Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 07, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36541 | ||
Entity Registrant Name | LIMBACH HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-5399422 | ||
Entity Address, Address Line One | 797 Commonwealth Drive | ||
Entity Address, Address Line Two | |||
Entity Address, City or Town | Warrendale | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 15086 | ||
City Area Code | 412 | ||
Local Phone Number | 359-2100 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | LMB | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 49 | ||
Entity Common Stock, Shares Outstanding | 10,449,689 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement relating to the registrant’s 2023 Annual Meeting of Stockholders to be filed hereafter are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001606163 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Crowe LLP |
Auditor Location | Atlanta, Georgia |
Auditor Firm ID | 173 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 36,001 | $ 14,476 |
Restricted cash | 113 | 113 |
Accounts receivable (net of allowance for doubtful accounts of $234 and $263 as of December 31, 2022 and 2021, respectively) | 124,442 | 89,327 |
Contract assets | 61,453 | 83,863 |
Advances to and equity in joint ventures, net | 12 | 12 |
Income tax receivable | 95 | 114 |
Other current assets | 3,874 | 5,001 |
Total current assets | 225,990 | 192,906 |
Property and equipment, net | 18,224 | 21,621 |
Intangible assets, net | 15,340 | 16,907 |
Goodwill | 11,370 | 11,370 |
Operating lease right-of-use assets | 18,288 | 20,119 |
Deferred tax asset | 4,829 | 4,330 |
Other assets | 515 | 259 |
Total assets | 294,556 | 267,512 |
Current liabilities: | ||
Current portion of long-term debt | 9,564 | 9,879 |
Current operating lease liabilities | 3,562 | 4,366 |
Accounts payable, including retainage | 75,122 | 63,840 |
Contract liabilities | 44,007 | 26,712 |
Accrued income taxes | 1,888 | 501 |
Accrued expenses and other current liabilities | 24,942 | 24,444 |
Total current liabilities | 159,085 | 129,742 |
Long-term debt | 21,528 | 29,816 |
Long-term operating lease liabilities | 15,643 | 16,576 |
Other long-term liabilities | 2,858 | 3,540 |
Total liabilities | 199,114 | 179,674 |
Commitments and contingencies | ||
Redeemable convertible preferred stock, net, par value $0.0001, $1,000,000 shares authorized, no shares issued and outstanding ($0 redemption value) | 0 | 0 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, issued 10,471,410 and 10,304,242, respectively; 10,291,758 and 10,304,242 outstanding, respectively | 1 | 1 |
Additional paid-in capital | 87,809 | 85,004 |
Treasury stock, at cost (179,652 and — shares, respectively) | (2,000) | 0 |
Retained earnings | 9,632 | 2,833 |
Total stockholders’ equity | 95,442 | 87,838 |
Total liabilities and stockholders’ equity | $ 294,556 | $ 267,512 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for doubtful accounts | $ 234,000 | $ 263,000 |
Common stock, par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 10,471,410 | 10,304,242 |
Common stock, shares, outstanding (in shares) | 10,291,758 | 10,304,242 |
Treasury stock (in shares) | 179,652 | 0 |
Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 |
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 |
Redeemable convertible preferred stock, redemption value | $ 0 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 496,782 | $ 490,351 |
Cost of revenue | 403,041 | 404,441 |
Gross profit | 93,741 | 85,910 |
Operating expenses: | ||
Selling, general and administrative | 77,879 | 71,436 |
Change in fair value of contingent consideration | 2,285 | 0 |
Amortization of intangibles | 1,567 | 484 |
Total operating expenses | 81,731 | 71,920 |
Operating income | 12,010 | 13,990 |
Other (expenses) income: | ||
Interest expense, net | (2,144) | (2,568) |
Loss on early termination of operating lease | (849) | 0 |
Loss on early debt extinguishment | 0 | (1,961) |
Gain on change in fair value of interest rate swap | 310 | 0 |
Gain on disposition of property and equipment | 281 | 2 |
Gain on change in fair value of warrant liability | 0 | 14 |
Total other expenses | (2,402) | (4,513) |
Income before income taxes | 9,608 | 9,477 |
Income tax provision | 2,809 | 2,763 |
Net income | $ 6,799 | $ 6,714 |
Net income per share: | ||
Basic (in usd per share) | $ 0.65 | $ 0.67 |
Diluted (in usd per share) | $ 0.64 | $ 0.66 |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 10,425,119 | 10,013,117 |
Diluted (in shares) | 10,676,534 | 10,231,637 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Number of Shares | Additional paid-in capital | Treasury stock, at cost | (Accumulated deficit) retained earnings |
Beginning balance (in shares) at Dec. 31, 2020 | 7,926,137 | ||||
Treasury stock (in shares) at Dec. 31, 2020 | 0 | ||||
Beginning Balance at Dec. 31, 2020 | $ 53,732 | $ 1 | $ 57,612 | $ 0 | $ (3,881) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued related to sale of common stock (in shares) | 2,051,025 | ||||
Shares issued related to sale of common stock | 22,773 | 22,773 | |||
Exercise of warrants (in shares) | 172,874 | ||||
Exercise of warrants | 1,989 | 1,989 | |||
Shares issued related to vested restricted stock units (in shares) | 129,138 | ||||
Shares issued related to vested restricted stock units | 0 | ||||
Tax withholding related to vested restricted stock units | (191) | (191) | |||
Stock-based compensation | 2,601 | 2,601 | |||
Proceeds related to employee stock purchase plan | 220 | 220 | |||
Shares issued related to employee stock purchase plan (in shares) | 25,068 | ||||
Net income | $ 6,714 | 6,714 | |||
Ending balance (in shares) at Dec. 31, 2021 | 10,304,242 | ||||
Treasury stock (in shares) at Dec. 31, 2021 | 0 | 0 | |||
Ending Balance at Dec. 31, 2021 | $ 87,838 | $ 1 | 85,004 | $ 0 | 2,833 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued related to vested restricted stock units (in shares) | 129,678 | ||||
Shares issued related to vested restricted stock units | 0 | ||||
Tax withholding related to vested restricted stock units | (148) | (148) | |||
Stock-based compensation | 2,742 | 2,742 | |||
Proceeds related to employee stock purchase plan | 211 | 211 | |||
Shares issued related to employee stock purchase plan (in shares) | 37,490 | ||||
Repurchase of common stock under Share Repurchase Program (in shares) | (179,652) | ||||
Repurchase of common stock under Share Repurchase Program | (2,000) | $ (2,000) | |||
Net income | $ 6,799 | 6,799 | |||
Ending balance (in shares) at Dec. 31, 2022 | 10,471,410 | ||||
Treasury stock (in shares) at Dec. 31, 2022 | (179,652) | (179,652) | |||
Ending Balance at Dec. 31, 2022 | $ 95,442 | $ 1 | $ 87,809 | $ (2,000) | $ 9,632 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 6,799 | $ 6,714 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 8,158 | 5,948 |
Noncash operating lease expense | 4,260 | 4,268 |
Provision for doubtful accounts | 292 | 198 |
Stock-based compensation expense | 2,742 | 2,601 |
Loss on early debt extinguishment | 0 | 1,961 |
Loss on early termination of operating lease | 849 | 0 |
Amortization of debt discount and issuance costs | 138 | 280 |
Deferred income tax provision | (499) | 1,757 |
Gain on change in fair value of warrant liability | 0 | (14) |
Gain on sale of property and equipment | (281) | (2) |
Gain on change in fair value of interest rate swap | (310) | 0 |
Loss on change in fair value of contingent consideration | 2,285 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (35,407) | 3,408 |
Contract assets | 22,410 | (15,054) |
Other current assets | 1,128 | (555) |
Accounts payable, including retainage | 11,282 | (5,578) |
Contract liabilities | 17,296 | (20,399) |
Income tax receivable | 19 | (114) |
Accrued income taxes | 1,387 | (1,170) |
Accrued expenses and other current liabilities | (2,934) | (706) |
Operating lease liabilities | (4,133) | (4,083) |
Other long-term liabilities | (108) | (3,693) |
Net cash provided by (used in) operating activities | 35,373 | (24,233) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 498 | 467 |
Jake Marshall Transaction, net of cash acquired | 0 | (18,977) |
Advances to joint ventures | 0 | (2) |
Purchase of property and equipment | (993) | (791) |
Net cash used in investing activities | (495) | (19,303) |
Cash flows from financing activities: | ||
Proceeds from Wintrust and A&R Wintrust Term Loans | 0 | 40,000 |
Payments on Wintrust and A&R Wintrust Term Loans | (13,429) | (5,119) |
Proceeds from A&R Wintrust Revolving Loan | 15,194 | 0 |
Payment on A&R Wintrust Revolving Loan | (15,194) | 0 |
Payments on 2019 Refinancing Term Loan | 0 | (39,000) |
Proceeds from financing transaction | 5,400 | 0 |
Payments on financing liability | (49) | 0 |
Prepayment penalty and other costs associated with debt extinguishment | 0 | (1,376) |
Proceeds from sale of common stock | 0 | 22,773 |
Repurchase of common stock under Share Repurchase Program | (2,000) | 0 |
Proceeds from exercise of warrants | 0 | 1,989 |
Payments on finance leases | (2,734) | (2,623) |
Proceeds from contributions to employee stock purchase plan | 309 | 323 |
Taxes paid related to net-share settlement of equity awards | (417) | (459) |
Payments of debt issuance costs | (433) | (643) |
Net cash (used in) provided by financing activities | (13,353) | 15,865 |
Increase (decrease) in cash, cash equivalents and restricted cash | 21,525 | (27,671) |
Cash, cash equivalents and restricted cash, beginning of year | 14,589 | 42,260 |
Cash, cash equivalents and restricted cash, end of year | 36,114 | 14,589 |
Noncash investing and financing transactions: | ||
Earnout Payments associated with the Jake Marshall Transaction | 0 | 3,089 |
Right of use assets obtained in exchange for new operating lease liabilities | 0 | 5,417 |
Right of use assets obtained in exchange for new finance lease liabilities | 2,634 | 1,296 |
Right of use assets disposed or adjusted modifying operating leases liabilities | 2,455 | 219 |
Right of use assets disposed or adjusted modifying finance leases liabilities | (77) | 0 |
Interest paid | 2,005 | 2,549 |
Cash paid for income taxes | $ 1,979 | $ 2,290 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and OrganizationLimbach Holdings, Inc. (the “Company,” “we” or “us”), a Delaware corporation headquartered in Warrendale, Pennsylvania, was formed on July 20, 2016 as a result of a business combination with Limbach Holdings LLC (“LHLLC”). The Company is a building systems solutions firm with expertise in the design, prefabrication, installation, management and maintenance of heating, ventilation, air-conditioning (“HVAC”), mechanical, electrical, plumbing and controls systems. The Company provides comprehensive facility services consisting of mechanical construction, full HVAC service and maintenance, energy audits and retrofits, engineering and design build services, constructability evaluation, equipment and materials selection, offsite/prefabrication construction, and the complete range of sustainable building solutions. The Company’s customers operate in diverse industries including, but not limited to, data centers and healthcare, industrial and light manufacturing, cultural and entertainment, higher education, and life science facilities. The Company operates primarily in the Northeast, Mid-Atlantic, Southeast and Midwest regions of the United States.The Company operates in two segments, (i) General Contractor Relationships (“GCR”), in which the Company generally manages new construction or renovation projects that involve primarily HVAC, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) Owner Direct Relationships (“ODR”), in which the Company performs owner direct projects and/or provides maintenance or service primarily on HVAC, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. This work is primarily performed under fixed price, modified fixed price, and time and material contracts over periods of typically less than two years. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and based on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. Principles of Consolidation References in these financial statements to the Company refer collectively to the accounts of Limbach Holdings, Inc. and its wholly-owned subsidiaries, including LHLLC, Limbach Facility Services LLC (“LFS”), Limbach Company LLC (“LC LLC”), Limbach Company LP, Harper Limbach LLC, Harper Limbach Construction LLC, Limbach Facility & Project Solutions LLC, Jake Marshall, LLC (“JMLLC”) and Coating Solutions, LLC (“CSLLC”) for all periods presented, unless otherwise indicated. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements for assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the reported period, and the accompanying notes. Management believes that its most significant estimates and assumptions have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. The Company’s significant estimates include estimates associated with revenue recognition on construction contracts, costs incurred through each balance sheet date, intangibles, property and equipment, fair value accounting for acquisitions, insurance reserves, income tax valuation allowances, fair value of contingent consideration arrangements and contingencies. If the underlying estimates and assumptions upon which the consolidated financial statements are based change in the future, actual amounts may differ from those included in the accompanying consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents consist principally of currency on hand and demand deposits at commercial banks. The Company maintains demand accounts at several domestic banks. The Company's cash balances with financial institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage limit of $0.25 million. The Company's cash balances on deposit at December 31, 2022 and 2021, exceeded the balance insured by the FDIC by approximately $34.7 million and $13.5 million, respectively. Restricted Cash Restricted cash is cash held at a commercial bank in an imprest account held for the purpose of funding workers’ compensation and general liability claims against the Company. This amount is replenished either when depleted or at the beginning of each month. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: (in thousands) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 36,001 $ 14,476 Restricted cash 113 113 Total cash, cash equivalents and restricted cash $ 36,114 $ 14,589 Accounts Receivable and Allowance for Doubtful Accounts The carrying value of the receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. Management provides for probable uncollectible accounts through a charge to earnings and a credit to the valuation account based on its assessment of the current status of individual accounts, type of service performed, and current economic conditions. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and an adjustment of the account receivable. The majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable as current assets. Based on assessments by management, allowances for doubtful accounts were approximately $0.2 million and $0.3 million at December 31, 2022 and 2021, respectively. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326) , Measurement of Credit Losses on Financial Instruments. See below for further discussion. Joint Ventures The Company accounts for its participation in certain special purpose, project specific joint ventures under the equity method of accounting. The Company’s entry into these joint ventures is for the purpose of bidding, negotiating and completing specific projects. The Company and its joint venture partner(s) separately enter into their own sub-contracts with the joint venture for each party’s respective portion of the work. All revenue and expenses and the related contract assets and liabilities related to the Company’s sub-contract are recorded within the Company’s statements of operations and balance sheets, similarly to any other construction project. The joint venture itself does not accumulate any profits or losses, as the joint venture revenue is equal to the sum of the subcontracts it issues to the joint venture partners. The voting power and management of the joint ventures are shared equally by the joint venture partners, qualifying these entities for joint venture treatment under GAAP. The shared voting power and management responsibilities allow the Company to exercise significant influence without controlling the joint venture entity. As such, the Company applies the equity method of accounting as defined in ASC Topic 323, Investments – Equity Method and Joint Ventures . Revenue Recognition The Company’s revenue is primarily derived from construction-type and service contracts that generally range from three months to two years. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . ASC Topic 606 provides for a five-step model for recognizing revenue from contracts with customers as follows: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue Identify the contract with a customer. A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectability of consideration is probable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with our customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectability of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and our prior collection history with such customer. Identify the performance obligations in the contract . At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for purposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price. The transaction price represents the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to our customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. Such methods include: (a) the expected value method, whereby the amount of variable consideration to be recognized represents the sum of probability weighted amounts in a range of possible consideration amounts, and (b) the most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including historical, current, and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the most likely amount method is typically utilized in situations where a contract has only two possible outcomes. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts. Pending change orders represent one of the most common forms of variable consideration included within contract value and typically 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. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied. Contract claims are another form of variable consideration which is common within our industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by us in connection with claims, such litigation costs are expensed as incurred, although we may seek to recover these costs. Allocate the transaction price to performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation. Recognize revenue as performance obligations are satisfied. Throughout the execution of our construction-type contracts, the Company recognizes revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company. Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Certain construction-type contracts include retention provisions to provide assurance to our customers that we will perform in accordance with the contract terms and are not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work by the customer. The Company has determined there are no significant financing components in our contracts during the years ended December 31, 2022 and 2021. For our service-type contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service-type contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Costs to fulfill our contracts (“pre-bid costs”) that are not expected to be recovered from the customer are expensed as incurred and included in selling, general and administrative expenses on our consolidated statements of operations. In accordance with industry practice, we classify as current all assets and liabilities relating to the performance of contracts. See Note 4 – Revenue from Contracts with Customers for further information. Changes in Estimates on Construction Contracts The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the cost to complete each project. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include: • The completeness and accuracy of the original bid; • costs associated with scope changes; • expected, or actual, resolution terms for claims; • achievement of contract incentives; • changes in costs of labor and/or materials; • extended overhead and other costs due to owner, weather and other delays; • subcontractor performance issues; • changes in productivity expectations; • site conditions that differ from those assumed in the original bid; • changes from original design on design-build projects; • the availability and skill level of workers in the geographic location of the project; • a change in the availability and proximity of equipment and materials; • our ability to fully and promptly recover on claims and back charges for additional contract costs, and • the customer's ability to properly administer the contract. Subsequent to the inception of a construction-type contract in our GCR and ODR segments, the transaction price could change for various reasons, including the executed or estimated amount of change orders and unresolved contract modifications and claims to or from owners. Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception. Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated. Changes are made to the transaction price from unapproved change orders to the extent the amount can be reasonably estimated and recovery is probable. On certain projects, we have submitted and have pending unresolved contract modifications and claims to recover additional costs and the associated profit, if applicable, to which we believe we are entitled under the terms of contracts with customers, subcontractors, vendors or others. The owners or their authorized representatives and/or other third parties may be in partial or full agreement with the modifications or claims, or may have rejected or disagree entirely or partially as to such entitlement. Changes are made to the transaction price from affirmative claims with customers to the extent that additional revenue on a claim settlement with a customer is probable and estimable. A reduction to costs related to claims with non-customers with whom we have a contractual arrangement (“back charges”) is recognized when the estimated recovery is probable and estimable. Recognizing claims and back charge recoveries requires significant judgments of certain factors including, but not limited to, dispute resolution developments and outcomes, anticipated negotiation results, and the cost of resolving such matters. The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit and gross profit margin from period to period. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Significant changes in cost estimates, particularly in our larger, more complex projects have had, and can in future periods have, a significant effect on our profitability. Management evaluates changes in estimates on a contract by contract basis and discloses significant changes, if material, in the notes to the consolidated financial statements. The cumulative catch-up method is used to account for revisions in estimates. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined. Goodwill and Impairment of Long-Lived Assets Goodwill is evaluated for impairment at least annually or whenever events or changes in circumstance indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may perform either a qualitative assessment of potential impairment or proceed directly to a quantitative assessment of potential impairment. The Company's qualitative assessment of potential impairment may result in the determination that a quantitative impairment analysis is not necessary. Under this elective process, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative assessment is not required. However, if the Company concludes otherwise, a quantitative impairment analysis is performed. If the Company chooses not to perform a qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then the Company will perform a quantitative assessment. In the case of a quantitative assessment, the Company estimates the fair value of the reporting unit with which the goodwill is associated and compares it to the carrying value. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. See Note 5 – Goodwill and Intangible Assets for further detail. The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable. With respect to property, plant and equipment and finite lived intangibles, asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require the Company to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, the Company recognizes an impairment equal to the excess of carrying value over fair value as determined by quoted market prices in active markets or present value techniques if quotes are unavailable. The determination of the fair value using present value techniques requires the Company to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes the Company makes to these projections and assumptions could result in significant revisions to its evaluations of recoverability and the recognition of additional impairments. See Note 5 – Goodwill and Intangible Assets for further discussion on impairments of long-lived assets. Intangible Assets The Company’s indefinite-lived intangible assets associated with its trade name are evaluated for impairment at least annually or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its indefinite-lived intangible asset are less than their carrying amount. The Company’s identifiable intangible assets with finite lives are either amortized over their useful lives or over the period the Company expects to receive the related economic benefit based upon estimated future cash flows. The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The Company’s customer relationship-related intangible assets are amortized over the period the Company expects to receive the related economic benefit based upon estimated future net cash flows and its favorable leasehold interest-related intangible assets are amortized on a straight-line basis over the remaining lease terms. See Note 5 – Goodwill and Intangible Assets for further discussion of the Company’s intangible assets. Property and Equipment, net Property and equipment, with the exception of our fleet vehicle finance leases, are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. For buildings and leasehold improvements, the Company’s useful lives range from 5 years to 40 years; for machinery and equipment, useful lives range from 3 years to 10 years. Expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements for our real estate operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. The following table summarizes the Company’s property and equipment: ( in thousands ) December 31, 2022 December 31, 2021 Land and improvements $ 400 $ 400 Buildings and leasehold improvements 10,489 10,721 Machinery and equipment 26,061 24,600 Finance leases - vehicles (1) 10,789 10,771 Gross property and equipment 47,739 46,492 Less: Accumulated amortization on finance leases (6,001) (5,855) Less: Accumulated depreciation (23,514) (19,016) Property and equipment, net of accumulated amortization and depreciation (2) $ 18,224 $ 21,621 (1) See additional information provided in Note 14 – Leases. Depreciation and amortization expense on property and equipment was $6.6 million and $5.5 million for the years ended December 31, 2022 and 2021, respectively. Leases A lease contract conveys the right to use an underlying asset for a period of time in exchange for consideration. At inception, we determine whether a contract contains a lease by determining if there is an identified asset and if the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Leases are classified as either operating or finance, based on our evaluation of certain criteria. With the exception of short-term leases (leases with an initial term of 12 months or less), at lease commencement, we measure and record a lease liability equal to the present value of the remaining lease payments, generally discounted using quoted borrowing rates on our secured debt as the implicit rate is not readily determinable on many of our real estate operating leases. For our fleet vehicles classified as financing leases, we use the stated interest rate in the lease. On the lease commencement date, the amount of the right-of-use (“ROU”) assets consist of the following: • the amount of the initial measurement of the lease liability; • any lease payment made at or before the commencement date, minus any lease incentives received; and • any initial direct costs incurred. Most of our operating lease contracts have the option to extend or renew. We assess the option for individual leases, and we generally consider the base term to be the term of lease contracts. See Note 14 – Leases for additional information. