 2018 Common shares outstanding, end of period 36,188 36,658 36,894 Effect of using weighted average common shares outstanding 354 196 308 Shares used in computing earnings per share—basic 36,542 36,854 37,202 Effect of shares issuable under stock option plans based on the treasury stock method 123 204 283 Effect of restricted and contingently issuable shares 73 73 107 Shares used in computing earnings per share—diluted 36,738 37,131 37,592 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 15. Stock-Based Compensation Grants of stock options, restricted stock and restricted stock units, and performance share units have been, under the 2012 Plan and under the 2017 Plan, determined and administered by the compensation committee of the Board of Directors. In 2019, the Board of Directors approved a change to the structure of long-term incentive grants to remove stock options, commencing with the March 2019 equity grant. Total stock-based compensation expense was $6.9 million, $5.9 million and $7.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Stock-based compensation expense is recognized using the straight-line method over the vesting period and generally vests over a three-year vesting period. Certain awards provide for accelerated vesting when the sum of an employee's age and years of service is at least 75 . We recognize forfeitures as they occur. Total income tax benefit recognized for stock-based compensation arrangements was $1.5 million, $1.3 million and $1.5 million for each of the years ended December 31, 2020, 2019 and 2018. We generally issue treasury shares for stock options and restricted stock, unless treasury shares are not available. Upon the vesting of restricted shares, we have allowed the holder to elect to surrender an amount of shares to meet their statutory tax withholding requirements. These shares are accounted for as treasury stock based upon the value of the stock on the date of vesting. Stock Options The following table summarizes activity under our stock option plans (shares in thousands): Year Ended December 31, 2020 Weighted- Average Stock Options Shares Exercise Price Outstanding at beginning of year 382 $ 27.06 Granted — $ — Exercised (114) $ 18.85 Forfeited — $ — Expired — $ — Outstanding at end of year 268 $ 30.53 Options exercisable at end of year 241 The total intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $3.2 million, $3.5 million and $6.7 million, respectively. Stock options exercisable as of December 31, 2020 have a weighted-average remaining contractual term of 5.2 years and an aggregate intrinsic value of $5.7 million. As of December 31, 2020, we have 0.3 million options that are vested or expected to vest; these options have a weighted average exercise price of $30.53 per share, have a weighted-average remaining contractual term of 5.4 years and an aggregate intrinsic value of $5.9 million. The following table summarizes information about stock options outstanding at December 31, 2020 (shares in thousands): Options Outstanding Options Exercisable Weighted- Average Number Remaining Weighted- Number Weighted- Outstanding at Contractual Average Exercisable at Average Range of Exercise Prices 12/31/2020 Life (in years) Exercise Price 12/31/2020 Exercise Price $11.21 - $15.00 14 2.2 $ 13.76 14 $ 13.76 $15.01 - $35.00 130 4.4 $ 23.54 130 $ 23.54 $35.01 - $42.50 124 6.8 $ 39.78 97 $ 39.02 $11.21 - $42.50 268 5.4 $ 30.53 241 $ 29.18 The fair value of each option award is estimated, based on several assumptions, on the date of grant using the Black-Scholes option valuation model. We did not grant any options in 2019 or 2020. The fair values and the assumptions used for the 2018 grant are shown in the table below: 2018 Weighted-average fair value per share of options granted $ 13.06 Fair value assumptions: Expected dividend yield 0.79% Expected stock price volatility 31.7% Risk-free interest rate 2.66% Expected term 5.3 years Stock options are accounted for as equity instruments. As of December 31, 2020, the unrecognized compensation cost related to stock options was less than $0.1 million, which is expected to be recognized over a weighted-average period of 0.3 years. The total fair value of options vested during the year ended December 31, 2020 was $0.7 million. The following table summarizes information about nonvested stock option awards as of December 31, 2020 and changes for the year ended December 31, 2020 (shares in thousands): Weighted-Average Grant Date Stock Options Shares Fair Value Nonvested at December 31, 2019 81 $ 12.53 Granted — $ — Vested (54) $ 12.26 Forfeited — $ — Nonvested at December 31, 2020 27 $ 13.06 Restricted Stock and Restricted Stock Units The following table summarizes activity under our restricted stock plans (shares in thousands): Year Ended December 31, 2020 Weighted Average Grant Restricted Stock and Restricted Stock Units Shares Date Fair Value Unvested at beginning of year 91 $ 47.58 Granted 118 $ 39.03 Vested (85) $ 39.13 Forfeited (4) $ 45.21 Unvested at end of year 120 $ 45.21 Approximately $1.1 million of compensation expense related to restricted stock and restricted stock units will be recognized over a weighted-average period of 1.8 years. The total fair value of shares vested during the year ended December 31, 2020 was $3.3 million. The weighted-average fair value per share of restricted stock shares and units awarded during 2020, 2019 and 2018 was $39.03, $51.02 and $44.02, respectively. The aggregate intrinsic value of restricted stock vested during the years ended December 31, 2020, 2019 and 2018 was $2.9 million, $3.5 million and $3.3 million, respectively. Performance Stock Units Under the 2012 Plan, we granted dollar-denominated performance vesting restricted stock units (“PSUs”), which cliff vest at the end of a three-year performance period. The PSUs are subject to two performance measures; 50% of the PSUs are based on the annual performance of our stock price relative to a group of our peers (total shareholder return) and 50% of the PSUs are measured based on meeting or exceeding a pre-determined annual earnings per share target as set by our Board of Directors (EPS). Depending on the Company’s performance in relation to the established performance measures, the awards may vest at zero to a maximum of 2.0 times the dollar-denominated award granted at target. Upon achievement of the necessary performance metrics, the award will be determined in dollars and may be settled in cash or stock based on the market price of the Company’s common stock at the end of the performance period, at our discretion. Compensation expense for dollar-denominated performance units will ultimately be equal to the final dollar value awarded to the grantee upon vesting, settled either in cash or stock. However, throughout the performance period we must record and accrue expense based on an estimate of that future payout. For units determined by EPS performance, the awards are evaluated quarterly against established targets in order to estimate the liability throughout the vesting period. For units determined by total shareholder return performance, a Monte Carlo simulation model was used to estimate accruals throughout the vesting period. The model simulates our total shareholder return and compares it against our peer group over the three-year performance period to produce a predicted distribution of relative share performance. This is applied to the reward criteria to give an expected value of the total shareholder return element. The calculated fair market value as of December 31, 2020 was $6.2 million. Of this amount, $2.2 million relates to the PSUs granted in 2018 whose performance period ended December 31, 2020. These awards will be settled within the upcoming year either in cash or stock. The expense related to performance stock units for the years ended December 31, 2020, 2019 and 2018 was $2.7 million, $1.9 million and $2.9 million, respectively. At the December 31, 2020 calculated fair market value, approximately $0.7 million of compensation expense related to performance stock units will be recognized over a weighted-average period of 1.4 years. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Information | |
Segment Information | 16. Segment Information Mechanical Services Electrical Services Corporate Consolidated Total Assets at December 31, 2020 $ 1,215,985 $ 449,588 $ 91,782 $ 1,757,355 Total Assets at December 31, 2019 $ 1,056,609 $ 372,254 $ 76,149 $ 1,505,012 Year Ended December 31, 2020 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,413,016 $ 443,643 $ — $ 2,856,659 Gross Profit $ 509,740 $ 37,243 $ — $ 546,983 Capital Expenditures $ 22,550 $ 955 $ 626 $ 24,131 Year Ended December 31, 2019 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,251,560 $ 363,717 $ — $ 2,615,277 Gross Profit $ 465,144 $ 36,799 $ — $ 501,943 Capital Expenditures $ 27,933 $ 1,504 $ 2,313 $ 31,750 Year Ended December 31, 2018 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,176,223 $ 6,656 $ — $ 2,182,879 Gross Profit $ 444,960 $ 1,319 $ — $ 446,279 Capital Expenditures $ 25,945 $ 57 $ 1,266 $ 27,268 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Data | |
Selected Quarterly Financial Data | 17. Selected Quarterly Financial Data Quarterly financial information for the years ended December 31, 2020 and 2019 is summarized as follows (in thousands, except per share data): 2020 Q1 Q2 Q3 Q4 Revenue $ 700,131 $ 743,468 $ 714,099 $ 698,961 Gross profit 117,093 145,695 147,196 136,999 Net income 17,716 39,495 50,088 42,840 INCOME PER SHARE: Basic $ 0.48 $ 1.08 $ 1.37 $ 1.18 Diluted $ 0.48 $ 1.08 $ 1.36 $ 1.17 2019 Q1 Q2 Q3 Q4 Revenue $ 538,473 $ 650,302 $ 706,918 $ 719,584 Gross profit (1) 106,665 120,016 142,702 132,560 Net income 19,866 24,173 36,233 34,052 INCOME PER SHARE: Basic $ 0.54 $ 0.65 $ 0.98 $ 0.93 Diluted $ 0.53 $ 0.65 $ 0.98 $ 0.92 (1) In the fourth quarter of 2019, we recorded a $4.8 million gain due to insurance proceeds we received in the fourth quarter related to the ransomware incident that occurred in April 2019. The sums of the individual quarterly earnings per share amounts do not necessarily agree with year-to-date earnings per share as each quarter’s computation is based on the weighted average number of shares outstanding during the quarter, the weighted average stock price during the quarter and the dilutive effects of options and contingently issuable restricted stock in each quarter. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. All significant intercompany accounts and transactions have been eliminated. Certain amounts in prior periods may have been reclassified to conform to the current period presentation. The effects of the reclassifications were not material to the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, self-insurance accruals, deferred tax assets, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing. |
Cash Flow Information | Cash Flow Information We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash paid (in thousands) for: Year Ended December 31, 2020 2019 2018 Interest $ 7,684 $ 8,817 $ 3,743 Income taxes, net of refunds $ 51,286 $ 45,288 $ 33,401 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The standard requires companies to consider historical experiences, current market conditions and reasonable and supportable forecasts in the measurement of expected credit losses. The standard requires us to accrue higher credit losses on financial assets compared to the legacy guidance on various items, such as contract assets and current receivables. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. We adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326),” on January 1, 2020, and the impact was not material to our overall financial statements. The adoption of ASU No. 2016-13 resulted in an increase in Allowance for Credit Losses of $0.7 million, an increase to Deferred Tax Assets of $0.2 million and an impact of $0.5 million to Retained Earnings. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removes certain disclosure requirements including the valuation processes for Level 3 fair value measurements, the policy for timing of transfers between levels and the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The standard requires certain additional disclosures for public entities, including disclosure of the changes in unrealized gains and losses included in Other Comprehensive Income for Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Certain amendments, including the amendment on changes in unrealized gains and losses and the range and weighted average of significant unobservable inputs, should be applied prospectively while other amendments should be applied retrospectively to all periods presented upon their effective date. We have modified our fair value disclosures to conform with the requirements of ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,” which we adopted on January 1, 2020. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within that year. Early adoption is permitted. We do not expect our adoption of this standard on January 1, 2021 to have a material impact on our consolidated financial statements. |
