Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38272 | |
Entity Registrant Name | EVOQUA WATER TECHNOLOGIES CORP. | |
Entity Tax Identification Number | 46-4132761 | |
Entity Address, Address Line One | 210 Sixth Avenue | |
Entity Address, Postal Zip Code | 15222 | |
Entity Address, City or Town | Pittsburgh, | |
Entity Address, State or Province | PA | |
City Area Code | 724 | |
Local Phone Number | 772-0044 | |
Trading Symbol | AQUA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 121,282,642 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Entity Central Index Key | 0001604643 | |
Current Fiscal Year End Date | --09-30 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
ASSETS | ||
Current assets | $ 777,532 | $ 678,458 |
Cash and cash equivalents | 129,500 | 146,244 |
Receivables, net | 283,092 | 277,995 |
Inventories, net | 216,933 | 158,503 |
Contract assets | 99,502 | 72,746 |
Prepaid and other current assets | 47,923 | 21,871 |
Income tax receivable | 582 | 1,099 |
Property, plant, and equipment, net | 395,290 | 374,988 |
Goodwill | 476,259 | 407,376 |
Intangible assets, net | 328,024 | 290,075 |
Deferred income taxes, net of valuation allowance | 7,769 | 8,285 |
Operating lease right-of-use assets, net | 49,395 | 45,521 |
Other non‑current assets | 98,292 | 64,188 |
Total assets | 2,132,561 | 1,868,891 |
LIABILITIES AND EQUITY | ||
Current liabilities | 430,839 | 405,989 |
Accounts payable | 191,122 | 164,535 |
Current portion of debt, net of deferred financing fees and discounts | 14,219 | 12,775 |
Contract liabilities | 55,593 | 55,883 |
Product warranties | 7,498 | 8,138 |
Accrued expenses and other liabilities | 158,510 | 160,367 |
Income tax payable | 3,897 | 4,291 |
Non‑current liabilities | 1,063,651 | 880,683 |
Long-term debt, net of deferred financing fees and discounts | 920,343 | 730,430 |
Product warranties | 3,191 | 2,966 |
Obligation under operating leases | 39,995 | 37,935 |
Other non‑current liabilities | 83,418 | 92,909 |
Deferred income taxes | 16,704 | 16,443 |
Total liabilities | 1,494,490 | 1,286,672 |
Commitments and Contingent Liabilities (Note 19) | ||
Shareholders’ equity | ||
Common stock, par value $0.01: authorized 1,000,000 shares; issued 122,766 shares, outstanding 121,102 at March 31, 2022; issued 122,173 shares, outstanding 120,509 at September 30, 2021 | 1,229 | 1,223 |
Treasury stock: 1,664 shares at March 31, 2022 and 1,664 shares at September 30, 2021 | (2,837) | (2,837) |
Additional paid-in capital | 592,105 | 582,052 |
Retained earnings (deficit) | 2,135 | (11,182) |
Accumulated other comprehensive income, net of tax | 43,846 | 11,415 |
Total Evoqua Water Technologies Corp. equity | 636,478 | 580,671 |
Non-controlling interest | 1,593 | 1,548 |
Total shareholders’ equity | 638,071 | 582,219 |
Total liabilities and shareholders’ equity | $ 2,132,561 | $ 1,868,891 |
Consolidated Balance Sheets Con
Consolidated Balance Sheets Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 122,766,000 | 122,173,000 |
Common stock, outstanding (in shares) | 121,102,000 | 120,509,000 |
Treasury stock (in shares) | 1,664,000 | 1,664,000 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues [Abstract] | ||||
Revenues | $ 426,728 | $ 346,564 | $ 792,996 | $ 668,757 |
Cost of Revenue [Abstract] | ||||
Cost of product sales and services | (297,842) | (240,645) | (553,602) | (467,493) |
Gross profit | 128,886 | 105,919 | 239,394 | 201,264 |
Operating Expenses [Abstract] | ||||
General and administrative expense | (66,976) | (52,928) | (124,805) | (95,211) |
Sales and marketing expense | (39,859) | (33,830) | (76,308) | (67,758) |
Research and development expense | (3,751) | (3,393) | (7,203) | (6,516) |
Total operating expenses | (110,586) | (90,151) | (208,316) | (169,485) |
Other operating income | 1,415 | 511 | 3,072 | 991 |
Other operating expense | (143) | (101) | (290) | (358) |
Operating profit (loss) | 19,572 | 16,178 | 33,860 | 32,412 |
Interest expense | (9,950) | (8,395) | (16,529) | (17,068) |
Income before income taxes | 9,622 | 7,783 | 17,331 | 15,344 |
Income tax expense | (2,248) | (2,701) | (3,869) | (3,785) |
Net income | 7,374 | 5,082 | 13,462 | 11,559 |
Net income attributable to non‑controlling interest | 44 | 46 | ||
Net income attributable to Evoqua Water Technologies Corp. | $ 7,330 | $ 5,036 | $ 13,317 | $ 11,469 |
Basic income per common share | $ 0.06 | $ 0.04 | $ 0.11 | $ 0.10 |
Diluted income per common share | $ 0.06 | $ 0.04 | $ 0.11 | $ 0.09 |
Non-controlling Interest | ||||
Operating Expenses [Abstract] | ||||
Net income | $ 44 | $ 46 | ||
Net income attributable to non‑controlling interest | $ 145 | $ 90 | ||
Revenue from product sales | ||||
Revenues [Abstract] | ||||
Revenues | 259,775 | 202,466 | 472,343 | 382,481 |
Cost of Revenue [Abstract] | ||||
Cost of product sales and services | (185,330) | (144,521) | (339,125) | (275,582) |
Revenue from service | ||||
Revenues [Abstract] | ||||
Revenues | 166,953 | 144,098 | 320,653 | 286,276 |
Cost of Revenue [Abstract] | ||||
Cost of product sales and services | $ (112,512) | $ (96,124) | $ (214,477) | $ (191,911) |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Other comprehensive income (loss) | ||||
Net income | $ 7,374 | $ 5,082 | $ 13,462 | $ 11,559 |
Foreign currency translation adjustments | 2,176 | 26,891 | 3,785 | 22,014 |
Unrealized derivative gain on cash flow hedges, net of tax | 21,730 | 9,091 | 28,311 | 10,093 |
Change in pension liability, net of tax | 166 | 110 | 335 | 374 |
Total other comprehensive income | 24,072 | 36,092 | 32,431 | 32,481 |
Less: Comprehensive income attributable to non‑controlling interest | (44) | (46) | (145) | (90) |
Comprehensive income attributable to Evoqua Water Technologies Corp. | $ 31,402 | $ 41,128 | $ 45,748 | $ 43,950 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interest |
Common stock issued at the beginning of the period (shares) at Sep. 30, 2020 | 119,486,000 | ||||||
Stockholders' equity, balance at the beginning of the period at Sep. 30, 2020 | $ 482,063 | $ 1,189 | $ (2,837) | $ 564,928 | $ (62,664) | $ (20,472) | $ 1,919 |
Treasury stock, balance at the beginning of the period (in shares) at Sep. 30, 2020 | 2,195,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation expense | 3,019 | 3,019 | |||||
Issuance of common stock (in shares) | 1,264,000 | 1,000 | |||||
Stock Issued During Period, Value, New Issues | 14,263 | $ 13 | 14,250 | ||||
Issuance of common stock, net | (250) | (250) | |||||
Net income | 6,477 | 6,433 | 44 | ||||
Dividends paid to non-controlling interest | (3,611) | (3,611) | |||||
Common stock issued at the end of the period (shares) at Dec. 31, 2020 | 120,750,000 | ||||||
Stockholders' equity, balance at the end of the period at Dec. 31, 2020 | 501,961 | $ 1,202 | $ (2,837) | 582,197 | (56,231) | (24,083) | 1,713 |
Treasury stock, balance at the end of the period (in shares) at Dec. 31, 2020 | 2,196,000 | ||||||
Common stock issued at the beginning of the period (shares) at Sep. 30, 2020 | 119,486,000 | ||||||
Stockholders' equity, balance at the beginning of the period at Sep. 30, 2020 | 482,063 | $ 1,189 | $ (2,837) | 564,928 | (62,664) | (20,472) | 1,919 |
Treasury stock, balance at the beginning of the period (in shares) at Sep. 30, 2020 | 2,195,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 11,559 | ||||||
Dividends paid to non-controlling interest | 32,481 | ||||||
Common stock issued at the end of the period (shares) at Mar. 31, 2021 | 121,442,000 | ||||||
Stockholders' equity, balance at the end of the period at Mar. 31, 2021 | 524,885 | $ 1,215 | $ (2,837) | 564,034 | (51,195) | 12,009 | 1,659 |
Treasury stock, balance at the end of the period (in shares) at Mar. 31, 2021 | 1,664,000 | ||||||
Common stock issued at the beginning of the period (shares) at Dec. 31, 2020 | 120,750,000 | ||||||
Stockholders' equity, balance at the beginning of the period at Dec. 31, 2020 | 501,961 | $ 1,202 | $ (2,837) | 582,197 | (56,231) | (24,083) | 1,713 |
Treasury stock, balance at the beginning of the period (in shares) at Dec. 31, 2020 | 2,196,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation expense | 3,214 | 3,214 | |||||
Issuance of common stock (in shares) | 692,000 | (532,000) | |||||
Stock Issued During Period, Value, New Issues | (21,364) | $ 13 | (21,377) | ||||
Issuance of common stock, net | (100) | (100) | |||||
Net income | 5,082 | 5,036 | 46 | ||||
Dividends paid to non-controlling interest | 36,092 | 36,092 | |||||
Common stock issued at the end of the period (shares) at Mar. 31, 2021 | 121,442,000 | ||||||
Stockholders' equity, balance at the end of the period at Mar. 31, 2021 | $ 524,885 | $ 1,215 | $ (2,837) | 564,034 | (51,195) | 12,009 | 1,659 |
Treasury stock, balance at the end of the period (in shares) at Mar. 31, 2021 | 1,664,000 | ||||||
Common stock issued at the beginning of the period (shares) at Sep. 30, 2021 | 122,173,000 | 122,173,000 | |||||
Stockholders' equity, balance at the beginning of the period at Sep. 30, 2021 | $ 582,219 | $ 1,223 | $ (2,837) | 582,052 | (11,182) | 11,415 | 1,548 |
Treasury stock, balance at the beginning of the period (in shares) at Sep. 30, 2021 | 1,664,000 | 1,664,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation expense | $ 5,203 | 5,203 | |||||
Issuance of common stock (in shares) | 199,000 | 0 | |||||
Stock Issued During Period, Value, New Issues | 824 | $ 2 | 822 | ||||
Issuance of common stock, net | (100) | (100) | |||||
Net income | 6,088 | 5,987 | 101 | ||||
Dividends paid to non-controlling interest | 8,359 | 8,359 | |||||
Common stock issued at the end of the period (shares) at Dec. 31, 2021 | 122,372,000 | ||||||
Stockholders' equity, balance at the end of the period at Dec. 31, 2021 | $ 602,593 | $ 1,225 | $ (2,837) | 588,077 | (5,195) | 19,774 | 1,549 |
Treasury stock, balance at the end of the period (in shares) at Dec. 31, 2021 | 1,664,000 | ||||||
Common stock issued at the beginning of the period (shares) at Sep. 30, 2021 | 122,173,000 | 122,173,000 | |||||
Stockholders' equity, balance at the beginning of the period at Sep. 30, 2021 | $ 582,219 | $ 1,223 | $ (2,837) | 582,052 | (11,182) | 11,415 | 1,548 |
Treasury stock, balance at the beginning of the period (in shares) at Sep. 30, 2021 | 1,664,000 | 1,664,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 13,462 | ||||||
Dividends paid to non-controlling interest | $ 32,431 | ||||||
Common stock issued at the end of the period (shares) at Mar. 31, 2022 | 122,766,000 | 122,766,000 | |||||
Stockholders' equity, balance at the end of the period at Mar. 31, 2022 | $ 638,071 | $ 1,229 | $ (2,837) | 592,105 | 2,135 | 43,846 | 1,593 |
Treasury stock, balance at the end of the period (in shares) at Mar. 31, 2022 | 1,664,000 | 1,664,000 | |||||
Common stock issued at the beginning of the period (shares) at Dec. 31, 2021 | 122,372,000 | ||||||
Stockholders' equity, balance at the beginning of the period at Dec. 31, 2021 | $ 602,593 | $ 1,225 | $ (2,837) | 588,077 | (5,195) | 19,774 | 1,549 |
Treasury stock, balance at the beginning of the period (in shares) at Dec. 31, 2021 | 1,664,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation expense | 5,386 | 5,386 | |||||
Issuance of common stock (in shares) | 394,000 | ||||||
Stock Issued During Period, Value, New Issues | (1,354) | $ 4 | (1,358) | ||||
Issuance of common stock, net | 0 | ||||||
Net income | 7,374 | 7,330 | 44 | ||||
Dividends paid to non-controlling interest | $ 24,072 | 24,072 | |||||
Common stock issued at the end of the period (shares) at Mar. 31, 2022 | 122,766,000 | 122,766,000 | |||||
Stockholders' equity, balance at the end of the period at Mar. 31, 2022 | $ 638,071 | $ 1,229 | $ (2,837) | $ 592,105 | $ 2,135 | $ 43,846 | $ 1,593 |
Treasury stock, balance at the end of the period (in shares) at Mar. 31, 2022 | 1,664,000 | 1,664,000 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Changes in Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net income | $ 13,462 | $ 11,559 |
Reconciliation of net income to cash flows provided by operating activities: | ||
Depreciation and amortization | 61,156 | 54,607 |
Amortization of deferred financing fees (includes $0 and $0 write off of deferred financing fees) | 926 | 1,044 |
Deferred income taxes | 592 | 476 |
Share-based compensation | 10,589 | 6,233 |
(Gain) loss on sale of property, plant, and equipment | (61) | 807 |
(Gain) loss on sale of business | (193) | 191 |
Foreign currency exchange losses (gains) on intercompany loans and other non-cash items | 3,728 | (3,659) |
Changes in assets and liabilities | ||
Accounts receivable | 16,554 | 36,221 |
Inventories | (26,754) | (14,091) |
Contract assets | (26,910) | 6,553 |
Prepaids and other current assets | (14,049) | (9,921) |
Accounts payable | 19,589 | (9,799) |
Accrued expenses and other liabilities | (13,648) | (9,089) |
Contract liabilities | (382) | 9,829 |
Income taxes | 135 | (3,948) |
Other non‑current assets and liabilities | (15,586) | (13,955) |
Net cash provided by operating activities | 29,148 | 63,058 |
Investing activities | ||
Purchase of property, plant, and equipment | (36,320) | (36,297) |
Purchase of intangibles | (1,582) | (539) |
Proceeds from sale of property, plant, and equipment | 1,940 | 640 |
Proceeds from sale of business, net of cash of $0 and $0 | 356 | 897 |
Acquisitions, net of cash received $0 and $0 | (194,976) | (8,743) |
Net cash used in investing activities | (230,582) | (44,042) |
Financing activities | ||
Issuance of debt, net of deferred issuance costs | 223,793 | 13,993 |
Repayment of debt | (33,362) | (10,036) |
Repayment of finance lease obligation | (6,571) | (6,901) |
Proceeds from issuance of common stock | 5,274 | 13,430 |
Taxes paid related to net share settlements of share-based compensation awards | (5,144) | (1,863) |
Distribution to non‑controlling interest | (100) | (350) |
Net cash provided by financing activities | 183,890 | 8,273 |
Effect of exchange rate changes on cash | 800 | 2,428 |
Change in cash and cash equivalents | (16,744) | 29,717 |
Cash and cash equivalents | ||
Beginning of period | 146,244 | 193,001 |
End of period | 129,500 | 222,718 |
Supplemental disclosure of cash flow information | ||
Cash paid for taxes | 2,889 | 5,457 |
Cash paid for interest | 12,537 | 14,647 |
Non‑cash investing and financing activities | ||
Finance lease transactions | 6,199 | 9,044 |
Operating lease transactions | $ 11,385 | $ 7,993 |
Unaudited Consolidated Statem_5
Unaudited Consolidated Statements of Changes in Cash Flows (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | ||
Write off of deferred debt issuance cost | $ 0 | $ 0 |
Cash acquired from acquisition | 0 | 0 |
Cash divested with sale of business | $ 0 | $ 0 |
Description of the Company and