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of our ROU assets may not be recoverable. We use estimates of future undiscounted cash flows, as well as other economic and business factors, to assess the recoverability of these assets. Deferred Financing Costs and Debt Discount Deferred financing costs are deferred and amortized to interest expense using the effective interest rate method over the term of the related long-term debt agreement, and the straight-line method for the revolving credit agreement. Debt issuance costs related to the issuance and/or extension, as applicable, of the Company’s term loans are reflected as a direct reduction from the carrying amount of long-term debt. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an other asset. Prior to their extinguishment, the allocated fair value of the CB Warrants (defined in Note 7 ) were recorded as a debt discount and were accreted over the expected term of the debt as interest expense. See Note 7 – Debt for additional information. Stock-Based Compensation Stock-based compensation awards granted to executives, employees, and non-employee directors are measured at fair value and recognized as an expense. For awards with service conditions only, the Company recognizes compensation expense on a graded vesting basis over the requisite service period for each separately vesting tranche of the award based on the closing market price of the Company’s common stock at the grant date. For awards with service and performance conditions, the Company recognizes compensation expense based on the closing market price of the Company’s common stock at the grant date using the straight-line method over the requisite service period. Estimates of compensation expense for an award with performance conditions are based on the probable outcome of the performance conditions. The cumulative effect of changes in the probability outcomes are recorded in the period in which the changes occur. For awards with market-based conditions (“MRSUs”), the Company uses a Monte Carlo simulation model to estimate the grant-date fair value. The fair value related to market-based awards is recorded as compensation expense using the graded vesting method regardless of whether the market condition is achieved or not. The Company has elected to account for forfeitures as they occur to determine the amount of compensation expense to be recognized each period. See also Note 17 – Management Incentive Plans for further information. Income Taxes The provision for income taxes includes federal, state and local taxes. The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes , which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities and income or expense is recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in tax rates are recorded to deferred tax assets and liabilities and reflected in the provision for income taxes during the period that includes the enactment date. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, scheduling of anticipated reversals of taxable temporary differences, and considering prudent and feasible tax planning strategies. Any interest or penalties incurred related to unrecognized tax benefits are recorded as tax expense in the provision for income tax expense line item of the accompanying consolidated statements of operations. The consolidated financial statements reflect expected future tax consequenc |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Jake Marshall Transaction On December 2, 2021 (the “Effective Date”), the Company and LFS entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with JMLLC, CSLLC (together with JMLLC, the “Acquired Companies” and each an “Acquired Company”) and the owners of the Acquired Companies (collectively, the “Sellers”), pursuant to which LFS purchased all of the outstanding membership interests in the Acquired Companies from the Sellers (the transactions contemplated by the Purchase Agreement collectively being the “Jake Marshall Transaction”). The Jake Marshall Transaction closed on the Effective Date. As a result of the Jake Marshall Transaction, each of the Acquired Companies became wholly-owned indirect subsidiaries of the Company. The acquisition expanded the Company’s market share within its existing product and service lines. Total consideration paid by the Company for the Jake Marshall Transaction at closing was $21.3 million (the “Closing Purchase Price”), consisting of cash paid to the Sellers, net of adjustments for working capital. Of the consideration paid to the Sellers, $1.0 million is being held in escrow for indemnification purposes. The purchase price is subject to customary post-closing adjustments. In addition, the Sellers may receive up to an aggregate of $6.0 million in cash, consisting of two tranches of $3.0 million, as defined in the Purchase Agreement, if the gross profit of the Acquired Companies equals or exceeds $10.0 million in (i) the approximately 13 month period from closing through December 31, 2022 (the “2022 Earnout Period”) or (ii) fiscal year 2023 (the “2023 Earnout Period”), respectively (collectively, the “Earnout Payments”). To the extent, however, that the gross profit of the Acquired Companies is less than $10.0 million, but exceeds $8.0 million, during any of the 2022 Earnout Period or 2023 Earnout Period, the $3.0 million amount will be prorated for such period. See Note 9 – Fair Value Measurements for further information on the Earnout Payments. The Company recorded $0.6 million in acquisition-related expenses related to the Jake Marshall Transaction during the year ended December 31, 2021 associated with professional fees, which are included in selling, general and administrative expense in the consolidated statement of operations. Allocation of Purchase Price. The Jake Marshall Transaction was accounted for as a business combination using the acquisition method. The following table summarizes the final purchase price and estimated fair values of assets acquired and liabilities assumed as of the Effective Date, with any excess of purchase price over estimated fair value of the identified net assets acquired recorded as goodwill. As a result of the acquisition, the Company recognized $5.2 million of goodwill, all of which was allocated to the ODR segment and fully deductible for tax purposes. Such goodwill primarily related to anticipated future earnings. The following table summarizes the final allocation of the fair value of the assets and liabilities of the Jake Marshall Transaction as of the Effective Date by the Company. (in thousands) Purchase Price Allocation Consideration: Cash $ 21,313 Earnout provision 3,089 Total Consideration 24,402 Fair value of assets acquired: Cash and cash equivalents 2,336 Accounts receivable 7,165 Contract assets 1,711 Other current assets 164 Property and equipment 5,762 Intangible assets 5,710 Amount attributable to assets acquired 22,848 Fair value of liabilities assumed: Accounts payable, including retainage 2,655 Accrued expenses and other current liabilities 570 Contract liabilities 462 Amount attributable to liabilities assumed 3,687 Goodwill $ 5,241 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with CustomersThe Company generates revenue from construction type contracts, primarily consisting of fixed-price contracts, to deliver HVAC, plumbing, and electrical construction services to its customers. The duration of its contracts generally ranges from three months to two years. Revenue from fixed price contracts is recognized on the cost-to-cost method, measured by the relationship of total cost incurred to total estimated contract costs. Revenue from time and materials contracts is recognized as services are performed. The Company believes that its extensive experience in HVAC, plumbing, and electrical projects, and its internal cost review procedures during the bidding process, enable it to reasonably estimate costs and mitigate the risk of cost overruns on fixed price contracts. The Company generally invoices customers on a monthly basis, based on a schedule of values that breaks down the contract amount into discrete billing items. Costs and estimated earnings in excess of billings on uncompleted contracts are recorded as a contract asset until billable under the contract terms. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as a contract liability until the related revenue is recognizable. The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle. Contract assets Contract assets include amounts due under retainage provisions and costs and estimated earnings in excess of billings on uncompleted contracts. The components of the contract asset balances as of the respective dates were as follows: (in thousands) December 31, 2022 December 31, 2021 Change Contract assets Costs and estimated earnings in excess of billings on uncompleted contracts $ 33,573 $ 47,447 $ (13,874) Retainage receivable 27,880 36,416 (8,536) Total contract assets $ 61,453 $ 83,863 $ (22,410) Retainage receivable represents amounts invoiced to customers where payments have been partially withheld, typically 10%, pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion. Contract assets represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Contract assets result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC Topic 606, but a portion of the revenue recorded cannot be currently billed due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. The current estimated net realizable value on such items as recorded in contract assets and contract liabilities in the consolidated balance sheets was $28.5 million and $38.1 million as of December 31, 2022 and 2021, respectively. The Company currently anticipates that the majority of such amounts will be approved or executed within one year. The resolution of those claims and unapproved change orders that may require litigation or other forms of dispute resolution proceedings may delay the timing of billing beyond one year. Contract liabilities Contract liabilities include billings in excess of contract costs and provisions for losses. The components of the contract liability balances as of the respective dates were as follows: (in thousands) December 31, 2022 December 31, 2021 Change Contract liabilities Billings in excess of costs and estimated earnings on uncompleted contracts $ 43,806 $ 26,293 $ 17,513 Provisions for losses 201 419 (218) Total contract liabilities $ 44,007 $ 26,712 $ 17,295 Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Provisions for losses are recognized in the consolidated statements of operations at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds its estimated total revenue. The net (overbilling) underbilling position for contracts in process consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Revenue earned on uncompleted contracts $ 678,014 $ 758,450 Less: Billings to date (688,247) (737,296) Net (overbilling) underbilling $ (10,233) $ 21,154 (in thousands) December 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings on uncompleted contracts $ 33,573 $ 47,447 Billings in excess of costs and estimated earnings on uncompleted contracts (43,806) (26,293) Net (overbilling) underbilling $ (10,233) $ 21,154 Revisions in Contract Estimates The Company recorded revisions in its contract estimates for certain GCR and ODR projects. During the year ended December 31, 2022, the Company recorded material gross profit write-ups on three GCR projects for a total of $3.0 million and four material GCR project gross profit write-downs for a total of $2.8 million that had a net gross profit impact of $0.5 million or more. There were no material write-ups or write-downs within the ODR segment during the year ended December 31, 2022. During the year ended December 31, 2021, the Company recorded material gross profit write-downs on five GCR projects for a total of $4.9 million and gross profit write-ups of $2.7 million on three GCR projects that had a net gross profit impact of $0.5 million or more. There were no material write-ups or write-downs within the ODR segment during the year ended December 31, 2021. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. As of December 31, 2022, the aggregate amount of the transaction prices allocated to the remaining performance obligations of the Company's GCR and ODR segment contracts were $302.9 million and $90.0 million, respectively. The Company currently estimates that 68% and 90% of its GCR and ODR segment remaining performance obligations as of December 31, 2022, respectively, will be recognized as revenue during 2023, with the substantial majority of remaining performance obligations to be recognized within 24 months, although the timing of the Company’s performance is not always under its control. Additionally, the difference between remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s ODR agreements under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill was $11.4 million as of December 31, 2022 and 2021 and is entirely associated with the Company's ODR segment. The Company tests its goodwill and indefinite-lived intangible assets allocated to its reporting units for impairment annually on October 1, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its reporting units and indefinite-lived intangible asset are less than their carrying amount. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessments results in a more-likely-than-not determination or if a qualitative assessment is not performed. During the fourth quarter of 2022, the Company performed a quantitative impairment assessment for its ODR reporting unit. In estimating the fair value of the ODR reporting unit, the Company used a combination of the income approach and the market approach. The Company used the income approach’s discounted cash flow method, which applies significant inputs not observable in the public market (Level 3), including estimates and assumptions related to the use of an appropriate discount rate, future cash flows generated from existing work and new awards, projected operating margins and changes in working capital. The Company used the market approach’s comparable company method. The comparable company method evaluates the value of a company using metrics of other businesses of similar size and industry. As a result of the annual assessment, the Company determined that the fair value of the ODR reporting unit was greater than its respective carrying value. The impairment assessment concluded headroom of $47.2 million, or 194%, for the ODR reporting unit. No impairment to goodwill was recorded as a result of the annual assessment. The Company believes the estimates and assumptions used in estimating its reporting units’ fair values are reasonable and appropriate; however, different assumptions and estimates could materially affect the calculated fair value of the ODR reporting unit and the resulting conclusions on impairment of goodwill, which could materially affect the Company’s results of operations and financial position. Additionally, actual results could differ from these estimates and assumptions may not be realized. During the third quarter of 2021, the Company identified impairment indicators in the form of significant declines in the stock price of the Company's common shares and corresponding market capitalization. Management considered these declines as indicators that the fair value of the ODR reporting unit may have been below its carrying amount, and the performance of an interim quantitative goodwill impairment assessment was required. As a result of the interim assessment, the Company determined that the fair value of the ODR reporting unit was greater than its respective carrying value. The impairment assessment concluded headroom of $33.3 million, or 169%, for the ODR reporting unit. No impairment to goodwill was recorded as a result of the interim assessment. The following table summarizes the carrying amount of goodwill associated with the Company's segments for the years ended December 31, 2022 and 2021. (in thousands) GCR ODR Total Goodwill as of January 1, 2021 $ — $ 6,129 $ 6,129 Goodwill associated with the Jake Marshall Transaction — 5,241 5,241 Goodwill as of December 31, 2021 — 11,370 11,370 Goodwill as of December 31, 2022 $ — $ 11,370 $ 11,370 Intangible Assets The Company reviews intangible assets with definite lives subject to amortization whenever events or changes in circumstances (triggering events) indicate that the carrying amount of an asset may not be recoverable. Intangible assets with definite lives subject to amortization are amortized on a straight-line or accelerated basis with estimated useful lives ranging from 1 to 15 years. Events or circumstances that might require impairment testing include the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, a significant decline in stock price, or a significant adverse change in the Company’s business climate or regulations affecting the Company. During the third quarter of 2021, the Company performed a quantitative impairment test on its indefinite-lived intangible assets due to the triggering events described in the goodwill impairment summary above. The fair value of the Company's trade name was estimated using an income approach, specifically known as the relief-from-royalty method. The relief-from-royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenue. As a result of the interim assessment, the Company determined that the fair value of the Company's indefinite-lived intangible asset was greater than its respective carrying value. The impairment assessment concluded headroom of $1.0 million, or 10%, for the Company's trade name. The Company did not recognize an impairment charge on its indefinite-lived intangible asset for the years ended December 31, 2022 and 2021. Definite-lived and indefinite-lived intangible assets consist of the following: (in thousands) Gross Accumulated Net intangible December 31, 2022 Amortized intangible assets: Customer relationships – GCR – Jake Marshall $ 570 $ (87) $ 483 Customer relationships – ODR – Jake Marshall 3,050 (436) 2,614 Customer relationships – ODR – Limbach 4,710 (3,765) 945 Favorable leasehold interests – Limbach 190 (97) 93 Backlog – GCR – Jake Marshall 260 (178) 82 Backlog – ODR – Jake Marshall 680 (465) 215 Trade name – Jake Marshall 1,150 (202) 948 Total amortized intangible assets 10,610 (5,230) 5,380 Unamortized intangible assets: Trade name – Limbach (1) 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (5,230) $ 15,340 (1) The Company has determined that its trade name has an indefinite useful life. The Limbach trade name has been in existence since the Company’s founding in 1901 and therefore is an established brand within the industry. (in thousands) Gross Accumulated Net intangible December 31, 2021 Amortized intangible assets: Customer relationships – GCR – Jake Marshall $ 570 $ (6) $ 564 Customer relationships – ODR – Jake Marshall 3,050 (35) 3,015 Customer relationships – ODR – Limbach 4,710 (3,475) 1,235 Favorable leasehold interests – Limbach 190 (82) 108 Backlog – GCR – Jake Marshall 260 (14) 246 Backlog – ODR – Jake Marshall 680 (36) 644 Trade name – Jake Marshall 1,150 (15) 1,135 Total amortized intangible assets 10,610 (3,663) 6,947 Unamortized intangible assets: Trade name – Limbach 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (3,663) $ 16,907 Total amortization expense for the Company’s definite-lived intangible assets was $1.6 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively. The estimated remaining useful lives of definite-lived intangible assets are as follows: Intangible Asset Amortization Method Estimated Remaining Useful Customer relationships – GCR – Jake Marshall Straight line 6.0 Customer Relationships – ODR – Limbach Pattern of economic benefit 8.0 Customer Relationships – ODR – Jake Marshall Straight line 6.5 Favorable Leasehold Interests – Limbach Straight line 6.2 Backlog – GCR – Jake Marshall Straight line 0.5 Backlog – ODR – Jake Marshall Straight line 0.5 Trade name – Jake Marshall Straight line 5.1 Estimated amortization expense is as follows for the years ending December 31: (in thousands) Estimated Amortization Expense 2023 $ 1,211 2024 867 2025 830 2026 800 2027 776 2028 and thereafter 896 Total $ 5,380 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are comprised of the following: ( in thousand s) December 31, 2022 December 31, 2021 Accrued payroll and related liabilities $ 4,545 $ 8,169 Accrued bonus and commissions 9,682 7,352 Accrued insurance liabilities 715 719 Accrued job costs 1,913 3,772 Assurance-type warranty liabilities 1,581 3,310 Estimated loss contingency 2,182 — Earnout Payments accrued, current 2,859 — Other accrued liabilities 1,465 1,122 Total $ 24,942 $ 24,444 Our construction-type contracts regularly include warranties to end customers that guarantee the work performed against defects in workmanship and the material we supply. These standard warranties are assurance-type warranties and do not offer any additional services. Therefore, these assurance-type warranties are not considered separate performance obligations and the expected cost of assurance-type warranties are accrued as an expense within cost of revenue. Our reconciliation of assurance-type warranties are as follows: ( in thousand s) December 31, 2022 December 31, 2021 Balance at the beginning of the period $ 3,310 $ 4,056 Accruals for warranties issued 302 432 Accruals related to pre-existing warranties (including changes in estimates) (494) 401 Settlements made (1,537) (1,579) Balance at the end of the period $ 1,581 $ 3,310 The Company also offers service-type warranties on certain construction-type projects. These service-type warranties were not accounted for as a separate performance obligation prior to the adoption of ASC Topic 606. Upon adoption of ASC Topic 606, we allocated a portion of the contract's transaction price to the service-type warranty based on its estimated standalone selling |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consists of the following obligations as of: ( in thousand s) December 31, 2022 December 31, 2021 A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 $ 21,453 $ 34,881 A&R Wintrust Revolving Loan — — Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 6.60% through 2027 4,954 5,132 Financing liability 5,351 — Total debt $ 31,758 $ 40,013 Less - Current portion of long-term debt (9,564) (9,879) Less - Unamortized discount and debt issuance costs (666) (318) Long-term debt $ 21,528 $ 29,816 Maturities of long-term debt and finance leases at December 31, 2022 are as follows: ( in thousands ) 2023 $ 9,564 2024 8,858 2025 7,537 2026 437 2027 and thereafter 5,362 Total $ 31,758 On February 24, 2021 (the “2021 Refinancing Date”), the Company refinanced its 2019 Refinancing Term Loan (as defined below) and 2019 Revolving Credit Facility (as defined below) with proceeds from the issuance of the Wintrust Term Loan (as defined below) (the “2021 Refinancing”). As a result of the 2021 Refinancing, the Company prepaid all principal, interest, fees and other obligations outstanding under the 2019 Refinancing Agreements (as defined below) and terminated its 2019 Refinancing Term Loan, 2019 Refinancing Revolving Credit Facility and the CB Warrants (as defined below). In addition, on the 2021 Refinancing Date, the Company recognized a loss on the early extinguishment of debt of $2.0 million, which consisted of the write-off of $2.6 million of unamortized discount and financing costs, the reversal of the $2.0 million CB warrants (defined below) liability and the prepayment penalty and other extinguishment costs of $1.4 million. 2019 Refinancing Agreement - 2019 Term Loans On April 12, 2019 (the “2019 Refinancing Closing Date”), LFS entered into a financing agreement (the “2019 Refinancing Agreement”) with the lenders thereto and Cortland Capital Market Services LLC, as collateral agent and administrative agent and CB Agent Services LLC (“CB”), as origination agent. The 2019 Refinancing Agreement consisted of (i) a $40.0 million term loan (the “2019 Refinancing Term Loan”) and (ii) a new $25.0 million multi-draw delayed draw term loan (the “2019 Delayed Draw Term Loan” and, collectively with the 2019 Refinancing Term Loan, the “2019 Term Loans”). On November 14, 2019, the Company entered into an amendment to the 2019 Refinancing Agreement which, among other things, amended the interest rate and certain covenants in the 2019 Refinancing Agreement. Prior to its refinancing in February 2021, the 2019 Refinancing Agreement would have matured on April 12, 2022. Required amortization was $1.0 million per quarter and commenced with the fiscal quarter ending September 30, 2020. There was an unused line fee of 2.0% per annum on the undrawn portion of the 2019 Delayed Draw Term Loan, and there was a make-whole premium on prepayments made prior to the 19-month anniversary of the 2019 Refinancing Closing Date. This make-whole provision guaranteed that the Company would pay no less than 18 months’ applicable interest to the lenders under the 2019 Refinancing Agreement. The interest rate on borrowings under the 2019 Refinancing Agreement was, at the 2019 Refinancing Borrowers’ option, either LIBOR (with a 2.00% floor) plus 11.00% or a base rate (with a 3.00% minimum) plus 10.00%. At February 24, 2021 (the “2021 Refinancing Date”), the interest rate in effect on the 2019 Refinancing Term Loan was 13.00%. 2019 Refinancing Agreement – CB Warrants In connection with the 2019 Refinancing Agreement, on the 2019 Refinancing Closing Date, the Company issued to CB and the other lenders under the 2019 Refinancing Agreement warrants (the “CB Warrants”) to purchase up to a maximum of 263,314 shares of the Company's common stock at an exercise price of $7.63 per share subject to certain adjustments, including for stock dividends, stock splits or reclassifications. The actual number of shares of common stock into which the CB Warrants were exercisable at any given time were equal to: (i) the product of (x) the number of shares equal to 2% of the Company’s issued and outstanding shares of common stock on the 2019 Refinancing Closing Date on a fully diluted basis and (y) the percentage of the total 2019 Delayed Draw Term Loan made as of the exercise date, minus (ii) the number of shares previously issued under the CB Warrants. As of the 2019 Refinancing Closing Date through the 2021 Refinancing Date, no amounts had been drawn on the 2019 Delayed Draw Term Loan, so no portion of the CB Warrants were exercisable. The CB Warrants were to be exercised for cash or on a “cashless basis,” subject to certain adjustments, at any time after the 2019 Refinancing Closing Date until the expiration of such warrant at 5:00 p.m., New York time, on the earlier of (i) the five (5) year anniversary of the 2019 Refinancing Closing Date, or (ii) the liquidation of the Company. For the period from January 1, 2021 through the 2021 Refinancing Date, the Company recorded interest expense for the amortization of the CB Warrants liability and embedded derivative debt discounts of $0.1 million and recorded an additional $0.1 million of interest expense for the amortization of debt issuance costs. 