Revenue Recognition | Revenue Recognition We recognize revenue over time for all of our services as we perform them because (i) control continuously transfers to that customer as work progresses, and (ii) we have the right to bill the customer as costs are incurred. The customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to the Company. For the reasons listed above, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost to cost measure of progress for our contracts, as it best depicts the transfer of assets to the customer that occurs as we incur costs on our contracts. Under the cost to cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue, including estimated fees or profits, is recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. For a small portion of our business in which our services are delivered in the form of service maintenance agreements for existing systems to be repaired and maintained, as opposed to constructed, our performance obligation is to maintain the customer’s mechanical system for a specific period of time. Similar to jobs, we recognize revenue over time; however, for service maintenance agreements in which the full cost to provide services may not be known, we generally use an input method to recognize revenue, which is based on the amount of time we have provided our services out of the total time we have been contracted to perform those services. Our revenue recognition policy is further discussed in Note 3 “Revenue from Contracts with Customers.” |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses We are required to estimate and record the expected credit losses over the contractual life of our financial assets measured at amortized cost, including billed and unbilled accounts receivable, other receivables and costs and estimated earnings in excess of billings. Accounts receivable include amounts from work completed in which we have billed or have an unconditional right to bill our customers. Our trade receivables are contractually due in less than a year. We estimate our credit losses using a loss-rate method for each of our identified portfolio segments. Our portfolio segments are construction, service and other. While our construction and service financial assets are often with the same subset of customers and industries, our construction financial assets will generally have a lower loss-rate than service financial assets due to lien rights, which we are more likely to have on construction jobs. These lien rights result in lower credit loss expenses on average compared to receivables that do not have lien rights. Financial assets classified as “other” include receivables that are not related to our core revenue producing activities, such as receivables related to our acquisition activity from former owners, our vendor rebate program or receivables for estimated losses in excess of our insurance deductible, which are accrued with a corresponding accrued insurance liability. Loss rates for our portfolios are based on numerous factors, including our history of credit loss expense by portfolio, the financial strength of our customers and counterparties in each portfolio, the aging of our receivables, our expectation of likelihood of payment, macroeconomic trends in the U.S. and the current and forecasted non-residential construction market trends in the U.S. In addition to the loss-rate calculations discussed above, we also record allowance for credit losses for specific receivables that are deemed to have a higher risk profile than the rest of the respective pool of receivables, such as concerns about a specific customer going bankrupt and no longer being able to pay the receivables due to us. Starting in March 2020, we experienced negative impacts to our business due to the disruption caused by Coronavirus Disease 2019 (“COVID-19”). In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The Company considered the impact of COVID-19 on the assumptions and estimates used to determine the results reported and asset valuations as of December 31, 2020. During the year ended December 31, 2020, we increased our loss rates and increased our specific reserves primarily due to the economic disruption caused by COVID-19, which is reflected in our bad debt expense in the current year. This increase was primarily, but not exclusively, due to concern over collectability of receivables from customers more directly impacted by COVID-19. Activity in our allowance for credit losses consisted of the following (in thousands): Year Ended December 31, 2020 Service Construction Other Total Balance at beginning of year $ 3,192 $ 3,400 $ 315 $ 6,907 Impact of new accounting standard 310 331 54 695 Bad debt expense (benefit) 2,566 2,697 (10) 5,253 Deductions for uncollectible receivables written off, net of recoveries (1,431) (735) — (2,166) Credit allowance of acquired companies on the acquisition date — 335 — 335 Reclass to other current liabilities — — (315) (315) Balance at December 31, 2020 $ 4,637 $ 6,028 $ 44 $ 10,709 Year Ended December 31, 2019 Balance at beginning of year $ 5,898 Bad debt expense (benefit) 2,978 Deductions for uncollectible receivables written off, net of recoveries (3,924) Credit allowance of acquired companies on the acquisition date 1,955 Balance at December 31, 2019 $ 6,907 |
Inventories | Inventories Inventories consist of parts and supplies that we purchase and hold for use in the ordinary course of business and are stated at the lower of cost or net realizable value using the average-cost method. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, and depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the expected life of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated over the remaining useful life of the equipment. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in “Gain on sale of assets” in the Statement of Operations. |
Recoverability of Goodwill and Identifiable Intangible Assets | Recoverability of Goodwill and Identifiable Intangible Assets Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. When the carrying value of a given reporting unit exceeds its fair value, a goodwill impairment loss is recorded for this difference, not to exceed the carrying amount of goodwill. The requirements for assessing whether goodwill has been impaired involve market-based information. This information, and its use in assessing goodwill, entails some degree of subjective assessment. We perform our annual impairment testing as of October 1, and any impairment charges resulting from this process are reported in the fourth quarter. We segregate our operations into reporting units based on the degree of operating and financial independence of each unit and our related management of them. We perform our annual goodwill impairment testing at the reporting unit level. We perform a goodwill impairment review for each of our operating units, as we have determined that each of our operating units are reporting units. In the evaluation of goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If, after completing such assessment, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then there is no need to perform any further testing. If we conclude otherwise, or if we elect to perform a quantitative assessment, then we calculate the fair value of the reporting unit and compare the fair value with the carrying value of the reporting unit. We estimate the fair value of the reporting unit based on a market approach and an income approach, which utilizes discounted future cash flows. Assumptions critical to the fair value estimates under the discounted cash flow model include discount rates, cash flow projections, projected long-term growth rates and the determination of terminal values. The market approach utilizes market multiples of invested capital from comparable publicly traded companies (“public company approach”). The market multiples from invested capital include revenue, book equity plus debt and earnings before interest, provision for income taxes, depreciation and amortization (“EBITDA”). We amortize identifiable intangible assets with finite lives over their useful lives. Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances or their useful lives. |
Long-Lived Assets | Long-Lived Assets Long-lived assets are comprised principally of goodwill, identifiable intangible assets, property and equipment, and deferred tax assets. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of these assets may not be recoverable. We use estimates of future income from operations and cash flows, as well as other economic and business factors, to assess the recoverability of these assets. |
Acquisitions | Acquisitions We recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition. Contingent Consideration Contingent Assets and Liabilities |
Self-Insurance Liabilities | Self-Insurance Liabilities We are substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer-developing risks—workers’ compensation, auto liability and general liability—are reviewed by a third-party actuary quarterly. Our self-insurance arrangements are further discussed in Note 13 “Commitments and Contingencies.” |
Warranty Costs | Warranty Costs We typically warrant labor for the first year after installation on new MEP systems that we build and install, and we pass through to the customer manufacturers’ warranties on equipment. We generally warrant labor for thirty days after servicing existing MEP systems. A reserve for warranty costs is estimated and recorded based upon the historical level of warranty claims and management’s estimate of future costs. |
Income Taxes | Income Taxes We conduct business throughout the United States in virtually all fifty states. Our effective tax rate changes based upon our relative profitability, or lack thereof, in states with varying tax rates and rules. In addition, discrete items such as tax law changes, judgments and legal structures can impact our effective tax rate. These items can also include the tax treatment for impairment of goodwill and other intangible assets, changes in fair value of acquisition-related assets and liabilities, tax reserves for uncertain tax positions and accounting for losses associated with underperforming operations. Income taxes are provided for under the liability method, which takes into account differences between financial statement treatment and tax treatment of certain transactions. Deferred taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more-likely-than-not some portion or all of the deferred tax assets will not be realized. We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we must consider whether it is more-likely-than-not some portion, or all, of the deferred tax assets will not be realized. We consider all available evidence, both positive and negative, in determining whether a valuation allowance is required. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence. Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are supportable, we believe that certain positions may be disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes. To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component in provision for income taxes in our Consolidated Statements of Operations. |
Concentrations of Credit Risk | Concentrations of Credit Risk We provide services in a broad range of geographic regions. Our credit risk primarily consists of receivables from a variety of customers including general contractors, property owners and developers, and commercial and industrial companies. We are subject to potential credit risk related to changes in business and economic factors throughout the United States within the nonresidential construction industry. However, we are entitled to payment for work performed and have certain lien rights related to that work. Further, we believe that our contract acceptance, billing and collection policies are adequate to manage potential credit risk. We regularly review our accounts receivable and estimate an allowance for uncollectible amounts. We have a diverse customer base, with our top customer representing 5% of consolidated 2020 revenue. |
Financial Instruments | Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, interest rate swaps, life insurance policies, notes to former owners, a revolving credit facility and a term loan. We believe that the carrying values of these instruments on the accompanying Balance Sheets approximate their fair values. |
Insurance Recovery | Insurance Recovery We recorded a $4.8 million gain in the fourth quarter of 2019 due to insurance proceeds we received in the fourth quarter related to the ransomware incident that occurred in April 2019. Approximately $1.6 million of the gain was recorded as a reduction in SG&A, and the remainder was recorded as a reduction in Cost of Services expense. These proceeds related to recoverable costs that were primarily incurred prior to the fourth quarter in 2019. We do not expect any additional insurance proceeds or other recoveries related to the ransomware incident. |