Description of the Company and Basis of Presentation | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Company and Basis of Presentation | Description of the Company and Basis of Presentation Background Evoqua Water Technologies Corp. (referred to herein as the “Company” or “EWT”) is a holding company and does not conduct any business operations of its own. The Company was incorporated on October 7, 2013. On November 6, 2017, the Company completed its initial public offering (“IPO”). The Business EWT provides a wide range of product brands and advanced water and wastewater treatment systems and technologies, as well as mobile and emergency water supply solutions and service contract options through its branch network. Headquartered in Pittsburgh, Pennsylvania, EWT is a multinational corporation with operations in the United States (“U.S.”), Canada, the United Kingdom (“UK”), the Netherlands, Germany, Australia, the People’s Republic of China, Singapore and India. The Company is organizationally structured into two reportable operating segments for the purpose of making operational decisions and assessing financial performance: (i) Integrated Solutions and Services and (ii) Applied Product Technologies. Basis of Presentation The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). All intercompany transactions have been eliminated. Unless otherwise specified, all dollar and share amounts in these notes are referred to in thousands. The interim Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such SEC rules. We believe that the disclosures made are adequate to make the information presented not misleading. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. We consistently applied the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the SEC on November 17, 2021 (“2021 Annual Report”), in preparing these Unaudited Consolidated Financial Statements, with the exception of accounting standard updates described in Note 2, “Recent Accounting Pronouncements.” These Unaudited Consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes included in our 2021 Annual Report. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends Accounting Standards Codification (“ASC”) 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) (“Topic 606”) , as if the entity had originated the contracts, rather than adjust them to fair value at the acquisition date. The guidance is effective for fiscal years beginning after December 15, 2022 and is to be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently assessing the impact of adoption on the Company’s Unaudited Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and also issued subsequent amendments to the initial guidance (collectively, “Topic 848”). Topic 848 became effective immediately and expires on December 31, 2022. Topic 848 allows eligible contracts that are modified to be accounted for as a continuation of those contracts, permits companies to preserve their hedge accounting during the transition period and enables companies to make a one-time election to transfer or sell held-to-maturity debt securities that are affected by rate reform. Topic 848 provides optional expedients and exceptions for contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met. The Company is currently assessing the impact of adoption on the Company’s Unaudited Consolidated Financial Statements and related disclosures. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Variable Interest Entities | Variable Interest Entities Treated Water Outsourcing (“TWO”) is a joint venture between the Company and Nalco Water, an Ecolab company (“Nalco”), in which the Company held a 50% partnership interest as of March 31, 2022. The Company is obligated to absorb all risk of loss up to 100% of the joint venture partner’s equity. As such, the Company fully consolidates TWO as a variable interest entity (“VIE”) under ASC Topic No. 810, Consolidation . The Company has not provided, and is not contractually required to provide, additional financial support to this entity, and the Company does not have the ability to use the assets of TWO to settle obligations of the Company’s other subsidiaries. The following provides a summary of TWO’s balance sheet as of March 31, 2022 and September 30, 2021, and summarized financial information for the three and six months ended March 31, 2022 and 2021. March 31, September 30, Current assets (includes cash of $1,165 and $1,380) $ 3,195 $ 3,202 Property, plant, and equipment 782 903 Goodwill 2,206 2,206 Total liabilities (791) (1,009) Three Months Ended Six Months Ended 2022 2021 2022 2021 Total revenue $ 796 $ 834 $ 1,641 $ 1,668 Total operating expenses (703) (732) (1,440) (1,469) Income from operations $ 93 $ 102 $ 201 $ 199 On April 1, 2022, the Company acquired the remaining 50% partnership interest in TWO from Nalco. See Note 23, “Subsequent Events” for further discussion. On October 1, 2019, the Company acquired a 60% investment position in San Diego-based Frontier Water Systems, LLC (“Frontier”). The Frontier acquisition is a VIE because it has insufficient equity to finance its activities due to key assets being assigned to the Company upon acquisition. The Company is the primary beneficiary of Frontier because the Company has the power to direct the activities that most significantly affect Frontier’s economic performance. In addition, the Company entered into an agreement to purchase the remaining 40% interest in Frontier on or prior to March 30, 2024. This agreement (a) gave holders of the remaining 40% interest in Frontier (the “Minority Owners”) the right to sell to Evoqua up to approximately 10% of the outstanding equity in Frontier at a predetermined price, which right was exercisable by the Minority Owners between January 1, 2021 and February 28, 2021 (the “Option”), and (b) obligates the Company to purchase and the Minority Owners to sell all of the Minority Owners’ remaining interest in Frontier at the fair market value at the time of sale on or prior to March 30, 2024 (the “Purchase Right”). The Purchase Right may be exercised early by the Minority Owners. The agreement to purchase the remaining interest was determined to be a financing due to the mandatory Purchase Right, as per ASC Topic 480, Distinguishing Liabilities From Equity , and as such, the Company recognized a liability for the remaining 40% interest. The Minority Owners exercised the Option, and on April 8, 2021, the Company completed the purchase of an additional 8% of the outstanding equity in Frontier for approximately $1,490. As a result, the Company’s ownership position in Frontier increased to 68%. In January 2022, the Minority Owners exercised the Purchase Right, and on April 1, 2022, the Company purchased the remaining outstanding equity in Frontier. See Note 23, “Subsequent Events” for further discussion. Additionally, the Company fully consolidates Frontier as a VIE under ASC Topic No. 810, Consolidation . The following provides a summary of Frontier’s balance sheet as of March 31, 2022 and September 30, 2021, and summarized financial information for the three and six months ended March 31, 2022 and 2021. March 31, September 30, Current assets (includes cash of $5,959 and $2,095) $ 13,278 $ 12,495 Property, plant, and equipment 1,955 2,113 Goodwill 1,798 1,798 Intangible assets, net 7,439 8,265 Total liabilities (7,911) (9,425) Three Months Ended Six Months Ended 2022 2021 2022 2021 Total revenue $ 6,414 $ 2,078 $ 13,363 $ 2,848 Total operating expenses (6,149) (2,401) (12,135) (4,139) Income (loss) from operations $ 265 $ (323) $ 1,228 $ (1,291) |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and DivestituresAcquisitions support the Company’s strategy of delivering a broad solutions portfolio with robust technology across multiple geographies and end markets. The Company continues to evaluate potential strategic acquisitions of businesses, assets and product lines and believes that capex-like, tuck-in acquisitions present key opportunities within its overall growth strategy. On December 20, 2021, the Company and its indirect wholly-owned subsidiaries Evoqua Water Technologies LLC (“EWT LLC”) and Evoqua Water Technologies Ltd. (together with EWT LLC, the “Buyer”) entered into an Asset Purchase Agreement (the “Agreement”) with Cantel Medical LLC, Mar Cor Purification, Inc., and certain of their affiliates (collectively, the “Sellers”), each wholly-owned subsidiaries of Steris plc, pursuant to which the Buyer agreed to acquire certain assets of the Sellers and assume certain liabilities of the Sellers that are owned or used or arise in connection with the global operation of the Sellers’ renal business (the “Mar Cor Business”) for an aggregate purchase price of $196,300 in cash at closing (the “Purchase Price”), subject to customary adjustments, including for working capital (the “Transaction”). On January 3, 2022, we completed the Transaction to acquire the Mar Cor Business for $194,976 paid in cash at closing, following adjustments. The Company utilized cash on hand and borrowed an additional $160,000 under our 2021 Revolving Credit Facility (as defined below) to fund the Transaction. The Mar Cor Business is included within the Integrated Solutions and Services segment. The Purchase Price includes a $12,300 earn out, which is being held in escrow and will be paid, pro rata, to the Sellers if the Mar Cor Business meets certain sales performance goals through December 31, 2022 (the “Earn Out”). Any portion of the Earn Out not paid to the Sellers during the first year following closing of the Transaction will be returned to the Buyer. A Monte Carlo simulation was performed to determine the fair value of an Earn Out asset for the amount expected to be received back from escrow based on the forecasted achievement of the sales performance goals associated with the Earn Out. See Note 6, Fair Value Measurements, for further discussion. In addition, approximately $12,965 of the Purchase Price was placed into an escrow account, of which $9,815 is to secure general indemnification claims against the Sellers and $3,150 is for net working capital adjustments. During the three and six months ended March 31, 2022, the Company incurred approximately $2,116 and $3,178, respectively, in acquisition costs, which are included in General and administrative expense on the Unaudited Consolidated Statements of Operations. The acquisition of the Mar Cor Business has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. These preliminary estimates are subject to revision during the measurement period as additional analyses are performed and third-party valuations are finalized, and these differences could have a material impact on the accounting for the business combination. Receivables, net $ 21,418 Inventories, net 32,560 Earn Out asset 7,824 Other current assets 1,732 Property, plant, and equipment, net 18,747 Goodwill 68,370 Intangible assets, net 57,152 Other non-current assets 7,434 Total assets acquired 215,237 Current liabilities (14,719) Non-current liabilities (5,542) Total liabilities assumed (20,261) Net assets acquired $ 194,976 During the three months ended March 31, 2022, the Company completed the divestiture of the resin regeneration assets in Germany (the “Germany Regen Business”) for $356 in cash at closing, resulting in a gain of $193 recognized on the sale. The Germany Regen Business was a part of the Applied Product Technologies |
Revenue
Revenue | 6 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Performance Obligations The Company elects to apply the practical expedient to exclude from this disclosure revenue related to performance obligations if the product has an alternative use and the Company does not have an enforceable right to payment for the performance completed to date, including a normal profit margin, in the event of termination for convenience. The Company maintains a backlog of confirmed orders, which totaled approximately $269,814 at March 31, 2022. This backlog represents the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as of the end of the reporting period. The Company estimates that the majority of these performance obligations will be satisfied within the next twelve Disaggregation of Revenue In accordance with Topic 606, the Company disaggregates revenue from contracts with customers into source of revenue, reportable operating segment, and geographical regions. The Company determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606, which is to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Information regarding the source of revenue: Three Months Ended Six Months Ended 2022 2021 2022 2021 Revenue from contracts with customers recognized under Topic 606 $ 382,758 $ 297,919 $ 700,529 $ 583,107 Other (1) 43,970 48,645 92,467 85,650 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 (1) Other revenue relates to revenue recognized pursuant to ASU 2016-02, Leases (Topic 842) , primarily attributable to long term rentals. Information regarding revenue disaggregated by source of revenue and segment is as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Integrated Solutions and Services Revenue from capital projects $ 70,702 $ 52,093 $ 137,804 $ 102,719 Revenue from aftermarket 62,271 32,501 91,569 59,647 Revenue from service 161,867 139,540 310,513 276,485 Total $ 294,840 $ 224,134 $ 539,886 $ 438,851 Applied Product Technologies Revenue from capital projects $ 91,778 $ 90,296 $ 175,662 $ 167,185 Revenue from aftermarket 35,024 27,576 67,308 52,930 Revenue from service 5,086 4,558 10,140 9,791 Total $ 131,888 $ 122,430 $ 253,110 $ 229,906 Total Revenue Revenue from capital projects $ 162,480 $ 142,389 $ 313,466 $ 269,904 Revenue from aftermarket 97,295 60,077 158,877 112,577 Revenue from service 166,953 144,098 320,653 286,276 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 Information regarding revenue disaggregated by geographic area is as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 United States $ 352,639 $ 274,681 $ 647,347 $ 538,812 Asia 28,042 26,976 58,947 49,581 Europe 28,641 31,527 54,270 52,812 Canada 13,748 10,636 26,409 21,815 Australia 3,658 2,744 6,023 5,737 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 Contract Balances The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets relate to costs incurred to perform in advance of scheduled billings. Contract liabilities relate to payments received in advance of performance under the contracts. Change in contract assets and liabilities are due to the Company’s performance under the contract. The tables below provide a roll-forward of contract assets and contract liabilities balances for the periods presented: Six Months Ended Contract assets (a) 2022 2021 Balance at beginning of period $ 72,746 $ 80,759 Recognized in current period 206,859 147,593 Reclassified to accounts receivable (179,967) (153,964) Foreign currency (136) 413 Balance at end of period $ 99,502 $ 74,801 (a) Excludes receivable balances which are disclosed on the Consolidated Balance Sheets. Six Months Ended Contract Liabilities 2022 2021 Balance at beginning of period $ 55,883 $ 26,259 Recognized in current period 174,518 158,452 Amounts in beginning balance reclassified to revenue (44,292) (20,703) Current period amounts reclassified to revenue (130,629) (127,684) Foreign currency 113 570 Balance at end of period $ 55,593 $ 36,894 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurements As of March 31, 2022 and September 30, 2021, the fair values of cash and cash equivalents, accounts receivable, and accounts payable approximated carrying values due to the short maturity of these items. The Company measures the fair value of pension plan assets and liabilities, deferred compensation plan assets and liabilities on a recurring basis pursuant to ASC Topic No. 820, Fair Value Measurement . ASC Topic No. 820 establishes a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model‑derived valuations whose inputs are observable or whose significant value driver is observable. Level 3: Unobservable inputs in which little or no market data is available, therefore requiring an entity to develop its own assumptions. The following table presents the Company’s financial assets and liabilities at fair value. The fair values related to the pension plan assets are determined using net asset value (“NAV”) as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value. The reported carrying amounts of deferred compensation plan assets and liabilities and debt approximate their fair values. The Company uses interest rates and other relevant information generated by market transactions involving similar instruments to measure the fair value of these assets and liabilities, therefore all are classified as Level 2 within the valuation hierarchy. Net Asset Value Quoted Market Significant Other Significant As of March 31, 2022 Assets: Pension plan Cash $ — $ 441 $ — $ — Global Multi-Asset Fund 14,182 — — — Government Securities 1,966 — — — Liability Driven Investment 5,687 — — — Guernsey Unit Trust 2,423 — — — Global Absolute