2019 ABL Credit Agreement On the 2019 Refinancing Closing Date, LFS also entered into a financing agreement with the lenders thereto and Citizens Bank, N.A., as collateral agent, administrative agent and origination agent (the “2019 ABL Credit Agreement” and, together with the 2019 Refinancing Agreement, the “Refinancing Agreements”). The 2019 ABL Credit Agreement consisted of a $15.0 million revolving credit facility (the “2019 Revolving Credit Facility”). Proceeds of the 2019 Revolving Credit Facility were to be used for general corporate purposes. On the 2019 Refinancing Closing Date, the Company entered into an amendment to the 2019 ABL Credit Agreement (as amended, 2019 ABL Credit Amendment Number One and Waiver), which amended certain provisions under the 2019 ABL Credit Agreement. The interest rate on borrowings under the 2019 ABL Credit Agreement was, at the option of LFS and its subsidiaries, either LIBOR (with a 2.0% floor) plus an applicable margin ranging from 3.00% to 3.50% or a base rate (with a 3.0% minimum) plus an applicable margin ranging from 2.00% to 2.50%. At the 2021 Refinancing Date, the interest rate in effect on the 2019 ABL Credit Agreement was 5.25%. As of the 2021 Refinancing Date, the Company had irrevocable letters of credit each in the amount of $3.4 million with its lender to secure obligations under its self-insurance program. Prior to the 2021 Refinancing Date, the 2019 ABL Agreement would have matured in April 2022. Wintrust Term and Revolving Loans On the 2021 Refinancing Date, LFS, LHLLC and the direct and indirect subsidiaries of LFS from time to time included as parties to the agreement (the “Wintrust Guarantors”) entered into a credit agreement (the “Wintrust Credit Agreement”) by and among the LFS, LHLLC, Wintrust Guarantors, the lenders party thereto from time to time, Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively, “Wintrust”), as administrative agent and L/C issuer, Bank of the West as documentation agent, M&T Bank as syndication agent, and Wintrust as lead arranger and sole book runner. In accordance with the terms of the Wintrust Credit Agreement, Lenders provided to LFS (i) a $30.0 million senior secured term loan (the “Wintrust Term Loan”); and (ii) a $25.0 million senior secured revolving credit facility with a $5.0 million sublimit for the issuance of letters of credit (the “Wintrust Revolving Loan” and, together with the Wintrust Term Loan, the “Wintrust Loans”). Proceeds of the Wintrust Loans were used to refinance certain existing indebtedness, finance working capital and other general corporate purposes and fund certain fees and expenses associated with the closing of the Wintrust Loans. The Wintrust Revolving Loan initially bore interest, at LFS’s option, at either LIBOR (with a 0.25% floor) plus 3.5% or a base rate (with a 3.0% floor) plus 0.50%, subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA (earnings before interest, income taxes, depreciation and amortization) of the LFS and its subsidiaries for the most recently ended four fiscal quarters. The Wintrust Term Loan initially bore interest, at LFS’s option, at either LIBOR (with a 0.25% floor) plus 4.0% or a base rate (with a 3.0% floor) plus 1.00%, subject to a 50 (for LIBOR) or 75 (for base rate) basis point step-down based on the Senior Leverage Ratio. LFS initially was required to make principal payments on the Wintrust Term Loan in $0.5 million installments on the last business day of each month commencing on March 31, 2021 with a final payment of all principal and interest not sooner paid on the Wintrust Term Loan due and payable on February 24, 2026. In conjunction with the Jake Marshall Transaction, the Company entered into an amendment to the Wintrust Credit Agreement (the “A&R Wintrust Credit Agreement”). In accordance with the terms of the A&R Credit Agreement, Lenders provided to LFS (i) a $35.5 million senior secured term loan (the “A&R Wintrust Term Loan”); and (ii) a $25 million senior secured revolving credit facility with a $5 million sublimit for the issuance of letters of credit (the “A&R Wintrust Revolving Loan” and, together with the Term Loan, the “A&R Wintrust Loans”). The overall Wintrust Term Loan commitment under the A&R Wintrust Credit Agreement was recast at $35.5 million in connection with the A&R Credit Agreement. A portion of the A&R Wintrust Term Loan commitment was used to fund the closing purchase price of the Jake Marshall Transaction. The A&R Credit Agreement was also amended to: (i) permit the Company to undertake the Jake Marshall Transaction, (ii) make certain adjustments to the covenants under the A&R Credit Agreement (which were largely done to make certain adjustments for the Jake Marshall Transaction), (iii) allow for the Earnout Payments under the Jake Marshall Transaction, and (iv) make other corresponding changes to the A&R Credit Agreement. The A&R Wintrust Revolving Loan bears interest, at LFS’s option, at either Term SOFR (as defined in the A&R Credit Agreement) (with a 0.15% floor) plus 3.60%, 3.76% or 3.92% for a tenor of one month, three months or six months, respectively, or a base rate (as set forth in the A&R Credit Agreement) (with a 3.0% floor) plus 0.50%, subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters (the “Senior Leverage Ratio”). The A&R Wintrust Term Loan bears interest, at LFS’s option, at either Term SOFR (with a 0.15% floor) plus 4.10%, 4.26% or 4.42% for a tenor of one month, three months or six months, respectively, or a base rate (with a 3.0% floor) plus 1.00%, subject to a 50 (for Term SOFR) or 75 (for base rate) basis point step-down based on the Senior Leverage Ratio. At December 31, 2022 and 2021, the interest rate in effect on the non-hedged portion of the Wintrust Term Loan was 8.50% and 4.25%, respectively. For the years ended December 31, 2022 and 2021, the Company incurred interest on the A&R Wintrust Term Loan at a weighted average annual interest rate of 5.68% and 4.25%, respectively. The A&R Wintrust Term Loan is payable through a combination of (i) monthly installments of approximately $0.6 million due on the last business day of each month commencing on December 31, 2021, (ii) annual Excess Cash Flow payments as defined in the A&R Wintrust Credit Agreement, which are due 120 days after the last day of the Company's fiscal year and (iii) Net Claim Proceeds from Legacy Claims as defined in the A&R Wintrust Credit Agreement. Subject to defaults and remedies under the A&R Credit Agreement, the final payment of all principal and interest not sooner paid on the A&R Wintrust Term Loan is due and payable on February 24, 2026. Subject to defaults and remedies under the A&R Credit Agreement, the A&R Wintrust Revolving Loan matures and becomes due and payable by LFS on February 24, 2026. During the second quarter of 2022, the Company made certain Excess Cash Flow and Net Claim Proceeds payments of $3.3 million and $2.1 million, respectively, which concurrently reduced the outstanding A&R Wintrust Term Loan balance. In addition, during the third quarter of 2022, the Company made a Net Claim Proceeds payment of $0.6 million, which was also applied against the outstanding A&R Wintrust Term Loan balance. The A&R Wintrust Loans are secured by (i) a valid, perfected and enforceable lien of the administrative agent on the ownership interests held by each of LFS and Wintrust Guarantors in their respective subsidiaries; and (ii) a valid, perfected and enforceable lien of the administrative agent on each of LFS and Wintrust Guarantors’ personal property, fixtures and real estate, subject to certain exceptions and limitations. Additionally, the re-payment of the A&R Wintrust Loans shall be jointly and severally guaranteed by each Wintrust Guarantor. The A&R Credit Agreement contains representations and warranties, covenants and events of default that are customary for facilities of this type, as more particularly described in the A&R Credit Agreement. The A&R Wintrust Loans also contain three financial maintenance covenants, including (i) a requirement to have as of the last day of each quarter for the senior leverage ratio of the Company and its subsidiaries not to exceed an amount beginning at 2.00 to 1.00 (ii) a fixed charge coverage ratio of not less than 1.20 to 1.00 as of the last day of each fiscal quarter commencing with the fiscal quarter ending December 31, 2021, and (iii) no unfinanced capital expenditures, except for unfinanced capital expenditures in the ordinary course of business not exceeding in the aggregate $4.0 million during any fiscal year; and no default or event of default (as defined by the agreement) has occurred and is continuing, 50% of any portion of this annual limit, if not expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next following fiscal year as stipulated by the agreement. LFS and its affiliates maintain various commercial and service relationships with certain members of the syndicate and their affiliates in the ordinary course of business. On May 5, 2022, the Company, LFS and LHLLC entered into a first amendment and waiver to the A&R Wintrust Credit Agreement (the “First Amendment to the A&R Wintrust Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent. The First Amendment to the A&R Wintrust Credit Agreement modifies certain definitions within the A&R Wintrust Credit Agreement, and make other corresponding changes, including: (i) the definition of “EBITDA” to allow for the recognition of certain restructuring charges and lease breakage costs not previously specified, (ii) the definition of “Excess Cash Flow” to exclude the aggregate amount of the Earnout Payments paid in cash, (iii) the definition of “Total Funded Debt” to exclude certain capitalized lease obligations for real estate based on the approval of each lender and (iv) the definition of “Disposition” to include a clause for the sale and leaseback of certain real property based on the approval of each lender. In July 2022, the Company entered into an interest rate swap agreement to manage the risk associated with a portion of its variable-rate long-term debt. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The new swap agreement became effective on July 14, 2022 and will terminate on July 31, 2027. The notional amount of the swap agreement is $10.0 million with a fixed interest rate of 3.12%. If the one-month SOFR (as defined in the A&R Credit Agreement) is above the fixed rate, the counterparty pays the Company, and if the one-month SOFR is less the fixed rate, the Company pays the counterparty, the difference between the fixed rate of 3.12% and one-month SOFR. The Company has not designated this instrument as a hedge for accounting purposes. As a result, the change in fair value of the derivative instrument is recognized directly in earnings on the Company's consolidated statements of operations as a gain or loss on interest rate swap. Refer to Note 9 for further information regarding this interest rate swap. On September 28, 2022, the Company, LFS and LHLLC entered into a second amendment and waiver to the amended and restated Wintrust credit agreement (the “Second Amendment to the A&R Wintrust Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent. The Second Amendment to the A&R Wintrust Credit Agreement incorporates certain restricted payment provisions, among other things, to permit LFS to repurchase shares under the Company’s Share Repurchase Program (as defined in Note 8 – Equity). As of December 31, 2022 and 2021, the Company had no borrowings outstanding under the A&R Wintrust Revolving Loan. During the year ended December 31, 2022, the maximum outstanding borrowings under the A&R Wintrust Revolving Loan at any time was $9.4 million and the average daily balance was approximately $0.1 million. For the year ended December 31, 2022, the Company incurred interest on the A&R Wintrust Revolving Loan at a weighted average annual interest rate of 4.78%. The Company did not make any borrowings on the A&R Wintrust Revolving Loan during the year ended December 31, 2021. At December 31, 2022, the Company had irrevocable letters of credit in the amount of $3.2 million with its lender to secure obligations under its self-insurance program. The following is a summary of the applicable margin and commitment fees payable on the available A&R Wintrust Term Loan and A&R Wintrust Revolving Loan credit commitment: Level Senior Leverage Ratio Additional Margin for Additional Margin for Additional Margin for Eurodollar Term loans I Greater than 1.00 to 1.00 1.00 % 0.50 % 0.25 % II Less than or equal to 1.00 to 1.00 0.25 % — % 0.25 % Sale-Leaseback Financing Transaction On September 29, 2022, LC LLC and Royal Oak Acquisitions, LLC (the “Purchaser”) consummated the purchase of the real property under a sale and leaseback transaction, with an aggregate value of approximately $7.8 million (a purchase price of approximately $5.4 million and $2.4 million in tenant improvement allowances), pursuant to a purchase agreement under which the Purchaser purchased from LC LLC the Company’s facility and real property in Pontiac, MI (collectively, the “Pontiac Facility”). In connection with the sale and leaseback transaction, LC LLC and Featherstone St Pontiac MI LLC (the “Landlord”) entered into a Lease Agreement (the “Lease Agreement”), dated September 29, 2022 (the “Lease Effective Date”) for the Pontiac Facility. Commencing on the Lease Effective Date, pursuant to the Lease Agreement, LC LLC has leased the Pontiac Facility, subject to the terms and conditions of the Lease Agreement. The Lease Agreement provides for a term of 25 years (the “Primary Term”). The Lease Agreement also provides LC LLC with the option to extend the Primary Term by two separate renewal terms of 5 years each (each a “Renewal Term”). Under the terms of the Lease Agreement, the Company’s annual minimum rent is $499,730, payable in monthly installments, subject to annual increases of approximately 2.5% each year under the Primary Term and for each year under the Renewal Terms, if exercised. LC LLC has a one-time option to terminate the Lease Agreement effective on the last day of the fifteenth lease year by providing written notice to the Landlord as more fully set forth in the Lease Agreement. The one-time termination option of the Lease Agreement would require LC LLC to pay to the Landlord a termination fee of approximately $1.7 million. Pursuant to the terms and conditions set forth in the Lease Agreement, the Landlord has agreed to provide LC LLC with a tenant improvement allowance in an amount up to $2.4 million. LC LLC is responsible for the initial capital outlay and completion of the agreed upon improvement work. The Landlord will subsequently reimburse LC LLC for such items up to the stated allowance amount. The Company accounted for the sale and leaseback arrangement as a financing transaction in accordance with ASC 842, “ Leases ,” as the Lease Agreement was determined to be a finance lease. The Company concluded the Lease Agreement met the qualifications to be classified as a finance lease due to the significance of the present value of the lease payments, using an implicit rate of 11.11% to reflect the Company’s incremental borrowing rate associated with the $5.4 million purchase price as of the Lease Agreement date, compared to the fair value of the Pontiac Facility. The implicit rate associated with the aggregate purchase value, inclusive of tenant improvement allowances, was 6.53% as of the Lease Agreement date. The presence of a finance lease indicates that control of the Pontiac Facility has not transferred to the Purchaser and, as such, the transaction was deemed a failed sale-leaseback and must be accounted for as a financing arrangement. As a result of this determination, the Company is viewed as having received the sale proceeds from the Purchaser in the form of a hypothetical loan collateralized by its leased facilities. The hypothetical loan is payable as principal and interest in the form of “lease payments” to the Purchaser. Principal repayments are recorded as a reduction to the financing liability. The Company will not derecognize the Pontiac Facility from its books for accounting purposes until the lease ends. No gain or loss was recognized under GAAP related to the sale and leaseback arrangement. As of December 31, 2022 , the financing liability was $4.9 million, net of issuance costs, which was recognized within other long-term debt on the Company's consolidated balance sheets. For the year ended December 31, 2022 , less than $0.1 million of |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity | Equity The Company’s second amended and restated certificate of incorporation currently authorizes the issuance of 100,000,000 shares of common stock, par value $0.0001, and 1,000,000 shares of preferred stock, par value $0.0001. Warrants In conjunction with the Company's initial public offering, the Company issued Public Warrants, Private Warrants and $15 Exercise Price Sponsor Warrants. The Company issued certain Merger Warrants and Additional Merger Warrants in conjunction with the Company's business combination with LHLLC in July 2016 (the “Business Combination”). On July 20, 2021, the Public Warrants, Private Warrants, and Additional Merger Warrants expired by their terms. The following table summarizes the underlying shares of common stock with respect to outstanding warrants: December 31, 2022 December 31, 2021 $15 Exercise Price Sponsor Warrants (1)(2) 600,000 600,000 Merger Warrants (3)(4) 629,643 629,643 Total 1,229,643 1,229,643 (1) Exercisable for one share of common stock at an exercise price of $15.00 per share (“$15 Exercise Price Sponsor Warrants”). (2) Issued under a warrant agreement dated July 15, 2014, between Continental Stock Transfer and Trust Company, as warrant agent, and the Company. (3) Exercisable for one share of common stock at an exercise price of $12.50 per share (“Merger Warrants”). (4) Issued to the sellers of LHLLC. Incentive Plan Upon the consummation of the Company’s Business Combination, the Company adopted an omnibus incentive plan (the “Omnibus Incentive Plan”) pursuant to which equity awards may be granted thereunder. On March 9, 2021, the Board of Directors approved certain amendments to the Company's Omnibus Incentive Plan (the “2021 Amended and Restated Omnibus Incentive Plan”) to increase the number of shares of the Company's common stock that may be issued pursuant to awards by 600,000, for a total of 2,250,000 shares, and extended the term of the plan so that it will expire on the tenth anniversary of the date the stockholders approve the 2021 Amended and Restated Omnibus Incentive Plan. The amendments were approved by the Company's stockholders at the Annual Meeting held on June 16, 2021. On March 25, 2022, the Board of Directors approved certain additional amendments to the Company's Omnibus Incentive Plan (the “2022 Amended and Restated Omnibus Incentive Plan”) to increase the number of shares of the Company's common stock that may be issued pursuant to awards by 350,000, for a total of 2,600,000 shares, and extended the term of the plan so that it will expire on the tenth anniversary of the date the stockholders approve the 2022 Amended and Restated Omnibus Incentive Plan. The amendments were approved by the Company's stockholders at the Annual Meeting held on June 22, 2022. See Note 17 – Management Incentive Plans for a discussion of the Company's management incentive plans for RSUs granted, vested, forfeited and remaining unvested. Share Repurchase Program In September 2022, the Company announced that its Board of Directors approved a share repurchase program (the “Share Repurchase Program”) to repurchase shares of its common stock for an aggregate purchase price not to exceed $2.0 million. The share repurchase authority is valid through September 29, 2023. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or by other means in accordance with federal securities laws. The Share Repurchase Program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or terminated by the Company at any time at its discretion without prior notice. As of December 31, 2022, the Company has made share repurchases of approximately $2.0 million under its Share Repurchase Program. Employee Stock Purchase Plan Upon approval of the Company's stockholders on May 30, 2019, the Company adopted the Limbach Holdings, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”). On January 1, 2020, the ESPP went into effect. The ESPP enables eligible employees, as defined by the ESPP, the right to purchase the Company’s common stock through payroll deductions during consecutive subscription periods at a purchase price of 85% of the fair market value of a common share at the end of each offering period. Annual purchases by participants are limited to the number of whole shares that can be purchased by an amount equal to ten percent of the participant's compensation or $5,000, whichever is less. Each offering period of the ESPP lasts six months, commencing on January 1st and July 1st of each year. The amounts collected from participants during a subscription period are used on the exercise date to purchase full shares of common stock. Participants may withdraw from an offering before the exercise date and obtain a refund of amounts withheld through payroll deductions. Compensation cost, representing the 15% discount applied to the fair market value of common stock, is recognized on a straight-line basis over the six-month vesting period during which employees perform related services. Under the ESPP 500,000 shares are authorized to be issued. For the years ended December 31, 2022 and 2021, the Company issued 37,490 and 25,068 shares of its common stock, respectively, to participants in the ESPP who contributed to the plan during these periods. As of December 31, 2022, 406,617 shares remain available for future issuance under the ESPP. 2021 Public Offering On February 10, 2021 the Company entered into an underwriting agreement (“Underwriting Agreement”) with Lake Street Capital Markets, LLC (“Underwriter”) relating to an underwritten public offering (the “2021 Public Offering”). On February 12, 2021, the Company sold to the Underwriter 1,783,500 shares of its Common Stock. The Underwriting Agreement provided for purchase and sale of the Shares by the company to the Underwriter at a price of $11.28 per share. The price to the public in the 2021 Public Offering was $12.00 per share. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriter a 30-day option to purchase up to an additional 267,525 shares of Common Stock to cover over-allotments, if any, on the same terms and conditions. The net proceeds to the Company from the 2021 Public Offering after deducting the underwriting discounts and commissions were approximately $19.8 million. On February 18, 2021, the Company received approximately $3.0 million of net proceeds for the sale of 267,525 shares of common stock in connection with the exercise of the over-allotment option. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe Company believes that the carrying amounts of its financial instruments, including cash and cash equivalents, trade accounts receivable and accounts payable, consist primarily of instruments without extended maturities, which approximate fair value primarily due to their short-term maturities and low risk of counterparty default. The Company also believes that the carrying value of the A&R Wintrust Term Loan approximates its respective fair value due to the variable rate on such debt. As of December 31, 2022, the Company determined that the fair value of the A&R Wintrust Term Loan was $21.5 million. Such fair value was determined using discounted estimated future cash flows using level 3 inputs. Earnout Payments As a part of the total consideration for the Jake Marshall Transaction, the Company initially recognized $3.1 million in contingent consideration, of which the entire balance was included in other long-term liabilities in the Company’s consolidated balance sheets on the Effective Date. The fair value of contingent Earnout Payments is based on generating growth rates on the projected gross margins of the Acquired Entities and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. Based on the Company’s ongoing assessment of the fair value of contingent earnout liability, the Company recorded a net increase in the estimated fair value of such liabilities of $2.3 million for the year ended December 31, 2022, which was presented in change in fair value of contingent consideration in the Company's consolidated statements of operations. The Company has assessed the estimated exposure to the contingent earnout liabilities to be approximately $5.4 million at December 31, 2022, of which approximately $2.9 million was included in accrued expenses and other current liabilities and approximately $2.5 million was included in other long-term liabilities. The Company determines the fair value of the Earnout Payments by utilizing the Monte Carlo Simulation method, which represents a Level 3 measurement. The Monte Carlo Simulation method models the probability of different financial results of the Acquired Entities during the earn-out period, utilizing a discount rate, which reflects a credit spread over the term-adjusted continuous risk-free rate. As of December 31, 2022 and the Effective Date, the Earnout Payments associated with the Jake Marshall Transaction were valued utilizing a discount rate of 10.20% and 6.83%, respectively. The discount rate was calculated using the build-up method with a risk-free rate commensurate with the term of the Earnout Payments based on the U.S. Treasury Constant Maturity Yield. Interest Rate Swap The fair value of the interest rate swap is determined using widely accepted valuation techniques and reflects the contractual terms of the interest rate swap including the period to maturity, and while there are no quoted prices in active markets, it uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value analysis also considers a credit valuation adjustment to reflect nonperformance risk of both the Company and the single counterparty. The fair value of the interest rate contract has been determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The interest rate swap is classified as a Level 2 item within the fair value hierarchy. As of December 31, 2022, the Company determined that the fair value of the interest rate swap was $0.3 million and is recognized in other assets on the Company's consolidated balance sheets. For the year ended December 31, 2022, the Company recognized a gain of $0.3 million on its consolidated statements of operations associated with the change in fair value of the interest rate swap arrangement. CB Warrants Prior to its termination as a result of the 2021 Refinancing, the Company's CB Warrants were determined using the Black-Scholes-Merton option pricing model. The valuation inputs included the quoted price of the Company’s common stock in an active market, volatility and expected life of the warrants, which were considered Level 3 inputs. The CB Warrants liability was included in other long-term liabilities on the Company's consolidated balance sheets. The Company remeasured the fair value of the CB Warrants liability as of February 24, 2021 and recorded any adjustments to other income (expense). Prior to its extinguishment, the CB Warrants liability was $2.0 million. Due to the extinguishment of the CB Warrants on the 2021 Refinancing Date, there was no liability associated with the CB Warrants. For the period from January 1, 2021 through the 2021 Refinancing Date, the Company recorded other income of $14 thousand to reflect the change in the CB Warrants liability. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earning per Share Earnings per Share The Company calculates earnings per share in accordance with ASC Topic 260 - Earnings Per Share (“EPS”) . Basic earnings per common share applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding and assumed to be outstanding. Diluted EPS assumes the dilutive effect of outstanding common stock warrants, shares issued in conjunction with the Company’s ESPP (defined in Note 8) and restricted stock units (“RSUs”), all using the treasury stock method. The following table sets forth the computation of the basic and diluted earnings per share attributable to the Company's common shareholders for the years ended December 31, 2022 and 2021: For the Years Ended (in thousands, except per share amounts) December 31, 2022 December 31, 2021 EPS numerator: Net income $ 6,799 $ 6,714 EPS denominator: Weighted average shares outstanding – basic 10,425 10,013 Nonvested restricted stock units 247 215 Employee stock purchase plan 5 4 Weighted average shares outstanding – diluted 10,677 10,232 EPS: Basic $ 0.65 $ 0.67 Diluted $ 0.64 $ 0.66 The following table summarizes the securities that were antidilutive or out-of-the-money, and therefore, were not included in the computations of diluted income per common share: For the Years Ended December 31, 2022 December 31, 2021 Out-of-the-money warrants 1,229,643 2,981,473 Service-based RSUs — 54 Performance and market-based RSUs (1) — 14,164 Employee stock purchase plan 1,573 — Total 1,231,216 2,995,691 (1) For the years ended December 31, 2022 and 2021, certain PRSU and MRSU awards (each defined in Note 17) were not included in the computation of diluted income per common share because the performance and market conditions were not satisfied during the periods and would not be satisfied if the reporting date was at the end of the contingency period. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company is taxed as a C Corporation. Provision for Income Taxes The Company’s provision for income taxes relating to continuing operations consists of the following: For the Years Ended (in thousands) December 31, 2022 December 31, 2021 Current tax provision U.S. Federal $ 2,613 $ 812 State and local 695 194 Total current tax provision 3,308 1,006 Deferred tax provision U.S. Federal (584) 1,127 State and local 85 630 Total deferred tax provision (499) 1,757 Income tax provision $ 2,809 $ 2,763 The provision for income taxes for the years ended December 31, 2022 and 2021 resulted in effective tax rates on continuing operations of 29.2% for both periods. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows: For the Years Ended December 31, 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal tax effect 6.4 % 7.0 % Stock based compensation – restricted stock 1.4 % (1.1) % Return to provision adjustment (0.1) % 1.2 % Permanent differences 1.3 % 1.9 % Tax credits (0.9) % (0.8) % Effective tax rate 29.2 % 29.2 % The Company is subject to taxation in various jurisdictions. The Company’s 2019 through 2021 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2019 and forward. Deferred Tax Assets (Liabilities) The significant components of deferred tax assets (liabilities) were as follows: As of As of December 31, (in thousands) 2022 2021 Deferred tax assets: Accrued expenses $ 950 $ 1,328 Allowance for doubtful accounts 60 68 Intangibles 463 524 Goodwill 3,301 3,304 Startup costs 68 79 Stock-based compensation 1,066 881 Research and development expenses 640 — Lease liabilities 6,280 5,547 Accrued bonuses and commissions 253 1,810 Total deferred tax assets 13,081 13,541 Deferred tax liabilities: Fixed assets (3,248) (3,775) Right-of-use assets (4,684) (5,231) Percentage of completion (241) (205) Interest (79) — Total deferred tax liabilities (8,252) (9,211) Net deferred tax asset $ 4,829 $ 4,330 In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. After giving consideration to these factors, management concluded that it was more likely than not that the deferred tax assets would be fully realized, and as a result, no valuation allowance against the deferred tax assets was deemed necessary at December 31, 2022 and 2021. At December 31, 2022 and 2021, the Company had no net operating loss carryforwards. Liabilities for Uncertain Tax Positions The Company had no unrecognized tax benefits as of December 31, 2022 and 2021. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments As discussed in Note 1, the Company operates in two operating segments (i) GCR, in which the Company generally manages new construction or renovation projects that involve primarily HVAC, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) ODR, in which the Company performs owner direct projects and/or provides maintenance or service primarily on HVAC, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company's CODM is comprised of its President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Executive Vice President and Chief Operating Officer. The CODM evaluates performance based on income from operations of the respective branches after the allocation of corporate office operating expenses. In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the GCR work performed at branches into one GCR reportable segment and all of the ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation. The Company’s corporate department provides general and administrative support services to its two operating segments. The CODM allocates costs between segments for selling, general and administrative expenses and depreciation expense. Interest expense is not allocated to segments because of the corporate management of debt service. All of the Company’s identifiable assets are located in the United States, which is where the Company is domiciled. The Company does not have sales outside of the United States. For the year ended December 31, 2022, one GCR segment customer accounted for approximately 11% of consolidated total revenue. For the year ended December 31, 2021, two GCR segment customers accounted for approximately 17% and 12% of consolidated total revenue. Consolidated segment information for the periods presented is as follows: For the Years Ended December 31, (in thousands) 2022 2021 Statement of Operations Data: Revenue: GCR $ 280,379 $ 350,015 ODR 216,403 140,336 Total revenue 496,782 490,351 Gross profit: GCR 38,622 45,409 ODR 55,119 40,501 Total gross profit 93,741 85,910 Selling, general and administrative: GCR 36,332 37,558 ODR 38,805 31,277 Corporate 2,742 2,601 Total selling, general and administrative 77,879 71,436 Change in fair value of contingent consideration 2,285 — Amortization of intangibles 1,567 484 Operating income $ 12,010 $ 13,990 Less unallocated amounts: Interest expense, net (2,144) (2,568) Loss on early termination of operating lease (849) — Loss on early debt extinguishment — (1,961) Gain on change in fair value of interest rate swap 310 — Gain on disposition of property and equipment 281 2 Gain on change in fair value of warrant liability — 14 Total unallocated amounts (2,402) (4,513) Total consolidated income before income taxes $ 9,608 $ 9,477 Other Data: Depreciation and amortization: GCR $ 4,307 $ 4,085 ODR 2,284 1,379 Corporate 1,567 484 Total other data $ 8,158 $ 5,948 The Company does not identify capital expenditures and total assets by segment in its internal financial reports due in part to the shared use of a centralized fleet of vehicles and specialized equipment. Interest expense is also not allocated to segments because of the Company’s corporate management of debt service, including interest. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal . The Company is continually engaged in administrative proceedings, arbitrations, and litigation with owners, general contractors, suppliers, employees, former employees and other unrelated parties, all arising in the ordinary courses of business. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the consolidated financial statements. In the opinion of the Company’s management, the current belief is that the results of these actions will not have a material adverse effect on the financial position, results of operations, or cash flows of the Company. On January 23, 2020, plaintiff, Bernards Bros. Inc. (“Bernards”), filed a complaint against the Company in Superior Court of the State of California for the County of Los Angeles. The complaint alleges that the Company’s Southern California business unit refused to honor a proposal made to Bernards to act as a subcontractor on a construction project, and that, as a result of the wrongful failure to honor the proposal, Bernards suffered damages in excess of $3.0 million plus interest, including alleged increased costs for hiring a different subcontractor to perform the work. The Company has vigorously defended the suit. Per the agreement of the Company and Bernards, in January 2022, the Court appointed a private referee to manage the case and adjudicate the dispute. A trial took place before the referee in January 2023, with no formal resolution of the matter having yet been rendered. As of December 31, 2022, the Company determined that a loss was probable, and, as such, recorded an estimated loss contingency, which was included in accrued expenses and other current liabilities reported within the Company’s consolidated balance sheets. In addition, the estimated loss contingency was recorded within selling, general and administrative expenses on the Company’s consolidated statements of operations and is presented within GCR selling, general and administrative expenses within the Company’s segment operations data. On April 17, 2020, plaintiff, LA Excavating, Inc., filed a complaint against the Company’s wholly-owned subsidiary, Limbach Company LP, and several other parties, in Superior Court of the State of California, for the County of Los Angeles. The complaint sought damages of approximately $1.0 million for alleged failure to pay contract balances and extra work ordered by Limbach Company LP, as well as to enforce payment obligations under a payment bond. In April 2022, the parties settled for an immaterial amount and the case was dismissed. On January 26, 2022, claimant, Suffolk Construction Company, Inc. (“Suffolk”) filed a Demand for Arbitration in Massachusetts against Boston Medical Center Corporation (“BMC”) and numerous of Suffolk’s trade subcontractors, including, the Company’s wholly-owned subsidiary, Limbach Company LLC, seeking to recover monies BMC withheld from Suffolk and its subcontractors based on an audit of project billings. Suffolk demanded that the Company defend and indemnify Suffolk against BMC’s audit findings that the Company overbilled the project just over $0.3 million and for the Company’s share of BMC’s audit costs. The Company disputed the findings of BMC’s audit and vigorously defended the allegation that it overbilled the project. In January 2023, the parties settled the matter for an immaterial amount, resulting in the Company recovering a portion of the amount being sought, and the case was dismissed. Surety. The terms of its construction contracts frequently require that the Company obtain from surety companies, and provide to its customers, payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety Bonds secure its payment and performance obligations under such contracts, and the Company has agreed to indemnify the surety companies for amounts, if any, paid by them in respect of Surety Bonds issued on its behalf. In addition, at the request of labor unions representing certain of the Company's employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, the Company's bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2022, the Company had approximately $129.6 million in surety bonds outstanding. The Surety Bonds are issued by surety companies in return for premiums, which vary depending on the size and type of bond. Collective Bargaining Agreements. Many of the Company’s craft labor employees are covered by collective bargaining agreements. The agreements require the Company to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If the Company withdraws from any of the multi-employer pension plans or if the plans were to otherwise become underfunded, the Company could incur additional liabilities related to these plans. Although the Company has been informed that some of the multi-employer pension plans to which it contributes have been classified as “critical” status, the Company is not currently aware of any significant liabilities related to this issue. Self-insurance . The Company is substantially self-insured for workers’ compensation and general liability claims, in the view of the relatively high per-incident deductibles the Company absorbs under its insurance arrangements for these risks. The Company purchases workers’ compensation and general liability insurance under policies with per-incident deductibles of $250,000 per occurrence and a $4.4 million maximum aggregate deductible loss limit per year. Losses incurred over primary policy limits are covered by umbrella and excess policies up to specified limits with multiple excess insurers. The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as current and non-current liabilities. The liability is determined by establishing a reserve for each reported claim on a case-by-case basis based on the nature of the claim and historical loss experience for similar claims plus an allowance for the cost of incurred but not reported claims. The current portion of the liability is included in accrued expenses and other current liabilities on the consolidated balance sheets. The non-current portion of the liability is included in other long-term liabilities on the consolidated balance sheets. The Company is self-insured related to medical and dental claims under policies with annual per-claimant and annual aggregate stop-loss limits. The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as a current liability in accrued expenses and other current liabilities. The components of the self-insurance liability as of December 31, 2022 and 2021 are as follows: (in thousands) December 31, 2022 December 31, 2021 Current liability — workers' compensation and general liability $ 158 $ 184 Current liability — medical and dental 557 456 Non-current liability 343 451 Total liability $ 1,058 $ 1,091 Restricted cash $ 113 $ 113 The restricted cash balance represents an imprest cash balance set aside for the funding of workers' compensation and general liability insurance claims. This amount is replenished either when depleted or at the beginning of each month. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases real estate, trucks and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term. The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased vehicles. For all leased asset classes, the Company has elected to not separate non-lease components from lease components and will account for each separate lease component and non-lease component associated with the lease as a single lease component. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. For the Company’s leased vehicles, the Company uses the interest rate implicit in its leases with the lessor to discount lease payments at the lease commencement date. When the implicit rate is not readily available, as is the case with the Company’s real estate leases, the Company uses quoted borrowing rates on its secured debt. Related Party Lease Agreement. In conjunction with the closing of the Jake Marshall Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of JMLLC who became a full-time employee of the Company. The lease term is ten years and includes an option to extend the lease for two successive periods of two years each through November 2035. Base rent for the term of the lease is $37,500 per month for the first five years with payment commencing on January 1, 2022. The fixed rent payment is escalated to $45,000 per month for years 6 through 10 of the lease term. Fixed rent payments for the extension term shall be increased from $45,000 by the percentage increase, if any, in the consumer price index from the lease commencement date. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. Southern California Sublease . In June, 2021, the Company entered into a sublease agreement with a third party for the entire ground floor of its leased space in Southern California, consisting of 71,787 square feet. Under the terms of the sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.6 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The initial lease term commenced in September 2021 and continues through April 30, 2027. As of December 31, 2022, the Company remains obligated under the original lease for such office space and, in the event the sublessee of such office space fails to satisfy its obligations under the sublease, the Company would be required to satisfy its obligations directly to the landlord under such original lease. In addition, during the first quarter of 2022, the Company entered into an amendment to the aforementioned sublease agreement, which, among other things, expanded the sublease premises to include the entire second floor of its leased space in Southern California, consisting of 16,720 square feet. Under the terms of the amended sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.8 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The amended sublease term commenced in March 2022 and continues through April 30, 2027. For the years ended December 31, 2022 and 2021, the Company recorded $1.1 million and $0.4 million of income in selling, general and administrative expenses Pittsburgh Lease Termination . In March, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) to terminate, effective March 31, 2022, the lease associated with the Company’s office space located in Pittsburgh, Pennsylvania, which previously served as its corporate headquarters. Absent the Lease Termination Agreement, the lease would have expired in accordance with its terms in July 2025. Pursuant to the Lease Termination Agreement, in exchange for allowing the Company to terminate the lease early, the Company agreed to pay a termination fee in the aggregate of approximately $0.7 million in 16 equal monthly installments commencing on April 1, 2022. The Company recognized the full termination fee expense during the first quarter of 2022. In connection with the lease termination, the Company recognized a gain of $0.1 million associated with the derecognition of the operating lease right-of-use asset and corresponding operating lease liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvements and moving expenses. The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2022 December 31, 2021 Assets Operating Operating lease right-of-use assets (1) $ 18,288 $ 20,119 Finance Property and equipment, net (2)(3) 7,402 4,916 Total lease assets $ 25,690 $ 25,035 Liabilities Current Operating Current operating lease liabilities $ 3,562 $ 4,366 Finance Current portion of long-term debt 2,135 2,451 Noncurrent Operating Long-term operating lease liabilities 15,643 16,576 Finance Long-term debt (4) 8,170 2,681 Total lease liabilities $ 29,510 $ 26,074 (1) Operating lease assets are recorded net of accumulated amortization of $12.2 million and $15.9 million at December 31, 2022 and 2021, respectively. (2) Finance lease assets are recorded net of accumulated amortization of $6.0 million and $5.9 million at December 31, 2022 and 2021, respectively. (3) Includes approximately $2.6 million of net property assets associated with the Company's Pontiac Facility. (4) Includes approximately $5.4 million, net of issuance costs, associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. The following table summari zes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2022 December 31, 2021 Operating lease cost Cost of revenue (1) $ 2,627 $ 2,901 Operating lease cost Selling, general and administrative (1) 2,555 2,223 Finance lease cost: Amortization Cost of revenue (2) 2,687 2,622 Interest Interest expense, net (2) 264 305 Total lease cost $ 8,133 $ 8,051 (1) Operating lease costs recorded in cost of revenue includes $0.5 million of variable lease costs for both the years ended December 31, 2022 and 2021, respectively. In addition, $0.5 million and $0.4 million of variable lease costs are included in selling, general and administrative expenses for the years ended December 31, 2022 and 2021, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.8 million and $2.8 million of variable leases costs for the years ended December 31, 2022 and 2021, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2022 and 2021. Future minimum commitments for finance and operating leases that have non-cancelable lease terms in excess of one year as of the year ended December 31, 2022 were as follows (in thousands): Finance Leases Operating Leases Year ending December 31: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Sublease Receipts (2) Total Operating 2023 $ 2,135 $ — $ 2,135 $ 3,948 $ 450 $ (885) $ 3,513 2024 1,429 — 1,429 3,259 450 (912) 2,797 2025 942 — 942 2,745 450 (939) 2,256 2026 437 — 437 2,625 450 (967) 2,108 2027 11 — 11 1,645 540 (326) 1,859 Thereafter — 5,351 5,351 1,834 4,275 — 6,109 Total minimum lease payments $ 4,954 $ 5,351 $ 10,305 $ 16,056 $ 6,615 $ (4,029) $ 18,642 Amounts representing interest 357 11,593 11,950 Aggregate future value of minimum lease payments $ 5,311 $ 16,944 $ 22,255 (1) Associated with the aforementioned related party lease entered into with a former member of JMLLC. (2) Associated with the aforementioned third party sublease. The following is a summary of the lease terms and discount rates as of: December 31, 2022 December 31, 2021 Weighted average lease term (in years): Operating 6.98 7.10 Finance (1) 2.73 2.51 Weighted average discount rate: Operating 4.76 % 4.68 % Finance (1) 5.06 % 5.27 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,055 $ 4,938 Operating cash flows from finance leases 264 305 Financing cash flows from finance leases 2,734 2,623 Right-of-use assets exchanged for lease liabilities Operating leases $ — $ 5,417 Finance leases 2,634 1,296 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 2,455 $ 219 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (77) $ — |
Leases | Leases The Company leases real estate, trucks and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term. The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased vehicles. For all leased asset classes, the Company has elected to not separate non-lease components from lease components and will account for each separate lease component and non-lease component associated with the lease as a single lease component. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. For the Company’s leased vehicles, the Company uses the interest rate implicit in its leases with the lessor to discount lease payments at the lease commencement date. When the implicit rate is not readily available, as is the case with the Company’s real estate leases, the Company uses quoted borrowing rates on its secured debt. Related Party Lease Agreement. In conjunction with the closing of the Jake Marshall Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of JMLLC who became a full-time employee of the Company. The lease term is ten years and includes an option to extend the lease for two successive periods of two years each through November 2035. Base rent for the term of the lease is $37,500 per month for the first five years with payment commencing on January 1, 2022. The fixed rent payment is escalated to $45,000 per month for years 6 through 10 of the lease term. Fixed rent payments for the extension term shall be increased from $45,000 by the percentage increase, if any, in the consumer price index from the lease commencement date. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. Southern California Sublease . In June, 2021, the Company entered into a sublease agreement with a third party for the entire ground floor of its leased space in Southern California, consisting of 71,787 square feet. Under the terms of the sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.6 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The initial lease term commenced in September 2021 and continues through April 30, 2027. As of December 31, 2022, the Company remains obligated under the original lease for such office space and, in the event the sublessee of such office space fails to satisfy its obligations under the sublease, the Company would be required to satisfy its obligations directly to the landlord under such original lease. In addition, during the first quarter of 2022, the Company entered into an amendment to the aforementioned sublease agreement, which, among other things, expanded the sublease premises to include the entire second floor of its leased space in Southern California, consisting of 16,720 square feet. Under the terms of the amended sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.8 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The amended sublease term commenced in March 2022 and continues through April 30, 2027. For the years ended December 31, 2022 and 2021, the Company recorded $1.1 million and $0.4 million of income in selling, general and administrative expenses Pittsburgh Lease Termination . In March, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) to terminate, effective March 31, 2022, the lease associated with the Company’s office space located in Pittsburgh, Pennsylvania, which previously served as its corporate headquarters. Absent the Lease Termination Agreement, the lease would have expired in accordance with its terms in July 2025. Pursuant to the Lease Termination Agreement, in exchange for allowing the Company to terminate the lease early, the Company agreed to pay a termination fee in the aggregate of approximately $0.7 million in 16 equal monthly installments commencing on April 1, 2022. The Company recognized the full termination fee expense during the first quarter of 2022. In connection with the lease termination, the Company recognized a gain of $0.1 million associated with the derecognition of the operating lease right-of-use asset and corresponding operating lease liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvements and moving expenses. The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2022 December 31, 2021 Assets Operating Operating lease right-of-use assets (1) $ 18,288 $ 20,119 Finance Property and equipment, net (2)(3) 7,402 4,916 Total lease assets $ 25,690 $ 25,035 Liabilities Current Operating Current operating lease liabilities $ 3,562 $ 4,366 Finance Current portion of long-term debt 2,135 2,451 Noncurrent Operating Long-term operating lease liabilities 15,643 16,576 Finance Long-term debt (4) 8,170 2,681 Total lease liabilities $ 29,510 $ 26,074 (1) Operating lease assets are recorded net of accumulated amortization of $12.2 million and $15.9 million at December 31, 2022 and 2021, respectively. (2) Finance lease assets are recorded net of accumulated amortization of $6.0 million and $5.9 million at December 31, 2022 and 2021, respectively. (3) Includes approximately $2.6 million of net property assets associated with the Company's Pontiac Facility. (4) Includes approximately $5.4 million, net of issuance costs, associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. The following table summari zes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2022 December 31, 2021 Operating lease cost Cost of revenue (1) $ 2,627 $ 2,901 Operating lease cost Selling, general and administrative (1) 2,555 2,223 Finance lease cost: Amortization Cost of revenue (2) 2,687 2,622 Interest Interest expense, net (2) 264 305 Total lease cost $ 8,133 $ 8,051 (1) Operating lease costs recorded in cost of revenue includes $0.5 million of variable lease costs for both the years ended December 31, 2022 and 2021, respectively. In addition, $0.5 million and $0.4 million of variable lease costs are included in selling, general and administrative expenses for the years ended December 31, 2022 and 2021, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.8 million and $2.8 million of variable leases costs for the years ended December 31, 2022 and 2021, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2022 and 2021. Future minimum commitments for finance and operating leases that have non-cancelable lease terms in excess of one year as of the year ended December 31, 2022 were as follows (in thousands): Finance Leases Operating Leases Year ending December 31: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Sublease Receipts (2) Total Operating 2023 $ 2,135 $ — $ 2,135 $ 3,948 $ 450 $ (885) $ 3,513 2024 1,429 — 1,429 3,259 450 (912) 2,797 2025 942 — 942 2,745 450 (939) 2,256 2026 437 — 437 2,625 450 (967) 2,108 2027 11 — 11 1,645 540 (326) 1,859 Thereafter — 5,351 5,351 1,834 4,275 — 6,109 Total minimum lease payments $ 4,954 $ 5,351 $ 10,305 $ 16,056 $ 6,615 $ (4,029) $ 18,642 Amounts representing interest 357 11,593 11,950 Aggregate future value of minimum lease payments $ 5,311 $ 16,944 $ 22,255 (1) Associated with the aforementioned related party lease entered into with a former member of JMLLC. (2) Associated with the aforementioned third party sublease. The following is a summary of the lease terms and discount rates as of: December 31, 2022 December 31, 2021 Weighted average lease term (in years): Operating 6.98 7.10 Finance (1) 2.73 2.51 Weighted average discount rate: Operating 4.76 % 4.68 % Finance (1) 5.06 % 5.27 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,055 $ 4,938 Operating cash flows from finance leases 264 305 Financing cash flows from finance leases 2,734 2,623 Right-of-use assets exchanged for lease liabilities Operating leases $ — $ 5,417 Finance leases 2,634 1,296 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 2,455 $ 219 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (77) $ — |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement PlanThe Company maintains a 401(k) plan for eligible, participating employees. The Company contributes an amount equal to 100% of an employee’s salary reduction contributions up to 4% of such employee’s compensation in a given year, as defined by the plan and subject to IRS limitations. The Company’s mandatory contributions were $2.4 million for the year ended December 31, 2022, as compared to $2.3 million for the year ended December 31, 2021. The Company may make a discretionary profit sharing contribution to the 401(k) plan in accordance with plan provisions. The Company has full discretion to determine whether to make such a contribution, and the amount of such contribution. In order to share in the profit sharing contribution, employees must have satisfied the 401(k) Plan’s eligibility requirements and be employed on the last day of the year. Employees are not required to contribute any money to the 401(k) Plan in order to qualify for the Company profit sharing contribution. Any discretionary profit sharing contribution would be divided among participants eligible to share in the contribution for the year in the same proportion that the participant’s pay bears to the total pay of all participants. This means the amount allocated to each eligible participant’s account would, as a percentage of pay, be the same. No discretionary profit sharing contributions were made for the years ended December 31, 2022 or 2021. |
Multiemployer Pension Plans