Leases | We lease certain facilities, vehicles and equipment under noncancelable operating leases. The most significant portion of these noncancelable operating leases are for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. We account for lease components separately from the non-lease components. We have certain leases with variable payments based on an index as well as some short-term leases on equipment and facilities. Variable lease expense and short-term lease expense were not material to our financial statements and aggregated to $7.7 million in 2020 and $8.4 million in 2019. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate as of December 31, 2020 and 2019 was 4.2% and 3.9%, respectively. We recognize lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Lease expense for the years ended December 31, 2020, 2019 and 2018 was $28.2 million, $24.8 million and $23.4 million, respectively. The lease terms generally range from three A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the years ended December 31, 2020, 2019 and 2018 was approximately $4.2 million, $3.7 million and $4.8 million, respectively. If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions, we rent or sublease certain real estate assets that we no longer use to third parties. The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands): December 31, 2020 December 31, 2019 Lease right-of-use assets $ 94,727 $ 84,073 Lease liabilities: Other current liabilities $ 16,586 $ 14,016 Long-term lease liabilities 80,576 72,697 Total lease liabilities $ 97,162 $ 86,713 The maturities of lease liabilities as of December 31, 2020 are as follows (in thousands): Year ending December 31— 2021 $ 20,254 2022 17,004 2023 14,727 2024 13,221 2025 12,108 Thereafter 36,645 Total Lease Payments 113,959 Less—Present Value Discount (16,797) Present Value of Lease Liabilities $ 97,162 Supplemental information related to leases was as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 20,443 $ 16,895 Lease right-of-use assets obtained in exchange for lease liabilities $ 27,346 $ 26,811 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of cash paid | Cash paid (in thousands) for: Year Ended December 31, 2020 2019 2018 Interest $ 7,684 $ 8,817 $ 3,743 Income taxes, net of refunds $ 51,286 $ 45,288 $ 33,401 |
Schedule of activity in allowance for credit losses | Activity in our allowance for credit losses consisted of the following (in thousands): Year Ended December 31, 2020 Service Construction Other Total Balance at beginning of year $ 3,192 $ 3,400 $ 315 $ 6,907 Impact of new accounting standard 310 331 54 695 Bad debt expense (benefit) 2,566 2,697 (10) 5,253 Deductions for uncollectible receivables written off, net of recoveries (1,431) (735) — (2,166) Credit allowance of acquired companies on the acquisition date — 335 — 335 Reclass to other current liabilities — — (315) (315) Balance at December 31, 2020 $ 4,637 $ 6,028 $ 44 $ 10,709 Year Ended December 31, 2019 Balance at beginning of year $ 5,898 Bad debt expense (benefit) 2,978 Deductions for uncollectible receivables written off, net of recoveries (3,924) Credit allowance of acquired companies on the acquisition date 1,955 Balance at December 31, 2019 $ 6,907 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customers | |
Schedule of contracts in progress | Contracts in progress are as follows (in thousands): December 31, 2020 2019 Costs incurred on contracts in progress $ 3,103,580 $ 2,518,581 Estimated earnings, net of losses 548,435 405,891 Less—Billings to date (3,813,171) (3,033,112) Less—Unbilled accounts receivable (45,596) (55,542) Less—Unbilled accounts receivable credit allowance (784) — $ (207,536) $ (164,182) Costs and estimated earnings in excess of billings $ 18,622 $ 2,736 Plus—Costs and estimated earnings in excess of billings credit allowance 79 — Billings in excess of costs and estimated earnings (226,237) (166,918) $ (207,536) $ (164,182) |
Schedule of disaggregation of revenue | Our consolidated 2020 revenue was derived from contracts to provide service activities in the mechanical and electrical services segments we serve. Refer to Note 16 “Segment Information” for additional information on our reportable segments. We disaggregate our revenue from contracts with customers by activity, customer type and service provided, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the following tables (dollars in thousands): Year Ended December 31, Revenue by Service Provided 2020 2019 2018 Mechanical Services $ 2,413,016 84.5 % $ 2,251,560 86.1 % $ 2,176,223 99.7 % Electrical Services 443,643 15.5 % 363,717 13.9 % 6,656 0.3 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % Year Ended December 31, Revenue by Type of Customer 2020 2019 2018 Industrial $ 1,112,075 38.9 % $ 886,668 33.9 % $ 596,557 27.3 % Education 487,922 17.1 % 412,318 15.8 % 391,937 18.0 % Office Buildings 319,426 11.2 % 348,640 13.3 % 288,090 13.2 % Healthcare 371,105 13.0 % 358,155 13.7 % 319,958 14.7 % Government 163,717 5.7 % 162,507 6.2 % 143,958 6.6 % Retail, Restaurants and Entertainment 239,541 8.4 % 248,083 9.5 % 225,348 10.3 % Multi-Family and Residential 86,799 3.0 % 104,693 4.0 % 136,075 6.2 % Other 76,074 2.7 % 94,213 3.6 % 80,956 3.7 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % Year Ended December 31, Revenue by Activity Type 2020 2019 2018 New Construction $ 1,333,739 46.7 % $ 1,201,122 45.9 % $ 829,978 38.0 % Existing Building Construction 910,807 31.9 % 793,159 30.3 % 796,946 36.5 % Service Projects 241,402 8.4 % 231,228 8.9 % 206,506 9.5 % Service Calls, Maintenance and Monitoring 370,711 13.0 % 389,768 14.9 % 349,449 16.0 % Total $ 2,856,659 100.0 % $ 2,615,277 100.0 % $ 2,182,879 100.0 % |
Schedule of contract assets and liabilities | Year Ended December 31, Year Ended December 31, 2020 2019 Contract Contract Contract Contract Assets Liabilities Assets Liabilities Balance at beginning of period $ 2,736 $ 166,918 $ 10,213 $ 130,986 Change due to acquisitions / disposals 9,509 39,885 6,573 31,556 Change related to credit allowance (79) — — — Other changes in the period 6,456 19,434 (14,050) 4,376 Balance at end of period $ 18,622 $ 226,237 $ 2,736 $ 166,918 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Summary of fair values and levels within the fair value hierarchy in which the fair value measurements fall for assets and liabilities measured on a recurring basis | The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of December 31, 2020 and 2019 (in thousands): Fair Value Measurements at December 31, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 54,896 $ — $ — $ 54,896 Life insurance—cash surrender value $ — $ 5,420 $ — $ 5,420 Contingent earn-out obligations $ — $ — $ 25,979 $ 25,979 Interest rate swap liability $ — $ 42 $ — $ 42 Fair Value Measurements at December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 50,788 $ — $ — $ 50,788 Life insurance—cash surrender value $ — $ 3,905 $ — $ 3,905 Contingent earn-out obligations $ — $ — $ 28,497 $ 28,497 |
Schedule of reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands): December 31, 2020 2019 Balance at beginning of year $ 28,497 $ 7,375 Issuances 16,715 19,500 Settlements (10,114) (1,369) Adjustments to fair value (9,119) 2,991 Balance at end of year $ 25,979 $ 28,497 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
TAS Energy | |
Business Acquisition [Line Items] | |
Schedule of acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill | The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands): Consideration transferred: Cash paid at closing $ 105,950 Working capital adjustment 40,455 Notes issued to former owners 14,000 Estimated fair value of contingent earn-out payments 9,100 $ 169,505 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 47,460 Billed and unbilled accounts receivable 18,702 Other current assets 15,634 Other long-term assets 1,556 Property and equipment 7,709 Goodwill 72,788 Identifiable intangible assets 53,400 Lease right-of-use asset 19,736 Accounts payable (16,453) Billings in excess of costs and estimated earnings (24,196) Current lease liabilities (2,337) Accrued expenses and other current liabilities (4,109) Long-term lease liabilities (17,398) Other long-term liabilities (2,987) $ 169,505 |
Schedule of acquired intangible assets | The acquired intangible assets include the following (dollars in thousands): Valuation Method Estimated Useful Life Estimated Fair Value Backlog Excess earnings 1 year $ 5,200 Trade Name Relief-from-royalty 25 years 8,200 Customer Relationships Excess earnings 10 years 40,000 Total $ 53,400 |
T E C Industrial Construction and Maintenance | |
Business Acquisition [Line Items] | |
Schedule of acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill | The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands): Consideration transferred: Cash paid at closing $ 73,000 Working capital adjustment 2,006 Notes issued to former owners 7,000 Estimated fair value of contingent earn-out payments 7,560 $ 89,566 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 4 Billed and unbilled accounts receivable 13,660 Costs in excess of billings 2,040 Other current assets 108 Other long-term assets 53 Property and equipment 912 Goodwill 44,431 Identifiable intangible assets 37,200 Lease right-of-use asset 1,234 Accounts payable (4,123) Billings in excess of costs and estimated earnings (2,838) Current lease liabilities (175) Accrued expenses and other current liabilities (1,881) Long-term lease liabilities (1,059) $ 89,566 |
Schedule of acquired intangible assets | The acquired intangible assets include the following (dollars in thousands): Valuation Estimated Estimated Method Useful Life Fair Value Backlog Excess earnings 2 years $ 7,200 Trade Name Relief-from-royalty 20 years 5,800 Customer Relationships Excess earnings 9 years 24,200 Total $ 37,200 |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Identifiable Intangible Assets, Net | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): Mechanical Services Electrical Services Segment Segment Total Balance at December 31, 2018 $ 235,182 $ — $ 235,182 Acquisitions and purchase price adjustments (See Note 5) 579 96,686 97,265 Impact of segment reorganization (1,101) 1,101 — Balance at December 31, 2019 234,660 97,787 332,447 Acquisitions and purchase price adjustments (See Note 5) 72,788 59,157 131,945 Balance at December 31, 2020 $ 307,448 $ 156,944 $ 464,392 |
Schedule of components of identifiable intangible assets | Identifiable intangible assets consist of the following (dollars in thousands): Weighted-Average December 31, 2020 December 31, 2019 Remaining Useful Lives Gross Book Accumulated Gross Book Accumulated in Years Value Amortization Value Amortization Customer Relationships 8.0 $ 255,692 $ (103,919) $ 183,061 $ (80,813) Backlog 2.0 19,800 (12,600) 7,400 (6,388) Trade Names 20.5 91,495 (18,661) 71,995 (15,281) Total 11.7 $ 366,987 $ (135,180) $ 262,456 $ (102,482) |
Schedule of future amortization expense of identifiable intangible assets | As of December 31, 2020, future amortization expense of identifiable intangible assets was as follows (in thousands): Year ended December 31— 2021 $ 32,344 2022 27,412 2023 23,514 2024 22,164 2025 19,977 Thereafter 106,396 Total $ 231,807 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Schedule of components of property and equipment | Property and equipment consist of the following (dollars in thousands): Estimated Useful Lives December 31, in Years 2020 2019 Land — $ 7,167 $ 6,206 Transportation equipment 1 - 7 113,802 106,972 Machinery and equipment 1 - 20 43,386 35,575 Computer and telephone equipment 1 - 10 23,215 20,744 Buildings and leasehold improvements 1 - 40 69,683 62,301 Furniture and fixtures 1 - 17 5,861 5,244 Construction in progress — 1,294 2,123 264,408 239,165 Less—Accumulated depreciation (147,202) (129,369) Property and equipment, net $ 117,206 $ 109,796 |
Detail of Other Current Liabi_2
Detail of Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Detail of Other Current Liabilities | |
Schedule of other current liabilities | Other current liabilities consist of the following (in thousands): December 31, 2020 2019 Accrued warranty costs $ 8,914 $ 7,452 Current lease liability 16,586 14,016 Accrued job losses 2,151 2,226 Accrued sales and use tax 3,731 2,938 Deferred revenue 4,559 5,506 Liabilities due to former owners 10,280 11,219 Other current liabilities 45,271 38,273 $ 91,492 $ 81,630 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Obligations | |
Schedule of components of debt obligations | Debt obligations consist of the following (in thousands): December 31, 2020 2019 Revolving credit facility $ 70,000 $ 28,000 Term loan 135,000 150,000 Notes to former owners 31,000 48,483 Total principal amount 236,000 226,483 Less—unamortized debt issuance costs (267) (348) Total debt, net of unamortized debt issuance costs 235,733 226,135 Less—current portion — (20,817) Total long-term portion of debt, net $ 235,733 $ 205,318 |
Schedule of future principal payments of long-term debt | At December 31, 2020, future principal payments of debt are as follows (in thousands): Year ended December 31— 2021 $ — 2022 23,000 2023 34,000 2024 26,500 2025 152,500 Thereafter — $ 236,000 |
Schedule of interest expense | Interest expense included the following primary elements (in thousands): Year Ended December 31, 2020 2019 2018 Interest expense on notes to former owners $ 1,354 $ 1,531 $ 642 Interest expense on borrowings and unused commitment fees 5,319 6,887 2,211 Interest expense on interest rate swaps 338 — — Letter of credit fees 830 512 474 Amortization of debt financing costs 544 387 383 Total $ 8,385 $ 9,317 $ 3,710 |
Schedule of reconciliation of Credit Facility Adjusted EBITDA to net income | Net income $ 150,139 Provision for income taxes 41,401 Interest expense, net 8,282 Depreciation and amortization expense 60,629 Stock-based compensation 6,934 Pre-acquisition results of acquired companies, as defined under the Facility 18,511 Credit Facility Adjusted EBITDA $ 285,896 |