Return 2,106 — — — Deferred compensation plan assets Cash — 1,052 — — Mutual Funds — 15,432 — — Earn-out assets related to acquisitions — — — 7,824 Total return swaps—deferred compensation — — 250 — Interest rate swaps — — 30,940 — Foreign currency forward contracts — — 112 — Commodity swaps — — 9 — Liabilities: Pension plan — — (44,344) — Deferred compensation plan liabilities — — (24,191) — Long‑term debt — — (942,133) — Foreign currency forward contracts — — (33) — Earn-out liabilities related to acquisitions — — — (25) Purchase Right — — — (10,396) Net Asset Value Quoted Market Significant Other Significant As of September 30, 2021 Assets: Pension plan Cash $ — $ 831 $ — $ — Global Multi-Asset Fund 15,244 — — — Government Securities 5,158 — — — Liability Driven Investment 2,793 — — — Guernsey Unit Trust 2,387 — — — Global Absolute Return 2,225 — — — Deferred compensation plan assets Cash — 1,251 — — Mutual Funds — 17,806 — — Interest rate swaps — — 3,127 — Foreign currency forward contracts — — 24 — Liabilities: Pension plan — — (46,013) — Deferred compensation plan liabilities — — (24,382) — Total return swaps—deferred compensation — — (130) — Long‑term debt — — (752,988) — Interest rate swaps — — (303) — Foreign currency forward contracts — — (102) — Commodity swaps — — (19) — Earn-out liabilities related to acquisitions — — — (150) Purchase Right — — — (8,305) The pension plan assets and liabilities and deferred compensation plan assets and liabilities are included in Other non‑current assets and Other non‑current liabilities at March 31, 2022 and September 30, 2021. The unrealized loss on mutual funds was $418 at March 31, 2022. The Company records contingent consideration arrangements at fair value on a recurring basis, and the associated balances presented as of March 31, 2022 and September 30, 2021 are earn-outs related to acquisitions. The fair value of earn-outs related to acquisitions is based on significant unobservable inputs including the achievement of certain performance metrics. Significant changes in these inputs would result in corresponding increases or decreases in the fair value of the earn-out each period until the related contingency has been resolved. Changes in the fair value of the contingent consideration obligations and assets can result from adjustments in the probability of achieving future development steps, sales targets and profitability and are recorded in General and administrative expenses in the Unaudited Consolidated Statements of Operations. During the three and six months ended March 31, 2022, the Company recorded a decrease in the fair value of the earn-out liability related to the prior year acquisition of Water Consulting Specialists, Inc. (“WCSI”) of $25 and $125, respectively. As a result of the Mar Cor Business acquisition on January 3, 2022, the Company recorded an Earn Out asset for $7,824 which represents the fair value of amounts expected to be received back from escrow based on the forecasted achievement of certain sales performance goals. As of March 31, 2022 and September 30, 2021, earn-out liabilities related to acquisitions totaled $25 and $150, respectively, and are included in Accrued expenses and other liabilities on the Consolidated Balance Sheets. As of March 31, 2022 and September 30, 2021, earn-out assets related to acquisitions total $7,824 and $0, respectively, and are included in Prepaid and other current assets on the Consolidated Balance Sheets. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts receivable | Accounts Receivable Accounts receivable are summarized as follows: March 31, September 30, Accounts receivable $ 289,462 $ 282,819 Allowance for credit losses (6,370) (4,824) Receivables, net $ 283,092 $ 277,995 The movement in the allowance for credit losses was as follows for the six months ended March 31, 2022: Balance at September 30, 2021 $ (4,824) Charged to costs and expenses (1,134) Write-offs 146 Foreign currency and other (558) Balance at March 31, 2022 $ (6,370) |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The major classes of Inventories, net are as follows: March 31, September 30, Raw materials and supplies $ 115,340 $ 86,469 Work in progress 31,599 19,842 Finished goods and products held for resale 79,766 59,624 Costs of unbilled projects 2,545 2,277 Reserves for excess and obsolete (12,317) (9,709) Inventories, net $ 216,933 $ 158,503 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 6 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant, and Equipment Property, plant, and equipment consists of the following: March 31, September 30, Machinery and equipment $ 395,017 $ 388,352 Rental equipment 253,800 246,257 Land and buildings 77,498 70,048 Construction in process 62,142 59,737 788,457 764,394 Less: accumulated depreciation (393,167) (389,406) Property, plant, and equipment, net $ 395,290 $ 374,988 The Company entered into secured financing agreements that require providing a security interest in specified equipment and, in some cases, the underlying contract. As of March 31, 2022 and September 30, 2021, the gross and net amounts of those assets are as follows: March 31, September 30, Gross Net Gross Net Machinery and equipment $ 86,033 $ 65,752 $ 73,632 $ 57,036 Construction in process 9,668 9,668 30,504 30,504 $ 95,701 $ 75,420 $ 104,136 $ 87,540 Depreciation expense and maintenance and repairs expense for the three and six months ended March 31, 2022 and 2021 were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Depreciation expense $ 20,722 $ 18,769 $ 40,042 $ 37,280 Maintenance and repair expense 7,475 4,754 13,594 9,962 |
Goodwill
Goodwill | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Changes in the carrying amount of goodwill are as follows: Integrated Solutions and Services Applied Product Technologies Total Balance at September 30, 2021 $ 233,830 $ 173,546 $ 407,376 Business combinations and divestitures 68,370 (34) 68,336 Foreign currency translation 714 (167) 547 Balance at March 31, 2022 $ 302,914 $ 173,345 $ 476,259 As of March 31, 2022 and September 30, 2021, $228,037 and $159,730, respectively, of goodwill was deductible for tax purposes. |
Debt
Debt | 6 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long‑term debt, including accrued interest, consists of the following: March 31, September 30, 2021 Term Loan, due April 1, 2028 (1) $ 471,438 $ 473,837 2021 Revolving Credit Facility, due April 1, 2026 (2) 221,106 37,268 Securitization Facility, due April 1, 2024 (3) 150,078 150,061 Equipment Financing, due September 30, 2023 to July 31, 2029, interest rates ranging from 3.13% to 8.07% 102,752 93,375 Notes Payable, due July 31, 2023 (4) — 402 Total debt 945,374 754,943 Less unamortized deferred financing fees (10,812) (11,738) Total net debt 934,562 743,205 Less current portion (14,219) (12,775) Total long‑term debt $ 920,343 $ 730,430 (1) The interest rate on the 2021 Term Loan was 2.75% as of March 31, 2022, comprised of 0.25% LIBOR plus the 2.50% spread. Includes accrued interest of $0 and $25 at March 31, 2022 and September 30, 2021, respectively. (2) The 2021 Revolving Credit Facility includes $187,000 with an interest rate of 2.20% as of March 31, 2022, comprised of 0.25% LIBOR plus the 1.95% spread, and $34,000 with an interest rate of 4.45%. as of March 31, 2022, comprised of 3.50% Prime Rate plus the 0.95% spread. During the three months ended March 31, 2022, the spread on the 2021 Revolving Credit Facility was reduced from 2.25% at September 30, 2021 as a result of a Sustainability Pricing Adjustment per the 2021 Credit Agreement. Includes accrued interest of $106 and $268, at March 31, 2022 and September 30, 2021, respectively. (3) The interest rate on the Securitization Facility was 1.70% as of March 31, 2022, comprised of 0.45% LIBOR plus the 1.25% spread. Includes accrued interest of $78 and $61 at March 31, 2022 and September 30, 2021, respectively. (4) In March 2022, the outstanding balance of the Notes Payable due July 31, 2023, was repaid in conjunction with the Company’s acquisition of TWO. See Note 23, “Subsequent Events” for further discussion. 2021 Credit Agreement On April 1, 2021, EWT III entered into a Credit Agreement (the “2021 Credit Agreement”) among EWT III, as borrower, EWT II, as parent guarantor, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and ING Capital, LLC, as sustainability coordinator. The 2021 Credit Agreement provides for a multi-currency senior secured revolving credit facility in an aggregate principal amount not to exceed the U.S. dollar equivalent of $350,000 (the “2021 Revolving Credit Facility”) and a discounted senior secured term (the “2021 Term Loan”) in the amount of $475,000 (together with the 2021 Revolving Credit Facility, the “Senior Facilities”). The 2021 Credit Agreement also provides for a letter of credit sub-facility not to exceed $60,000. The 2021 Credit Agreement contains customary representations, warranties, affirmative covenants, and negative covenants, including, among other things, a springing maximum first lien leverage ratio of 5.55 to 1.00. The Company did not exceed this ratio during the six months ended March 31, 2022, does not anticipate exceeding this ratio during the year ending September 30, 2022, and therefore does not anticipate any additional repayments during the year ending September 30, 2022. The following table summarizes the amount of the Company’s outstanding borrowings and outstanding letters of credit under the 2021 Revolving Credit Facility as of March 31, 2022 and September 30, 2021. March 31, September 30, Borrowing availability $ 350,000 $ 350,000 Outstanding borrowings 221,000 37,000 Outstanding letters of credit 9,604 10,112 Unused amounts $ 119,396 $ 302,888 Receivables Securitization Program On April 1, 2021, Evoqua Finance LLC (“Evoqua Finance”), an indirect wholly-owned subsidiary of the Company, entered into an accounts receivable securitization program (the “Receivables Securitization Program”) consisting of, among other agreements, (i) a Receivables Financing Agreement (the “Receivables Financing Agreement”) among Evoqua Finance, as the borrower, the lenders from time to time party thereto (the “Receivables Financing Lenders”), PNC Bank, National Association (“PNC Bank”), as administrative agent, EWT LLC, as initial servicer, and PNC Capital Markets LLC (“PNC Markets”), as structuring agent, pursuant to which the lenders have made available to Evoqua Finance a receivables finance facility (the “Securitization Facility”) in an amount up to $150,000 and (ii) a Sale and Contribution Agreement (the “Sale Agreement”) among Evoqua Finance, as purchaser, EWT LLC, as initial servicer and as an originator, and Neptune Benson, Inc., an indirectly wholly-owned subsidiary of the Company, as an originator (together with EWT LLC, the “Originators”). The Receivables Securitization Program contains certain customary representations, warranties, affirmative covenants, and negative covenants, subject to certain cure periods in some cases, including the eligibility of the Receivables being sold by the Originators and securing the loans made by the Receivables Financing Lenders, as well as customary reserve requirements, events of default, termination events, and servicer defaults. The Company was in compliance with all covenants during the six months ended March 31, 2022, does not anticipate becoming noncompliant during the year ending September 30, 2022, and therefore, subject to limitations arising from collateral availability, does not anticipate any additional repayments during the year ending September 30, 2022. Equipment Financings During the six months ended March 31, 2022, the Company completed the following equipment financings: Date Entered Due Interest Rate at March 31, 2022 Principal Amount March 18, 2022 March 17, 2029 4.67 % $ 1,839 March 16, 2022 July 31, 2029 (1) 4.75 % 1,317 March 15, 2022 April 1, 2029 4.74 % 4,788 December 30, 2021 December 30, 2028 3.94 % 2,207 December 23, 2021 July 31, 2029 (1) 4.75 % 3,742 $ 13,893 (1) Represents an advance received from the lender on a multiple draw term loan in which the Company is making interest only payments through August 1, 2022 based on a 1.00% LIBOR floor plus a 3.75% spread. The Company entered into an interest rate swap with an effective date of August 1, 2022 to mitigate risk associated with this variable rate equipment financing, see Note 12, “Derivative Financial Instruments” for further discussion. Deferred Financing Fees and Discounts Deferred financing fees and discounts related to the Company’s long-term debt were included as a contra liability to debt on the Consolidated Balance Sheets as follows: March 31, September 30, Current portion of deferred financing fees and discounts (1) $ (1,883) $ (1,866) Long-term portion of deferred financing fees and discounts (2) (8,929) (9,872) Total deferred financing fees and discounts $ (10,812) $ (11,738) (1) Included in Current portion of debt, net of deferred financing fees and discounts on the Consolidated Balance Sheets. (2) Included in Long-term debt, net of deferred financing fees and discounts on the Consolidated Balance Sheets. Amortization of deferred financing fees and discounts included in interest expense was $459 and $518 for the three months ended March 31, 2022 and 2021 and $926 and $1,044 for the six months ended March 31, 2022 and 2021, respectively. Repayment Schedule Aggregate maturities of all long‑term debt, including current portion of long‑term debt and excluding finance lease obligations as of March 31, 2022, are presented below: Fiscal Year Remainder of 2022 $ 7,886 2023 16,748 2024 165,512 2025 17,100 2026 20,417 Thereafter 717,711 Total $ 945,374 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Financial Instruments Interest Rate Risk Management The Company is subject to market risk exposure arising from changes in interest rates on the senior secured credit facilities as well as variable rate equipment financings, which bear interest at rates that are indexed against LIBOR. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to mitigate its exposure to rising interest rates. As of March 31, 2022, the notional amount of the Company’s interest rate swaps was $531,000. Foreign Currency Risk Management The Company’s functional currency is the U.S. dollar. By operating internationally, the Company is subject to foreign currency translation risk associated with converting the foreign operations’ financial statements into U.S. dollars transactions denominated in currencies other than the U.S. dollar (“foreign currencies”). The Company is also subject to currency risk from transactions denominated in foreign currencies. To mitigate cross-currency transaction risk, the Company analyzes significant exposures where it has receipts or payments in a currency other than the functional currency of its operations, and from time to time may strategically enter into short-term foreign currency forward contracts to lock in some or all of the cash flows associated with these transactions. The Company uses foreign currency derivative contracts in order to manage the effect of exchange fluctuations on forecasted sales and purchases that are denominated in foreign currencies. To mitigate the impact of foreign exchange rate risk, the Company entered into a series of forward contracts designated as cash flow hedges. As of March 31, 2022, the notional amount of the forward contracts was $9,460. Equity Price Risk Management The Company is exposed to variability in compensation charges related to certain deferred compensation obligations to employees. Equity price movements affect the compensation expense as certain investments made by the Company’s employees in the deferred compensation plan are revalued. Although not designated as accounting hedges, the Company utilizes derivatives such as total return swaps to economically hedge a portion of this exposure and offset the related compensation expense. As of March 31, 2022, the notional amount of the total return swaps was $5,488. Credit Risk Management The counterparties to the Company’s derivative contracts are highly-rated financial institutions. The Company regularly reviews the creditworthiness of its financial counterparties and fully expects the counterparties to perform under their respective agreements. The Company is not subject to any obligations to post collateral under derivative instrument contracts. The Company records all derivative instruments on a gross basis in the Consolidated Balance Sheets. Accordingly, there are no offsetting amounts that net assets against liabilities. Derivatives Designated as Cash Flow Hedges The following represents the fair value recorded for derivatives designated as cash flow hedges for the periods presented: Asset Derivatives Balance Sheet Location March 31, September 30, Interest rate swaps Prepaid and other current assets $ 5,996 $ 3,127 Foreign currency forward contracts Prepaid and other current assets 112 6 Commodity swaps Prepaid and other current assets 9 — Interest rate swaps Other non‑current assets 24,944 — Liability Derivatives Balance Sheet Location March 31, September 30, Interest rate swaps Accrued expenses and other current liabilities $ — $ 303 Foreign currency forward contracts Accrued expenses and other current liabilities 33 102 Commodity swaps Accrued expenses and other current liabilities — 19 The following represents the amount of gain (loss) recognized in Accumulated other comprehensive income (loss) (“AOCI”) (net of tax) during the periods presented: Three Months Ended Six Months Ended 2022 2021 2022 2021 Interest rate swaps $ 21,077 $ 8,811 $ 26,948 $ 9,268 Foreign currency forward contracts 100 (335) 82 (332) Commodity swaps 8 — 28 — $ 21,185 $ 8,476 $ 27,058 $ 8,936 The following represents the amount of (loss) gain reclassified from AOCI into earnings during the periods presented: Three Months Ended Six Months Ended Location of (Loss) Gain 2022 2021 2022 2021 Cost of product sales and services $ 6 $ (13) $ (79) $ (13) General and administrative expense — (40) (7) (72) Selling and marketing expense (1) (39) — (39) Interest expense (550) (523) (1,167) (1,033) $ (545) $ (615) $ (1,253) $ (1,157) Based on the fair value amounts of the Company’s cash flow hedges at March 31, 2022, the Company expects that approximately $76 of pre-tax net gains will be reclassified from AOCI into earnings during the next twelve months. The amount ultimately realized, however, will differ as exchange rates vary and the underlying contracts settle. Derivatives Not Designated as Hedging Instruments The following represents the fair value recorded for derivatives not designated as cash flow hedges for the periods presented: Asset Derivatives Balance Sheet Location March 31, September 30, Total return swaps—deferred compensation Prepaid and other current assets $ 250 $ — Foreign currency forward contracts Prepaid and other current assets — 18 Liability Derivatives Balance Sheet Location March 31, September 30, Total return swaps—deferred compensation Accrued expenses and other current liabilities $ — $ 130 The following represents the amount of loss recognized in earnings for derivatives not designated as hedges during the periods presented: Three Months Ended Six Months Ended Location of Loss 2022 2021 2022 2021 General and administrative expense $ (352) $ — $ (41) $ — $ (352) $ — $ (41) $ — |
Product Warranties
Product Warranties | 6 Months Ended |
Mar. 31, 2022 | |
Guarantees and Product Warranties [Abstract] | |
Product warranties | Product Warranties A reconciliation of the activity related to the accrued warranty, including both the current and long‑term portions, is as follows: Current Product Warranties Non-Current Product Warranties Six Months Ended Six Months Ended 2022 2021 2022 2021 Balance at beginning of the period $ 8,138 $ 6,115 $ 2,966 $ 1,724 Warranty provision for sales 2,797 2,188 609 714 Settlement of warranty claims (3,345) (1,699) (338) (471) Foreign currency translation and other (92) 110 (46) 22 Balance at end of the period $ 7,498 $ 6,714 $ 3,191 $ 1,989 |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and related charges | Restructuring and Related Charges To better align its resources with its growth strategies and reduce its cost structure, the Company commits to various restructuring plans as necessary. The Company has undertaken various restructuring initiatives, including activities to reduce the cost structure and rationalize location footprint following the sale of the Memcor product line, transitioning from a three-segment structure to a two-segment operating model designed to better serve the needs of customers worldwide, and various initiatives within the Integrated Solutions and Services segment to drive efficiency and effectiveness in certain divisions. The Company currently expects to incur in future periods approximately $100 to $1,100 of costs related to restructuring programs initiated in prior periods. The table below sets forth the amounts accrued for the restructuring components and related activity: Six Months Ended 2022 2021 Balance at beginning of the period $ 304 $ 970 Restructuring charges following the sale of the Memcor product line 754 3,808 Restructuring charges related to two-segment realignment 297 562 Restructuring charges related to other initiatives 1,817 1,444 Release of prior reserves (66) (283) Write off charges — (966) Cash payments (2,220) (4,359) Other adjustments 2 9 Balance at end of the period $ 888 $ 1,185 The balances for accrued restructuring liabilities at March 31, 2022 and September 30, 2021, are recorded in Accrued expenses and other liabilities on the Consolidated Balance Sheets. Restructuring charges primarily represent severance charges and other employee costs, fixed asset write-offs, and certain relocation expenses. The Company expects to pay the remaining amounts accrued as of March 31, 2022 during the remainder of fiscal 2022. The table below sets forth the location of amounts recorded above on the Unaudited Consolidated Statements of Operations: Six Months Ended 2022 2021 Cost of product sales and services $ 867 $ 3,428 General and administrative expense 1,719 1,089 Sales and marketing expense — 340 Research and development expense 1 (16) Other operating expense, net 215 690 $ 2,802 $ 5,531 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Employee Benefit Plans The Company maintains multiple employee benefit plans. Certain of the Company’s employees in the UK were participants in a Siemens defined benefit plan established for employees of a UK-based operation acquired by Siemens in 2004. The plan was frozen with respect to future service credits for active employees, however the benefit formula recognized future compensation increases. The Company agreed to establish a replacement defined benefit plan, with the assets of the Siemens scheme transferring to the new scheme on April 1, 2015. The Company’s employees in Germany also participate in a defined benefit plan. Assets equaling the plan’s accumulated benefit obligation were transferred to a German defined benefit plan sponsored by the Company upon the acquisition of EWT from Siemens. The German entity also sponsors a defined benefit plan for a small group of employees located in France. The components of net periodic benefit cost for the plans were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Service cost $ 227 $ 287 $ 459 $ 571 Interest cost 107 80 215 159 Expected return on plan assets (129) (87) (261) (174) Amortization of actuarial losses 166 110 335 374 Pension expense for defined benefit plans $ 371 $ 390 $ 748 $ 930 The components of pension expense, other than the service cost component which is included in General and administrative expense, are included in the line item Other operating expense in the Unaudited Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Year-to-date income tax expense (benefit) is the product of the most current projected annual effective tax rate (“PAETR”) and the actual year-to-date pretax income (loss) adjusted for any discrete tax items. The income tax expense (benefit) for a particular quarter, except for the first quarter, is the difference between the year-to-date calculation of income tax expense (benefit) and the year-to-date calculation for the prior quarter. Items unrelated to current period ordinary income or (loss) are recognized entirely in the period identified as a discrete item of tax. Annual Effective Tax Rate The PAETR, which excludes the impact of discrete items, was 22.6% and 14.6% as of the six months ended March 31, 2022 and 2021, respectively. For the six months ended March 31, 2022, the PAETR was higher than the U.S. federal statutory rate of 21.0% primarily due to the mix of earnings between countries, most of which have higher statutory rates than the U.S., which was mostly offset by the impact of maintaining a valuation allowance that is provided on U.S. deferred tax assets. The current year PAETR was higher than the prior year’s rate due to an increase in projected pretax book income in countries with higher statutory tax rates. The Company continues to maintain a full valuation allowance on U.S. federal and state net deferred tax assets (excluding the tax effects of deferred tax liabilities associated with indefinite lived intangibles) for the period ending March 31, 2022 as a result of pretax losses incurred since the Company’s inception in early 2014. The Company believes it is prudent to retain a valuation allowance until a more consistent pattern of earnings is established and net operating loss carryforwards begin to be utilized. Current and Prior Period Tax Expense For the three months ended March 31, 2022, the Company recognized income tax expense of $2,248 on pretax income of $9,622. The rate of 23.4% differed from the U.S. statutory rate of 21.0% as the mix of earnings between countries, most of which have higher statutory tax rates than the U.S., was mostly offset by the impact of maintaining a U.S. valuation allowance that is provided on U.S. deferred tax assets. For the three months ended March 31, 2021, the Company recognized income tax expense of $2,701 on pretax income of $7,783. The rate of 34.7% differed from the U.S. statutory rate of 21.0% principally due to the impact of maintaining a U.S. valuation allowance against U.S. deferred tax assets. For the six months ended March 31, 2022, the Company recognized income tax expense of $3,869 on pretax income of $17,331. The rate of 22.3% differed from the U.S. statutory rate of 21.0% as the mix of earnings between countries, most of which have higher statutory tax rates than the U.S., was mostly offset by the impact of maintaining a U.S. valuation allowance that is provided on U.S. deferred tax assets. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share Based Compensation | Share-Based Compensation The Company designs equity compensation plans to attract and retain employees while also aligning employees’ interests with the interests of the Company’s shareholders. In addition, members of the Company’s Board of Directors (the “Board”) participate in equity compensation plans in connection with their service on the Board. The Company established the Evoqua Water Technologies Corp. Stock Option Plan (the “Stock Option Plan”) on March 6, 2014 . The plan allows certain management employees and the Board to purchase shares in the Company. Under the Stock Option Plan, the number of shares available for award was 11,083. As of March 31, 2022, there were approximately 2,177 shares available for future grants, however, the Company does not currently intend to make additional grants under the Stock Option Plan. In connection with the IPO, the Board adopted, and the Company’s shareholders approved, the Evoqua Water Technologies Corp. 2017 Equity Incentive Plan (the “Equity Incentive Plan”), under which equity awards may be granted in the form of options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, dividend equivalent rights, share awards, and performance-based awards (including performance share units and performance-based restricted stock). During the six months ended March 31, 2022, the Company granted RSUs and performance share units (measured at a target award level) under the Equity Incentive Plan to certain employees of the Company. The final number of performance share units that may be earned is dependent on the Company’s achievement of performance goals related to organic revenue growth dollars and average adjusted EBITDA margin over a three-year measurement period ending September 30, 2024. The final number of performance share units that may be earned is also subject to a total stockholder return (“TSR”) modifier, which operates by increasing or decreasing the total number of shares earned by up to 25% based on the Company’s TSR relative to the TSR of the U.S. constituents of the S&P Global Water Index. In order to receive shares earned at the end of the performance period, the recipient must remain employed by the Company and its subsidiaries through the end of the three As of March 31, 2022, there were approximately 3,950 shares available for grants under the Equity Incentive Plan. Outstanding option awards vest ratably at 25% per year, and are exercisable at the time of vesting. The options granted have a ten A summary of the stock option activity as of March 31, 2022 is presented below: (In thousands, except per share amounts) Options Weighted Average Exercise Price/Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at September 30, 2021 5,090 $ 13.87 5.9 years $ 120,611 Granted 2 46.75 Exercised (249) 15.87 Forfeited (28) 20.76 Outstanding at March 31, 2022 4,815 $ 13.73 5.4 years $ 160,085 Options exercisable at March 31, 2022 3,752 $ 11.51 4.6 years $ 133,087 Options vested and expected to vest at March 31, 2022 4,805 $ 13.71 5.4 years $ 159,838 The total intrinsic value of options exercised (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) during the six months ended March 31, 2022 was $6,873. A summary of the status of the Company's unvested stock options as of and for the six months ended March 31, 2022 is presented below. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Unvested at beginning of period 1,901 $ 6.69 Granted 2 24.22 Vested (812) 6.55 Forfeited (28) 6.60 Unvested at end of period 1,063 $ 6.87 The total fair value of options vested during the six months ended March 31, 2022, was $5,317. The following is a summary of the RSU activity for the six months ended March 31, 2022. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Outstanding at September 30, 2021 1,209 $ 22.77 Granted 321 45.10 Vested (417) 21.09 Forfeited (27) 23.73 Outstanding at March 31, 2022 1,086 $ 29.99 Expected to vest at March 31, 2022 1,049 $ 29.64 The following is a summary of the performance share unit activity for the six months ended March 31, 2022, assuming target award level. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Unvested at beginning of period 469 $ 16.92 Granted 124 52.50 Unvested at end of period 593 $ 23.39 Expected to vest 546 $ 23.28 Expense Measurement and Recognition The Company recognizes share-based compensation for all currently outstanding awards and, in future periods, will recognize compensation costs for the unvested portion of awards based on grant date fair values. Total share-based compensation expense was $6,068 and $3,214 during the three months ended March 31, 2022 and 2021, respectively, of which $5,386 and $3,214 was non-cash, respectively. Total share-based compensation expense was $11,402 and $6,290 during the six months ended March 31, 2022 and 2021, respectively, of which $10,589 and $6,233 was non-cash, respectively. The unrecognized compensation expense related to stock options, RSUs, and performance share units (measured at a target award level) was $6,565, $27,863 and $11,063, respectively at March 31, 2022, and is expected to be recognized over a weighted average period of 1.9 years, 2.2 years and 2.3 years, respectively. The Company received $5,274 from the exercise of stock options during the six months ended March 31, 2022. Employee Stock Purchase Plan Effective October 1, 2018, the Company implemented an employee stock purchase plan (the “ESPP”) which allows employees to purchase shares of the Company’s stock at 85% of the lower of the fair market value on the first or last business day of the applicable six-month offering period. These purchases are offered twice throughout each fiscal year, and are paid by employees through payroll deductions over the respective six month purchase period, at the end of which the stock is transferred to the employees. On December 21, 2018, the Company registered 11,297 shares of common stock, par value $0.01 per share, of which 5,000 are available for future issuance under the ESPP. During the three months ended March 31, 2022 and 2021, the Company incurred compensation expense of $198 and $187, respectively, in salaries and wages with respect to the ESPP, representing the fair value of the discounted price of the shares. During the six months ended March 31, 2022 and 2021, the Company incurred compensation expense of $419 and $403, respectively. These amounts are included in the total share-based compensation expense above. On October 1, 2021 and April 1, 2022, 60 and 48 shares, respectively, were issued under the ESPP. |