Multiemployer Pension Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Multiemployer Pension Plans | Multiemployer Pension Plans The Company participates in approximately 40 multiemployer pension plans (“MEPPs”) that provide pension benefits to certain union employees in accordance with various collective bargaining agreements (“CBAs”). As of December 31, 2022, approximately 54% of the Company’s employees are members of collective bargaining units. As one of many employers who are obligated to contribute to these MEPPs, the Company is responsible with the other participating employers for any unfunded pension liabilities. The Company’s contributions to a particular MEPP are established by the applicable CBAs; however, the Company’s required contributions to a MEPP may increase based on the funded status of the individual MEPP and the legal requirements of the Pension Protection Act of 2006 (the “PPA”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) to improve their funded status. Factors that could impact the funded status of a MEPP include, without limitation, investment performance, changes in participant demographics, a decline in the number of actively employed covered employees, a decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions. If a contributing employer stops contributing to a MEPP, the unfunded obligations of the MEPP may be borne by the remaining contributing employers. Assets contributed to an individual MEPP are pooled with contributions made by other contributing employers; the pooled assets will be used to provide benefits to the Company’s employees and the employees of the other contributing employers. A FIP or RP requires a particular MEPP to adopt measures to correct its underfunded status. These measures may include, but are not limited to an increase in a contributing employer’s contribution rate, or changes to the benefits paid to retirees. In addition, the PPA requires that a 5% surcharge be levied on employer contributions for the first year commencing shortly after the date the employer receives notice that the MEPP is in critical status and a 10% surcharge on each succeeding year until a CBA is in place with terms and conditions consistent with the RP. If a MEPP has unfunded pension liabilities, the Company could be obligated to make additional payments to a MEPP if the Company either ceases to have an obligation to contribute to the MEPP under a CBA or significantly reduces the Company’s contributions to the MEPP because they reduce the number of employees who are covered by the relevant MEPP for various reasons, including, but not limited to, layoffs or closure of a subsidiary. The amount of such payments (known as a complete or partial withdrawal liability) would equal the Company’s proportionate share of the MEPPs unfunded vested benefits. Based on the information available to the Company from the MEPPs, the Company believes that some of the MEPPs to which they contribute are underfunded and are in “critical” or “endangered” status as those terms are defined by the PPA. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPPs’ current financial situation, the Company is unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether the Company’s participation in these MEPPs could have a material adverse impact on our financial condition, results of operations or liquidity. The nature and diversity of the Company’s business may result in volatility of the amount of contributions to a particular MEPP for any given period. That is because, in any given market, the Company could be working on a significant project and/or projects, which could result in an increase in the direct labor force and a corresponding increase in contributions to the MEPP(s) dictated by the applicable CBA. When that particular project(s) finishes and is not replaced, the level of direct labor would also decrease, as would the level of contributions to the particular MEPP(s). Additionally, the level of contributions to a particular MEPP could also be affected by the terms of the CBA, which could require at a particular time, an increase in the contribution rate and/or surcharges. Total contributions to the various union construction industry MEPP, welfare, training and other benefits programs in accordance with the CBAs were $31.3 million for the year ended December 31, 2022, as compared to $36.3 million for the year ended December 31, 2021. Of these amounts, total contributions to MEPPs accounted for $12.6 million and $14.3 million for the years ended December 31, 2022 and 2021, respectively. The following table presents the MEPPs in which the Company participates. Additionally, this table also lists the PPA Zone Status for MEPPs as the critical status (red zone-less than 65% funded), the endangered status (yellow-less than 80% funded), the seriously endangered status (orange-less than 80% funded and projects a credit balance deficit within seven years) or neither critical or endangered status (green-greater than 80% funded). The zone status represents the most recent available information for the respective MEPP, which in certain circumstances is 2021 for the 2022 year. These dates may not correspond with the Company’s calendar year contributions. The zone status is based on information received from the MEPPs and is certified by the MEPPs’ actuaries. The “FIP/RP Status” column indicates MEPPs for which a financial improvement plan (FIP) or rehabilitation plan (RP) has been adopted or implemented. Pension Fund EIN/Pension PPA Zone Status FIP/RP Status Contributions (in Contributions Surcharge Expiration date 2022 2021 2022 2021 Pipefitters Local 636 Defined Benefit Pension Fund 38-3009873 / 001 Green Yellow N/A 1,483 1,437 No No May-22 (1) Plumbers Local No 98 Defined Benefit Pension Fund 38-3031916 / 001 Yellow Yellow Implemented 1,371 1,386 Yes No May-25 Sheet Metal Workers Local Union No. 80 Pension Fund 38-6105633 / 001 Green Green N/A 1,245 1,571 Yes No May-26 Sheet Metal Workers Local 98 Pension Fund 31-6171213 / 001 Green Green N/A 1,232 1,003 Yes No May 23 Plumbers and Pipefitters Local Union No. 43 Pension Fund 62-6101288 / 001 Green Green N/A 1,205 95 Yes No June-24 Pipefitters Union Local No. 537 Pension Fund 51-6030859 / 001 Green Green N/A 1,204 1,805 No No Aug-25 Sheet Metal Workers' National Pension Fund 52-6112463 / 001 Green Yellow N/A 792 701 No No Ranging from May-23 – Apr-26 Heating, Piping and Refrigeration Pension Fund 52-1058013 / 001 Green Green N/A $ 609 $ 851 No No Jul-25 Plumbers & Pipefitters Local No 189 Pension Plan 31-0894807 / 001 Green Green N/A 596 489 Yes No May-25 Steamfitters Local Union No. 420 Pension Fund 23-2004424 / 001 Red (2) Red Implemented 537 526 No No Apr-23 United Association National Pension Fund (3) 52-6152779 / 001 Green Yellow N/A 525 700 No No Ranging from May-23 - May-27 Plumbers & Pipefitters of Local Union No. 333 Pension Fund 38-3545518 / 005 Green (2) Green N/A 393 1,694 Yes No May-27 Plumbers & Steamfitters Local 577 Pension Plan 31-6134953 /001 Red Yellow Implemented 316 277 Yes No May-23 Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 / 001 Green Green N/A 247 429 No No May-24 Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada 95-6052257 / 001 Yellow Yellow Implemented 139 297 No No Jun-24 Southern California Pipe Trades Retirement Fund 51-6108443 / 001 Green (2) Green N/A 130 161 No No Aug-26 Steamfitters Local #449 Pension Plan 25-6032401 / 001 Green Green N/A 103 68 No No May-23 National Electrical Benefit Fund 53-0181657 / 001 Green Green N/A 81 1 No No May-24 Airconditioning and Refrigeration Industry Retirement Trust Fund 95-6035386 / 001 Green (2) Green N/A 74 130 No No Aug-24 Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan 22-6109064 / 001 Green Green N/A 65 57 No No Jul-27 Plumbers Local Union No. 690 Pension Fund 23-6405018 / 001 Green Green N/A 25 53 No No Apr-24 United Association Local Union No. 322 Pension Plan 21-6016638 / 001 Red Red Implemented 25 24 No Yes Apr-24 Plumbers Union Local No. 12 Pension 04-6023174 / 001 Green Green N/A 14 131 No No Aug-25 Laborers District Council Pension and Disability Trust Fund No. 2 52-0749130 / 001 Green Yellow N/A 10 33 No No Oct-25 Sheet Metal Workers Local 7, Zone 1 Pension Plan 38-6234066 / 001 Yellow Green Implemented 8 293 No No Apr-26 Sheet Metal Workers Local 224 Pension Fund 31-6171353 / 001 Yellow Yellow Implemented 5 21 No No May-24 Plumbers and Steamfitters Local 486 Pension Fund 52-6124449 / 001 Green (2) Green N/A — 15 No No Dec-22 All other plans (10 and 15 as of December 31, 2022 and 2021, respectively) 144 70 Total Contributions $ 12,578 $ 14,318 (1) A new collective bargaining agreement has not been executed as of the date of the filing of the Company’s Annual Report. (2) Funding status based off of the prior year funding notice as the current year’s funding notice was not available prior to the filing of this Annual Report on Form 10-K. (3) Formerly the Plumbers and Pipefitters National Pension Fund. |
Management Incentive Plans
Management Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Management Incentive Plans | Management Incentive Plans The Company initially adopted the Omnibus Incentive Plan on July 20, 2016 for the purpose of: (a) encouraging the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives; (b) giving participants an incentive for excellence in individual performance; (c) promoting teamwork among participants; and (d) giving the Company a significant advantage in attracting and retaining key employees, directors and consultants. To accomplish such purposes, the Omnibus Incentive Plan, and such subsequent amendments to the Omnibus Incentive Plan, provides that the Company may grant options, stock appreciation rights, restricted shares, RSUs, performance-based awards (including performance-based restricted shares and restricted stock units), other share based awards, other cash-based awards or any combination of the foregoing. Following the approval of the 2022 Amended and Restated Omnibus Incentive Plan, the Company will reserve 2,600,000 shares of its common stock for issuance. The number of shares issued or reserved pursuant to the Omnibus Incentive Plan will be adjusted by the plan administrator, as they deem appropriate and equitable, as a result of stock splits, stock dividends, and similar changes in the Company’s common stock. In connection with the grant of an award, the plan administrator may provide for the treatment of such award in the event of a change in control. All awards are made in the form of shares only. Service-Based Awards The Company grants service-based stock awards in the form of RSUs. Service-based RSUs granted to executives, employees, and non-employee directors vest ratably, on an annual basis, over three years and in the case of certain awards to non-employee directors, one year. The grant date fair value of the service-based awards was equal to the closing market price of the Company’s common stock on the date of grant. For both of the years ended December 31, 2022 and 2021, the Company recognized $1.6 million of stock-based compensation expense related to outstanding service-based RSUs. The following table summarizes the Company’s service-based RSU activity: Awards Weighted-Average Unvested at January 1, 2021 285,799 $ 6.32 Granted 127,407 11.99 Vested (144,784) 7.35 Forfeited (2,333) 8.27 Unvested at December 31, 2021 266,089 $ 8.45 Granted 184,941 8.97 Vested (146,151) 7.78 Forfeited (24,604) 9.43 Unvested at December 31, 2022 280,275 $ 9.06 Performance-Based Awards The Company grants performance-based restricted stock units (“PRSUs”) under which shares of the Company’s common stock may be earned based on the Company’s performance compared to defined metrics. The number of shares earned under a performance award may vary from zero to 150% of the target shares awarded, based upon the Company’s performance compared to the metrics. The metrics used for the grant are determined by the Company’s Compensation Committee of the Board of Directors and are based on internal measures such as the achievement of certain predetermined adjusted EBITDA, EPS growth and EBITDA margin performance goals over a three year period. The Company recognizes stock-based compensation expense for these awards over the vesting period based on the projected probability of achievement of the performance conditions as of the end of each reporting period during the performance period and may periodically adjust the recognition of such expense, as necessary, in response to any changes in the Company’s forecasts with respect to the performance conditions. For the years ended December 31, 2022 and 2021, the Company recognized $1.2 million and $0.9 million, respectively, of stock-based compensation expense related to outstanding PRSUs. The following table summarizes our PRSU activity: Awards Weighted-Average Unvested at January 1, 2021 99,500 $ 4.23 Granted 185,367 12.26 Vested — — Forfeited (4,167) 8.92 Unvested at December 31, 2021 280,700 $ 9.46 Granted 258,363 7.18 Vested — — Forfeited (41,123) 8.98 Unvested at December 31, 2022 497,940 $ 8.32 Market-Based Awards The following table summarizes our MRSU activity for the fiscal years ended December 31, 2022 and 2021: Awards Weighted-Average Unvested at January 1, 2021 102,500 $ 8.26 Granted — — Vested — — Forfeited — — Unvested at December 31, 2021 102,500 $ 8.26 Granted — — Vested — — Forfeited (102,500) 8.26 Unvested at December 31, 2022 — $ — The vesting of the MRSUs was contingent upon the Company’s closing price of a share of the Company's common stock on the Nasdaq Capital market, or such other applicable principal securities exchange or quotation system, achieving at least $18.00 over a period of eighty $0.2 million of incremental stock-based compensation expense over 1.26 years from the modification date based on an updated Monte Carlo simulation model. These awards expired on July 16, 2022 as the MRSU award market condition was not achieved. Stock-Based Compensation Expense Total recognized stock-based compensation expense amounted to $2.7 million and $2.6 million for the years ended December 31, 2022 and 2021, respectively. The aggregate fair value as of the vest date of RSUs that vested during the years ended December 31, 2022 and 2021 was $1.3 million and $1.6 million, respectively. Total unrecognized stock-based compensation expense related to unvested RSUs which are probable of vesting amounted to $2.5 million at December 31, 2022. These costs are expected to be recognized over a weighted average period of 1.61 years. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and based on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. |
Principles of Consolidation | Principles of Consolidation References in these financial statements to the Company refer collectively to the accounts of Limbach Holdings, Inc. and its wholly-owned subsidiaries, including LHLLC, Limbach Facility Services LLC (“LFS”), Limbach Company LLC (“LC LLC”), Limbach Company LP, Harper Limbach LLC, Harper Limbach Construction LLC, Limbach Facility & Project Solutions LLC, Jake Marshall, LLC (“JMLLC”) and Coating Solutions, LLC (“CSLLC”) for all periods presented, unless otherwise indicated. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements for assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the reported period, and the accompanying notes. Management believes that its most significant estimates and assumptions have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. The Company’s significant estimates include estimates associated with revenue recognition on construction contracts, costs incurred through each balance sheet date, intangibles, property and equipment, fair value accounting for acquisitions, insurance reserves, income tax valuation allowances, fair value of contingent consideration arrangements and contingencies. If the underlying estimates and assumptions upon which the consolidated financial statements are based change in the future, actual amounts may differ from those included in the accompanying consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents consist principally of currency on hand and demand deposits at commercial banks. The Company maintains demand accounts at several domestic banks. The Company's cash balances with financial institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage limit of $0.25 million. |
Restricted Cash | Restricted Cash Restricted cash is cash held at a commercial bank in an imprest account held for the purpose of funding workers’ compensation and general liability claims against the Company. This amount is replenished either when depleted or at the beginning of each month. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Doubtful Accounts The carrying value of the receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. Management provides for probable uncollectible accounts through a charge to earnings and a credit to the valuation account based on its assessment of the current status of individual accounts, type of service performed, and current economic conditions. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and an adjustment of the account receivable. The majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable as current assets. Based on assessments by management, allowances for doubtful accounts were approximately $0.2 million and $0.3 million at December 31, 2022 and 2021, respectively. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326) |
Joint Ventures | Joint Ventures The Company accounts for its participation in certain special purpose, project specific joint ventures under the equity method of accounting. The Company’s entry into these joint ventures is for the purpose of bidding, negotiating and completing specific projects. The Company and its joint venture partner(s) separately enter into their own sub-contracts with the joint venture for each party’s respective portion of the work. All revenue and expenses and the related contract assets and liabilities related to the Company’s sub-contract are recorded within the Company’s statements of operations and balance sheets, similarly to any other construction project. The joint venture itself does not accumulate any profits or losses, as the joint venture revenue is equal to the sum of the subcontracts it issues to the joint venture partners. The voting power and management of the joint ventures are shared equally by the joint venture partners, qualifying these entities for joint venture treatment under GAAP. The shared voting power and management responsibilities allow the Company to exercise significant influence without controlling the joint venture entity. As such, the Company applies the equity method of accounting as defined in ASC Topic 323, Investments – Equity Method and Joint Ventures . |
Revenue Recognition | Revenue Recognition The Company’s revenue is primarily derived from construction-type and service contracts that generally range from three months to two years. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . ASC Topic 606 provides for a five-step model for recognizing revenue from contracts with customers as follows: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue Identify the contract with a customer. A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectability of consideration is probable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with our customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectability of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and our prior collection history with such customer. Identify the performance obligations in the contract . At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for purposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price. The transaction price represents the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to our customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. Such methods include: (a) the expected value method, whereby the amount of variable consideration to be recognized represents the sum of probability weighted amounts in a range of possible consideration amounts, and (b) the most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including historical, current, and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the most likely amount method is typically utilized in situations where a contract has only two possible outcomes. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts. Pending change orders represent one of the most common forms of variable consideration included within contract value and typically 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. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied. Contract claims are another form of variable consideration which is common within our industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by us in connection with claims, such litigation costs are expensed as incurred, although we may seek to recover these costs. Allocate the transaction price to performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation. Recognize revenue as performance obligations are satisfied. Throughout the execution of our construction-type contracts, the Company recognizes revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company. Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Certain construction-type contracts include retention provisions to provide assurance to our customers that we will perform in accordance with the contract terms and are not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work by the customer. The Company has determined there are no significant financing components in our contracts during the years ended December 31, 2022 and 2021. For our service-type contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service-type contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Costs to fulfill our contracts (“pre-bid costs”) that are not expected to be recovered from the customer are expensed as incurred and included in selling, general and administrative expenses on our consolidated statements of operations. In accordance with industry practice, we classify as current all assets and liabilities relating to the performance of contracts. See Note 4 – Revenue from Contracts with Customers for further information. Changes in Estimates on Construction Contracts The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the cost to complete each project. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include: • The completeness and accuracy of the original bid; • costs associated with scope changes; • expected, or actual, resolution terms for claims; • achievement of contract incentives; • changes in costs of labor and/or materials; • extended overhead and other costs due to owner, weather and other delays; • subcontractor performance issues; • changes in productivity expectations; • site conditions that differ from those assumed in the original bid; • changes from original design on design-build projects; • the availability and skill level of workers in the geographic location of the project; • a change in the availability and proximity of equipment and materials; • our ability to fully and promptly recover on claims and back charges for additional contract costs, and • the customer's ability to properly administer the contract. Subsequent to the inception of a construction-type contract in our GCR and ODR segments, the transaction price could change for various reasons, including the executed or estimated amount of change orders and unresolved contract modifications and claims to or from owners. Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception. Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated. Changes are made to the transaction price from unapproved change orders to the extent the amount can be reasonably estimated and recovery is probable. On certain projects, we have submitted and have pending unresolved contract modifications and claims to recover additional costs and the associated profit, if applicable, to which we believe we are entitled under the terms of contracts with customers, subcontractors, vendors or others. The owners or their authorized representatives and/or other third parties may be in partial or full agreement with the modifications or claims, or may have rejected or disagree entirely or partially as to such entitlement. Changes are made to the transaction price from affirmative claims with customers to the extent that additional revenue on a claim settlement with a customer is probable and estimable. A reduction to costs related to claims with non-customers with whom we have a contractual arrangement (“back charges”) is recognized when the estimated recovery is probable and estimable. Recognizing claims and back charge recoveries requires significant judgments of certain factors including, but not limited to, dispute resolution developments and outcomes, anticipated negotiation results, and the cost of resolving such matters. The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit and gross profit margin from period to period. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Significant changes in cost estimates, particularly in our larger, more complex projects have had, and can in future periods have, a significant effect on our profitability. Management evaluates changes in estimates on a contract by contract basis and discloses significant changes, if material, in the notes to the consolidated financial statements. The cumulative catch-up method is used to account for revisions in estimates. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined. Retainage receivable represents amounts invoiced to customers where payments have been partially withheld, typically 10%, pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion. Contract assets represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Contract assets result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC Topic 606, but a portion of the revenue recorded cannot be currently billed due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. |
Goodwill and Impairment of Long-Lived Assets | Goodwill and Impairment of Long-Lived Assets Goodwill is evaluated for impairment at least annually or whenever events or changes in circumstance indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may perform either a qualitative assessment of potential impairment or proceed directly to a quantitative assessment of potential impairment. The Company's qualitative assessment of potential impairment may result in the determination that a quantitative impairment analysis is not necessary. Under this elective process, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative assessment is not required. However, if the Company concludes otherwise, a quantitative impairment analysis is performed. If the Company chooses not to perform a qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then the Company will perform a quantitative assessment. In the case of a quantitative assessment, the Company estimates the fair value of the reporting unit with which the goodwill is associated and compares it to the carrying value. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. See Note 5 – Goodwill and Intangible Assets for further detail. The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable. With respect to property, plant and equipment and finite lived intangibles, asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require the Company to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, the Company recognizes an impairment equal to the excess of carrying value over fair value as determined by quoted market prices in active markets or present value techniques if quotes are unavailable. The determination of the fair value using present value techniques requires the Company to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes the Company makes to these projections and assumptions could result in significant revisions to its evaluations of recoverability and the recognition of additional impairments. See Note 5 – Goodwill and Intangible Assets for further discussion on impairments of long-lived assets. |
Intangible Assets | Intangible Assets The Company’s indefinite-lived intangible assets associated with its trade name are evaluated for impairment at least annually or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its indefinite-lived intangible asset are less than their carrying amount. The Company’s identifiable intangible assets with finite lives are either amortized over their useful lives or over the period the Company expects to receive the related economic benefit based upon estimated future cash flows. The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The Company’s customer relationship-related intangible assets are amortized over the period the Company expects to receive the related economic benefit based upon estimated future net cash flows and its favorable leasehold interest-related intangible assets are amortized on a straight-line basis over the remaining lease terms. |