Schedule of market rates relating to interest options under the Facility | Base Rate Loan Option: Federal Funds Rate plus 0.50% 0.59% Wells Fargo Bank, N.A. Prime Rate 3.25% One-month LIBOR plus 1.00% 1.14% Eurodollar Rate Loan Option: One-month LIBOR 0.14% Six-month LIBOR 0.26% |
Summary of additional margins | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA Less than 1.00 1.00 to 1.75 1.75 to 2.50 2.50 or greater Additional Per Annum Interest Margin Added Under: Base Rate Loan Option 0.25 % 0.50 % 0.75 % 1.00 % Eurodollar Rate Loan Option 1.25 % 1.50 % 1.75 % 2.00 % Letter of credit fees 1.25 % 1.50 % 1.75 % 2.00 % Commitment fees on any portion of the Revolving Loan capacity not in use for borrowings or letters of credit at any given time 0.20 % 0.25 % 0.30 % 0.35 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of lease assets and liabilities | The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands): December 31, 2020 December 31, 2019 Lease right-of-use assets $ 94,727 $ 84,073 Lease liabilities: Other current liabilities $ 16,586 $ 14,016 Long-term lease liabilities 80,576 72,697 Total lease liabilities $ 97,162 $ 86,713 |
Schedule of maturities of lease liabilities | The maturities of lease liabilities as of December 31, 2020 are as follows (in thousands): Year ending December 31— 2021 $ 20,254 2022 17,004 2023 14,727 2024 13,221 2025 12,108 Thereafter 36,645 Total Lease Payments 113,959 Less—Present Value Discount (16,797) Present Value of Lease Liabilities $ 97,162 |
Schedule of supplemental information related to leases | Supplemental information related to leases was as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 20,443 $ 16,895 Lease right-of-use assets obtained in exchange for lease liabilities $ 27,346 $ 26,811 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of provision for income taxes relating to continuing operations | Our provision for income taxes relating to continuing operations consists of the following (in thousands): December 31, 2020 2019 2018 Current tax provision— Federal $ 36,556 $ 33,281 $ 22,728 State and Puerto Rico 12,798 8,388 8,589 Total current 49,354 41,669 31,317 Deferred tax provision (benefit)— Federal (5,483) (3,750) 4,347 State and Puerto Rico (2,470) (501) 109 Total deferred (7,953) (4,251) 4,456 Provision for income taxes $ 41,401 $ 37,418 $ 35,773 |
Schedule of difference in income taxes provided for and the amounts determined by applying the federal statutory tax rate to income before income taxes results | The provision for income taxes for the years ended December 31, 2020, 2019 and 2018 resulted in effective tax rates on continuing operations of 21.6%, 24.7% and 24.1%, respectively. The reasons for the differences between these effective tax rates and the federal statutory rates are as follows (in thousands): December 31, 2020 2019 2018 Federal statutory rate of— 21 % 21 % 21 % Income taxes at the federal statutory rate $ 40,223 $ 31,866 $ 31,222 Increases (decreases) resulting from— Net state income taxes 8,406 6,644 7,470 Valuation allowances (254) (279) (2,852) Net unrecognized tax benefits 18,557 7,338 (15) Nondeductible expenses 2,470 2,180 1,926 R&D tax credit (26,133) (4,569) (2,726) 179D deduction (1,062) (5,126) — Net operating loss carryforwards — — 2,225 Stock-based compensation deductions (426) (714) (1,293) Other (380) 78 (184) Provision for income taxes $ 41,401 $ 37,418 $ 35,773 |
Schedule of significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the balance sheet | Significant components of the deferred tax assets and deferred tax liabilities as reflected on the balance sheets are as follows (in thousands): Year Ended December 31, 2020 2019 Deferred tax assets— Accounts receivable and allowance for credit losses $ 2,186 $ 1,660 Stock-based compensation 2,791 2,561 Accrued liabilities and expenses 39,761 25,569 Lease liabilities 22,768 20,873 Net operating loss carryforwards 12,127 2,750 Intangible assets — 7,988 Other 627 525 Subtotal 80,260 61,926 Valuation allowances (514) (369) Total deferred tax assets 79,746 61,557 Deferred tax liabilities— Property and equipment (13,877) (11,286) Lease right-of-use asset (22,715) (20,873) Long-term contracts (609) (876) Intangible assets (242) — Goodwill (11,615) (6,020) Other (2,626) (2,004) Total deferred tax liabilities (51,684) (41,059) Net deferred tax assets $ 28,062 $ 20,498 |
Schedule of deferred income tax assets and liabilities included in the consolidated balance sheets | The deferred tax assets and liabilities reflected above are included in the consolidated balance sheets as follows (in thousands): December 31, 2020 2019 Deferred tax assets $ 29,401 $ 21,923 Deferred tax liabilities $ 1,339 $ 1,425 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties | A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 10,199 $ 2,966 $ 8,929 Additions based on tax positions related to current year — — — Additions based on tax positions related to prior years 26,858 7,473 2,726 Reductions for tax positions related to prior years — (240) (8,689) Reductions for settlements with tax authorities (8,301) — — Balance at end of year $ 28,756 $ 10,199 $ 2,966 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Reconciliation of number of shares outstanding with the number of shares used in computing basic and diluted earnings per share | The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands): Year Ended December 31, 2020 2019 2018 Common shares outstanding, end of period 36,188 36,658 36,894 Effect of using weighted average common shares outstanding 354 196 308 Shares used in computing earnings per share—basic 36,542 36,854 37,202 Effect of shares issuable under stock option plans based on the treasury stock method 123 204 283 Effect of restricted and contingently issuable shares 73 73 107 Shares used in computing earnings per share—diluted 36,738 37,131 37,592 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation | |
Summary of activity under the entity's stock option plans | The following table summarizes activity under our stock option plans (shares in thousands): Year Ended December 31, 2020 Weighted- Average Stock Options Shares Exercise Price Outstanding at beginning of year 382 $ 27.06 Granted — $ — Exercised (114) $ 18.85 Forfeited — $ — Expired — $ — Outstanding at end of year 268 $ 30.53 Options exercisable at end of year 241 |
Summary information about stock options outstanding | The following table summarizes information about stock options outstanding at December 31, 2020 (shares in thousands): Options Outstanding Options Exercisable Weighted- Average Number Remaining Weighted- Number Weighted- Outstanding at Contractual Average Exercisable at Average Range of Exercise Prices 12/31/2020 Life (in years) Exercise Price 12/31/2020 Exercise Price $11.21 - $15.00 14 2.2 $ 13.76 14 $ 13.76 $15.01 - $35.00 130 4.4 $ 23.54 130 $ 23.54 $35.01 - $42.50 124 6.8 $ 39.78 97 $ 39.02 $11.21 - $42.50 268 5.4 $ 30.53 241 $ 29.18 |
Schedule of fair values and the assumptions used for the grants | 2018 Weighted-average fair value per share of options granted $ 13.06 Fair value assumptions: Expected dividend yield 0.79% Expected stock price volatility 31.7% Risk-free interest rate 2.66% Expected term 5.3 years |
Summary of information about nonvested stock option awards and changes | The following table summarizes information about nonvested stock option awards as of December 31, 2020 and changes for the year ended December 31, 2020 (shares in thousands): Weighted-Average Grant Date Stock Options Shares Fair Value Nonvested at December 31, 2019 81 $ 12.53 Granted — $ — Vested (54) $ 12.26 Forfeited — $ — Nonvested at December 31, 2020 27 $ 13.06 |
Summary of activity under the entity's restricted stock plans | The following table summarizes activity under our restricted stock plans (shares in thousands): Year Ended December 31, 2020 Weighted Average Grant Restricted Stock and Restricted Stock Units Shares Date Fair Value Unvested at beginning of year 91 $ 47.58 Granted 118 $ 39.03 Vested (85) $ 39.13 Forfeited (4) $ 45.21 Unvested at end of year 120 $ 45.21 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Information | |
Summary of information about reportable segments | Mechanical Services Electrical Services Corporate Consolidated Total Assets at December 31, 2020 $ 1,215,985 $ 449,588 $ 91,782 $ 1,757,355 Total Assets at December 31, 2019 $ 1,056,609 $ 372,254 $ 76,149 $ 1,505,012 Year Ended December 31, 2020 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,413,016 $ 443,643 $ — $ 2,856,659 Gross Profit $ 509,740 $ 37,243 $ — $ 546,983 Capital Expenditures $ 22,550 $ 955 $ 626 $ 24,131 Year Ended December 31, 2019 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,251,560 $ 363,717 $ — $ 2,615,277 Gross Profit $ 465,144 $ 36,799 $ — $ 501,943 Capital Expenditures $ 27,933 $ 1,504 $ 2,313 $ 31,750 Year Ended December 31, 2018 Mechanical Services Electrical Services Corporate Consolidated Revenue $ 2,176,223 $ 6,656 $ — $ 2,182,879 Gross Profit $ 444,960 $ 1,319 $ — $ 446,279 Capital Expenditures $ 25,945 $ 57 $ 1,266 $ 27,268 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Data | |
Schedule of quarterly financial information | Quarterly financial information for the years ended December 31, 2020 and 2019 is summarized as follows (in thousands, except per share data): 2020 Q1 Q2 Q3 Q4 Revenue $ 700,131 $ 743,468 $ 714,099 $ 698,961 Gross profit 117,093 145,695 147,196 136,999 Net income 17,716 39,495 50,088 42,840 INCOME PER SHARE: Basic $ 0.48 $ 1.08 $ 1.37 $ 1.18 Diluted $ 0.48 $ 1.08 $ 1.36 $ 1.17 2019 Q1 Q2 Q3 Q4 Revenue $ 538,473 $ 650,302 $ 706,918 $ 719,584 Gross profit (1) 106,665 120,016 142,702 132,560 Net income 19,866 24,173 36,233 34,052 INCOME PER SHARE: Basic $ 0.54 $ 0.65 $ 0.98 $ 0.93 Diluted $ 0.53 $ 0.65 $ 0.98 $ 0.92 (1) In the fourth quarter of 2019, we recorded a $4.8 million gain due to insurance proceeds we received in the fourth quarter related to the ransomware incident that occurred in April 2019. |
Business and Organization (Deta
Business and Organization (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Installation of systems in newly constructed facilities | |
Business and Organization | |
Percentage of revenue attributable to services | 46.70% |
Maintenance, repair and replacement services | |
Business and Organization | |
Percentage of revenue attributable to services | 53.30% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash paid for: | |||
Interest | $ 7,684 | $ 8,817 | $ 3,743 |
Income taxes | $ 51,286 | $ 45,288 | $ 33,401 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle | |||||
Impact to Retained Earnings | $ 696,429 | $ 585,304 | $ 498,047 | $ 417,945 | |
Lease right-of-use assets | 94,727 | 84,073 | |||
Operating lease liability | 97,162 | $ 86,713 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Impact to Retained Earnings | $ (515) | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Impact to Retained Earnings | $ 500 | ||||
Adjustments | ASU 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Increase in Allowance for Credit Losses | 700 | ||||
Increase to Deferred Tax Assets | $ 200 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 6,907 | $ 5,898 | |
Impact of new accounting standard | 695 | ||
Bad debt expense (benefit) | 5,253 | 2,978 | $ 3,562 |
Deductions for uncollectible receivables written off, net of recoveries | (2,166) | (3,924) | |
Credit allowance of acquired companies on the acquisition date | 335 | 1,955 | |
Reclass to other current liabilities | (315) | ||
Balance at end of year | 10,709 | 6,907 | $ 5,898 |
Service | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | 3,192 | ||
Impact of new accounting standard | 310 | ||
Bad debt expense (benefit) | 2,566 | ||
Deductions for uncollectible receivables written off, net of recoveries | (1,431) | ||
Balance at end of year | 4,637 | 3,192 | |
Construction | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | 3,400 | ||
Impact of new accounting standard | 331 | ||
Bad debt expense (benefit) | 2,697 | ||
Deductions for uncollectible receivables written off, net of recoveries | (735) | ||
Credit allowance of acquired companies on the acquisition date | 335 | ||
Balance at end of year | 6,028 | 3,400 | |
Other. | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | 315 | ||
Impact of new accounting standard | 54 | ||
Bad debt expense (benefit) | (10) | ||
Reclass to other current liabilities | (315) | ||
Balance at end of year | $ 44 | $ 315 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Risk (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Warranty Costs | |
Labor warranty period after servicing of existing MEP system | 30 days |
Revenue | Customer concentration | Minimum | |
Warranty Costs | |
Single customer, percentage of revenue | 5.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Insurance Recovery (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Summary of Significant Accounting Policies | |
Gain due to insurance proceeds received | $ 4.8 |
Gain recorded as reduction in SG&A | 1.6 |
Gain recorded as reduction in cost of services expense | $ 3.2 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contracts in progress | |||