Concentration of Credit Risk
Concentration of Credit Risk | 6 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of credit risk | Concentration of Credit RiskThe Company’s cash and cash equivalents and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Accounts receivable are derived from revenue earned from customers located in the U.S. and internationally and generally do not require collateral. The Company’s trade receivables do not represent a significant concentration of credit risk at March 31, 2022 and September 30, 2021 due to the wide variety of customers and markets into which products are sold and their dispersion across geographic areas. The Company does perform ongoing credit evaluations of its customers and maintains an allowance for potential credit losses on trade receivables. As of and for the three and six months ended March 31, 2022 and 2021, no customer accounted for more than 10% of net sales or net accounts receivable.The Company operates predominantly in nine countries worldwide and provides a wide range of proven product brands and advanced water and wastewater treatment technologies, mobile and emergency water supply solutions, and service contract options through its Integrated Solutions and Services and Applied Product Technologies segments. The Company is a multi-national business but its sales and operations are primarily in the U.S. Sales to unaffiliated customers are transacted with the Company location that maintains the customer relationship. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Guarantees From time to time, the Company is required to provide letters of credit, bank guarantees, or surety bonds in support of its commitments and as part of the terms and conditions on water treatment projects. In addition, the Company is required to provide letters of credit or surety bonds to the Department of Environmental Protection or equivalent in some states in order to maintain its licenses to handle toxic substances at certain of its water treatment facilities. These financial instruments typically expire after all Company commitments have been met, a period typically ranging from twelve months to ten years, or more in some circumstances. The letters of credit, bank guarantees, or surety bonds are arranged through major banks or insurance companies. In the case of surety bonds, the Company generally indemnifies the issuer for all costs incurred if a claim is made against the bond. The following summarizes the Company’s outstanding letters of credit and surety bonds as of March 31, 2022 and September 30, 2021, respectively. March 31, September 30, Revolving credit capacity $ 60,000 $ 60,000 Letters of credit outstanding 9,604 10,112 Remaining revolving credit capacity $ 50,396 $ 49,888 Surety capacity $ 252,225 $ 250,000 Surety issuances 122,086 147,845 Remaining surety available $ 130,139 $ 102,155 The longest maturity date of letters of credit and surety bonds in effect as of March 31, 2022 was March 20, 2030. Litigation From time to time, as a normal incident of the nature and kind of business in which the Company is engaged, various claims or charges are asserted and litigation is commenced against it arising from or related to: product liability; personal injury; trademarks, trade secrets, or other intellectual property; shareholder disputes; labor and employee disputes; commercial or contractual disputes; breach of warranty; or environmental matters. Claimed amounts may be substantial but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. While it is not feasible to predict the outcome of these matters with certainty, and some lawsuits, claims, or proceedings may be disposed or decided unfavorably, the Company does not expect that any asserted or un-asserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on its results of operations, or financial condition. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 6 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: March 31, September 30, Salaries, wages, and other benefits $ 60,552 $ 79,110 Obligation under operating leases 14,668 13,316 Obligation under finance leases 12,263 12,093 Third party commissions 10,563 10,031 Frontier Purchase Right liability 10,396 — Taxes, other than income 6,811 4,575 Provisions for litigation 6,153 2,938 Insurance liabilities 3,557 3,720 Severance payments 888 304 Fair value of liability derivatives 33 554 Earn-outs related to acquisitions 25 150 Other 32,601 33,576 $ 158,510 $ 160,367 |
Business Segments
Business Segments | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company’s reportable operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. The key factors used to identify these reportable operating segments are the organization and alignment of the Company’s internal operations, the nature of the products and services, and customer type. The Company has two reportable operating segments, Integrated Solutions and Services and Applied Product Technologies. The business segments are described as follows: Integrated Solutions and Services is a group entirely focused on engaging directly with end users through direct sales with a market vertical focus. Integrated Solutions and Services provides tailored services and solutions in collaboration with the customers backed by life‑cycle services including on‑demand water, outsourced water, recycle / reuse, and emergency response service alternatives to improve operational reliability, performance, and environmental compliance. Key offerings within this segment also include equipment systems for industrial needs (influent water, boiler feed water, ultrahigh purity, process water, wastewater treatment, and recycle / reuse), full-scale outsourcing of operations and maintenance, and municipal services, including odor and corrosion control services. Applied Product Technologies is focused on developing product platforms to be sold primarily through third party channels. This segment primarily engages in indirect sales through independent sales representatives, distributors, and aftermarket channels. Applied Product Technologies provides a range of highly differentiated and scalable products and technologies specified by global water treatment designers, original equipment manufacturers (“OEMs”), engineering firms, and integrators. Key offerings within this segment include filtration and separation, disinfection, wastewater solutions, anode and electrochlorination technology, and aquatics technologies and solutions for the global recreational and commercial pool market. Corporate activities include general corporate expenses, elimination of inter-segment transactions, interest income and expense, and certain other charges. Certain other charges may include restructuring and other business transformation charges that have been undertaken to align and reposition the Company to the current reporting structure, acquisition related costs (including transaction costs and certain integration costs,), and share-based compensation charges. Since certain administrative and other operating expenses and other items have not been allocated to business segments, the results in the below table are not necessarily a measure computed in accordance with generally accepted accounting principles and may not be comparable to other companies. Reportable operating segment revenue and operating profit for the three and six months ended March 31, 2022 and 2021 were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Total revenue Integrated Solutions and Services $ 304,499 $ 228,203 $ 558,075 $ 444,956 Applied Product Technologies 154,861 146,107 297,358 269,688 Total revenue 459,360 374,310 855,433 714,644 Intersegment revenue Integrated Solutions and Services 9,659 4,069 18,189 6,105 Applied Product Technologies 22,973 23,677 44,248 39,782 Total intersegment revenue 32,632 27,746 62,437 45,887 Revenue to external customers Integrated Solutions and Services 294,840 224,134 539,886 438,851 Applied Product Technologies 131,888 122,430 253,110 229,906 Total revenue $ 426,728 $ 346,564 $ 792,996 $ 668,757 Operating profit (loss) Integrated Solutions and Services $ 38,105 $ 30,784 $ 73,405 $ 57,141 Applied Product Technologies 22,993 18,103 40,820 31,483 Corporate (41,526) (32,709) (80,365) (56,212) Total operating profit 19,572 16,178 33,860 32,412 Interest expense (9,950) (8,395) (16,529) (17,068) Income before income taxes 9,622 7,783 17,331 15,344 Income tax expense (2,248) (2,701) (3,869) (3,785) Net income $ 7,374 $ 5,082 $ 13,462 $ 11,559 |
Earnings per Share
Earnings per Share | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings from continuing operations per common share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2022 2021 2022 2021 Numerator: Numerator for basic and diluted earnings per common share—Net income attributable to Evoqua Water Technologies Corp. $ 7,330 $ 5,036 $ 13,317 $ 11,469 Denominator: Denominator for basic net income per common share—weighted average shares 120,942 118,882 120,785 118,882 Effect of dilutive securities: Share‑based compensation 4,012 3,041 4,145 3,393 Denominator for diluted net income per common share—adjusted weighted average shares 124,954 121,923 124,930 122,275 Basic earnings attributable to Evoqua Water Technologies Corp. per common share $ 0.06 $ 0.04 $ 0.11 $ 0.10 Diluted earnings attributable to Evoqua Water Technologies Corp. per common share $ 0.06 $ 0.04 $ 0.11 $ 0.09 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 1, 2022, the Company acquired the remaining 32% interest in Frontier from the Minority Owners for an aggregate purchase price of $10,396, which is included in Accrued expenses and other liabilities on the Consolidated Balance Sheets at March 31, 2022.Also on April 1, 2022, the Company acquired the remaining 50% partnership interest in TWO from Nalco for an aggregate purchase price of $1,099. |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). All intercompany transactions have been eliminated. Unless otherwise specified, all dollar and share amounts in these notes are referred to in thousands. The interim Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such SEC rules. We believe that the disclosures made are adequate to make the information presented not misleading. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. We consistently applied the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the SEC on November 17, 2021 (“2021 Annual Report”), in preparing these Unaudited Consolidated Financial Statements, with the exception of accounting standard updates described in Note 2, “Recent Accounting Pronouncements.” These Unaudited Consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes included in our 2021 Annual Report. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends Accounting Standards Codification (“ASC”) 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) (“Topic 606”) , as if the entity had originated the contracts, rather than adjust them to fair value at the acquisition date. The guidance is effective for fiscal years beginning after December 15, 2022 and is to be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently assessing the impact of adoption on the Company’s Unaudited Consolidated Financial Statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and also issued subsequent amendments to the initial guidance (collectively, “Topic 848”). Topic 848 became effective immediately and expires on December 31, 2022. Topic 848 allows eligible contracts that are modified to be accounted for as a continuation of those contracts, permits companies to preserve their hedge accounting during the transition period and enables companies to make a one-time election to transfer or sell held-to-maturity debt securities that are affected by rate reform. Topic 848 provides optional expedients and exceptions for contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met. The Company is currently assessing the impact of adoption on the Company’s Unaudited Consolidated Financial Statements and related disclosures. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Opening Balance Sheet | These preliminary estimates are subject to revision during the measurement period as additional analyses are performed and third-party valuations are finalized, and these differences could have a material impact on the accounting for the business combination. Receivables, net $ 21,418 Inventories, net 32,560 Earn Out asset 7,824 Other current assets 1,732 Property, plant, and equipment, net 18,747 Goodwill 68,370 Intangible assets, net 57,152 Other non-current assets 7,434 Total assets acquired 215,237 Current liabilities (14,719) Non-current liabilities (5,542) Total liabilities assumed (20,261) Net assets acquired $ 194,976 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Information regarding the source of revenue: Three Months Ended Six Months Ended 2022 2021 2022 2021 Revenue from contracts with customers recognized under Topic 606 $ 382,758 $ 297,919 $ 700,529 $ 583,107 Other (1) 43,970 48,645 92,467 85,650 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 (1) Other revenue relates to revenue recognized pursuant to ASU 2016-02, Leases (Topic 842) , primarily attributable to long term rentals. Information regarding revenue disaggregated by source of revenue and segment is as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Integrated Solutions and Services Revenue from capital projects $ 70,702 $ 52,093 $ 137,804 $ 102,719 Revenue from aftermarket 62,271 32,501 91,569 59,647 Revenue from service 161,867 139,540 310,513 276,485 Total $ 294,840 $ 224,134 $ 539,886 $ 438,851 Applied Product Technologies Revenue from capital projects $ 91,778 $ 90,296 $ 175,662 $ 167,185 Revenue from aftermarket 35,024 27,576 67,308 52,930 Revenue from service 5,086 4,558 10,140 9,791 Total $ 131,888 $ 122,430 $ 253,110 $ 229,906 Total Revenue Revenue from capital projects $ 162,480 $ 142,389 $ 313,466 $ 269,904 Revenue from aftermarket 97,295 60,077 158,877 112,577 Revenue from service 166,953 144,098 320,653 286,276 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 Information regarding revenue disaggregated by geographic area is as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 United States $ 352,639 $ 274,681 $ 647,347 $ 538,812 Asia 28,042 26,976 58,947 49,581 Europe 28,641 31,527 54,270 52,812 Canada 13,748 10,636 26,409 21,815 Australia 3,658 2,744 6,023 5,737 Total $ 426,728 $ 346,564 $ 792,996 $ 668,757 |