Property and Equipment, net | Property and Equipment, net Property and equipment, with the exception of our fleet vehicle finance leases, are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. For buildings and leasehold improvements, the Company’s useful lives range from 5 years to 40 years; for machinery and equipment, useful lives range from 3 years to 10 years. Expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements for our real estate operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. |
Leases | Leases A lease contract conveys the right to use an underlying asset for a period of time in exchange for consideration. At inception, we determine whether a contract contains a lease by determining if there is an identified asset and if the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Leases are classified as either operating or finance, based on our evaluation of certain criteria. With the exception of short-term leases (leases with an initial term of 12 months or less), at lease commencement, we measure and record a lease liability equal to the present value of the remaining lease payments, generally discounted using quoted borrowing rates on our secured debt as the implicit rate is not readily determinable on many of our real estate operating leases. For our fleet vehicles classified as financing leases, we use the stated interest rate in the lease. On the lease commencement date, the amount of the right-of-use (“ROU”) assets consist of the following: • the amount of the initial measurement of the lease liability; • any lease payment made at or before the commencement date, minus any lease incentives received; and • any initial direct costs incurred. Most of our operating lease contracts have the option to extend or renew. We assess the option for individual leases, and we generally consider the base term to be the term of lease contracts. See Note 14 – Leases for additional information. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of our ROU assets may not be recoverable. We use estimates of future undiscounted cash flows, as well as other economic and business factors, to assess the recoverability of these assets. |
Deferred Financing Costs and Debt Discount | Deferred Financing Costs and Debt Discount Deferred financing costs are deferred and amortized to interest expense using the effective interest rate method over the term of the related long-term debt agreement, and the straight-line method for the revolving credit agreement. Debt issuance costs related to the issuance and/or extension, as applicable, of the Company’s term loans are reflected as a direct reduction from the carrying amount of long-term debt. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an other asset. Prior to their extinguishment, the allocated fair value of the CB Warrants (defined in Note 7 ) were recorded as a debt discount and were accreted over the expected term of the debt as interest expense. See Note 7 – Debt for additional information. |
Stock-Based Compensation | Stock-Based CompensationStock-based compensation awards granted to executives, employees, and non-employee directors are measured at fair value and recognized as an expense. For awards with service conditions only, the Company recognizes compensation expense on a graded vesting basis over the requisite service period for each separately vesting tranche of the award based on the closing market price of the Company’s common stock at the grant date. For awards with service and performance conditions, the Company recognizes compensation expense based on the closing market price of the Company’s common stock at the grant date using the straight-line method over the requisite service period. Estimates of compensation expense for an award with performance conditions are based on the probable outcome of the performance conditions. The cumulative effect of changes in the probability outcomes are recorded in the period in which the changes occur. For awards with market-based conditions (“MRSUs”), the Company uses a Monte Carlo simulation model to estimate the grant-date fair value. The fair value related to market-based awards is recorded as compensation expense using the graded vesting method regardless of whether the market condition is achieved or not. The Company has elected to account for forfeitures as they occur to determine the amount of compensation expense to be recognized each period. |
Income Taxes | Income Taxes The provision for income taxes includes federal, state and local taxes. The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes , which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities and income or expense is recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in tax rates are recorded to deferred tax assets and liabilities and reflected in the provision for income taxes during the period that includes the enactment date. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, scheduling of anticipated reversals of taxable temporary differences, and considering prudent and feasible tax planning strategies. Any interest or penalties incurred related to unrecognized tax benefits are recorded as tax expense in the provision for income tax expense line item of the accompanying consolidated statements of operations. The consolidated financial statements reflect expected future tax consequences of such positions presuming the taxing authorities have full knowledge of the position and all relevant facts, but without considering time values. |
Fair Value Measurements | Fair Value Measurements The Company measures the fair value of financial assets and liabilities in accordance with ASC Topic 820 - Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 — inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date; • Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities; and • Level 3 — unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. See also Note 9 – Fair Value Measurements for further information. |
Recently Adopted Accounting Standards and Recent Accounting Pronouncements | Recently Adopted Accounting Standards In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. Under this exception, an acquirer applies ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and contract liabilities on the acquisition date. ASC 805 generally requires the acquirer in a business combination to recognize and measure the assets it acquires and the liabilities it assumes at fair value on the acquisition date. The changes are effective for annual periods beginning after December 15, 2022. The Company early adopted ASU 2021-08 in December 2021. The contract assets and contract liabilities associated with the Jake Marshall Transaction have been valued in accordance with this standard. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial instruments, including trade receivables and off-balance sheet credit exposure. Under this guidance, an entity is required to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. This ASU also requires disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. The Company adopted ASU 2016-13 on January 1, 2023 using the modified retrospective method, whereby the guidance was applied prospectively as of the date of adoption and prior periods are not restated. The adoption of this ASU did not have a material impact on the Company's financial position or results of operations. The Company assessed the scope of its financial assets and determined that the guidance associated with ASU 2016-13 is relevant to its trade accounts receivable and contract assets, including retainage. The Company’s trade receivables include amounts from work completed in which it has billed or has an unconditional right to bill its customers. The majority of the Company’s trade receivables are contractually due in less than a year. The Company further assessed the guidance based on its segment portfolio of receivables. While the Company’s construction-type GCR and ODR financial assets are often in the same subset of customers and industries, the Company’s construction-type related project work is typically bonded and the customers to which they perform work are well-known, solvent and have no history of receivable write-offs. On the contrary, the Company’s service-type work, in particular its ODR core service work, is smaller in nature and is usually more susceptible to customer write-offs. As such, there is greater risk of credit loss on the Company’s ODR-related service-type receivables. The Company’s contract assets include amounts due under retainage provisions and costs and estimated earnings in excess of billings on uncompleted contracts. The Company has policies and procedures in place where it reviews claims and change orders on a quarterly basis to determine legal entitlement and recoverability in accordance with ASC 606. As such, the Company has determined the risk of credit loss on its contracts assets to be remote. The Company develops its allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its ODR-related service-type receivables, using an aging method. Under the aging method, the Company assigns its accounts receivable to a level of delinquency and applies a loss rates to each class. Loss rates are determined based on historical loss experiences with customers, the consideration of a customer’s financial condition, current market economic conditions and a forecast of future economic conditions when appropriate. When the Company becomes aware of a customer's inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the expected amount to be collected. As part of the Company’s analysis of expected credit losses, it may analyze receivables with customers on an individual basis in situations where such accounts receivables exhibit unique risk characteristics and are not expected to experience similar losses to the rest of their class. The FASB has issued ASU 2020-04, Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020. This new guidance provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform, on financial reporting. The risk of termination of the London Interbank Offered Rate (LIBOR), has caused regulators to undertake reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based that are less susceptible to manipulation. ASU 2020-04 was effective between March 12, 2020 and December 31, 2022. However, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, extending the sunset date under Topic 848 from December 31, 2022 to December 31, 2024 to align the temporary accounting relief guidance with the expected LIBOR cessation date of June 30, 2023. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) : Scope. The amendments in this update refine the scope for certain optional expedients and exceptions for contract modifications and hedge accounting to apply to derivative contracts and certain hedging relationships affected by the discounting transition. As a result of ASU 2022-06, an entity may now elect to apply the amendments in this update from the beginning of an interim period beginning as of March 12, 2020, through December 31, 2024. The Company has evaluated the impact of adopting the reference rate reform guidance (both ASU 2020-04 and ASU 2021-01) on its consolidated financial statements and has determined that these pronouncements did not have a significant impact. As discussed in Note 7, the A&R Credit Agreement removed LIBOR as a benchmark rate and now utilizes SOFR (as defined in the A&R Credit Agreement) as its replacement. In addition, the Company’s interest rate swap utilizes SOFR as its benchmark rate. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity and amends the scope guidance for contracts in an entity's own equity. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The guidance is effective for all entities for fiscal years beginning after March 31, 2024, albeit early adoption is permitted no earlier than fiscal years beginning after December 15, 2020. Management is currently assessing the impact of this pronouncement on its consolidated financial statements. |
Earnings per Share | Earnings per Share The Company calculates earnings per share in accordance with ASC Topic 260 - Earnings Per Share (“EPS”) . Basic earnings per common share applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding and assumed to be outstanding. Diluted EPS assumes the dilutive effect of outstanding common stock warrants, shares issued in conjunction with the Company’s ESPP (defined in Note 8) and restricted stock units (“RSUs”), all using the treasury stock method. |
Operating Segments | Operating Segments As discussed in Note 1, the Company operates in two operating segments (i) GCR, in which the Company generally manages new construction or renovation projects that involve primarily HVAC, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) ODR, in which the Company performs owner direct projects and/or provides maintenance or service primarily on HVAC, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company's CODM is comprised of its President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Executive Vice President and Chief Operating Officer. The CODM evaluates performance based on income from operations of the respective branches after the allocation of corporate office operating expenses. In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the GCR work performed at branches into one GCR reportable segment and all of the ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation. The Company’s corporate |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: (in thousands) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 36,001 $ 14,476 Restricted cash 113 113 Total cash, cash equivalents and restricted cash $ 36,114 $ 14,589 |
Schedule of Property and Equipment | The following table summarizes the Company’s property and equipment: ( in thousands ) December 31, 2022 December 31, 2021 Land and improvements $ 400 $ 400 Buildings and leasehold improvements 10,489 10,721 Machinery and equipment 26,061 24,600 Finance leases - vehicles (1) 10,789 10,771 Gross property and equipment 47,739 46,492 Less: Accumulated amortization on finance leases (6,001) (5,855) Less: Accumulated depreciation (23,514) (19,016) Property and equipment, net of accumulated amortization and depreciation (2) $ 18,224 $ 21,621 (1) See additional information provided in Note 14 – Leases. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Allocation of Fair Value of Assets and Liabilities from Jake Marshall Transaction | The following table summarizes the final allocation of the fair value of the assets and liabilities of the Jake Marshall Transaction as of the Effective Date by the Company. (in thousands) Purchase Price Allocation Consideration: Cash $ 21,313 Earnout provision 3,089 Total Consideration 24,402 Fair value of assets acquired: Cash and cash equivalents 2,336 Accounts receivable 7,165 Contract assets 1,711 Other current assets 164 Property and equipment 5,762 Intangible assets 5,710 Amount attributable to assets acquired 22,848 Fair value of liabilities assumed: Accounts payable, including retainage 2,655 Accrued expenses and other current liabilities 570 Contract liabilities 462 Amount attributable to liabilities assumed 3,687 Goodwill $ 5,241 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Components of Contract Asset and Liability Balances | The components of the contract asset balances as of the respective dates were as follows: (in thousands) December 31, 2022 December 31, 2021 Change Contract assets Costs and estimated earnings in excess of billings on uncompleted contracts $ 33,573 $ 47,447 $ (13,874) Retainage receivable 27,880 36,416 (8,536) Total contract assets $ 61,453 $ 83,863 $ (22,410) (in thousands) December 31, 2022 December 31, 2021 Change Contract liabilities Billings in excess of costs and estimated earnings on uncompleted contracts $ 43,806 $ 26,293 $ 17,513 Provisions for losses 201 419 (218) Total contract liabilities $ 44,007 $ 26,712 $ 17,295 |
Schedule of Contracts in Progress | The net (overbilling) underbilling position for contracts in process consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Revenue earned on uncompleted contracts $ 678,014 $ 758,450 Less: Billings to date (688,247) (737,296) Net (overbilling) underbilling $ (10,233) $ 21,154 (in thousands) December 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings on uncompleted contracts $ 33,573 $ 47,447 Billings in excess of costs and estimated earnings on uncompleted contracts (43,806) (26,293) Net (overbilling) underbilling $ (10,233) $ 21,154 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The following table summarizes the carrying amount of goodwill associated with the Company's segments for the years ended December 31, 2022 and 2021. (in thousands) GCR ODR Total Goodwill as of January 1, 2021 $ — $ 6,129 $ 6,129 Goodwill associated with the Jake Marshall Transaction — 5,241 5,241 Goodwill as of December 31, 2021 — 11,370 11,370 Goodwill as of December 31, 2022 $ — $ 11,370 $ 11,370 |
Schedule of Definite-lived and Indefinite-lived Intangible Assets | Definite-lived and indefinite-lived intangible assets consist of the following: (in thousands) Gross Accumulated Net intangible December 31, 2022 Amortized intangible assets: Customer relationships – GCR – Jake Marshall $ 570 $ (87) $ 483 Customer relationships – ODR – Jake Marshall 3,050 (436) 2,614 Customer relationships – ODR – Limbach 4,710 (3,765) 945 Favorable leasehold interests – Limbach 190 (97) 93 Backlog – GCR – Jake Marshall 260 (178) 82 Backlog – ODR – Jake Marshall 680 (465) 215 Trade name – Jake Marshall 1,150 (202) 948 Total amortized intangible assets 10,610 (5,230) 5,380 Unamortized intangible assets: Trade name – Limbach (1) 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (5,230) $ 15,340 (1) The Company has determined that its trade name has an indefinite useful life. The Limbach trade name has been in existence since the Company’s founding in 1901 and therefore is an established brand within the industry. (in thousands) Gross Accumulated Net intangible December 31, 2021 Amortized intangible assets: Customer relationships – GCR – Jake Marshall $ 570 $ (6) $ 564 Customer relationships – ODR – Jake Marshall 3,050 (35) 3,015 Customer relationships – ODR – Limbach 4,710 (3,475) 1,235 Favorable leasehold interests – Limbach 190 (82) 108 Backlog – GCR – Jake Marshall 260 (14) 246 Backlog – ODR – Jake Marshall 680 (36) 644 Trade name – Jake Marshall 1,150 (15) 1,135 Total amortized intangible assets 10,610 (3,663) 6,947 Unamortized intangible assets: Trade name – Limbach 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (3,663) $ 16,907 |
Schedule of Estimated Remaining Useful Lives of Definite-lived Intangible Assets | The estimated remaining useful lives of definite-lived intangible assets are as follows: Intangible Asset Amortization Method Estimated Remaining Useful Customer relationships – GCR – Jake Marshall Straight line 6.0 Customer Relationships – ODR – Limbach Pattern of economic benefit 8.0 Customer Relationships – ODR – Jake Marshall Straight line 6.5 Favorable Leasehold Interests – Limbach Straight line 6.2 Backlog – GCR – Jake Marshall Straight line 0.5 Backlog – ODR – Jake Marshall Straight line 0.5 Trade name – Jake Marshall Straight line 5.1 |
Schedule of Estimated Amortization Expense | Estimated amortization expense is as follows for the years ending December 31: (in thousands) Estimated Amortization Expense 2023 $ 1,211 2024 867 2025 830 2026 800 2027 776 2028 and thereafter 896 Total $ 5,380 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities are comprised of the following: ( in thousand s) December 31, 2022 December 31, 2021 Accrued payroll and related liabilities $ 4,545 $ 8,169 Accrued bonus and commissions 9,682 7,352 Accrued insurance liabilities 715 719 Accrued job costs 1,913 3,772 Assurance-type warranty liabilities 1,581 3,310 Estimated loss contingency 2,182 — Earnout Payments accrued, current 2,859 — Other accrued liabilities 1,465 1,122 Total $ 24,942 $ 24,444 |
Schedule of Reconciliation of Assurance-type Warranties | Our reconciliation of assurance-type warranties are as follows: ( in thousand s) December 31, 2022 December 31, 2021 Balance at the beginning of the period $ 3,310 $ 4,056 Accruals for warranties issued 302 432 Accruals related to pre-existing warranties (including changes in estimates) (494) 401 Settlements made (1,537) (1,579) Balance at the end of the period $ 1,581 $ 3,310 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following obligations as of: ( in thousand s) December 31, 2022 December 31, 2021 A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 $ 21,453 $ 34,881 A&R Wintrust Revolving Loan — — Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 6.60% through 2027 4,954 5,132 Financing liability 5,351 — Total debt $ 31,758 $ 40,013 Less - Current portion of long-term debt (9,564) (9,879) Less - Unamortized discount and debt issuance costs (666) (318) Long-term debt $ 21,528 $ 29,816 |
Schedule of Maturities of Long-term Debt and Finance Leases | Maturities of long-term debt and finance leases at December 31, 2022 are as follows: ( in thousands ) 2023 $ 9,564 2024 8,858 2025 7,537 2026 437 2027 and thereafter 5,362 Total $ 31,758 |
Schedule of Applicable Margin and Fees Payable | The following is a summary of the applicable margin and commitment fees payable on the available A&R Wintrust Term Loan and A&R Wintrust Revolving Loan credit commitment: Level Senior Leverage Ratio Additional Margin for Additional Margin for Additional Margin for Eurodollar Term loans I Greater than 1.00 to 1.00 1.00 % 0.50 % 0.25 % II Less than or equal to 1.00 to 1.00 0.25 % — % 0.25 % |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Outstanding Warrants | The following table summarizes the underlying shares of common stock with respect to outstanding warrants: December 31, 2022 December 31, 2021 $15 Exercise Price Sponsor Warrants (1)(2) 600,000 600,000 Merger Warrants (3)(4) 629,643 629,643 Total 1,229,643 1,229,643 (1) Exercisable for one share of common stock at an exercise price of $15.00 per share (“$15 Exercise Price Sponsor Warrants”). (2) Issued under a warrant agreement dated July 15, 2014, between Continental Stock Transfer and Trust Company, as warrant agent, and the Company. (3) Exercisable for one share of common stock at an exercise price of $12.50 per share (“Merger Warrants”). (4) Issued to the sellers of LHLLC. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the basic and diluted earnings per share attributable to the Company's common shareholders for the years ended December 31, 2022 and 2021: For the Years Ended (in thousands, except per share amounts) December 31, 2022 December 31, 2021 EPS numerator: Net income $ 6,799 $ 6,714 EPS denominator: Weighted average shares outstanding – basic 10,425 10,013 Nonvested restricted stock units 247 215 Employee stock purchase plan 5 4 Weighted average shares outstanding – diluted 10,677 10,232 EPS: Basic $ 0.65 $ 0.67 Diluted $ 0.64 $ 0.66 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the securities that were antidilutive or out-of-the-money, and therefore, were not included in the computations of diluted income per common share: For the Years Ended December 31, 2022 December 31, 2021 Out-of-the-money warrants 1,229,643 2,981,473 Service-based RSUs — 54 Performance and market-based RSUs (1) — 14,164 Employee stock purchase plan 1,573 — Total 1,231,216 2,995,691 (1) For the years ended December 31, 2022 and 2021, certain PRSU and MRSU awards (each defined in Note 17) were not included in the computation of diluted income per common share because the performance and market conditions were not satisfied during the periods and would not be satisfied if the reporting date was at the end of the contingency period. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The Company’s provision for income taxes relating to continuing operations consists of the following: For the Years Ended (in thousands) December 31, 2022 December 31, 2021 Current tax provision U.S. Federal $ 2,613 $ 812 State and local 695 194 Total current tax provision 3,308 1,006 Deferred tax provision U.S. Federal (584) 1,127 State and local 85 630 Total deferred tax provision (499) 1,757 Income tax provision $ 2,809 $ 2,763 |
Schedule of Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows: For the Years Ended December 31, 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal tax effect 6.4 % 7.0 % Stock based compensation – restricted stock 1.4 % (1.1) % Return to provision adjustment (0.1) % 1.2 % Permanent differences 1.3 % 1.9 % Tax credits (0.9) % (0.8) % Effective tax rate 29.2 % 29.2 % |
Schedule of Deferred Tax Assets (Liabilities) | The significant components of deferred tax assets (liabilities) were as follows: As of As of December 31, (in thousands) 2022 2021 Deferred tax assets: Accrued expenses $ 950 $ 1,328 Allowance for doubtful accounts 60 68 Intangibles 463 524 Goodwill 3,301 3,304 Startup costs 68 79 Stock-based compensation 1,066 881 Research and development expenses 640 — Lease liabilities 6,280 5,547 Accrued bonuses and commissions 253 1,810 Total deferred tax assets 13,081 13,541 Deferred tax liabilities: Fixed assets (3,248) (3,775) Right-of-use assets (4,684) (5,231) Percentage of completion (241) (205) Interest (79) — Total deferred tax liabilities (8,252) (9,211) Net deferred tax asset $ 4,829 $ 4,330 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Consolidated segment information for the periods presented is as follows: For the Years Ended December 31, (in thousands) 2022 2021 Statement of Operations Data: Revenue: GCR $ 280,379 $ 350,015 ODR 216,403 140,336 Total revenue 496,782 490,351 Gross profit: GCR 38,622 45,409 ODR 55,119 40,501 Total gross profit 93,741 85,910 Selling, general and administrative: GCR 36,332 37,558 ODR 38,805 31,277 Corporate 2,742 2,601 Total selling, general and administrative 77,879 71,436 Change in fair value of contingent consideration 2,285 — Amortization of intangibles 1,567 484 Operating income $ 12,010 $ 13,990 Less unallocated amounts: Interest expense, net (2,144) (2,568) Loss on early termination of operating lease (849) — Loss on early debt extinguishment — (1,961) Gain on change in fair value of interest rate swap 310 — Gain on disposition of property and equipment 281 2 Gain on change in fair value of warrant liability — 14 Total unallocated amounts (2,402) (4,513) Total consolidated income before income taxes $ 9,608 $ 9,477 Other Data: Depreciation and amortization: GCR $ 4,307 $ 4,085 ODR 2,284 1,379 Corporate 1,567 484 Total other data $ 8,158 $ 5,948 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Self-insurance | The components of the self-insurance liability as of December 31, 2022 and 2021 are as follows: (in thousands) December 31, 2022 December 31, 2021 Current liability — workers' compensation and general liability $ 158 $ 184 Current liability — medical and dental 557 456 Non-current liability 343 451 Total liability $ 1,058 $ 1,091 Restricted cash $ 113 $ 113 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheets Information | The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2022 December 31, 2021 Assets Operating Operating lease right-of-use assets (1) $ 18,288 $ 20,119 Finance Property and equipment, net (2)(3) 7,402 4,916 Total lease assets $ 25,690 $ 25,035 Liabilities Current Operating Current operating lease liabilities $ 3,562 $ 4,366 Finance Current portion of long-term debt 2,135 2,451 Noncurrent Operating Long-term operating lease liabilities 15,643 16,576 Finance Long-term debt (4) 8,170 2,681 Total lease liabilities $ 29,510 $ 26,074 (1) Operating lease assets are recorded net of accumulated amortization of $12.2 million and $15.9 million at December 31, 2022 and 2021, respectively. (2) Finance lease assets are recorded net of accumulated amortization of $6.0 million and $5.9 million at December 31, 2022 and 2021, respectively. (3) Includes approximately $2.6 million of net property assets associated with the Company's Pontiac Facility. (4) Includes approximately $5.4 million, net of issuance costs, associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. |
Schedule of Lease Costs, Terms and Discount Rates | The following table summari zes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2022 December 31, 2021 Operating lease cost Cost of revenue (1) $ 2,627 $ 2,901 Operating lease cost Selling, general and administrative (1) 2,555 2,223 Finance lease cost: Amortization Cost of revenue (2) 2,687 2,622 Interest Interest expense, net (2) 264 305 Total lease cost $ 8,133 $ 8,051 (1) Operating lease costs recorded in cost of revenue includes $0.5 million of variable lease costs for both the years ended December 31, 2022 and 2021, respectively. In addition, $0.5 million and $0.4 million of variable lease costs are included in selling, general and administrative expenses for the years ended December 31, 2022 and 2021, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.8 million and $2.8 million of variable leases costs for the years ended December 31, 2022 and 2021, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2022 and 2021. The following is a summary of the lease terms and discount rates as of: December 31, 2022 December 31, 2021 Weighted average lease term (in years): Operating 6.98 7.10 Finance (1) 2.73 2.51 Weighted average discount rate: Operating 4.76 % 4.68 % Finance (1) 5.06 % 5.27 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. |