Costs incurred on contracts in progress | $ 3,103,580 | $ 2,518,581 | |
Estimated earnings, net of losses | 548,435 | 405,891 | |
Less-Billings to date | (3,813,171) | (3,033,112) | |
Less-Unbilled accounts receivable | (45,596) | (55,542) | |
Less-Unbilled accounts receivable credit allowance | (784) | 0 | |
Contracts in progress | (207,536) | (164,182) | |
Costs and estimated earnings in excess of billings | 18,622 | 2,736 | $ 10,213 |
Plus-Costs and estimated earnings in excess of billings credit allowance | 79 | 0 | |
Billings in excess of costs and estimated earnings | $ (226,237) | (166,918) | $ (130,986) |
Period during which progress billings or contract price can be withheld until completion of work | 6 months | ||
Retention receivable | $ 124,100 | 111,700 | |
Retention payable | $ 22,200 | $ 15,800 | |
Revenue, Performance Obligation, Description of Payment Terms | We typically invoice our customers with payment terms of net due in 30 days | ||
Receivable payment terms (in days) | 30 days | ||
Minimum | |||
Contracts in progress | |||
Receivable payment terms (in days) | 45 days | ||
Payments received term (in days) | 30 days | ||
Maximum | |||
Contracts in progress | |||
Receivable payment terms (in days) | 60 days | ||
Payments received term (in days) | 90 days |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue | |||
Revenue | $ 2,856,659 | $ 2,615,277 | |
Percentage of revenue from contract with customer (as a percent) | 100.00% | 100.00% | |
Industrial | |||
Disaggregation of Revenue | |||
Revenue | $ 1,112,075 | $ 886,668 | |
Percentage of revenue from contract with customer (as a percent) | 38.90% | 33.90% | |
Education | |||
Disaggregation of Revenue | |||
Revenue | $ 487,922 | $ 412,318 | |
Percentage of revenue from contract with customer (as a percent) | 17.10% | 15.80% | |
Office Buildings | |||
Disaggregation of Revenue | |||
Revenue | $ 319,426 | $ 348,640 | |
Percentage of revenue from contract with customer (as a percent) | 11.20% | 13.30% | |
Healthcare | |||
Disaggregation of Revenue | |||
Revenue | $ 371,105 | $ 358,155 | |
Percentage of revenue from contract with customer (as a percent) | 13.00% | 13.70% | |
Government | |||
Disaggregation of Revenue | |||
Revenue | $ 163,717 | $ 162,507 | |
Percentage of revenue from contract with customer (as a percent) | 5.70% | 6.20% | |
Retail, Restaurants and Entertainment | |||
Disaggregation of Revenue | |||
Revenue | $ 239,541 | $ 248,083 | |
Percentage of revenue from contract with customer (as a percent) | 8.40% | 9.50% | |
Multi-Family and Residential | |||
Disaggregation of Revenue | |||
Revenue | $ 86,799 | $ 104,693 | |
Percentage of revenue from contract with customer (as a percent) | 3.00% | 4.00% | |
Other | |||
Disaggregation of Revenue | |||
Revenue | $ 76,074 | $ 94,213 | |
Percentage of revenue from contract with customer (as a percent) | 2.70% | 3.60% | |
New Construction | |||
Disaggregation of Revenue | |||
Revenue | $ 1,333,739 | $ 1,201,122 | |
Percentage of revenue from contract with customer (as a percent) | 46.70% | 45.90% | |
Existing Building Construction | |||
Disaggregation of Revenue | |||
Revenue | $ 910,807 | $ 793,159 | |
Percentage of revenue from contract with customer (as a percent) | 31.90% | 30.30% | |
Service Projects | |||
Disaggregation of Revenue | |||
Revenue | $ 241,402 | $ 231,228 | |
Percentage of revenue from contract with customer (as a percent) | 8.40% | 8.90% | |
Service Calls, Maintenance and Monitoring | |||
Disaggregation of Revenue | |||
Revenue | $ 370,711 | $ 389,768 | |
Percentage of revenue from contract with customer (as a percent) | 13.00% | 14.90% | |
Mechanical Services | |||
Disaggregation of Revenue | |||
Revenue | $ 2,413,016 | $ 2,251,560 | |
Percentage of revenue from contract with customer (as a percent) | 84.50% | 86.10% | |
Electrical Services | |||
Disaggregation of Revenue | |||
Revenue | $ 443,643 | $ 363,717 | |
Percentage of revenue from contract with customer (as a percent) | 15.50% | 13.90% | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||
Disaggregation of Revenue | |||
Revenue | $ 2,182,879 | ||
Percentage of revenue from contract with customer (as a percent) | 100.00% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Industrial | |||
Disaggregation of Revenue | |||
Revenue | $ 596,557 | ||
Percentage of revenue from contract with customer (as a percent) | 27.30% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Education | |||
Disaggregation of Revenue | |||
Revenue | $ 391,937 | ||
Percentage of revenue from contract with customer (as a percent) | 18.00% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Office Buildings | |||
Disaggregation of Revenue | |||
Revenue | $ 288,090 | ||
Percentage of revenue from contract with customer (as a percent) | 13.20% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Healthcare | |||
Disaggregation of Revenue | |||
Revenue | $ 319,958 | ||
Percentage of revenue from contract with customer (as a percent) | 14.70% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Government | |||
Disaggregation of Revenue | |||
Revenue | $ 143,958 | ||
Percentage of revenue from contract with customer (as a percent) | 6.60% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Retail, Restaurants and Entertainment | |||
Disaggregation of Revenue | |||
Revenue | $ 225,348 | ||
Percentage of revenue from contract with customer (as a percent) | 10.30% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Multi-Family and Residential | |||
Disaggregation of Revenue | |||
Revenue | $ 136,075 | ||
Percentage of revenue from contract with customer (as a percent) | 6.20% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Other | |||
Disaggregation of Revenue | |||
Revenue | $ 80,956 | ||
Percentage of revenue from contract with customer (as a percent) | 3.70% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | New Construction | |||
Disaggregation of Revenue | |||
Revenue | $ 829,978 | ||
Percentage of revenue from contract with customer (as a percent) | 38.00% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Existing Building Construction | |||
Disaggregation of Revenue | |||
Revenue | $ 796,946 | ||
Percentage of revenue from contract with customer (as a percent) | 36.50% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Service Projects | |||
Disaggregation of Revenue | |||
Revenue | $ 206,506 | ||
Percentage of revenue from contract with customer (as a percent) | 9.50% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Service Calls, Maintenance and Monitoring | |||
Disaggregation of Revenue | |||
Revenue | $ 349,449 | ||
Percentage of revenue from contract with customer (as a percent) | 16.00% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Mechanical Services | |||
Disaggregation of Revenue | |||
Revenue | $ 2,176,223 | ||
Percentage of revenue from contract with customer (as a percent) | 99.70% | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Electrical Services | |||
Disaggregation of Revenue | |||
Revenue | $ 6,656 | ||
Percentage of revenue from contract with customer (as a percent) | 0.30% |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contract Assets | ||
Balance at beginning of period | $ 2,736 | $ 10,213 |
Change due to acquisitions / disposals | 9,509 | 6,573 |
Change related to credit allowance | (79) | |
Other changes in the period | 6,456 | (14,050) |
Balance at end of period | 18,622 | 2,736 |
Contract Liabilities | ||
Balance at beginning of period | 166,918 | 130,986 |
Change due to acquisitions / disposals | 39,885 | 31,556 |
Other changes in the period | 19,434 | 4,376 |
Balance at end of period | 226,237 | 166,918 |
Revenue related to our contract liabilities | $ 165,800 | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||
Contract Liabilities | ||
Revenue related to our contract liabilities | $ 126,700 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Remaining Performance Obligations (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Remaining Performance Obligations | |
The term of the renewable service maintenance agreements (in years) | 1 year |
Practical Expedient | true |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Remaining Performance Obligations | |
Remaining performance obligations | $ 1,510 |
Expected timing of performance obligations | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Minimum | |
Remaining Performance Obligations | |
Expected percentage of remaining performance obligations | 80.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Maximum | |
Remaining Performance Obligations | |
Expected percentage of remaining performance obligations | 85.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Nov. 30, 2021USD ($) | |
Fair Value Measurements | |||
Number of employees covered under life insurance policies | item | 86 | ||
Combined face value of life insurance policies | $ 61,700 | ||
Cash surrender value | $ 5,400 | $ 3,900 | |
Minimum | |||
Fair Value Measurements | |||
Weighted average cost of capital | 9.50% | ||
Maximum | |||
Fair Value Measurements | |||
Weighted average cost of capital | 17.00% | ||
Contingent earn-out obligations | |||
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | |||
Balance at beginning of year | $ 28,497 | 7,375 | |
Issuances | 16,715 | 19,500 | |
Settlements | (10,114) | (1,369) | |
Adjustments to fair value | 9,119 | (2,991) | |
Balance at end of period | 25,979 | 28,497 | |
Recurring basis | Total | |||
Fair Value Measurements | |||
Cash and cash equivalents | 54,896 | 50,788 | |
Life insurance-cash surrender value | 5,420 | 3,905 | |
Contingent earn-out obligations | 25,979 | 28,497 | |
Recurring basis | Quoted Market Prices In Active Markets for Identical Assets (Level 1) | |||
Fair Value Measurements | |||
Cash and cash equivalents | 54,896 | 50,788 | |
Recurring basis | Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) | |||
Fair Value Measurements | |||
Life insurance-cash surrender value | 5,420 | 3,905 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurements | |||
Contingent earn-out obligations | 25,979 | $ 28,497 | |
Non recurring basis | Significant Unobservable Inputs (Level 3) | |||
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | |||
Impairment charges | 0 | ||
Interest Rate Swap | |||
Fair Value Measurements | |||
Net loss on derivative | 300 | ||
Interest Rate Swap | Not Designated as Hedging Instrument, Economic Hedge [Member] | |||
Fair Value Measurements | |||
Notional amount | 130,000 | $ 80,000 | |
Interest Rate Swap | Recurring basis | Total | Not Designated as Hedging Instrument, Economic Hedge [Member] | |||
Fair Value Measurements | |||
Interest rate swap liability | 42 | ||
Interest Rate Swap | Recurring basis | Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) | Not Designated as Hedging Instrument, Economic Hedge [Member] | |||
Fair Value Measurements | |||
Interest rate swap liability | $ 42 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Dec. 31, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Consideration transferred: | ||||||
Total consideration transferred | $ 41,600 | $ 2,600 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Goodwill | $ 464,392 | 464,392 | $ 332,447 | $ 235,182 | ||
TAS Energy | ||||||
Consideration transferred: | ||||||
Cash paid at closing | $ 105,950 | |||||
Working capital adjustment | 40,455 | |||||
Notes issued to former owners | 14,000 | |||||
Estimated fair value of contingent earn-out payments | 9,100 | |||||
Total consideration transferred | 169,505 | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Cash and cash equivalents | 47,460 | |||||
Billed and unbilled accounts receivable | 18,702 | |||||
Other current assets | 15,634 | |||||
Other long-term assets | 1,556 | |||||
Property and equipment | 7,709 | |||||
Goodwill | 72,788 | |||||
Identifiable intangible assets | 53,400 | |||||
Lease right-of-use asset | 19,736 | |||||
Accounts payable | (16,453) | |||||
Billings in excess of costs and estimated earnings | (24,196) | |||||
Current lease liabilities | (2,337) | |||||
Accrued expenses and other current liabilities | (4,109) | |||||
Long-term lease liabilities | (17,398) | |||||
Other long-term liabilities | (2,987) | |||||
Total assets acquired and liabilities assumed | $ 169,505 | |||||
T E C Industrial Construction and Maintenance | ||||||
Consideration transferred: | ||||||
Cash paid at closing | 73,000 | |||||
Working capital adjustment | 2,006 | |||||
Notes issued to former owners | 7,000 | |||||
Estimated fair value of contingent earn-out payments | 7,560 | |||||
Total consideration transferred | 89,566 | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Cash and cash equivalents | 4 | 4 | ||||
Billed and unbilled accounts receivable | 13,660 | 13,660 | ||||
Costs in excess of billings | 2,040 | 2,040 | ||||
Other current assets | 108 | 108 | ||||
Other long-term assets | 53 | 53 | ||||
Property and equipment | 912 | 912 | ||||
Goodwill | 44,431 | 44,431 | ||||
Identifiable intangible assets | 37,200 | 37,200 | ||||
Lease right-of-use asset | 1,234 | 1,234 | ||||
Accounts payable | (4,123) | (4,123) | ||||
Billings in excess of costs and estimated earnings | (2,838) | (2,838) | ||||
Current lease liabilities | (175) | (175) | ||||
Accrued expenses and other current liabilities | (1,881) | (1,881) | ||||
Long-term lease liabilities | (1,059) | (1,059) | ||||