Contract with Customer, Asset and Liability | The tables below provide a roll-forward of contract assets and contract liabilities balances for the periods presented: Six Months Ended Contract assets (a) 2022 2021 Balance at beginning of period $ 72,746 $ 80,759 Recognized in current period 206,859 147,593 Reclassified to accounts receivable (179,967) (153,964) Foreign currency (136) 413 Balance at end of period $ 99,502 $ 74,801 (a) Excludes receivable balances which are disclosed on the Consolidated Balance Sheets. Six Months Ended Contract Liabilities 2022 2021 Balance at beginning of period $ 55,883 $ 26,259 Recognized in current period 174,518 158,452 Amounts in beginning balance reclassified to revenue (44,292) (20,703) Current period amounts reclassified to revenue (130,629) (127,684) Foreign currency 113 570 Balance at end of period $ 55,593 $ 36,894 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s financial assets and liabilities at fair value. The fair values related to the pension plan assets are determined using net asset value (“NAV”) as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value. The reported carrying amounts of deferred compensation plan assets and liabilities and debt approximate their fair values. The Company uses interest rates and other relevant information generated by market transactions involving similar instruments to measure the fair value of these assets and liabilities, therefore all are classified as Level 2 within the valuation hierarchy. Net Asset Value Quoted Market Significant Other Significant As of March 31, 2022 Assets: Pension plan Cash $ — $ 441 $ — $ — Global Multi-Asset Fund 14,182 — — — Government Securities 1,966 — — — Liability Driven Investment 5,687 — — — Guernsey Unit Trust 2,423 — — — Global Absolute Return 2,106 — — — Deferred compensation plan assets Cash — 1,052 — — Mutual Funds — 15,432 — — Earn-out assets related to acquisitions — — — 7,824 Total return swaps—deferred compensation — — 250 — Interest rate swaps — — 30,940 — Foreign currency forward contracts — — 112 — Commodity swaps — — 9 — Liabilities: Pension plan — — (44,344) — Deferred compensation plan liabilities — — (24,191) — Long‑term debt — — (942,133) — Foreign currency forward contracts — — (33) — Earn-out liabilities related to acquisitions — — — (25) Purchase Right — — — (10,396) Net Asset Value Quoted Market Significant Other Significant As of September 30, 2021 Assets: Pension plan Cash $ — $ 831 $ — $ — Global Multi-Asset Fund 15,244 — — — Government Securities 5,158 — — — Liability Driven Investment 2,793 — — — Guernsey Unit Trust 2,387 — — — Global Absolute Return 2,225 — — — Deferred compensation plan assets Cash — 1,251 — — Mutual Funds — 17,806 — — Interest rate swaps — — 3,127 — Foreign currency forward contracts — — 24 — Liabilities: Pension plan — — (46,013) — Deferred compensation plan liabilities — — (24,382) — Total return swaps—deferred compensation — — (130) — Long‑term debt — — (752,988) — Interest rate swaps — — (303) — Foreign currency forward contracts — — (102) — Commodity swaps — — (19) — Earn-out liabilities related to acquisitions — — — (150) Purchase Right — — — (8,305) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable are summarized as follows: March 31, September 30, Accounts receivable $ 289,462 $ 282,819 Allowance for credit losses (6,370) (4,824) Receivables, net $ 283,092 $ 277,995 |
Accounts Receivable, Allowance for Credit Loss | The movement in the allowance for credit losses was as follows for the six months ended March 31, 2022: Balance at September 30, 2021 $ (4,824) Charged to costs and expenses (1,134) Write-offs 146 Foreign currency and other (558) Balance at March 31, 2022 $ (6,370) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The major classes of Inventories, net are as follows: March 31, September 30, Raw materials and supplies $ 115,340 $ 86,469 Work in progress 31,599 19,842 Finished goods and products held for resale 79,766 59,624 Costs of unbilled projects 2,545 2,277 Reserves for excess and obsolete (12,317) (9,709) Inventories, net $ 216,933 $ 158,503 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant, and equipment consists of the following: March 31, September 30, Machinery and equipment $ 395,017 $ 388,352 Rental equipment 253,800 246,257 Land and buildings 77,498 70,048 Construction in process 62,142 59,737 788,457 764,394 Less: accumulated depreciation (393,167) (389,406) Property, plant, and equipment, net $ 395,290 $ 374,988 Depreciation expense and maintenance and repairs expense for the three and six months ended March 31, 2022 and 2021 were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Depreciation expense $ 20,722 $ 18,769 $ 40,042 $ 37,280 Maintenance and repair expense 7,475 4,754 13,594 9,962 |
Schedule of Financial Instruments Owned and Pledged as Collateral | March 31, September 30, Gross Net Gross Net Machinery and equipment $ 86,033 $ 65,752 $ 73,632 $ 57,036 Construction in process 9,668 9,668 30,504 30,504 $ 95,701 $ 75,420 $ 104,136 $ 87,540 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill are as follows: Integrated Solutions and Services Applied Product Technologies Total Balance at September 30, 2021 $ 233,830 $ 173,546 $ 407,376 Business combinations and divestitures 68,370 (34) 68,336 Foreign currency translation 714 (167) 547 Balance at March 31, 2022 $ 302,914 $ 173,345 $ 476,259 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long‑term debt, including accrued interest, consists of the following: March 31, September 30, 2021 Term Loan, due April 1, 2028 (1) $ 471,438 $ 473,837 2021 Revolving Credit Facility, due April 1, 2026 (2) 221,106 37,268 Securitization Facility, due April 1, 2024 (3) 150,078 150,061 Equipment Financing, due September 30, 2023 to July 31, 2029, interest rates ranging from 3.13% to 8.07% 102,752 93,375 Notes Payable, due July 31, 2023 (4) — 402 Total debt 945,374 754,943 Less unamortized deferred financing fees (10,812) (11,738) Total net debt 934,562 743,205 Less current portion (14,219) (12,775) Total long‑term debt $ 920,343 $ 730,430 (1) The interest rate on the 2021 Term Loan was 2.75% as of March 31, 2022, comprised of 0.25% LIBOR plus the 2.50% spread. Includes accrued interest of $0 and $25 at March 31, 2022 and September 30, 2021, respectively. (2) The 2021 Revolving Credit Facility includes $187,000 with an interest rate of 2.20% as of March 31, 2022, comprised of 0.25% LIBOR plus the 1.95% spread, and $34,000 with an interest rate of 4.45%. as of March 31, 2022, comprised of 3.50% Prime Rate plus the 0.95% spread. During the three months ended March 31, 2022, the spread on the 2021 Revolving Credit Facility was reduced from 2.25% at September 30, 2021 as a result of a Sustainability Pricing Adjustment per the 2021 Credit Agreement. Includes accrued interest of $106 and $268, at March 31, 2022 and September 30, 2021, respectively. (3) The interest rate on the Securitization Facility was 1.70% as of March 31, 2022, comprised of 0.45% LIBOR plus the 1.25% spread. Includes accrued interest of $78 and $61 at March 31, 2022 and September 30, 2021, respectively. (4) In March 2022, the outstanding balance of the Notes Payable due July 31, 2023, was repaid in conjunction with the Company’s acquisition of TWO. See Note 23, “Subsequent Events” for further discussion. |
Schedule of Line of Credit Facilities | The following table summarizes the amount of the Company’s outstanding borrowings and outstanding letters of credit under the 2021 Revolving Credit Facility as of March 31, 2022 and September 30, 2021. March 31, September 30, Borrowing availability $ 350,000 $ 350,000 Outstanding borrowings 221,000 37,000 Outstanding letters of credit 9,604 10,112 Unused amounts $ 119,396 $ 302,888 The following summarizes the Company’s outstanding letters of credit and surety bonds as of March 31, 2022 and September 30, 2021, respectively. March 31, September 30, Revolving credit capacity $ 60,000 $ 60,000 Letters of credit outstanding 9,604 10,112 Remaining revolving credit capacity $ 50,396 $ 49,888 Surety capacity $ 252,225 $ 250,000 Surety issuances 122,086 147,845 Remaining surety available $ 130,139 $ 102,155 |
Schedule of Equipment Financing | During the six months ended March 31, 2022, the Company completed the following equipment financings: Date Entered Due Interest Rate at March 31, 2022 Principal Amount March 18, 2022 March 17, 2029 4.67 % $ 1,839 March 16, 2022 July 31, 2029 (1) 4.75 % 1,317 March 15, 2022 April 1, 2029 4.74 % 4,788 December 30, 2021 December 30, 2028 3.94 % 2,207 December 23, 2021 July 31, 2029 (1) 4.75 % 3,742 $ 13,893 |
Schedule of Deferred Financing Costs and Discounts | Deferred financing fees and discounts related to the Company’s long-term debt were included as a contra liability to debt on the Consolidated Balance Sheets as follows: March 31, September 30, Current portion of deferred financing fees and discounts (1) $ (1,883) $ (1,866) Long-term portion of deferred financing fees and discounts (2) (8,929) (9,872) Total deferred financing fees and discounts $ (10,812) $ (11,738) (1) Included in Current portion of debt, net of deferred financing fees and discounts on the Consolidated Balance Sheets. |
Schedule of Aggregate Maturities of Long-term Debt | Aggregate maturities of all long‑term debt, including current portion of long‑term debt and excluding finance lease obligations as of March 31, 2022, are presented below: Fiscal Year Remainder of 2022 $ 7,886 2023 16,748 2024 165,512 2025 17,100 2026 20,417 Thereafter 717,711 Total $ 945,374 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following represents the fair value recorded for derivatives designated as cash flow hedges for the periods presented: Asset Derivatives Balance Sheet Location March 31, September 30, Interest rate swaps Prepaid and other current assets $ 5,996 $ 3,127 Foreign currency forward contracts Prepaid and other current assets 112 6 Commodity swaps Prepaid and other current assets 9 — Interest rate swaps Other non‑current assets 24,944 — Liability Derivatives Balance Sheet Location March 31, September 30, Interest rate swaps Accrued expenses and other current liabilities $ — $ 303 Foreign currency forward contracts Accrued expenses and other current liabilities 33 102 Commodity swaps Accrued expenses and other current liabilities — 19 The following represents the fair value recorded for derivatives not designated as cash flow hedges for the periods presented: Asset Derivatives Balance Sheet Location March 31, September 30, Total return swaps—deferred compensation Prepaid and other current assets $ 250 $ — Foreign currency forward contracts Prepaid and other current assets — 18 Liability Derivatives Balance Sheet Location March 31, September 30, Total return swaps—deferred compensation Accrued expenses and other current liabilities $ — $ 130 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following represents the amount of gain (loss) recognized in Accumulated other comprehensive income (loss) (“AOCI”) (net of tax) during the periods presented: Three Months Ended Six Months Ended 2022 2021 2022 2021 Interest rate swaps $ 21,077 $ 8,811 $ 26,948 $ 9,268 Foreign currency forward contracts 100 (335) 82 (332) Commodity swaps 8 — 28 — $ 21,185 $ 8,476 $ 27,058 $ 8,936 |
Derivative Instruments, Gain (Loss) | The following represents the amount of (loss) gain reclassified from AOCI into earnings during the periods presented: Three Months Ended Six Months Ended Location of (Loss) Gain 2022 2021 2022 2021 Cost of product sales and services $ 6 $ (13) $ (79) $ (13) General and administrative expense — (40) (7) (72) Selling and marketing expense (1) (39) — (39) Interest expense (550) (523) (1,167) (1,033) $ (545) $ (615) $ (1,253) $ (1,157) |
Derivatives Not Designated as Hedging Instruments | The following represents the amount of loss recognized in earnings for derivatives not designated as hedges during the periods presented: Three Months Ended Six Months Ended Location of Loss 2022 2021 2022 2021 General and administrative expense $ (352) $ — $ (41) $ — $ (352) $ — $ (41) $ — |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of product warranty liability | A reconciliation of the activity related to the accrued warranty, including both the current and long‑term portions, is as follows: Current Product Warranties Non-Current Product Warranties Six Months Ended Six Months Ended 2022 2021 2022 2021 Balance at beginning of the period $ 8,138 $ 6,115 $ 2,966 $ 1,724 Warranty provision for sales 2,797 2,188 609 714 Settlement of warranty claims (3,345) (1,699) (338) (471) Foreign currency translation and other (92) 110 (46) 22 Balance at end of the period $ 7,498 $ 6,714 $ 3,191 $ 1,989 |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring components | Six Months Ended 2022 2021 Balance at beginning of the period $ 304 $ 970 Restructuring charges following the sale of the Memcor product line 754 3,808 Restructuring charges related to two-segment realignment 297 562 Restructuring charges related to other initiatives 1,817 1,444 Release of prior reserves (66) (283) Write off charges — (966) Cash payments (2,220) (4,359) Other adjustments 2 9 Balance at end of the period $ 888 $ 1,185 The table below sets forth the location of amounts recorded above on the Unaudited Consolidated Statements of Operations: Six Months Ended 2022 2021 Cost of product sales and services $ 867 $ 3,428 General and administrative expense 1,719 1,089 Sales and marketing expense — 340 Research and development expense 1 (16) Other operating expense, net 215 690 $ 2,802 $ 5,531 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit costs | The components of net periodic benefit cost for the plans were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Service cost $ 227 $ 287 $ 459 $ 571 Interest cost 107 80 215 159 Expected return on plan assets (129) (87) (261) (174) Amortization of actuarial losses 166 110 335 374 Pension expense for defined benefit plans $ 371 $ 390 $ 748 $ 930 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock options, activity | A summary of the stock option activity as of March 31, 2022 is presented below: (In thousands, except per share amounts) Options Weighted Average Exercise Price/Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at September 30, 2021 5,090 $ 13.87 5.9 years $ 120,611 Granted 2 46.75 Exercised (249) 15.87 Forfeited (28) 20.76 Outstanding at March 31, 2022 4,815 $ 13.73 5.4 years $ 160,085 Options exercisable at March 31, 2022 3,752 $ 11.51 4.6 years $ 133,087 Options vested and expected to vest at March 31, 2022 4,805 $ 13.71 5.4 years $ 159,838 |