Schedule of Future Minimum Commitment for Finance Leases | Future minimum commitments for finance and operating leases that have non-cancelable lease terms in excess of one year as of the year ended December 31, 2022 were as follows (in thousands): Finance Leases Operating Leases Year ending December 31: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Sublease Receipts (2) Total Operating 2023 $ 2,135 $ — $ 2,135 $ 3,948 $ 450 $ (885) $ 3,513 2024 1,429 — 1,429 3,259 450 (912) 2,797 2025 942 — 942 2,745 450 (939) 2,256 2026 437 — 437 2,625 450 (967) 2,108 2027 11 — 11 1,645 540 (326) 1,859 Thereafter — 5,351 5,351 1,834 4,275 — 6,109 Total minimum lease payments $ 4,954 $ 5,351 $ 10,305 $ 16,056 $ 6,615 $ (4,029) $ 18,642 Amounts representing interest 357 11,593 11,950 Aggregate future value of minimum lease payments $ 5,311 $ 16,944 $ 22,255 (1) Associated with the aforementioned related party lease entered into with a former member of JMLLC. (2) Associated with the aforementioned third party sublease. |
Schedule of Future Minimum Commitment for Operating Leases | Future minimum commitments for finance and operating leases that have non-cancelable lease terms in excess of one year as of the year ended December 31, 2022 were as follows (in thousands): Finance Leases Operating Leases Year ending December 31: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Sublease Receipts (2) Total Operating 2023 $ 2,135 $ — $ 2,135 $ 3,948 $ 450 $ (885) $ 3,513 2024 1,429 — 1,429 3,259 450 (912) 2,797 2025 942 — 942 2,745 450 (939) 2,256 2026 437 — 437 2,625 450 (967) 2,108 2027 11 — 11 1,645 540 (326) 1,859 Thereafter — 5,351 5,351 1,834 4,275 — 6,109 Total minimum lease payments $ 4,954 $ 5,351 $ 10,305 $ 16,056 $ 6,615 $ (4,029) $ 18,642 Amounts representing interest 357 11,593 11,950 Aggregate future value of minimum lease payments $ 5,311 $ 16,944 $ 22,255 (1) Associated with the aforementioned related party lease entered into with a former member of JMLLC. (2) Associated with the aforementioned third party sublease. |
Schedule of Supplemental Cash Flow Information | The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,055 $ 4,938 Operating cash flows from finance leases 264 305 Financing cash flows from finance leases 2,734 2,623 Right-of-use assets exchanged for lease liabilities Operating leases $ — $ 5,417 Finance leases 2,634 1,296 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 2,455 $ 219 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (77) $ — |
Multiemployer Pension Plans (Ta
Multiemployer Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Multiemployer Plans | The following table presents the MEPPs in which the Company participates. Additionally, this table also lists the PPA Zone Status for MEPPs as the critical status (red zone-less than 65% funded), the endangered status (yellow-less than 80% funded), the seriously endangered status (orange-less than 80% funded and projects a credit balance deficit within seven years) or neither critical or endangered status (green-greater than 80% funded). The zone status represents the most recent available information for the respective MEPP, which in certain circumstances is 2021 for the 2022 year. These dates may not correspond with the Company’s calendar year contributions. The zone status is based on information received from the MEPPs and is certified by the MEPPs’ actuaries. The “FIP/RP Status” column indicates MEPPs for which a financial improvement plan (FIP) or rehabilitation plan (RP) has been adopted or implemented. Pension Fund EIN/Pension PPA Zone Status FIP/RP Status Contributions (in Contributions Surcharge Expiration date 2022 2021 2022 2021 Pipefitters Local 636 Defined Benefit Pension Fund 38-3009873 / 001 Green Yellow N/A 1,483 1,437 No No May-22 (1) Plumbers Local No 98 Defined Benefit Pension Fund 38-3031916 / 001 Yellow Yellow Implemented 1,371 1,386 Yes No May-25 Sheet Metal Workers Local Union No. 80 Pension Fund 38-6105633 / 001 Green Green N/A 1,245 1,571 Yes No May-26 Sheet Metal Workers Local 98 Pension Fund 31-6171213 / 001 Green Green N/A 1,232 1,003 Yes No May 23 Plumbers and Pipefitters Local Union No. 43 Pension Fund 62-6101288 / 001 Green Green N/A 1,205 95 Yes No June-24 Pipefitters Union Local No. 537 Pension Fund 51-6030859 / 001 Green Green N/A 1,204 1,805 No No Aug-25 Sheet Metal Workers' National Pension Fund 52-6112463 / 001 Green Yellow N/A 792 701 No No Ranging from May-23 – Apr-26 Heating, Piping and Refrigeration Pension Fund 52-1058013 / 001 Green Green N/A $ 609 $ 851 No No Jul-25 Plumbers & Pipefitters Local No 189 Pension Plan 31-0894807 / 001 Green Green N/A 596 489 Yes No May-25 Steamfitters Local Union No. 420 Pension Fund 23-2004424 / 001 Red (2) Red Implemented 537 526 No No Apr-23 United Association National Pension Fund (3) 52-6152779 / 001 Green Yellow N/A 525 700 No No Ranging from May-23 - May-27 Plumbers & Pipefitters of Local Union No. 333 Pension Fund 38-3545518 / 005 Green (2) Green N/A 393 1,694 Yes No May-27 Plumbers & Steamfitters Local 577 Pension Plan 31-6134953 /001 Red Yellow Implemented 316 277 Yes No May-23 Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 / 001 Green Green N/A 247 429 No No May-24 Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada 95-6052257 / 001 Yellow Yellow Implemented 139 297 No No Jun-24 Southern California Pipe Trades Retirement Fund 51-6108443 / 001 Green (2) Green N/A 130 161 No No Aug-26 Steamfitters Local #449 Pension Plan 25-6032401 / 001 Green Green N/A 103 68 No No May-23 National Electrical Benefit Fund 53-0181657 / 001 Green Green N/A 81 1 No No May-24 Airconditioning and Refrigeration Industry Retirement Trust Fund 95-6035386 / 001 Green (2) Green N/A 74 130 No No Aug-24 Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan 22-6109064 / 001 Green Green N/A 65 57 No No Jul-27 Plumbers Local Union No. 690 Pension Fund 23-6405018 / 001 Green Green N/A 25 53 No No Apr-24 United Association Local Union No. 322 Pension Plan 21-6016638 / 001 Red Red Implemented 25 24 No Yes Apr-24 Plumbers Union Local No. 12 Pension 04-6023174 / 001 Green Green N/A 14 131 No No Aug-25 Laborers District Council Pension and Disability Trust Fund No. 2 52-0749130 / 001 Green Yellow N/A 10 33 No No Oct-25 Sheet Metal Workers Local 7, Zone 1 Pension Plan 38-6234066 / 001 Yellow Green Implemented 8 293 No No Apr-26 Sheet Metal Workers Local 224 Pension Fund 31-6171353 / 001 Yellow Yellow Implemented 5 21 No No May-24 Plumbers and Steamfitters Local 486 Pension Fund 52-6124449 / 001 Green (2) Green N/A — 15 No No Dec-22 All other plans (10 and 15 as of December 31, 2022 and 2021, respectively) 144 70 Total Contributions $ 12,578 $ 14,318 (1) A new collective bargaining agreement has not been executed as of the date of the filing of the Company’s Annual Report. (2) Funding status based off of the prior year funding notice as the current year’s funding notice was not available prior to the filing of this Annual Report on Form 10-K. (3) Formerly the Plumbers and Pipefitters National Pension Fund. |
Management Incentive Plans (Tab
Management Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RSUs | |
Schedule of Share-based Awards Activity | The following table summarizes the Company’s service-based RSU activity: Awards Weighted-Average Unvested at January 1, 2021 285,799 $ 6.32 Granted 127,407 11.99 Vested (144,784) 7.35 Forfeited (2,333) 8.27 Unvested at December 31, 2021 266,089 $ 8.45 Granted 184,941 8.97 Vested (146,151) 7.78 Forfeited (24,604) 9.43 Unvested at December 31, 2022 280,275 $ 9.06 |
PRSUs | |
Schedule of Share-based Awards Activity | The following table summarizes our PRSU activity: Awards Weighted-Average Unvested at January 1, 2021 99,500 $ 4.23 Granted 185,367 12.26 Vested — — Forfeited (4,167) 8.92 Unvested at December 31, 2021 280,700 $ 9.46 Granted 258,363 7.18 Vested — — Forfeited (41,123) 8.98 Unvested at December 31, 2022 497,940 $ 8.32 |
MRSUs | |
Schedule of Share-based Awards Activity | The following table summarizes our MRSU activity for the fiscal years ended December 31, 2022 and 2021: Awards Weighted-Average Unvested at January 1, 2021 102,500 $ 8.26 Granted — — Vested — — Forfeited — — Unvested at December 31, 2021 102,500 $ 8.26 Granted — — Vested — — Forfeited (102,500) 8.26 Unvested at December 31, 2022 — $ — |
Business and Organization (Deta
Business and Organization (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Service period | 2 years |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash and Cash Equivalents [Line Items] | ||
FDIC coverage limit | $ 250,000 | |
Cash balance in excess of FDIC limit | 34,700,000 | $ 13,500,000 |
Allowance for doubtful accounts | 234,000 | 263,000 |
Depreciation and amortization | $ 6,600,000 | $ 5,500,000 |
Minimum | ||
Cash and Cash Equivalents [Line Items] | ||
Term of service contract | 3 months | |
Minimum | Buildings and leasehold improvements | ||
Cash and Cash Equivalents [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Minimum | Machinery and equipment | ||
Cash and Cash Equivalents [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Maximum | ||
Cash and Cash Equivalents [Line Items] | ||
Term of service contract | 2 years | |
Maximum | Buildings and leasehold improvements | ||
Cash and Cash Equivalents [Line Items] | ||
Property, plant and equipment, useful life | 40 years | |
Maximum | Machinery and equipment | ||
Cash and Cash Equivalents [Line Items] | ||
Property, plant and equipment, useful life | 10 years |
Significant Accounting Polici_5
Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 36,001 | $ 14,476 | |
Restricted cash | 113 | 113 | |
Total cash, cash equivalents and restricted cash | $ 36,114 | $ 14,589 | $ 42,260 |
Significant Accounting Polici_6
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Finance leases - vehicles | $ 10,789 | $ 10,771 |
Gross property and equipment | 47,739 | 46,492 |
Less: Accumulated amortization on finance leases | (6,001) | (5,855) |
Less: Accumulated depreciation | (23,514) | (19,016) |
Property and equipment, net of accumulated depreciation and amortization | 18,224 | 21,621 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 400 | 400 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 10,489 | 10,721 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 26,061 | $ 24,600 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 02, 2021 USD ($) payment | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |||
Goodwill associated with acquisition | $ 5,241 | ||
ODR | |||
Business Acquisition [Line Items] | |||
Goodwill associated with acquisition | 5,241 | ||
Jake Marshall Transaction | |||
Business Acquisition [Line Items] | |||
Closing purchase price | $ 21,313 | ||
Amount of consideration paid held in escrow for indemnification purposes | 1,000 | ||
Earnout payments | 6,000 | ||
Acquisition-related expenses | $ 600 | ||
Jake Marshall Transaction | ODR | |||
Business Acquisition [Line Items] | |||
Goodwill associated with acquisition | 5,200 | ||
Goodwill fully deductible for tax purposes | 5,200 | ||
Jake Marshall Transaction | Equal or Exceeds | |||
Business Acquisition [Line Items] | |||
Earnout payments | $ 5,400 | ||
Jake Marshall Transaction | 2022 Earnout Period | |||
Business Acquisition [Line Items] | |||
Earnout payments | $ 3,000 | ||
Number of earnout tranches | payment | 2 | ||
Earnout period | 13 months | ||
Jake Marshall Transaction | 2022 Earnout Period | Equal or Exceeds | |||
Business Acquisition [Line Items] | |||
Gross profits from acquired companies | $ 10,000 | ||
Jake Marshall Transaction | 2022 Earnout Period | Exceeds | |||
Business Acquisition [Line Items] | |||
Gross profits from acquired companies | 8,000 | ||
Jake Marshall Transaction | 2023 Earnout Period | |||
Business Acquisition [Line Items] | |||
Earnout payments | $ 3,000 | ||
Number of earnout tranches | payment | 2 | ||
Earnout period | 13 months | ||
Jake Marshall Transaction | 2023 Earnout Period | Equal or Exceeds | |||
Business Acquisition [Line Items] | |||
Gross profits from acquired companies | $ 10,000 | ||
Jake Marshall Transaction | 2023 Earnout Period | Exceeds | |||
Business Acquisition [Line Items] | |||
Gross profits from acquired companies | $ 8,000 |
Acquisitions - Allocation of Pu
Acquisitions - Allocation of Purchase Price of Assets and Liabilities from Jake Marshall Transaction (Details) - USD ($) $ in Thousands | Dec. 02, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value of liabilities assumed: | ||||
Goodwill | $ 11,370 | $ 11,370 | $ 6,129 | |
Jake Marshall Transaction | ||||
Consideration: | ||||
Cash | $ 21,313 | |||
Earnout provision | 3,089 | |||
Total Consideration | 24,402 | |||
Fair value of assets acquired: | ||||
Cash and cash equivalents | 2,336 | |||
Accounts receivable | 7,165 | |||
Contract assets | 1,711 | |||
Other current assets | 164 | |||
Property and equipment | 5,762 | |||
Intangible assets | 5,710 | |||
Amount attributable to assets acquired | 22,848 | |||
Fair value of liabilities assumed: | ||||
Accounts payable, including retainage | 2,655 | |||
Accrued expenses and other current liabilities | 570 | |||
Contract liabilities | 462 | |||
Amount attributable to liabilities assumed | 3,687 | |||
Goodwill | $ 5,241 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) project | Dec. 31, 2021 USD ($) project | |
Disaggregation of Revenue [Line Items] | ||
Term of revenue contracts | three months to two years | |
Percentage completed of certain milestones | 10% | |
Net amount of unresolved change orders and claims | $ 28.5 | $ 38.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months | |
GCR | ||
Disaggregation of Revenue [Line Items] | ||
Number of projects with write downs | project | 3 | 3 |
Total net gross profits write ups (downs) | $ 3 | $ 2.7 |
Total net gross profits write ups (downs) | project | 4 | 5 |
Total gross profit write downs | $ (2.8) | $ (4.9) |
Revision amount of gross profit contract estimates (more than) | 0.5 | $ 0.5 |
GCR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 302.9 | |
Revenue, remaining performance obligation, percentage | 68% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
GCR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, percentage | 32% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
ODR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 90 | |
Revenue, remaining performance obligation, percentage | 90% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
ODR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, percentage | 10% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Components of Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contract assets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 33,573 | $ 47,447 |
Retainage receivable | 27,880 | 36,416 |
Contract assets | 61,453 | 83,863 |
Change in Costs in excess of billings and estimated earnings | (13,874) | |
Change in Retainage receivable | (8,536) | |
Change in Total contract assets | (22,410) | |
Contract liabilities | ||
Billings in excess of costs and estimated earnings on uncompleted contracts | 43,806 | 26,293 |
Provisions for losses | 201 | 419 |
Total contract liabilities | 44,007 | $ 26,712 |
Change in Billings in excess of costs and estimated earnings | 17,513 | |
Change in Provisions for losses | (218) | |
Change in Total contract liabilities | $ 17,295 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contracts in Progress (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Revenue earned on uncompleted contracts | $ 678,014 | $ 758,450 |
Less: Billings to date | (688,247) | (737,296) |
Net (overbilling) underbilling | (10,233) | 21,154 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 33,573 | 47,447 |
Billings in excess of costs and estimated earnings on uncompleted contracts | $ (43,806) | $ (26,293) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 11,370,000 | $ 11,370,000 | $ 11,370,000 | $ 6,129,000 | |
Impairment of intangible assets | 0 | 0 | |||
Amortization of intangibles | $ 1,567,000 | $ 484,000 | |||
Trade Names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amount of fair value of intangibles in excess of carrying value | $ 1,000,000 | ||||
Percentage of fair value of intangibles in excess of carrying amount | 0.10 | ||||
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible asset, useful life | 1 year | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible asset, useful life | 15 years | ||||
ODR | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amount of fair value of reporting unit in excess of carrying amount | $ 47,200,000 | $ 33,300,000 | $ 47,200,000 | ||
Percentage of fair value or reporting unit in excess of carrying amount | 194% | 169% | 194% | ||
Goodwill impairment | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 6,129 |
Goodwill associated with the Jake Marshall Transaction | 5,241 |
Ending Balance | 11,370 |
GCR | |
Goodwill [Roll Forward] | |
Beginning Balance | 0 |
Goodwill associated with the Jake Marshall Transaction | 0 |
Ending Balance | 0 |
ODR | |
Goodwill [Roll Forward] | |
Beginning Balance | 6,129 |
Goodwill associated with the Jake Marshall Transaction | 5,241 |
Ending Balance | $ 11,370 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Definite-lived and Indefinite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized intangible assets: | ||
Gross carrying amount | $ 10,610 | $ 10,610 |
Accumulated amortization | (5,230) | (3,663) |
Total | 5,380 | 6,947 |
Unamortized intangible assets: | ||
Gross carrying amount | 9,960 | 9,960 |
Net intangible assets, excluding goodwill | 9,960 | 9,960 |
Intangible Assets, Gross (Excluding Goodwill), Total | 20,570 | 20,570 |
Accumulated amortization | (5,230) | (3,663) |
Intangible Assets, Net (Excluding Goodwill), Total | 15,340 | 16,907 |
Trade Names | ||
Unamortized intangible assets: | ||
Gross carrying amount | 9,960 | 9,960 |
Net intangible assets, excluding goodwill | 9,960 | 9,960 |
Customer relationships | GCR | Jake Marshall Transaction | ||
Amortized intangible assets: | ||
Gross carrying amount | 570 | 570 |
Accumulated amortization | (87) | (6) |
Total | 483 | 564 |
Unamortized intangible assets: | ||
Accumulated amortization | (87) | (6) |
Customer relationships | ODR | ||
Amortized intangible assets: | ||
Gross carrying amount | 4,710 | 4,710 |
Accumulated amortization | (3,765) | (3,475) |
Total | 945 | 1,235 |
Unamortized intangible assets: | ||
Accumulated amortization | (3,765) | (3,475) |
Customer relationships | ODR | Jake Marshall Transaction | ||
Amortized intangible assets: | ||
Gross carrying amount | 3,050 | 3,050 |
Accumulated amortization | (436) | (35) |
Total | 2,614 | 3,015 |
Unamortized intangible assets: | ||
Accumulated amortization | (436) | (35) |
Favorable leasehold interests | ||
Amortized intangible assets: | ||
Gross carrying amount | 190 | 190 |
Accumulated amortization | (97) | (82) |
Total | 93 | 108 |
Unamortized intangible assets: | ||
Accumulated amortization | (97) | (82) |
Backlog | GCR | Jake Marshall Transaction | ||
Amortized intangible assets: | ||
Gross carrying amount | 260 | 260 |
Accumulated amortization | (178) | (14) |
Total | 82 | 246 |
Unamortized intangible assets: | ||
Accumulated amortization | (178) | (14) |
Backlog | ODR | Jake Marshall Transaction | ||
Amortized intangible assets: | ||
Gross carrying amount | 680 | 680 |
Accumulated amortization | (465) | (36) |
Total | 215 | 644 |
Unamortized intangible assets: | ||
Accumulated amortization | (465) | (36) |
Trade Names | Jake Marshall Transaction | ||
Amortized intangible assets: | ||
Gross carrying amount | 1,150 | 1,150 |
Accumulated amortization | (202) | (15) |
Total | 948 | 1,135 |
Unamortized intangible assets: | ||
Accumulated amortization | $ (202) | $ (15) |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Remaining Useful Lives of Definite-Lived Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Customer relationships | GCR | Jake Marshall Transaction | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 6 years |
Customer relationships | ODR | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 8 years |
Customer relationships | ODR | Jake Marshall Transaction | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 6 years 6 months |
Favorable leasehold interests | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 6 years 2 months 12 days |
Backlog | GCR | Jake Marshall Transaction | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 6 months |
Backlog | ODR | Jake Marshall Transaction | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 6 months |
Trade Names | Jake Marshall Transaction | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Remaining Useful Life (Years) | 5 years 1 month 6 days |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,211 | |
2024 | 867 | |
2025 | 830 | |
2026 | 800 | |
2027 | 776 | |
2028 and thereafter | 896 | |
Total | $ 5,380 | $ 6,947 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related liabilities | $ 4,545 | $ 8,169 |
Accrued bonus and commissions | 9,682 | 7,352 |
Accrued insurance liabilities | 715 | 719 |
Accrued job costs | 1,913 | 3,772 |
Assurance-type warranty liabilities | 1,581 | 3,310 |
Estimated loss contingency | 2,182 | 0 |
Earnout Payments accrued, current | 2,859 | 0 |
Other accrued liabilities | 1,465 | 1,122 |
Total | $ 24,942 | $ 24,444 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Reconciliation of Assurance-type Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 3,310 | $ 4,056 |
Accruals for warranties issued | 302 | 432 |
Accruals related to pre-existing warranties (including changes in estimates) | (494) | 401 |
Settlements made | (1,537) | (1,579) |
Ending balance | $ 1,581 | $ 3,310 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) | 12 Months Ended | |||
Feb. 24, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 12, 2019 | |
Debt Instrument [Line Items] | ||||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 6.60% through 2027 | $ 10,305,000 | |||
Total debt | 31,758,000 | $ 40,013,000 | ||
Less - Current portion of long-term debt | (9,564,000) | (9,879,000) | ||
Less - Unamortized discount and debt issuance costs | (666,000) | (318,000) | ||
Long-term debt | 21,528,000 | 29,816,000 | ||
Loss on early debt extinguishment | 0 | 1,961,000 | ||
Prepayment penalty and other extinguishment costs | 0 | 1,376,000 | ||
Vehicles | ||||
Debt Instrument [Line Items] | ||||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 6.60% through 2027 | 4,954,000 | 5,132,000 | ||
Building | ||||
Debt Instrument [Line Items] | ||||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 6.60% through 2027 | $ 5,351,000 | 0 | ||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Finance leases, interest rate | 3.96% | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Finance leases, interest rate | 6.60% | |||
Refinancing Agreement 2019 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 0 | |||
Loss on early debt extinguishment | $ 2,000,000 | |||
Write-off of unamortized discount and financing costs | 2,600,000 | |||
(Income) expense recorded on change in fair value of warrant liability | 2,000,000 | |||
Prepayment penalty and other extinguishment costs | $ 1,400,000 | |||
Term Loan | A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 21,453,000 | 34,881,000 | ||
Revolving Credit Facility | A&R Wintrust Revolving Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 0 | $ 0 |
Debt - Maturities of Long-Term
Debt - Maturities of Long-Term Debt and Finance Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 9,564 | |
2024 | 8,858 | |
2025 | 7,537 | |
2026 | 437 | |
2027 | 5,362 | |
Total debt | $ 31,758 | $ 40,013 |
Debt - 2019 Refinancing Agreeme
Debt - 2019 Refinancing Agreement - 2019 Term Loans (Details) - Refinancing Agreement 2019 - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 12, 2019 | Sep. 30, 2020 | Feb. 24, 2021 | |
Debt Instrument [Line Items] | |||
Debt issued | $ 40 | ||
Debt installment payments | $ 1 | ||
Unused line fee percentage | 2% | ||
Make-whole premium prepayment period | 19 months | ||
Make-whole provision applicable to interest period | 18 months | ||
Debt instrument, interest rate, effective percentage | 13% | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 11% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 10% | ||
Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 2% | ||
Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 3% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 25 |
Debt - 2019 Refinancing Agree_2
Debt - 2019 Refinancing Agreement - CB Warrants (Details) - USD ($) | 2 Months Ended | |
Apr. 12, 2019 | Feb. 24, 2021 | |
Debt Instrument [Line Items] | ||
Percentage of number of shares | 2% | |
2019 Refinancing Term Loan embedded derivative | ||
Debt Instrument [Line Items] | ||
Number of warrants per each share of common stock (in shares) | 263,314 | |
Warrant exercise price (in usd per share) | $ 7.63 | |
Warrants term | 5 years | |
2019 Refinancing Agreement | ||
Debt Instrument [Line Items] | ||
Number of warrants per each share of common stock (in shares) | 0 | |
Debt outstanding | $ 0 | |
Interest expense, debt | $ 100,000 | |
Amortization of debt issuance costs | $ 100,000 |
Debt - 2019 ABL Agreement (Deta
Debt - 2019 ABL Agreement (Details) - 2019 ABL Credit Agreement - USD ($) $ in Millions | Apr. 12, 2019 | Feb. 24, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, effective percentage | 5.25% | 5.25% | |
Letters of credit | $ 3.4 | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 2% | ||
LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 3% | ||
LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 3.50% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 3% | ||
Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 2% | ||
Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread over variable rate | 2.50% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 15 |
Debt - Wintrust Term and Revolv
Debt - Wintrust Term and Revolving Loans (Details) | 3 Months Ended | 12 Months Ended | |||||
Dec. 02, 2021 USD ($) covenant | Feb. 24, 2021 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Interest Rate Swap | |||||||
Debt Instrument [Line Items] | |||||||
Notional amount | $ 10,000,000 | ||||||
Fixed interest rate | 3.12% | ||||||
Wintrust Loans | |||||||
Debt Instrument [Line Items] | |||||||
Letters of credit | $ 3,200,000 | ||||||
Wintrust Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 8.50% | 4.25% | |||||
Debt weighted average annual interest rate | 5.68% | 4.25% | |||||
A&R Wintrust Loans | |||||||
Debt Instrument [Line Items] | |||||||
Number of financial covenants | covenant | 3 | ||||||
Leverage ratio | 200% | ||||||
Coverage ratio | 1.20 | ||||||
Aggregate amount of unfinanced capital expenditures during any fiscal year | $ 0 | ||||||
Limit annual percentage of unfinanced capital expenditures | 50% | ||||||
Amount drawn under credit agreement | $ 0 | ||||||
Maximum outstanding borrowings during the period | $ 9,400,000 | ||||||
Weighted average annual interest rate | 4.78% | ||||||
A&R Wintrust Loans | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate amount of unfinanced capital expenditures during any fiscal year | $ 4,000,000 | ||||||
Amount drawn under credit agreement | $ 0 | $ 0 | |||||
Average daily balance of borrowings outstanding | $ 100,000 | ||||||
Term Loan | Wintrust Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt issued | $ 30,000,000 | ||||||
Debt installment payments | $ 500,000 | ||||||
Term Loan | A&R Wintrust Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt installment payments | 600,000 | ||||||
Excess cash flow payments | $ 3,300,000 | ||||||
Net claim proceeds payments | $ 600,000 | $ 2,100,000 | |||||
Term Loan | A&R Wintrust Term Loan | Jake Marshall Transaction | |||||||
Debt Instrument [Line Items] | |||||||
Debt issued | 35,500,000 | ||||||
Term Loan | Revolving Credit Facility | A&R Wintrust Revolving Loan | Jake Marshall Transaction | |||||||
Debt Instrument [Line Items] | |||||||
Sublimit for issuance of letters of credit | 25,000,000 | ||||||
Term Loan | Sublimit for Letters of Credit | A&R Wintrust Revolving Loan | Jake Marshall Transaction | |||||||
Debt Instrument [Line Items] | |||||||
Sublimit for issuance of letters of credit | $ 5,000,000 | ||||||
Line of Credit | A&R Wintrust Term Loan | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 1% | ||||||
Variable rate step-down adjustment | 0.0075 | ||||||
Line of Credit | A&R Wintrust Term Loan | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3% | ||||||
Line of Credit | A&R Wintrust Term Loan | SOFR | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate step-down adjustment | 0.0050 | ||||||