Total assets acquired and liabilities assumed | $ 89,566 | $ 89,566 | ||||
Walker | ||||||
Consideration transferred: | ||||||
Cash paid at closing | $ 178,000 | |||||
Working capital adjustment | 7,800 | |||||
Notes issued to former owners | 25,000 | |||||
Total consideration transferred | 235,400 | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Total assets acquired and liabilities assumed | $ 187,000 |
Acquisitions - Acquired Intangi
Acquisitions - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Dec. 31, 2020 |
TAS Energy | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 53,400 | |
TAS Energy | Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 1 year | |
Estimated Fair Value | $ 5,200 | |
TAS Energy | Trade Name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 25 years | |
Estimated Fair Value | $ 8,200 | |
TAS Energy | Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | |
Estimated Fair Value | $ 40,000 | |
T E C Industrial Construction and Maintenance | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Fair Value | $ 37,200 | |
T E C Industrial Construction and Maintenance | Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 2 years | |
Estimated Fair Value | $ 7,200 | |
T E C Industrial Construction and Maintenance | Trade Name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 20 years | |
Estimated Fair Value | $ 5,800 | |
T E C Industrial Construction and Maintenance | Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 9 years | |
Estimated Fair Value | $ 24,200 |
Acquisitions - Contingent Earn-
Acquisitions - Contingent Earn-out Obligation (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||||||||||||
Revenues | $ 698,961 | $ 714,099 | $ 743,468 | $ 700,131 | $ 719,584 | $ 706,918 | $ 650,302 | $ 538,473 | $ 2,856,659 | $ 2,615,277 | $ 2,182,879 | |||
Federal | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Net operating loss carryforwards | $ 53,200 | $ 44,900 | 44,900 | $ 44,900 | 44,900 | |||||||||
State | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Net operating loss carryforwards | $ 6,500 | $ 46,200 | 46,200 | 46,200 | 46,200 | |||||||||
TAS Energy | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Revenues | 106,400 | |||||||||||||
Contingent earn-out period | 27 months | |||||||||||||
Contingent earn-out estimated milestone payment, minimum | $ 1,000 | |||||||||||||
Contingent earn-out estimated milestone payment, maximum | $ 8,000 | |||||||||||||
Cash flow discount rate | 17.70% | |||||||||||||
TAS Energy | Minimum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash flow discount rate | 15.00% | |||||||||||||
TAS Energy | Maximum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash flow discount rate | 23.50% | |||||||||||||
T E C Industrial Construction and Maintenance | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent earn-out period | 3 years | |||||||||||||
Contingent earn-out estimated milestone payment, minimum | $ 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||
Contingent earn-out estimated milestone payment, maximum | $ 5,000 | $ 5,000 | $ 5,000 | $ 5,000 | ||||||||||
Cash flow discount rate | 12.90% | |||||||||||||
T E C Industrial Construction and Maintenance | Minimum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash flow discount rate | 14.00% | |||||||||||||
T E C Industrial Construction and Maintenance | Maximum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash flow discount rate | 15.00% |
Acquisitions - Other Acquisitio
Acquisitions - Other Acquisitions (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)item | |
Acquisitions | |||
Number of acquisitions | item | 2 | ||
Total purchase price | $ 41.6 | $ 2.6 | |
Walker | |||
Acquisitions | |||
Total purchase price | $ 235.4 | ||
Amount allocated to goodwill and intangible assets for acquisitions | 187 | ||
Purchase price paid in cash | 178 | ||
Promissory note payable | 25 | ||
Advance to former owners | 20.5 | ||
Contingent earn-out obligation | 19.5 | ||
Tax equalization payment | 0.2 | ||
Working capital adjustment | $ 7.8 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets, Net - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the carrying amount of goodwill | ||
Balance at beginning of year | $ 332,447 | $ 235,182 |
Acquisitions and purchase price adjustments (See Note 5) | 131,945 | 97,265 |
Balance at end of period | 464,392 | 332,447 |
Mechanical Services Segment | ||
Changes in the carrying amount of goodwill | ||
Balance at beginning of year | 234,660 | 235,182 |
Acquisitions and purchase price adjustments (See Note 5) | 72,788 | 579 |
Impact of segment reorganization | (1,101) | |
Balance at end of period | 307,448 | 234,660 |
Accumulated impairment charges | 116,600 | 116,600 |
Electrical Services | ||
Changes in the carrying amount of goodwill | ||
Balance at beginning of year | 97,787 | |
Acquisitions and purchase price adjustments (See Note 5) | 59,157 | 96,686 |
Impact of segment reorganization | 1,101 | |
Balance at end of period | $ 156,944 | $ 97,787 |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangible Assets, Net - Identifiable Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 11 years 8 months 12 days | ||
Gross Book Value | $ 366,987 | $ 262,456 | |
Accumulated Amortization | (135,180) | (102,482) | |
Amortization of identifiable intangible assets | 32,698 | 27,082 | $ 20,089 |
Future amortization expense of identifiable intangible assets | |||
2021 | 32,344 | ||
2022 | 27,412 | ||
2023 | 23,514 | ||
2024 | 22,164 | ||
2025 | 19,977 | ||
Thereafter | 106,396 | ||
Total | $ 231,807 | ||
Customer Relationships | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 8 years | ||
Gross Book Value | $ 255,692 | 183,061 | |
Accumulated Amortization | $ (103,919) | (80,813) | |
Customer Relationships | Minimum | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 8 years | ||
Backlog | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 2 years | ||
Gross Book Value | $ 19,800 | 7,400 | |
Accumulated Amortization | $ (12,600) | (6,388) | |
Backlog | Minimum | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 2 years | ||
Trade Name | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 20 years 6 months | ||
Gross Book Value | $ 91,495 | 71,995 | |
Accumulated Amortization | $ (18,661) | $ (15,281) | |
Trade Name | Minimum | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 20 years 6 months | ||
Customer Relationships Noncompete Agreements and Tradenames | Minimum | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 1 year | ||
Customer Relationships Noncompete Agreements and Tradenames | Maximum | |||
Identifiable Intangible Assets, Net | |||
Estimated Useful Lives in Years | 25 years |
Goodwill and Identifiable Int_5
Goodwill and Identifiable Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Impairment Charges [Abstract] | |||
Goodwill | $ 464,392 | $ 332,447 | $ 235,182 |
Impairment testing, Scenario one | |||
Asset Impairment Charges [Abstract] | |||
Impairment testing, discounted cash flow analysis weightage assigned | 50.00% | ||
Impairment testing, Scenario two | |||
Asset Impairment Charges [Abstract] | |||
Impairment testing, public company approach weightage assigned | 50.00% | ||
Walker | |||
Asset Impairment Charges [Abstract] | |||
Percentage of fair values in excess of carrying value of two acquired reporting units | 27.00% | ||
Percentage of fair values in excess of carrying value for Walker reporting unit | 24.00% | ||
Goodwill | $ 96,800 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | |||
Property and equipment, gross | $ 264,408 | $ 239,165 | |
Less-Accumulated depreciation | (147,202) | (129,369) | |
Property and equipment, net | 117,206 | 109,796 | |
Depreciation expense | 27,900 | 24,500 | $ 22,600 |
Land | |||
Property and equipment | |||
Property and equipment, gross | 7,167 | 6,206 | |
Transportation equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 113,802 | 106,972 | |
Transportation equipment | Minimum | |||
Property and equipment | |||
Estimated useful life | 1 year | ||
Transportation equipment | Maximum | |||
Property and equipment | |||
Estimated useful life | 7 years | ||
Machinery and equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 43,386 | 35,575 | |
Machinery and equipment | Minimum | |||
Property and equipment | |||
Estimated useful life | 1 year | ||
Machinery and equipment | Maximum | |||
Property and equipment | |||
Estimated useful life | 20 years | ||
Computer and telephone equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 23,215 | 20,744 | |
Computer and telephone equipment | Minimum | |||
Property and equipment | |||
Estimated useful life | 1 year | ||
Computer and telephone equipment | Maximum | |||
Property and equipment | |||
Estimated useful life | 10 years | ||
Buildings and leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | $ 69,683 | 62,301 | |
Buildings and leasehold improvements | Minimum | |||
Property and equipment | |||
Estimated useful life | 1 year | ||
Buildings and leasehold improvements | Maximum | |||
Property and equipment | |||
Estimated useful life | 40 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Property and equipment, gross | $ 5,861 | 5,244 | |
Furniture and fixtures | Minimum | |||
Property and equipment | |||
Estimated useful life | 1 year | ||
Furniture and fixtures | Maximum | |||
Property and equipment | |||
Estimated useful life | 17 years | ||
Construction in progress | |||
Property and equipment | |||
Property and equipment, gross | $ 1,294 | $ 2,123 |
Detail of Other Current Liabi_3
Detail of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other current liabilities | ||
Accrued warranty costs | $ 8,914 | $ 7,452 |
Current lease liability | 16,586 | 14,016 |
Operating lease liability | 97,162 | 86,713 |
Accrued job losses | 2,151 | 2,226 |
Accrued sales and use tax | 3,731 | 2,938 |
Deferred revenue | 4,559 | 5,506 |
Liabilities due to former owners | 10,280 | 11,219 |
Other current liabilities | 45,271 | 38,273 |
Total other current liabilities | $ 91,492 | $ 81,630 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Obligations | ||
Total principal amount | $ 236,000 | $ 226,483 |
Less-unamortized debt issuance costs | (267) | (348) |
Total debt, net of unamortized debt issuance costs | 235,733 | 226,135 |
Less-current portion | 20,817 | |
Total long-term portion of debt, net | 235,733 | 205,318 |
Revolving credit facility | ||
Debt Obligations | ||
Total principal amount | 70,000 | 28,000 |
Term loan | ||
Debt Obligations | ||
Total principal amount | 135,000 | 150,000 |
Notes to former owners | ||
Debt Obligations | ||
Outstanding balance | $ 31,000 | $ 48,483 |
Debt Obligations - Future Payme
Debt Obligations - Future Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Future principal payments of long-term debt | |||
2022 | $ 23,000 | ||
2023 | 34,000 | ||
2023 | 26,500 | ||
2024 | 152,500 | ||
Total debt | 236,000 | ||
Interest expense | |||
Interest expense on notes to former owners | 1,354 | $ 1,531 | $ 642 |
Interest expense on borrowings and unused commitment fees | 5,319 | 6,887 | 2,211 |
Interest expense on interest rate swaps | 338 | ||
Letter of credit fees | 830 | 512 | 474 |
Amortization of debt financing costs | 544 | 387 | 383 |
Total | $ 8,385 | $ 9,317 | $ 3,710 |
Debt Obligations - Other (Detai
Debt Obligations - Other (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 20, 2019USD ($) | Dec. 19, 2019USD ($) | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Obligations | ||||||
Payments on term loan | $ 15,000 | |||||
Financing and professional cost | $ 1,405 | $ 844 | ||||
Outstanding balance | $ 226,483 | 236,000 | 226,483 | |||
Reconciliation of Credit Facility Adjusted EBITDA to net income | ||||||
Net income | 150,139 | 114,324 | 112,903 | |||
Provision for income taxes | 41,401 | 37,418 | 35,773 | |||
Stock-based compensation | $ 6,934 | 5,878 | $ 7,161 | |||
Principal financial covenants | ||||||
Fixed charge coverage ratio | 2 | |||||
Other disclosures | ||||||
2022 | $ 23,000 | |||||
2023 | 34,000 | |||||
Revolving credit facility | ||||||
Debt Obligations | ||||||
Borrowing capacity | $ 450,000 | |||||
Payments of financing costs line of credit arrangements | 1,000 | |||||
Outstanding borrowings | 70,000 | |||||
Outstanding balance | 28,000 | 70,000 | 28,000 | |||
Letters of credit amount outstanding | 49,500 | |||||
Credit available | 330,500 | |||||
Book value of assets pledged as collateral | $ 167,800 | |||||
Number of quarters of net earnings used for the calculation of the credit facility adjusted EBITDA | item | 4 | |||||
Reconciliation of Credit Facility Adjusted EBITDA to net income | ||||||
Net income | $ 150,139 | |||||
Provision for income taxes | 41,401 | |||||
Interest expense, net | 8,282 | |||||
Depreciation and amortization expense | (60,629) | |||||
Stock-based compensation | 6,934 | |||||
Pre-acquisition results of acquired companies, as defined under the Facility | (18,511) | |||||
Credit Facility Adjusted EBITDA | $ 285,896 | |||||
Principal financial covenants | ||||||
Number of interest rate options | item | 2 | |||||
Leverage ratio | 0.8 | |||||
Fixed charge coverage ratio | 7.2 | |||||
Number of quarters of capital expenditures, tax provision, dividends and stock repurchase payments used for calculation of fixed charge coverage ratio | item | 4 | |||||