Schedule of Nonvested Share Activity | A summary of the status of the Company's unvested stock options as of and for the six months ended March 31, 2022 is presented below. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Unvested at beginning of period 1,901 $ 6.69 Granted 2 24.22 Vested (812) 6.55 Forfeited (28) 6.60 Unvested at end of period 1,063 $ 6.87 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following is a summary of the RSU activity for the six months ended March 31, 2022. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Outstanding at September 30, 2021 1,209 $ 22.77 Granted 321 45.10 Vested (417) 21.09 Forfeited (27) 23.73 Outstanding at March 31, 2022 1,086 $ 29.99 Expected to vest at March 31, 2022 1,049 $ 29.64 The following is a summary of the performance share unit activity for the six months ended March 31, 2022, assuming target award level. (In thousands, except per share amounts) Shares Weighted Average Grant Date Fair Value/Share Unvested at beginning of period 469 $ 16.92 Granted 124 52.50 Unvested at end of period 593 $ 23.39 Expected to vest 546 $ 23.28 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The following table summarizes the amount of the Company’s outstanding borrowings and outstanding letters of credit under the 2021 Revolving Credit Facility as of March 31, 2022 and September 30, 2021. March 31, September 30, Borrowing availability $ 350,000 $ 350,000 Outstanding borrowings 221,000 37,000 Outstanding letters of credit 9,604 10,112 Unused amounts $ 119,396 $ 302,888 The following summarizes the Company’s outstanding letters of credit and surety bonds as of March 31, 2022 and September 30, 2021, respectively. March 31, September 30, Revolving credit capacity $ 60,000 $ 60,000 Letters of credit outstanding 9,604 10,112 Remaining revolving credit capacity $ 50,396 $ 49,888 Surety capacity $ 252,225 $ 250,000 Surety issuances 122,086 147,845 Remaining surety available $ 130,139 $ 102,155 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses and other liabilities consisted of the following: March 31, September 30, Salaries, wages, and other benefits $ 60,552 $ 79,110 Obligation under operating leases 14,668 13,316 Obligation under finance leases 12,263 12,093 Third party commissions 10,563 10,031 Frontier Purchase Right liability 10,396 — Taxes, other than income 6,811 4,575 Provisions for litigation 6,153 2,938 Insurance liabilities 3,557 3,720 Severance payments 888 304 Fair value of liability derivatives 33 554 Earn-outs related to acquisitions 25 150 Other 32,601 33,576 $ 158,510 $ 160,367 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Reportable operating segment revenue and operating profit for the three and six months ended March 31, 2022 and 2021 were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Total revenue Integrated Solutions and Services $ 304,499 $ 228,203 $ 558,075 $ 444,956 Applied Product Technologies 154,861 146,107 297,358 269,688 Total revenue 459,360 374,310 855,433 714,644 Intersegment revenue Integrated Solutions and Services 9,659 4,069 18,189 6,105 Applied Product Technologies 22,973 23,677 44,248 39,782 Total intersegment revenue 32,632 27,746 62,437 45,887 Revenue to external customers Integrated Solutions and Services 294,840 224,134 539,886 438,851 Applied Product Technologies 131,888 122,430 253,110 229,906 Total revenue $ 426,728 $ 346,564 $ 792,996 $ 668,757 Operating profit (loss) Integrated Solutions and Services $ 38,105 $ 30,784 $ 73,405 $ 57,141 Applied Product Technologies 22,993 18,103 40,820 31,483 Corporate (41,526) (32,709) (80,365) (56,212) Total operating profit 19,572 16,178 33,860 32,412 Interest expense (9,950) (8,395) (16,529) (17,068) Income before income taxes 9,622 7,783 17,331 15,344 Income tax expense (2,248) (2,701) (3,869) (3,785) Net income $ 7,374 $ 5,082 $ 13,462 $ 11,559 March 31, September 30, Assets Integrated Solutions and Services $ 1,119,669 $ 887,265 Applied Product Technologies 651,991 656,362 Corporate 360,901 325,264 Total assets $ 2,132,561 $ 1,868,891 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted earnings from continuing operations per common share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2022 2021 2022 2021 Numerator: Numerator for basic and diluted earnings per common share—Net income attributable to Evoqua Water Technologies Corp. $ 7,330 $ 5,036 $ 13,317 $ 11,469 Denominator: Denominator for basic net income per common share—weighted average shares 120,942 118,882 120,785 118,882 Effect of dilutive securities: Share‑based compensation 4,012 3,041 4,145 3,393 Denominator for diluted net income per common share—adjusted weighted average shares 124,954 121,923 124,930 122,275 Basic earnings attributable to Evoqua Water Technologies Corp. per common share $ 0.06 $ 0.04 $ 0.11 $ 0.10 Diluted earnings attributable to Evoqua Water Technologies Corp. per common share $ 0.06 $ 0.04 $ 0.11 $ 0.09 |
Description of the Company an_2
Description of the Company and Basis of Presentation (Details) - segment | Oct. 29, 2018 | Mar. 31, 2022 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of reportable segments | 3 | 2 | 2 |
Variable Interest Entities- Inv
Variable Interest Entities- Investments, Equity Method and Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 08, 2021 | Feb. 28, 2021 | Oct. 01, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Obligation to absorb risk of loss, percentage of partner's equity | 100.00% | 100.00% | ||||||
Current assets | $ 777,532 | $ 678,458 | $ 777,532 | |||||
Property, plant, and equipment, net | 395,290 | 374,988 | 395,290 | |||||
Goodwill | 476,259 | 407,376 | 476,259 | |||||
Intangible assets, net | 328,024 | 290,075 | 328,024 | |||||
Liabilities | (1,494,490) | (1,286,672) | (1,494,490) | |||||
Revenues | 426,728 | $ 346,564 | 792,996 | $ 668,757 | ||||
Operating Expenses | (110,586) | (90,151) | (208,316) | (169,485) | ||||
Operating profit (loss) | 19,572 | 16,178 | 33,860 | 32,412 | ||||
Purchase of outstanding equity | 10,396 | 0 | 10,396 | |||||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Purchase of outstanding equity | $ 10,396 | 8,305 | $ 10,396 | |||||
Frontier | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Percentage of voting interests acquired | 68.00% | 68.00% | 8.00% | 60.00% | ||||
Remaining percentage to be acquired | 40.00% | 40.00% | 32.00% | |||||
Purchase of additional interest in subsidiaries | 1,490 | |||||||
Frontier | Maximum | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Remaining percentage to be acquired | 10.00% | |||||||
Treated Water Outsourcing | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Partnership interest | 50.00% | |||||||
Cash | $ 1,165 | 1,380 | $ 1,165 | |||||
Current assets | 3,195 | 3,202 | 3,195 | |||||
Property, plant, and equipment, net | 782 | 903 | 782 | |||||
Goodwill | 2,206 | 2,206 | 2,206 | |||||
Liabilities | (791) | (1,009) | (791) | |||||
Revenues | 796 | 834 | 1,641 | 1,668 | ||||
Operating Expenses | (703) | (732) | (1,440) | (1,469) | ||||
Operating profit (loss) | 93 | 102 | 201 | 199 | ||||
Frontier | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Cash | 5,959 | 2,095 | 5,959 | |||||
Current assets | 13,278 | 12,495 | 13,278 | |||||
Property, plant, and equipment, net | 1,955 | 2,113 | 1,955 | |||||
Goodwill | 1,798 | 1,798 | 1,798 | |||||
Intangible assets, net | 7,439 | 8,265 | 7,439 | |||||
Liabilities | (7,911) | $ (9,425) | (7,911) | |||||
Revenues | 6,414 | 2,078 | 13,363 | 2,848 | ||||
Operating Expenses | (6,149) | (2,401) | (12,135) | (4,139) | ||||
Operating profit (loss) | $ 265 | $ (323) | $ 1,228 | $ (1,291) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) - USD ($) $ in Thousands | Jan. 03, 2022 | Dec. 20, 2021 | Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Business Acquisition [Line Items] | |||||
Proceeds from sale of business, net of cash of $0 and $0 | $ 356 | $ 897 | |||
Gain on sale of business | $ 193 | 193 | $ (191) | ||
Mar Cor | |||||
Business Acquisition [Line Items] | |||||
Price of acquisition, expected | $ 196,300 | ||||
Payments to acquire businesses | $ 194,976 | ||||
Borrowings under credit facility | 160,000 | ||||
Contingent consideration, liability | 12,300 | 12,300 | |||
Escrow deposit | 12,965 | ||||
Acquisition costs | $ 2,116 | $ 3,178 | |||
Mar Cor | General Indemnity | |||||
Business Acquisition [Line Items] | |||||
Escrow deposit | 9,815 | ||||
Mar Cor | Working Capital Adjustments | |||||
Business Acquisition [Line Items] | |||||
Escrow deposit | $ 3,150 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Preliminary Opening Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Business Combination, Separately Recognized Transactions [Line Items] | ||
Goodwill | $ 476,259 | $ 407,376 |
Mar Cor | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Receivables, net | 21,418 | |
Inventories, net | 32,560 | |
Earn Out asset | 7,824 | $ 0 |
Other current assets | 1,732 | |
Property, plant, and equipment, net | 18,747 | |
Goodwill | 68,370 | |
Intangible assets, net | 57,152 | |
Other non-current assets | 7,434 | |
Total assets acquired | 215,237 | |
Current liabilities | (14,719) | |
Non-current liabilities | (5,542) | |
Total liabilities assumed | (20,261) | |
Net assets acquired | $ 194,976 |
Revenue (Performance Obligation
Revenue (Performance Obligation) (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 269,814 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period: 2022-01-01 | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 24 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period: 2022-04-01 | Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contracts with customers recognized under Topic 606 | $ 382,758 | $ 297,919 | $ 700,529 | $ 583,107 | |
Other | [1] | 43,970 | 48,645 | 92,467 | 85,650 |
Revenues | 426,728 | 346,564 | 792,996 | 668,757 | |
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 352,639 | 274,681 | 647,347 | 538,812 | |
Europe | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 28,641 | 31,527 | 54,270 | 52,812 | |
Asia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 28,042 | 26,976 | 58,947 | 49,581 | |
Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 13,748 | 10,636 | 26,409 | 21,815 | |
Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 3,658 | 2,744 | 6,023 | 5,737 | |
Integrated Solutions and Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 294,840 | 224,134 | 539,886 | ||
Applied Product Technologies | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 131,888 | 122,430 | 253,110 | ||
Revenue from aftermarket | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 97,295 | 60,077 | 158,877 | 112,577 | |
Revenue from aftermarket | Integrated Solutions and Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 62,271 | 32,501 | 91,569 | 59,647 | |
Revenue from aftermarket | Applied Product Technologies | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 35,024 | 27,576 | 67,308 | 52,930 | |
Revenue from service | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 166,953 | 144,098 | 320,653 | 286,276 | |
Revenue from product sales and services | 166,953 | 144,098 | 320,653 | 286,276 | |
Revenue from service | Integrated Solutions and Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 161,867 | 139,540 | 310,513 | 276,485 | |
Revenue from service | Applied Product Technologies | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 5,086 | 4,558 | 10,140 | 9,791 | |
Revenue from capital projects | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 162,480 | 142,389 | 313,466 | 269,904 | |
Revenue from capital projects | Integrated Solutions and Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | 70,702 | 52,093 | 137,804 | 102,719 | |
Revenue from capital projects | Applied Product Technologies | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from product sales and services | $ 91,778 | $ 90,296 | $ 175,662 | $ 167,185 | |
[1] | Other revenue relates to revenue recognized pursuant to ASU 2016-02, Leases (Topic 842) , primarily attributable to long term rentals. |
Revenue (Contract Assets and Li
Revenue (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract liabilities | $ 55,593 | $ 36,894 | $ 55,883 | $ 26,259 |
Change in Contract with Customer, Asset [Roll Forward] | ||||
beginning of period | 72,746 | 80,759 | ||
Recognized in current period | 206,859 | 147,593 | ||
Reclassified to accounts receivable | 179,967 | 153,964 | ||
Foreign currency | (136) | 413 | ||
end of period | 99,502 | 74,801 | ||
Change in Contract with Customer, Liability [Roll Forward] | ||||
Recognized in current period | 174,518 | 158,452 | ||
Amounts in beginning balance reclassified to revenue | (44,292) | (20,703) | ||
Current period amounts reclassified to revenue | (130,629) | (127,684) | ||
Foreign currency | $ 113 | $ 570 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Deferred compensation plan assets | ||
Mutual Funds | $ 15,432 | |
Liabilities: | ||
Option and purchase right | (10,396) | $ 0 |
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets (Level 1) | ||
Deferred compensation plan assets | ||
Cash | 1,052 | 1,251 |
Mutual Funds | 17,806 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Foreign currency forward contracts | 112 | 24 |
Deferred compensation plan assets | ||
Mutual Funds | 0 | |
Total return swaps—deferred compensation | 250 | |
Interest rate cap | 3,127 | |
Commodity swaps | (9) | 19 |
Liabilities: | ||
Pension plan | (44,344) | (46,013) |
Deferred compensation plan liabilities | (24,191) | (24,382) |
Total Return Swaps, Fair Value | (130) | |
Long‑term debt | (942,133) | (752,988) |
Interest Rate Derivative Liabilities, at Fair Value | (303) | |
Foreign currency forward contracts | (33) | (102) |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Liabilities: | ||
Earn-out liabilities related to acquisitions | (25) | (150) |
Option and purchase right | (10,396) | (8,305) |
Fair Value, Measurements, Recurring | Cash | Quoted Market Prices in Active Markets (Level 1) | ||
Assets: | ||
Defined benefit plan, fair value of plan assets | 441 | 831 |
Fair Value, Measurements, Recurring | US Government Agencies Debt Securities | ||
Assets: | ||
Plan assets at net asset value | 1,966 | 5,158 |
Fair Value, Measurements, Recurring | Liability Driven Investment | ||
Assets: | ||
Plan assets at net asset value | 5,687 | 2,793 |
Fair Value, Measurements, Recurring | Guernsey Unit Trust | ||
Assets: | ||
Plan assets at net asset value | 2,423 | 2,387 |
Fair Value, Measurements, Recurring | Global Absolute Return | ||
Assets: | ||
Plan assets at net asset value | 2,106 | 2,225 |
Fair Value, Measurements, Recurring | Hedge Funds, Multi-strategy | ||
Assets: | ||
Plan assets at net asset value | 14,182 | 15,244 |
Mar Cor | ||
Deferred compensation plan assets | ||
Earn Out asset | $ 7,824 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Apr. 01, 2022 | Jan. 03, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Oct. 01, 2019 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Unrealized loss on investments | $ 418 | |||||
Option and purchase right | $ 10,396 | 10,396 | $ 0 | |||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Earn-out payments, change in fair value | 25 | (125) | ||||
Earn-out related to acquisitions | 25 | 25 | 150 | |||
Option and purchase right | 10,396 | 10,396 | 8,305 | |||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Other Current Liabilities | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Earn-out related to acquisitions | 25 | 25 | 25 | |||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Other Noncurrent Liabilities | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Option and purchase right | $ 0 | $ 0 | ||||
Frontier | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Remaining percentage to be acquired | 40.00% | 40.00% | 32.00% | |||
Purchase right liability | $ 2,091 | |||||
Purchase obligation, to be paid, remainder of year | $ 10,396 | 10,396 | 0 | |||
Frontier | Subsequent Event | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Remaining percentage to be acquired | 32.00% | |||||
Payments to acquire businesses | $ 10,396 | |||||
Mar Cor | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Earn Out asset | $ 7,824 | $ 7,824 | $ 0 | |||
Payments to acquire businesses | $ 194,976 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | |
Receivables [Abstract] | ||
Accounts receivable | $ 289,462 | $ 282,819 |
Allowance for credit losses | (6,370) | (4,824) |
Accounts receivable, net | 283,092 | $ 277,995 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at September 30, 2020 | (4,824) | |
Charged to costs and expenses | (1,134) | |
Write-offs | 146 | |
Foreign currency and other | (558) | |
Balance at December 31, 2020 | $ (6,370) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 115,340 | $ 86,469 |
Work in progress | 31,599 | 19,842 |
Finished goods and products held for resale | 79,766 | 59,624 |
Costs of unbilled projects | 2,545 | 2,277 |