Line of Credit | A&R Wintrust Term Loan | SOFR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.15% | ||||||
Line of Credit | A&R Wintrust Term Loan | SOFR | One month | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 4.10% | ||||||
Line of Credit | A&R Wintrust Term Loan | SOFR | Three months | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 4.26% | ||||||
Line of Credit | A&R Wintrust Term Loan | SOFR | Six months | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 4.42% | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate step-down adjustment | 0.0050 | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 4% | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate step-down adjustment | 0.0075 | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 1% | ||||||
Line of Credit | Revolving Credit Facility | Wintrust Term Loan | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | |||||||
Debt Instrument [Line Items] | |||||||
Sublimit for issuance of letters of credit | $ 25,000,000 | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3.50% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate step-down adjustment | 0.0050 | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.50% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.50% | ||||||
Variable rate step-down adjustment | 0.0050 | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | SOFR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 0.15% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | SOFR | One month | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3.60% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | SOFR | Three months | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3.76% | ||||||
Line of Credit | Revolving Credit Facility | A&R Wintrust Revolving Loan | SOFR | Six months | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread over variable rate | 3.92% | ||||||
Line of Credit | Sublimit for Letters of Credit | A&R Wintrust Revolving Loan | |||||||
Debt Instrument [Line Items] | |||||||
Sublimit for issuance of letters of credit | $ 5,000,000 |
Debt - Applicable Margin and Co
Debt - Applicable Margin and Commitment Fees Payable (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Level I | |
Debt Instrument [Line Items] | |
Senior Leverage Ratio | 100% |
Level I | Wintrust Term Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 1% |
Level I | Wintrust Term Loan | Eurodollar | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 0.25% |
Level I | A&R Wintrust Revolving Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 0.50% |
Level II | |
Debt Instrument [Line Items] | |
Senior Leverage Ratio | 100% |
Level II | Wintrust Term Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 0.25% |
Level II | Wintrust Term Loan | Eurodollar | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 0.25% |
Level II | A&R Wintrust Revolving Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Additional Margin for Loans | 0% |
Debt - Sale-Leaseback Financing
Debt - Sale-Leaseback Financing Transactions (Details) | 12 Months Ended | |
Sep. 29, 2022 USD ($) renewalTerm | Dec. 31, 2022 USD ($) | |
Debt Disclosure [Abstract] | ||
Purchase of property under sale and leaseback transaction | $ 7,800,000 | $ 2,600,000 |
Purchase price | 5,400,000 | |
Tenant improvement allowance | $ 2,400,000 | |
Lease agreement, term | 25 years | |
Lease agreement, number of renewal terms | renewalTerm | 2 | |
Lease agreement, renewal term | 5 years | |
Sale leaseback transaction, annual minimum rent | $ 499,730 | |
Annual increase rate | 2.50% | |
Termination fee | $ 1,700,000 | |
Discount rate | 11.11% | |
Tenant Improvement allowance, implicit rate | 6.53% | |
Financing liability | 4,900,000 | |
Financing interest expense | $ 100,000 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2022 | Mar. 25, 2022 | Mar. 09, 2021 | Feb. 18, 2021 | Feb. 12, 2021 | Jan. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Common stock, par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |||||||
Preferred stock, par or stated value per share (in usd per shares) | $ 0.0001 | $ 0.0001 | |||||||
Share Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Repurchase of common stock | $ 2,000,000 | ||||||||
Number of shares acquired (in shares) | 2,000,000 | ||||||||
Offering | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold (in shares) | 1,783,500 | ||||||||
Stock sale price (in usd per share) | $ 12 | ||||||||
Proceeds from sale of shares, net of underwriters discounts and commissions | $ 19,800,000 | ||||||||
Over-Allotment | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold (in shares) | 267,525 | ||||||||
Stock sale price (in usd per share) | $ 11.28 | ||||||||
Period to purchase additional shares | 30 days | ||||||||
Proceeds from sale of shares, net of underwriters discounts and commissions | $ 3,000,000 | ||||||||
2021 Amended and Restated Omnibus Incentive Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Increase in number of shares that may be issued (in shares) | 600,000 | ||||||||
Common stock, capital shares reserved for future issuance (in shares) | 2,250,000 | ||||||||
2022 Amended And Restated Omnibus Incentive Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Increase in number of shares that may be issued (in shares) | 350,000 | ||||||||
Common stock, capital shares reserved for future issuance (in shares) | 2,600,000 | ||||||||
ESPP | Employee Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Purchase price of common stock, percent of fair market value | 85% | ||||||||
Maximum contribution percentage | 10% | ||||||||
Maximum contribution amount | $ 5,000 | ||||||||
Offering period | 6 months | ||||||||
Discount percentage from market price, beginning of purchase period | 15% | ||||||||
Vesting period | 6 months | ||||||||
Number of shares authorized to be issued (in shares) | 500,000 | ||||||||
Number of stock issued (in shares) | 37,490 | 25,068 | |||||||
Shares available for future grants (in shares) | 406,617 | 406,617 | |||||||
$15 Exercise Price Sponsor Warrants | |||||||||
Class of Stock [Line Items] | |||||||||
Warrant exercise price (in usd per share) | $ 15 | $ 15 |
Equity - Outstanding Warrants (
Equity - Outstanding Warrants (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 1,229,643 | 1,229,643 |
$15 Exercise Price Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 600,000 | 600,000 |
Number of warrants per each share of common stock (in shares) | 1 | 1 |
Warrant exercise price (in usd per share) | $ 15 | $ 15 |
Merger Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 629,643 | 629,643 |
Number of warrants per each share of common stock (in shares) | 1 | 1 |
Warrant exercise price (in usd per share) | $ 12.50 | $ 12.50 |
Public Warrants | ||
Class of Stock [Line Items] | ||
Number of warrants per each share of common stock (in shares) | 0.50 | 0.50 |
Private Warrants | ||
Class of Stock [Line Items] | ||
Number of warrants per each share of common stock (in shares) | 0.50 | 0.50 |
$15 Exercise Price Sponsor Warrants | ||
Class of Stock [Line Items] | ||
Warrant exercise price (in usd per share) | $ 15 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | 2 Months Ended | 12 Months Ended | ||
Feb. 24, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 02, 2021 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of contingent consideration | $ 2,285,000 | $ 0 | ||
Gain on change in fair value of warrant liability | 0 | $ (14,000) | ||
Interest Rate Swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gain on change in fair value of interest rate swap | 300,000 | |||
Other Noncurrent Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of the interest rate swap | 300,000 | |||
Jake Marshall Transaction | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of contingent consideration | 2,300,000 | |||
Earnout payments | $ 6,000,000 | |||
Jake Marshall Transaction | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Earnout payments | 5,400,000 | |||
Jake Marshall Transaction | Maximum | Accrued Liabilities and Other Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Earnout payments | 2,900,000 | |||
Jake Marshall Transaction | Maximum | Other Noncurrent Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Earnout payments | 2,500,000 | |||
Fair Value, Inputs, Level 3 | Jake Marshall Transaction | Earnout Payments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of earnout payments | $ 3,100,000 | |||
Fair Value, Inputs, Level 3 | Jake Marshall Transaction | Earnout Payments | Measurement Input, Discount Rate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Earnout payments, measurement input | 0.1020 | 0.0683 | ||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of debt | $ 21,500,000 | |||
Refinancing Agreement 2019 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrants liability | $ 2,000,000 | $ 0 | ||
Gain on change in fair value of warrant liability | $ 14,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
EPS numerator: | ||
Net income | $ 6,799 | $ 6,714 |
EPS denominator: | ||
Weighted average shares outstanding – basic (in shares) | 10,425,119 | 10,013,117 |
Weighted average shares outstanding – diluted (in shares) | 10,676,534 | 10,231,637 |
EPS: | ||
Basic (in usd per share) | $ 0.65 | $ 0.67 |
Diluted (in usd per share) | $ 0.64 | $ 0.66 |
Restricted Stock Units | ||
EPS denominator: | ||
Incremental shares attributable to share-based payments (in shares) | 247,000 | 215,000 |
Employee Stock | ||
EPS denominator: | ||
Incremental shares attributable to share-based payments (in shares) | 5,000 | 4,000 |
Earnings per Share - Schedule_2
Earnings per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,231,216 | 2,995,691 |
Out-of-the-money warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,229,643 | 2,981,473 |
Service-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 54 |
Performance and market-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 14,164 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,573 | 0 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax provision | ||
U.S. Federal | $ 2,613 | $ 812 |
State and local | 695 | 194 |
Total current tax provision | 3,308 | 1,006 |
Deferred tax provision | ||
U.S. Federal | (584) | 1,127 |
State and local | 85 | 630 |
Total deferred tax provision | (499) | 1,757 |
Income tax provision | $ 2,809 | $ 2,763 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Effective tax rate | 29.20% | 29.20% | |
Valuation allowance against deferred tax assets | $ 0 | $ 0 | |
Unrecognized tax benefits | 0 | $ 0 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21% | 21% |
State income taxes, net of federal tax effect | 6.40% | 7% |
Stock based compensation – restricted stock | 1.40% | (1.10%) |
Return to provision adjustment | (0.10%) | 1.20% |
Permanent differences | 1.30% | 1.90% |
Tax credits | (0.90%) | (0.80%) |
Effective tax rate | 29.20% | 29.20% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 950 | $ 1,328 |
Allowance for doubtful accounts | 60 | 68 |
Intangibles | 463 | 524 |
Goodwill | 3,301 | 3,304 |
Startup costs | 68 | 79 |
Stock-based compensation | 1,066 | 881 |
Research and development expenses | 640 | 0 |
Lease liabilities | 6,280 | 5,547 |
Accrued bonuses and commissions | 253 | 1,810 |
Total deferred tax assets | 13,081 | 13,541 |
Deferred tax liabilities: | ||
Fixed assets | (3,248) | (3,775) |
Right-of-use assets | (4,684) | (5,231) |
Percentage of completion | (241) | (205) |
Interest | (79) | 0 |
Total deferred tax liabilities | (8,252) | (9,211) |
Net deferred tax asset | $ 4,829 | $ 4,330 |
Operating Segments - Narrative
Operating Segments - Narrative (Details) - segment | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Major Customer [Line Items] | ||
Number of operating segments | 2 | |
GCR | ||
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | 1 | |
GCR | Revenue, Segment Benchmark | Customer Concentration Risk | Customer One | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 11% | 17% |
GCR | Revenue, Segment Benchmark | Customer Concentration Risk | Customer Two | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 12% | |
ODR | ||
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | 1 |
Operating Segments - Segment In
Operating Segments - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 496,782 | $ 490,351 | |
Gross profit | 93,741 | 85,910 | |
Selling, general and administrative | 77,879 | 71,436 | |
Change in fair value of contingent consideration | 2,285 | 0 | |
Amortization of intangibles | 1,567 | 484 | |
Operating income | 12,010 | 13,990 | |
Interest expense, net | (2,144) | (2,568) | |
Loss on early termination of operating lease | (849) | 0 | |
Loss on early debt extinguishment | 0 | (1,961) | |
Gain on change in fair value of interest rate swap | $ 310 | 310 | 0 |
Gain on disposition of property and equipment | 281 | 2 | |
Gain on change in fair value of warrant liability | 0 | 14 | |
Total unallocated amounts | (2,402) | (4,513) | |
Income before income taxes | 9,608 | 9,477 | |
Depreciation and amortization: | 8,158 | 5,948 | |
Operating Segments | GCR | |||
Segment Reporting Information [Line Items] | |||
Revenue | 280,379 | 350,015 | |
Gross profit | 38,622 | 45,409 | |
Selling, general and administrative | 36,332 | 37,558 | |
Depreciation and amortization: | 4,307 | 4,085 | |
Operating Segments | ODR | |||
Segment Reporting Information [Line Items] | |||
Revenue | 216,403 | 140,336 | |
Gross profit | 55,119 | 40,501 | |
Selling, general and administrative | 38,805 | 31,277 | |
Depreciation and amortization: | 2,284 | 1,379 | |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Selling, general and administrative | 2,742 | 2,601 | |
Depreciation and amortization: | $ 1,567 | $ 484 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 26, 2022 | Apr. 17, 2020 | Jan. 23, 2020 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||||
Payment to acquire workers' compensation and general liability insurance | $ 250 | |||
Malpractice insurance, annual coverage limit | 4,400 | |||
Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Long-term debt | $ 129,600 | |||
Pending Litigation | Bernards | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought, value | $ 3,000 | |||
Pending Litigation | LA Excavating, Inc. vs. Limbach Company LP | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought, value | $ 1,000 | |||
Pending Litigation | Suffolk | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought, value | $ 300 |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Self-Insurance (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Current liability — workers' compensation and general liability | $ 158 | $ 184 |
Current liability — medical and dental | 557 | 456 |
Non-current liability | 343 | 451 |
Total liability | 1,058 | 1,091 |
Restricted cash | $ 113 | $ 113 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 02, 2021 USD ($) extension | Mar. 31, 2022 USD ($) ft² installment | Jun. 30, 2021 USD ($) ft² | Mar. 31, 2022 USD ($) ft² installment | Dec. 31, 2022 USD ($) extension | Dec. 31, 2021 USD ($) | Sep. 29, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative | Selling, general and administrative | |||||
Lease termination fee | $ 700,000 | ||||||
Lease termination fee payable, number of installments | installment | 16 | 16 | |||||
Gain on derecognition of lease assets and liabilities | $ 100,000 | ||||||
Loss on disposal of leasehold improvement | $ 100,000 | ||||||
Purchase price | $ 5,400,000 | ||||||
Real Estate Leases | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of lease extensions | extension | 1 | ||||||
Ground Floor Space | Southern California Region | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Subleased area (in sq ft) | ft² | 16,720 | 71,787 | 16,720 | ||||
Sublease annual base rent | $ 600,000 | $ 800,000 | |||||
Sublease annual base rent increase percentage | 3% | 3% | |||||
Sublease income | $ 1,100,000 | $ 400,000 | |||||
Jake Marshall Transaction | Full-time Employee | Land and facilities | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of lease extensions | extension | 2 | ||||||
Lease term | 10 years | ||||||
Term of lease extensions | 2 years | ||||||
Jake Marshall Transaction | Full-time Employee | Land and facilities | For the first 5 years | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lease term | 5 years | ||||||
Monthly base rent | $ 37,500 | ||||||
Jake Marshall Transaction | Full-time Employee | Land and facilities | For years 6 through 10 | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lease term | 5 years | ||||||
Monthly base rent | $ 45,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheets Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 29, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 18,288 | $ 20,119 | |
Property and equipment, net | 7,402 | 4,916 | |
Total lease assets | 25,690 | 25,035 | |
Current operating lease liabilities | $ 3,562 | $ 4,366 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt and Lease Obligation, Current | Long-Term Debt and Lease Obligation, Current | |
Current portion of long-term debt | $ 2,135 | $ 2,451 | |
Long-term operating lease liabilities | $ 15,643 | $ 16,576 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt | |
Long-term debt | $ 8,170 | $ 2,681 | |
Total lease liabilities | 29,510 | 26,074 | |
Operating lease, accumulated amortization | 12,200 | 15,900 | |
Finance lease, accumulated amortization | 6,001 | $ 5,855 | |
Purchase of property under sale and leaseback transaction | $ 2,600 | $ 7,800 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Finance lease cost, amortization, cost of revenue | $ 2,687 | $ 2,622 |
Finance lease cost, interest expense, net | 264 | 305 |
Total lease cost | 8,133 | 8,051 |
Cost of revenue | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2,627 | 2,901 |
Cost of revenue | Operating Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 500 | 500 |
Cost of revenue | Finance Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 3,800 | 2,800 |
Selling, general and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2,555 | 2,223 |
Selling, general and administrative expenses | Operating Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 500 | 400 |
Selling, general and administrative expenses | Finance Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | $ 0 | $ 0 |
Leases - Future Minimum Lease C
Leases - Future Minimum Lease Commitments For Finance and Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Total Finance | ||
2023 | $ 2,135 | |
2024 | 1,429 | |
2025 | 942 | |
2026 | 437 | |
2027 | 11 | |
Thereafter | 5,351 | |
Total minimum lease payments | 10,305 | |
Amounts representing interest | 11,950 | |
Aggregate future value of minimum lease payments | 22,255 | |
Operating Leases | ||
2023 | 3,513 | |
2024 | 2,797 | |
2025 | 2,256 | |
2026 | 2,108 | |
2027 | 1,859 | |
Thereafter | 6,109 | |
Total minimum lease payments | 18,642 | |
Sublease Receipts | ||
2023 | (885) | |
2024 | (912) | |
2025 | (939) | |
2026 | (967) | |
2027 | (326) | |
Thereafter | 0 | |
Total minimum lease payments | (4,029) | |
Vehicles | ||
Total Finance | ||
2023 | 2,135 | |
2024 | 1,429 | |
2025 | 942 | |
2026 | 437 | |
2027 | 11 | |
Thereafter | 0 | |
Total minimum lease payments | 4,954 | $ 5,132 |
Amounts representing interest | 357 | |
Aggregate future value of minimum lease payments | 5,311 | |
Building | ||
Total Finance | ||
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 5,351 | |
Total minimum lease payments | 5,351 | $ 0 |
Amounts representing interest | 11,593 | |
Aggregate future value of minimum lease payments | 16,944 | |
Non-Related Party | ||
Operating Leases | ||
2023 | 3,948 | |
2024 | 3,259 | |
2025 | 2,745 | |
2026 | 2,625 | |
2027 | 1,645 | |
Thereafter | 1,834 | |
Total minimum lease payments | 16,056 | |
Related Party | ||
Operating Leases | ||
2023 | 450 | |
2024 | 450 | |
2025 | 450 | |
2026 | 450 | |
2027 | 540 | |
Thereafter | 4,275 | |
Total minimum lease payments | $ 6,615 |
Leases - Terms and Discount Rat
Leases - Terms and Discount Rates (Details) | Sep. 29, 2022 | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted average lease term (in years): | |||
Operating | 6 years 11 months 23 days | 7 years 1 month 6 days | |
Finance(1) | 2 years 8 months 23 days | 2 years 6 months 3 days | |
Weighted average discount rate: | |||
Operating | 4.76% | 4.68% | |
Finance(1) | 5.06% | 5.27% | |
Lease agreement, term | 25 years | ||
Discount rate | 11.11% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 5,055 | $ 4,938 |
Operating cash flows from finance leases | 264 | 305 |
Financing cash flows from finance leases | 2,734 | 2,623 |
Right-of-use assets exchanged for lease liabilities | ||
Right of use assets obtained in exchange for new operating lease liabilities | 0 | 5,417 |
Right of use assets obtained in exchange for new finance lease liabilities | 2,634 | 1,296 |
Right of use assets disposed or adjusted modifying operating leases liabilities | 2,455 | 219 |
Right of use assets disposed or adjusted modifying finance leases liabilities | $ (77) | $ 0 |
Retirement Plan (Details)
Retirement Plan (Details) - Supplemental Employee Retirement Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 100% | |
Defined contribution plan, maximum annual contributions per employee, percent | 4% | |
Defined contribution plan, employer discretionary contribution amount | $ 2,400,000 | $ 2,300,000 |
Defined contribution plan, employer discretionary profit sharing contribution amount | $ 0 | $ 0 |
Multiemployer Pension Plans - N
Multiemployer Pension Plans - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) plan | Dec. 31, 2021 USD ($) | |
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 54% | |
Multiemployer plan, contributions | $ 12,578 | $ 14,318 |
CBAs | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plan, contributions | $ 31,300 | 36,300 |
MEPP | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans number of employer | plan | 40 | |
MEPP | CBAs | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plan, contributions | $ 12,600 | $ 14,300 |
MEPP | PPA | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 5% | |
MEPP | CBA | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 10% |
Multiemployer Pension Plans - (
Multiemployer Pension Plans - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Multiemployer Plans [Line Items] | ||
Contributions | $ 12,578 | $ 14,318 |
Pipefitters Local 636 Defined Benefit Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,483 | 1,437 |
Plumbers Local No 98 Defined Benefit Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,371 | 1,386 |
Sheet Metal Workers Local Union No. 80 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,245 | 1,571 |
Sheet Metal Workers Local 98 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,232 | 1,003 |
Plumbers and Pipefitters Local Union No. 43 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,205 | 95 |
Pipefitters Union Local No. 537 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,204 | 1,805 |
Sheet Metal Workers' National Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 792 | 701 |
Heating, Piping and Refrigeration Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 609 | 851 |
Plumbers & Pipefitters Local No 189 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 596 | 489 |
Steamfitters Local Union No. 420 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 537 | 526 |
United Association National Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 525 | 700 |
Plumbers & Pipefitters of Local Union No. 333 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 393 | 1,694 |
Plumbers & Steamfitters Local 577 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 316 | 277 |
Electrical Workers Local No. 26 Pension Trust Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 247 | 429 |
Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada | ||
Multiemployer Plans [Line Items] | ||
Contributions | 139 | 297 |
Southern California Pipe Trades Retirement Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 130 | 161 |
Steamfitters Local #449 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 103 | 68 |
National Electrical Benefit Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 81 | 1 |
Airconditioning and Refrigeration Industry Retirement Trust Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 74 | 130 |
Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 65 | 57 |
Plumbers Local Union No. 690 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 25 | 53 |
United Association Local Union No. 322 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 25 | 24 |
Plumbers Union Local No. 12 Pension | ||
Multiemployer Plans [Line Items] | ||
Contributions | 14 | 131 |
Laborers District Council Pension and Disability Trust Fund No. 2 | ||
Multiemployer Plans [Line Items] | ||
Contributions | 10 | 33 |
Sheet Metal Workers Local 7, Zone 1 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 8 | 293 |
Sheet Metal Workers Local 224 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 5 | 21 |
Plumbers and Steamfitters Local 486 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 0 | 15 |
All other plans | ||
Multiemployer Plans [Line Items] | ||
Contributions | $ 144 | $ 70 |
Management Incentive Plans - Na
Management Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 2,742 | $ 2,601 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Stock-based compensation expense | $ 1,600 | 1,600 |
RSUs | Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
PRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Stock-based compensation expense | $ 1,200 | 900 |
PRSUs | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares to be issued under grant | 0% | |
PRSUs | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares to be issued under grant | 150% | |
MRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense | $ 200 | |
Period to recognized stock-based compensation expense | 1 year 3 months 3 days | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense | $ 2,500 | |
Period to recognized stock-based compensation expense | 1 year 7 months 9 days | |
Aggregate fair value of vested awards | $ 1,300 | $ 1,600 |
Market-Based Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance target, price per share (in dollars per share) | $ 18 | |
Number of consecutive trading days within performance period to meet target share price | 80 days | |
Performance period | 3 years | |
Restated 2016 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, capital shares reserved for future issuance (in shares) | 2,600,000 |
Management Incentive Plans - RS
Management Incentive Plans - RSUs Activity (Details) - RSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Awards | ||
Unvested, beginning balance (in shares) | 266,089 | 285,799 |
Granted (in shares) | 184,941 | 127,407 |
Vested (in shares) | (146,151) | (144,784) |
Forfeited (in shares) | (24,604) | (2,333) |
Unvested, ending balance (in shares) | 280,275 | 266,089 |
Weighted-Average Grant Date Fair Values | ||
Unvested, beginning balance (in usd per share) | $ 8.45 | $ 6.32 |
Granted (in usd per share) | 8.97 | 11.99 |
Vested (in usd per share) | 7.78 | 7.35 |
Forfeited (in usd per share) | 9.43 | 8.27 |
Unvested, ending balance (in usd per share) | $ 9.06 | $ 8.45 |
Management Incentive Plans - PR
Management Incentive Plans - PRSUs Activity (Details) - PRSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Awards | ||
Unvested, beginning balance (in shares) | 280,700 | 99,500 |
Granted (in shares) | 258,363 | 185,367 |
Vested (in shares) | 0 | 0 |
Forfeited (in shares) | (41,123) | (4,167) |
Unvested, ending balance (in shares) | 497,940 | 280,700 |
Weighted-Average Grant Date Fair Values | ||
Unvested, beginning balance (in usd per share) | $ 9.46 | $ 4.23 |
Granted (in usd per share) | 7.18 | 12.26 |
Vested (in usd per share) | 0 | 0 |
Forfeited (in usd per share) | 8.98 | 8.92 |
Unvested, ending balance (in usd per share) | $ 8.32 | $ 9.46 |
Management Incentive Plans - MR
Management Incentive Plans - MRSUs Activity (Details) - MRSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Awards | ||
Unvested, beginning balance (in shares) | 102,500 | 102,500 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | 0 | 0 |
Forfeited (in shares) | (102,500) | 0 |
Unvested, ending balance (in shares) | 0 | 102,500 |
Weighted-Average Grant Date Fair Values | ||
Unvested, beginning balance (in usd per share) | $ 8.26 | $ 8.26 |
Granted (in usd per share) | 0 | 0 |
Vested (in usd per share) | 0 | 0 |
Forfeited (in usd per share) | 8.26 | 0 |
Unvested, ending balance (in usd per share) | $ 0 | $ 8.26 |
Uncategorized Items - lmb-20221
Label | Element | Value |
General Contractor (Construction Manager) Relationships Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 0 |
Owner Direct Relationships Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 11,370,000 |