Period of Credit Facility Adjusted EBITDA for determining additional margins | 12 months | |||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Weighted average interest rate (as a percent) | 1.40% | |||||
Revolving credit facility | Through maturity | ||||||
Principal financial covenants | ||||||
Leverage ratio | 3 | |||||
Revolving credit facility | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Letter of credit fees (as a percent) | 1.25% | |||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.20% | |||||
Revolving credit facility | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.00 to 1.75 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Letter of credit fees (as a percent) | 1.50% | |||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.25% | |||||
Revolving credit facility | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.75 to 2.50 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Letter of credit fees (as a percent) | 1.75% | |||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.30% | |||||
Revolving credit facility | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.50 or greater | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Letter of credit fees (as a percent) | 2.00% | |||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.35% | |||||
Revolving credit facility | Minimum | ||||||
Principal financial covenants | ||||||
Fixed charge coverage ratio | 1.50 | |||||
Revolving credit facility | Minimum | Covenant Requirement | ||||||
Principal financial covenants | ||||||
Net leverage ratio used as basis for other restrictions | 2.50 | |||||
Revolving credit facility | Maximum | ||||||
Principal financial covenants | ||||||
Permitted amount of acquisitions per transaction | $ 5,000 | |||||
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction | $ 10,000 | |||||
Revolving credit facility | Base Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 0.25% | |||||
Revolving credit facility | Base Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.00 to 1.75 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 0.50% | |||||
Revolving credit facility | Base Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.75 to 2.50 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 0.75% | |||||
Revolving credit facility | Base Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.50 or greater | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 1.00% | |||||
Revolving credit facility | Eurodollar Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 1.25% | |||||
Revolving credit facility | Eurodollar Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.00 to 1.75 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 1.50% | |||||
Revolving credit facility | Eurodollar Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.75 to 2.50 | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 1.75% | |||||
Revolving credit facility | Eurodollar Rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.50 or greater | ||||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 2.00% | |||||
Amended senior revolving credit facility | ||||||
Debt Obligations | ||||||
Borrowing capacity | 600,000 | $ 400,000 | $ 585,000 | |||
Line of credit borrowing capacity accordion option | 150,000 | |||||
Payments on term loan | 15,000 | |||||
Financing and professional cost | 1,400 | |||||
Unamortized costs | $ 1,300 | |||||
Term loan | ||||||
Debt Obligations | ||||||
Borrowing capacity | $ 150,000 | |||||
Repayment in terms of percentage of original aggregate principal amount | 3.75% | 1.25% | ||||
Payments of financing costs term loan | 400 | |||||
Outstanding balance | 150,000 | $ 135,000 | 150,000 | |||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Weighted average interest rate (as a percent) | 1.40% | |||||
Notes to former owners | ||||||
Other disclosures | ||||||
Cumulative number of companies acquired | item | 4 | |||||
Outstanding balance | $ 48,483 | $ 31,000 | $ 48,483 | |||
Promissory note | Walker | ||||||
Other disclosures | ||||||
Outstanding balance | $ 10,000 | |||||
Stated interest rate (as a percent) | 4.00% | |||||
Promissory note | TAS Energy | ||||||
Other disclosures | ||||||
Outstanding balance | $ 8,000 | |||||
Stated interest rate (as a percent) | 3.50% | |||||
Promissory note | T E C Industrial Construction and Maintenance | ||||||
Other disclosures | ||||||
Outstanding balance | $ 7,000 | |||||
Stated interest rate (as a percent) | 2.50% | |||||
Promissory note | Electrical Contractor North Carolina | ||||||
Other disclosures | ||||||
Outstanding balance | $ 6,000 | |||||
Stated interest rate (as a percent) | 3.00% | |||||
Letter of Credit | ||||||
Debt Obligations | ||||||
Borrowing capacity | $ 160,000 | |||||
Federal Funds Rate | Revolving credit facility | Base Rate | ||||||
Market rates relating to interest options | ||||||
Market rate (as a percent) | 0.59% | |||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 0.50% | |||||
Wells Fargo Bank, N.A. Prime Rate | Revolving credit facility | Base Rate | ||||||
Market rates relating to interest options | ||||||
Market rate (as a percent) | 3.25% | |||||
One-month LIBOR | Revolving credit facility | Base Rate | ||||||
Market rates relating to interest options | ||||||
Market rate (as a percent) | 1.14% | |||||
Debt Instrument, Interest Rate, Effective Percentage [Abstract] | ||||||
Additional per annum interest margin (as a percent) | 1.00% | |||||
One-month LIBOR | Revolving credit facility | Eurodollar Rate | ||||||
Market rates relating to interest options | ||||||
Variable rate basis | One-month LIBOR | |||||
Market rate (as a percent) | 0.14% | |||||
Six-month LIBOR | Revolving credit facility | Eurodollar Rate | ||||||
Market rates relating to interest options | ||||||
Variable rate basis | Six-month LIBOR | |||||
Market rate (as a percent) | 0.26% |
Leases (Details)
Leases (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)Option | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Variable lease expense and short-term lease expenses | $ 7.7 | $ 8.4 | |
Weighted average discount rate | 4.20% | 3.90% | |
Lease expense | $ 28.2 | $ 24.8 | $ 23.4 |
Weighted average remaining lease term | 7 years 6 months | 8 years 1 month 6 days | |
Rent paid to related parties | $ 4.2 | $ 3.7 | $ 4.8 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 3 years | ||
Number of options to renew | Option | 1 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 10 years |
Leases - Summary of Lease Asset
Leases - Summary of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of lease asset and liabilities | ||
Lease right-of-use assets | $ 94,727 | $ 84,073 |
Operating Lease, Liability [Abstract] | ||
Other current liabilities | $ 16,586 | $ 14,016 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Long-term lease liabilities | $ 80,576 | $ 72,697 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Long-term lease liabilities | Long-term lease liabilities |
Present Value of Lease Liabilities | $ 97,162 | $ 86,713 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Maturities of lease liabilities: | ||
2021 | $ 20,254 | |
2022 | 17,004 | |
2023 | 14,727 | |
2024 | 13,221 | |
2024 | 12,108 | |
Thereafter | 36,645 | |
Total Lease Payments | 113,959 | |
Less-Present Value Discount | (16,797) | |
Present Value of Lease Liabilities | 97,162 | $ 86,713 |
Supplemental information related to leases: | ||
Cash paid for amounts included in the measurement of lease liabilities | 20,443 | 16,895 |
Lease right-of-use assets obtained in exchange for lease liabilities | $ 27,346 | $ 26,811 |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision- | |||
Federal | $ 36,556 | $ 33,281 | $ 22,728 |
State and Puerto Rico | 12,798 | 8,388 | 8,589 |
Total current | 49,354 | 41,669 | 31,317 |
Deferred tax provision (benefit)- | |||
Federal | (5,483) | (3,750) | 4,347 |
State and Puerto Rico | (2,470) | (501) | 109 |
Total deferred | (7,953) | (4,251) | 4,456 |
Provision for income taxes | $ 41,401 | $ 37,418 | $ 35,773 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||||
Effective tax rates on continuing operations | 21.60% | 24.70% | 24.10% | |
Federal statutory income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | |
Income taxes at the federal statutory rate | $ 40,223 | $ 31,866 | $ 31,222 | |
Increases (decreases) resulting from- | ||||
Net state income taxes | 8,406 | 6,644 | 7,470 | |
Valuation allowances | (254) | (279) | (2,852) | |
Net unrecognized tax benefits | 18,557 | 7,338 | (15) | |
Nondeductible expenses | 2,470 | 2,180 | 1,926 | |
R&D tax credits | $ (4,600) | (26,133) | (4,569) | (2,726) |
179D deduction | (1,062) | (5,126) | ||
Net operating loss carryforwards | 2,225 | |||
Stock-based compensation deductions | (426) | (714) | (1,293) | |
Other | (380) | 78 | (184) | |
Provision for income taxes | $ 41,401 | 37,418 | $ 35,773 | |
179D deduction | $ (2,200) |
Income Taxes - Provision Change
Income Taxes - Provision Changes, Examination (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||||||
Change in provision for income taxes | $ 2,800 | ||||||
R&D tax credits | $ 4,600 | $ 26,133 | $ 4,569 | $ 2,726 | |||
Additions based on tax positions related to prior years | $ 26,400 | $ 7,300 | 26,858 | 7,473 | 2,726 | ||
Net operating loss carryforwards | 2,225 | ||||||
179D deduction | 2,200 | ||||||
Reduced provision for income taxes | 8,300 | 8,301 | |||||
Provision for income taxes | $ 41,401 | $ 37,418 | $ 35,773 | ||||
Internal Revenue Service (IRS) | |||||||
Income Taxes | |||||||
Refund claims allowed in Income tax examination | 8,900 | ||||||
Tax Year 2016 | |||||||
Income Taxes | |||||||
Provision for income taxes | 6,100 | ||||||
Tax Year 2017 | |||||||
Income Taxes | |||||||
Provision for income taxes | 8,500 | ||||||
Tax Year 2018 | |||||||
Income Taxes | |||||||
Provision for income taxes | 11,900 | ||||||
Total Tax Years 2016-2018 | |||||||
Income Taxes | |||||||
Provision for income taxes | $ 26,500 | ||||||
179D Deduction | |||||||
Income Taxes | |||||||
Reduced provision for income taxes | $ 1,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets- | ||
Accounts receivable and allowance for doubtful accounts | $ 2,186 | $ 1,660 |
Stock-based compensation | 2,791 | 2,561 |
Accrued liabilities and expenses | 39,761 | 25,569 |
Lease liabilities | 22,768 | 20,873 |
Net operating loss carryforwards | 12,127 | 2,750 |
Intangible assets | 7,988 | |
Other | 627 | 525 |
Subtotal | 80,260 | 61,926 |
Valuation allowances | (514) | (369) |
Total deferred tax assets | 79,746 | 61,557 |
Property and equipment | (13,877) | (11,286) |
Deferred tax liabilities | 1,339 | 1,425 |
Lease right-of-use asset | (22,715) | (20,873) |
Long-term contracts | (609) | (876) |
Intangible assets | (242) | |
Goodwill | (11,615) | (6,020) |
Other | (2,626) | (2,004) |
Total deferred tax liabilities | (51,684) | (41,059) |
Net deferred tax assets | 28,062 | 20,498 |
Deferred income tax assets | ||
Deferred tax assets | $ 29,401 | $ 21,923 |
Income Taxes - Loss Carryforwar
Income Taxes - Loss Carryforwards and Other (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 01, 2020 | |
Operating loss carryforwards | ||||||
Federal deferred tax assets net operating loss carryforwards | $ 9,400 | |||||
State deferred tax assets net operating loss carryforwards | 2,700 | |||||
Net deferred tax assets | 79,746 | $ 61,557 | ||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties | ||||||
Balance at beginning of year | 10,199 | 2,966 | $ 8,929 | |||
Additions based on tax positions related to prior years | $ 26,400 | $ 7,300 | 26,858 | 7,473 | 2,726 | |
Reductions for tax positions related to prior years | (240) | (8,689) | ||||
Reductions for settlements with tax authorities | (8,300) | (8,301) | ||||
Balance at end of year | 28,756 | 10,199 | 2,966 | |||
Interest and penalties accrued | 0 | 0 | 600 | |||
Reduced provision for income taxes | $ 8,300 | 8,301 | ||||
Federal | ||||||
Operating loss carryforwards | ||||||
Net operating loss carryforwards | 44,900 | $ 53,200 | ||||
State | ||||||
Operating loss carryforwards | ||||||
Net operating loss carryforwards | 46,200 | $ 6,500 | ||||
Increase in valuation allowance | 500 | |||||
Net deferred tax assets | 2,200 | |||||
Maximum | ||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties | ||||||
Decrease in unrecognized tax benefits | $ 28,800 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Employee Benefit Plans | |||
Percentage of contributions of covered employees' salaries or wages | 2.50% | ||
Contribution | $ 16.3 | $ 14.2 | $ 10.8 |
Amount payable to plan | $ 0.5 | $ 0.3 | |
Number of employees who are union members | item | 6 | 7 | |
Contributions made to multi-employer pension plans | $ 0 | $ 0 | $ 0 |
Period in which certain individuals are entitled to fixed annual payments | 15 years | ||
Maximum age under which certain individuals are entitled to fixed annual payments | 65 years | ||
Portion of benefits vesting after ten years of completed service (as a percent) | 50.00% | ||
Period of completed service over which 50% of benefits are vested | 10 years | ||
Portion of benefits vesting after fifteen years of completed service (as a percent) | 75.00% | ||
Period of completed service over which 75% of benefits are vested | 15 years | ||
Period of service over which benefits are fully vested | 20 years | ||
Unfunded benefit liability | $ 4 | $ 4.1 |
Commitments and Contingencies -
Commitments and Contingencies - Other and Bonds (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)item | |
Obligation to perform subcontract work | Pending Litigation | |
Commitments and Contingencies | |
Letter of intent under dispute | item | 2 |
Damages stated | $ 9 |
Obligation to perform subcontract work | Customer | Pending Litigation | |
Commitments and Contingencies | |
Damages claimed | $ 15 |
Surety | Minimum | |
Surety | |
Percentage of business which has required bonds | 15.00% |
Surety | Maximum | |
Surety | |
Percentage of business which has required bonds | 25.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Self-Insurance (Details) | Dec. 31, 2020USD ($)item |
Self-Insurance | |
Amount of loss fully insured above per-incident deductible amount | $ 132,500,000 |
Amount of excess loss insurance covered | 132,500,000 |
Workers' Compensation | |
Self-Insurance | |
Per incident deductible amount | 250,000,000,000 |
Amount of loss fully insured above per-incident deductible amount | 250,000,000,000 |
Employer's Liability | |
Self-Insurance | |
Per incident deductible amount | 250,000,000,000 |
Employer's Liability | Maximum | |
Self-Insurance | |
Amount of excess loss insurance covered | 132,500,000 |
General Liability | |
Self-Insurance | |
Per incident deductible amount | 250,000,000,000 |
Amount of loss fully insured above per-incident deductible amount | 10,000,000 |
General Liability | Maximum | |
Self-Insurance | |
Amount of excess loss insurance covered | 132,500,000 |
Auto Liability | |
Self-Insurance | |
Per incident deductible amount | 250,000,000,000 |
Amount of loss fully insured above per-incident deductible amount | 10,000,000 |
Auto Liability | Maximum | |
Self-Insurance | |
Amount of excess loss insurance covered | $ 132,500,000 |
Employee Medical | |
Self-Insurance | |
Number of medical plans | item | 3 |
Employee Medical - Plan One | |
Self-Insurance | |
Per person, per policy deductible amount | $ 350,000 |
Employee Medical - Plan Two | |
Self-Insurance | |
Per person, per policy deductible amount | 350,000 |
Employee Medical - Plan Three | |
Self-Insurance | |
Per incident deductible amount | $ 350,000 |
Stockholders' Equity - Incentiv
Stockholders' Equity - Incentive and Other (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | 165 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 08, 2020 | May 31, 2017 | May 31, 2012 | Mar. 29, 2007 | |
Share Repurchase Program | ||||||||
Share repurchase | $ 30,120 | $ 19,550 | $ 28,533 | |||||
2012 Equity Incentive Plan | ||||||||
Stockholders' Equity | ||||||||
Number of shares authorized and reserved for issuance | 5.1 | |||||||
Number of shares available for issuance | 2.9 | 2.9 | ||||||
2017 Omnibus Incentive Plan | ||||||||
Stockholders' Equity | ||||||||
Number of shares authorized and reserved for issuance | 2.9 | |||||||
Number of shares available for issuance | 2 | 2 | ||||||
Stock Repurchase Program 2007 | ||||||||
Share Repurchase Program | ||||||||
Number of shares of outstanding common stock authorized to be acquired under a stock repurchase program | 10.3 | 1 | ||||||
Additional number of shares authorized for repurchase | 0.7 | |||||||
Share repurchase (in shares) | 0.7 | 9.3 | ||||||
Average price (in dollars per share) | $ 43.99 | $ 19.63 | ||||||
Repurchased carrying basis | $ 30,100 | $ 30,100 |
Stockholders' Equity - Anti-Dil
Stockholders' Equity - Anti-Dilutive Stock Options (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | Maximum | |||
Earnings Per Share | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 0.1 | 0.1 | 0.1 |
Stockholders' Equity - Number o
Stockholders' Equity - Number of Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share | |||
Common shares outstanding, end of period | 36,188 | 36,658 | 36,894 |
Effect of using weighted average common shares outstanding | 354 | 196 | 308 |
Shares used in computing earnings per share-basic | 36,542 | 36,854 | 37,202 |
Effect of shares issuable under stock option plans based on the treasury stock method | 123 | 204 | 283 |
Effect of restricted and contingently issuable shares | 73 | 73 | 107 |
Shares used in computing earnings per share-diluted | 36,738 | 37,131 | 37,592 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ 6.9 | $ 5.9 | $ 7.2 |
Income tax benefit | $ 1.5 | $ 1.3 | 1.5 |
Minimum | |||
Stock-Based Compensation | |||
Sum of age and years of service for accelerated vesting on retirement of certain stock options and restricted stock awards | 75 years | ||
Stock Options | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Shares | |||
Outstanding at beginning of year (in shares) | 382 | ||
Exercised (in shares) | (114) | ||
Outstanding at end of year (in shares) | 268 | 382 | |
Options exercisable at end of year (in shares) | 241 | ||
Weighted-Average Exercise Price | |||
Outstanding at beginning of year (in dollars per share) | $ 27.06 | ||
Exercised (in dollars per share) | 18.85 | ||
Outstanding at end of year (in dollars per share) | $ 30.53 | $ 27.06 | |
Other information | |||
Intrinsic value of options exercised | $ 3.2 | $ 3.5 | $ 6.7 |
Weighted-average remaining contractual term of options exercisable | 5 years 2 months 12 days | ||
Aggregate intrinsic value of options exercisable | $ 5.7 | ||
Number of options that are vested and expected to vest (in shares) | 300 | ||
Weighted average exercise price of options that are vested and expected to vest (in dollars per share) | $ 30.53 | ||
Weighted-average remaining contractual term of options that are vested and expected to vest | 5 years 4 months 24 days | ||
Aggregate intrinsic value of options that are vested and expected to vest | $ 5.9 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Plan Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
$11.21 - $15.00 | |
Stock-Based Compensation | |
Exercise price, low end of range (in dollars per share) | $ 11.21 |
Exercise price, high end of range (in dollars per share) | 15 |
$15.01 - $35.00 | |
Stock-Based Compensation | |
Exercise price, low end of range (in dollars per share) | 15.01 |
Exercise price, high end of range (in dollars per share) | 35 |
$35.01 - $42.50 | |
Stock-Based Compensation | |
Exercise price, low end of range (in dollars per share) | 35.01 |
Exercise price, high end of range (in dollars per share) | 42.50 |
$11.21 - $42.50 | |
Stock-Based Compensation | |
Exercise price, low end of range (in dollars per share) | 11.21 |
Exercise price, high end of range (in dollars per share) | $ 42.50 |
Stock Options | $11.21 - $15.00 | |
Options Outstanding | |
Number of Shares | shares | 14 |
Weighted-Average Remaining Contractual Life | 2 years 2 months 12 days |
Weighted-Average Exercise Price (in dollars per share) | $ 13.76 |
Options Exercisable | |
Number of Shares | shares | 14 |
Weighted-Average Exercise Price (in dollars per share) | $ 13.76 |
Stock Options | $15.01 - $35.00 | |
Options Outstanding | |
Number of Shares | shares | 130 |
Weighted-Average Remaining Contractual Life | 4 years 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $ 23.54 |
Options Exercisable | |
Number of Shares | shares | 130 |
Weighted-Average Exercise Price (in dollars per share) | $ 23.54 |
Stock Options | $35.01 - $42.50 | |
Options Outstanding | |
Number of Shares | shares | 124 |
Weighted-Average Remaining Contractual Life | 6 years 9 months 18 days |
Weighted-Average Exercise Price (in dollars per share) | $ 39.78 |
Options Exercisable | |
Number of Shares | shares | 97 |
Weighted-Average Exercise Price (in dollars per share) | $ 39.02 |
Stock Options | $11.21 - $42.50 | |
Options Outstanding | |
Number of Shares | shares | 268 |
Weighted-Average Remaining Contractual Life | 5 years 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $ 30.53 |
Options Exercisable | |
Number of Shares | shares | 241 |
Weighted-Average Exercise Price (in dollars per share) | $ 29.18 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)item$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | |
Fair value assumptions: | |||
Expected term | 5 years 3 months 18 days | ||
Additional information | |||
Stock-based compensation expense | $ | $ 6.9 | $ 5.9 | $ 7.2 |
Stock Options | |||
Stock-Based Compensation | |||
Weighted-average fair value per share of options granted (in dollars per share) | $ 13.06 | ||
Fair value assumptions: | |||
Expected dividend yield (as a percent) | 0.79% | ||
Expected stock price volatility (as a percent) | 31.70% | ||
Risk-free interest rate (as a percent) | 2.66% | ||
Other information | |||
Compensation expense yet to be recognized | $ | $ 0.1 | ||
Weighted-average period over which compensation cost will be recognized | 3 months 18 days | ||
Total fair value of options vested | $ | $ 0.7 | ||
Nonvested Options, Shares | |||
Nonvested at beginning of year (in shares) | shares | 81 | ||
Vested (in shares) | shares | (54) | ||
Nonvested at end of year (in shares) | shares | 27 | 81 | |
Nonvested Options, Weighted-Average Grant Date Fair Value | |||
Nonvested at beginning of year (in dollars per share) | $ 12.53 | ||
Granted (in dollars per share) | $ 13.06 | ||
Vested (in dollars per share) | 12.26 | ||
Nonvested at end of year (in dollars per share) | $ 13.06 | $ 12.53 | |
Additional information | |||
Vesting period | 3 years | ||
Restricted Stock and Restricted Stock Units | |||
Other information | |||
Compensation expense yet to be recognized | $ | $ 1.1 | ||
Weighted-average period over which compensation cost will be recognized | 1 year 9 months 18 days | ||
Shares | |||
Unvested at beginning of year (in shares) | shares | 91 | ||
Granted (in shares) | shares | 118 | ||
Vested (in shares) | shares | (85) | ||
Forfeited (in shares) | shares | (4) | ||
Unvested at end of year (in shares) | shares | 120 | 91 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of year (in dollars per share) | $ 47.58 | ||
Granted (in dollars per share) | 39.03 | $ 51.02 | 44.02 |
Vested (in dollars per share) | 39.13 | ||
Forfeited (in dollars per share) | 45.21 | ||
Unvested at end of year (in dollars per share) | $ 45.21 | 47.58 | |
Additional information | |||
Fair value of shares vested | $ | $ 3.3 | ||
Weighted-average fair value (in dollars per share) | $ 39.03 | $ 51.02 | $ 44.02 |
Aggregate intrinsic value of restricted stock vested | $ | $ 2.9 | $ 3.5 | $ 3.3 |
Performance Stock Units | |||
Other information | |||
Compensation expense yet to be recognized | $ | $ 0.7 | ||
Weighted-average period over which compensation cost will be recognized | 1 year 4 months 24 days | ||
Additional information | |||
Vesting period | 3 years | ||
Types of performance units | item | 2 | ||
Percentage of units measured on stock price relative to peer group | 50.00% | ||
Percentage of units measured on stock price based on pre determined EPS | 50.00% | ||
Period for which shareholder return is compared with peer group for units determined by EPS performance | 3 years | ||
Calculated fair market value | $ | $ 6.2 | ||
Value of PSUs granted | $ | 2.2 | ||
Stock-based compensation expense | $ | $ 2.7 | $ 1.9 | $ 2.9 |
Performance Stock Units | Minimum | |||
Additional information | |||
Performance measures for dollar denominated award granted | 0 | ||
Performance Stock Units | Maximum | |||
Additional information | |||
Performance measures for dollar denominated award granted | 2 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Revenue | $ 698,961 | $ 714,099 | $ 743,468 | $ 700,131 | $ 719,584 | $ 706,918 | $ 650,302 | $ 538,473 | $ 2,856,659 | $ 2,615,277 | $ 2,182,879 |
Gross Profit | 136,999 | $ 147,196 | $ 145,695 | $ 117,093 | 132,560 | $ 142,702 | $ 120,016 | $ 106,665 | 546,983 | 501,943 | 446,279 |
Capital Expenditures | 24,131 | 31,750 | 27,268 | ||||||||
Total Assets | 1,757,355 | 1,505,012 | 1,757,355 | 1,505,012 | |||||||
Operating | Mechanical Services | |||||||||||
Segment Information | |||||||||||
Revenue | 2,413,016 | 2,251,560 | 2,176,223 | ||||||||
Gross Profit | 509,740 | 465,144 | 444,960 | ||||||||
Capital Expenditures | 22,550 | 27,933 | 25,945 | ||||||||
Total Assets | 1,215,985 | 1,056,609 | 1,215,985 | 1,056,609 | |||||||
Operating | Electrical Services | |||||||||||
Segment Information | |||||||||||
Revenue | 443,643 | 363,717 | 6,656 | ||||||||
Gross Profit | 37,243 | 36,799 | 1,319 | ||||||||
Capital Expenditures | 955 | 1,504 | 57 | ||||||||
Total Assets | 449,588 | 372,254 | 449,588 | 372,254 | |||||||
Corporate & Eliminations | |||||||||||
Segment Information | |||||||||||
Capital Expenditures | 626 | 2,313 | $ 1,266 | ||||||||
Total Assets | $ 91,782 | $ 76,149 | $ 91,782 | $ 76,149 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Selected Quarterly Financial Data | |||||||||||
Revenue | $ 698,961 | $ 714,099 | $ 743,468 | $ 700,131 | $ 719,584 | $ 706,918 | $ 650,302 | $ 538,473 | $ 2,856,659 | $ 2,615,277 | $ 2,182,879 |
Gross Profit | 136,999 | 147,196 | 145,695 | 117,093 | 132,560 | 142,702 | 120,016 | 106,665 | 546,983 | 501,943 | 446,279 |
Net income | $ 42,840 | $ 50,088 | $ 39,495 | $ 17,716 | $ 34,052 | $ 36,233 | $ 24,173 | $ 19,866 | $ 150,139 | $ 114,324 | $ 112,903 |
Basic- | |||||||||||
Basic (in dollars per share) | $ 1.18 | $ 1.37 | $ 1.08 | $ 0.48 | $ 0.93 | $ 0.98 | $ 0.65 | $ 0.54 | $ 4.11 | $ 3.10 | $ 3.03 |
Diluted- | |||||||||||
Diluted (in dollars per share) | $ 1.17 | $ 1.36 | $ 1.08 | $ 0.48 | $ 0.92 | $ 0.98 | $ 0.65 | $ 0.53 | $ 4.09 | $ 3.08 | $ 3 |
Gain due to insurance proceeds received | $ 4,800 |