Reserves for excess and obsolete | (12,317) | (9,709) |
Inventory, Net | $ 216,933 | $ 158,503 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 788,457 | $ 788,457 | $ 764,394 | ||
Less: accumulated depreciation | (393,167) | (393,167) | (389,406) | ||
Property, plant, and equipment, net | 395,290 | 395,290 | 374,988 | ||
Depreciation and amortization | 20,722 | $ 18,769 | 40,042 | $ 37,280 | |
Maintenance and repair expense | 7,475 | $ 4,754 | 13,594 | $ 9,962 | |
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 395,017 | 395,017 | 388,352 | ||
Land and buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 77,498 | 77,498 | 70,048 | ||
Construction in process | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 62,142 | 62,142 | 59,737 | ||
Rental equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 253,800 | $ 253,800 | $ 246,257 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment Property, Plant and Equipment (Secured Financing Agreements) (Details) - Equipment Financings - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Property, plant and equipment gross [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | $ 95,701 | $ 104,136 |
Property, plant and equipment gross [Member] | Machinery and equipment | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | 86,033 | 73,632 |
Property, plant and equipment gross [Member] | Construction in process | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | 9,668 | 30,504 |
Property, plant and equipment net [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | 75,420 | 87,540 |
Property, plant and equipment net [Member] | Machinery and equipment | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | 65,752 | 57,036 |
Property, plant and equipment net [Member] | Construction in process | ||
Debt Instrument [Line Items] | ||
Pledged Assets, Not Separately Reported, Other | $ 9,668 | $ 30,504 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Business acquisition, goodwill, expected tax deductible, amount | $ 228,037 | $ 159,730 |
Goodwill (Schedule of Goodwill)
Goodwill (Schedule of Goodwill) (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of the period | $ 407,376 |
Foreign currency translation | 547 |
Goodwill, end of the period | 476,259 |
Business combinations and divestitures | 68,336 |
Operating Segments | Integrated Solutions and Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning of the period | 233,830 |
Foreign currency translation | 714 |
Goodwill, end of the period | 302,914 |
Business combinations and divestitures | 68,370 |
Operating Segments | Applied Product Technologies | |
Goodwill [Roll Forward] | |
Goodwill, beginning of the period | 173,546 |
Foreign currency translation | (167) |
Goodwill, end of the period | 173,345 |
Goodwill, Written off Related to Sale of Business Unit | $ (34) |
Debt (Schedule of Long-term Deb
Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Total debt | $ 945,374 | $ 945,374 | $ 754,943 | |
Less unamortized deferred financing fees | (10,812) | (10,812) | (11,738) | |
Total net debt | 934,562 | 934,562 | 743,205 | |
Current portion of debt | (14,219) | (14,219) | (12,775) | |
Total long‑term debt | $ 920,343 | $ 920,343 | 730,430 | |
Prime Rate | Rate three | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 3.50% | |||
Prime Rate | Rate four | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.95% | |||
Securitization Facility, due April 1, 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt , interest rate, effective percentage | 1.70% | 1.70% | ||
Debt instrument, basis spread on variable rate | 1.25% | |||
Securitization Facility, due April 1, 2024 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.45% | |||
2021 Revolving Credit Facility, due April 2026 | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 221,106 | $ 221,106 | 37,268 | |
Debt instrument, basis spread on variable rate | 2.25% | 1.95% | ||
Interest payable | 106 | $ 106 | 268 | |
2021 Revolving Credit Facility, due April 2026 | Rate one | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 187,000 | $ 187,000 | ||
Debt , interest rate, effective percentage | 2.20% | 2.20% | ||
2021 Revolving Credit Facility, due April 2026 | Rate two | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 34,000 | $ 34,000 | ||
Debt , interest rate, effective percentage | 4.45% | 4.45% | ||
2021 Revolving Credit Facility, due April 2026 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.25% | |||
Securitization Facility, due April 1, 2024 | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 150,078 | $ 150,078 | 150,061 | |
Interest payable | 78 | 78 | 61 | |
Equipment Financing, due September 30, 2023 to July 31, 2029, interest rates ranging from 3.13% to 8.07% | Equipment Financings | ||||
Debt Instrument [Line Items] | ||||
Total debt | 102,752 | 102,752 | 93,375 | |
Notes Payable, due July 31, 2023 (4) | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | 0 | 402 | |
2021 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 471,438 | $ 471,438 | 473,837 | |
Debt , interest rate, effective percentage | 2.75% | 2.75% | ||
Debt instrument, basis spread on variable rate | 2.50% | |||
Interest payable | $ 0 | $ 0 | $ 25 | |
2021 Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.25% | |||
Minimum | Equipment Financing, due September 30, 2023 to July 31, 2029, interest rates ranging from 3.13% to 8.07% | Equipment Financings | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 3.13% | 3.13% | ||
Maximum | Equipment Financing, due September 30, 2023 to July 31, 2029, interest rates ranging from 3.13% to 8.07% | Equipment Financings | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 8.07% | 8.07% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 01, 2021 | |
Line of Credit Facility [Line Items] | |||||
Amortization of debt issuance costs and discounts | $ 459,000 | $ 518,000 | $ 926,000 | $ 1,044,000 | |
Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Accounts receivable from securitization | $ 150,000,000 | ||||
2021 Credit Agreement | Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Amount of loan | 475,000,000 | ||||
Revolving Credit Facility | 2021 Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility borrowing capacity | 350,000,000 | ||||
Letter of Credit | 2021 Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility borrowing capacity | $ 60,000,000 |
Debt (Schedule of Line of Credi
Debt (Schedule of Line of Credit Facilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||
Line of credit facility, remaining borrowing capacity | $ 60,000 | $ 60,000 |
Debt instrument, unused borrowing capacity, amount | 50,396 | 49,888 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, remaining borrowing capacity | 350,000 | 350,000 |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | 9,604 | 10,112 |
Debt instrument, unused borrowing capacity, amount | 119,396 | 302,888 |
2021 Revolving Credit Facility, due April 2026 | ||
Line of Credit Facility [Line Items] | ||
line of Credit Facility, Amount Drawn | $ 221,000 | $ 37,000 |
Debt (Schedule of Equipment Fin
Debt (Schedule of Equipment Financings) (Details) - Loans Payable - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Equipment Financing Due Dec 30 2028 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 4.74% | 3.94% |
Total debt | $ 4,788 | $ 2,207 |
Equipment Financing Due July 31 2029 | ||
Debt Instrument [Line Items] | ||
Debt , interest rate, effective percentage | 4.75% | 4.75% |
Total debt | $ 1,317 | $ 3,742 |
Debt instrument, basis spread on variable rate | 3.75% | |
Equipment Financing Due July 31 2029 | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.00% | |
Equipment Financings | ||
Debt Instrument [Line Items] | ||
Total debt | $ 13,893 | |
Equipment Financing Due March 17 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 4.67% | |
Total debt | $ 1,839 |
Debt (schedule of Deferred Fina
Debt (schedule of Deferred Financing Fees and Discounts (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Debt Instrument [Line Items] | ||
Unamortized discount (premium) and debt issuance costs, net | $ 10,812 | $ 11,738 |
First Lien Term Facility, due December 20, 2024 | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium) and debt issuance costs, net | (10,812) | (11,738) |
First Lien Term Facility, due December 20, 2024 | Other Current Liabilities | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium) and debt issuance costs, net | (1,883) | (1,866) |
First Lien Term Facility, due December 20, 2024 | Other Noncurrent Liabilities | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium) and debt issuance costs, net | $ (8,929) | $ (9,872) |
Debt (Long-term Debt Maturities
Debt (Long-term Debt Maturities) (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 7,886 |
2023 | 16,748 |
2024 | 165,512 |
2025 | 17,100 |
2026 | 20,417 |
Thereafter | 717,711 |
Long-term Debt | $ 945,374 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2022USD ($) | |
Derivative [Line Items] | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 76 |
Description of Reclassification of Cash Flow Hedge Gain (Loss) | twelve months |
Interest rate swaps | |
Derivative [Line Items] | |
Derivative, Notional Amount | $ 531,000 |
Foreign currency forward contracts | |
Derivative [Line Items] | |
Derivative, Notional Amount | 9,460 |
Commodity swaps | |
Derivative [Line Items] | |
Derivative, Notional Amount | $ 5,488 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Fair Values) (Details) - Fair Value, Inputs, Level 2 - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Derivatives, Fair Value [Line Items] | ||
Interest rate cap | $ 3,127 | |
Interest Rate Derivative Liabilities, at Fair Value | 303 | |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate cap | $ 5,996 | 3,127 |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Foreign Currency Cash Flow Hedge Asset at Fair Value | 112 | 6 |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Commodity swaps | ||
Derivatives, Fair Value [Line Items] | ||
Price Risk Derivative Assets, at Fair Value | 9 | 0 |
Designated as Hedging Instrument | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate cap | 30,940 | |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 303 |
Foreign Currency Cash Flow Hedge Liability at Fair Value | 33 | 102 |
Price Risk Fair Value Hedge Liability, at Fair Value | 0 | 19 |
Designated as Hedging Instrument | Other Assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate cap | $ 24,944 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Amounts Recognized in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized derivative gain on cash flow hedges, net of tax | $ 21,730 | $ 9,091 | $ 28,311 | $ 10,093 |
Other Comprehensive Income (Loss) | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized derivative gain on cash flow hedges, net of tax | 21,185 | 8,476 | 27,058 | 8,936 |
Interest rate swaps | Other Comprehensive Income (Loss) | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized derivative gain on cash flow hedges, net of tax | 21,077 | 8,811 | 26,948 | 9,268 |
Foreign currency forward contracts | Other Comprehensive Income (Loss) | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized derivative gain on cash flow hedges, net of tax | 100 | (335) | 82 | (332) |
Commodity swaps | Other Comprehensive Income (Loss) | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized derivative gain on cash flow hedges, net of tax | $ 8 | $ 0 | $ 28 | $ 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments (Amounts Reclassified out of AOCI) (Details) - Reclassification out of Accumulated Other Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | $ (545) | $ (615) | $ (1,253) | $ (1,157) |
Cost of Product Sales and Services | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | 6 | (13) | (79) | (13) |
General and Administrative Expense | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | 0 | (40) | (7) | (72) |
Sales and Marketing Expense | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | (1) | (39) | 0 | (39) |
Interest Expense | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | $ (550) | $ (523) | $ (1,167) | $ (1,033) |
Derivative Financial Instrume_7
Derivative Financial Instruments (Derivatives Not Designated as Cash Flow Hedges) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Derivatives, Fair Value [Line Items] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain | $ (352) | $ 0 | $ (41) | $ 0 | |
General and Administrative Expense | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain | (352) | $ 0 | (41) | $ 0 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Total Return Swap | Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Asset Derivatives | 250 | 250 | $ 0 | ||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Total Return Swap | Not Designated as Hedging Instrument | Accrued expenses and other current liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Liability Derivatives | 0 | 0 | 130 | ||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Foreign currency forward contracts | Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Asset Derivatives | $ 0 | $ 0 | $ 18 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of the period | $ 8,138 | |
Balance at beginning of the period | 2,966 | |
Balance at end of the period | 7,498 | |
Balance at end of the period | 3,191 | |
Other Current Liabilities | ||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of the period | 8,138 | $ 6,115 |
Warranty provision for sales | 2,797 | 2,188 |
Settlement of warranty claims | (3,345) | (1,699) |
Foreign currency translation and other | (92) | 110 |
Balance at end of the period | 7,498 | 6,714 |
Other Noncurrent Liabilities | ||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of the period | 2,966 | 1,724 |
Warranty provision for sales | 609 | 714 |
Settlement of warranty claims | (338) | (471) |
Foreign currency translation and other | (46) | 22 |
Balance at end of the period | $ 3,191 | $ 1,989 |
Restructuring and Related Cha_3
Restructuring and Related Charges (Details) $ in Thousands | Oct. 29, 2018segment | Mar. 31, 2022USD ($)segment | Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||
Number of reportable segments | segment | 3 | 2 | 2 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning of the period | $ 304 | $ 970 | ||
Restructuring charges | 2,802 | 5,531 | ||
Release of prior reserves | 66 | 283 | ||
Write off charges | 0 | (966) | ||
Cash payments | (2,220) | (4,359) | ||
Other adjustments | 2 | 9 | ||
Restructuring reserve, end of the period | $ 888 | 888 | 1,185 | |
Cost of Product Sales and Services | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 867 | 3,428 | ||
General and Administrative Expense | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 1,719 | 1,089 | ||
Sales and Marketing Expense | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 0 | 340 | ||
Research and Development Expense | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 1 | (16) | ||
Other Operating Income (Expense) | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 215 | 690 | ||
Post Memcor product line sale restructuring | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 754 | 3,808 | ||
Two-segment realignment | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 297 | 562 | ||
Other Restructuring | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 1,817 | $ 1,444 | ||
Other Restructuring | Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, expected cost | 100 | 100 | ||
Other Restructuring | Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, expected cost | $ 1,100 | $ 1,100 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 227 | $ 287 | $ 459 | $ 571 |
Interest cost | 107 | 80 | 215 | 159 |
Expected return on plan assets | (129) | (87) | (261) | (174) |
Amortization of actuarial losses | 166 | 110 | 335 | 374 |
Pension expense for defined benefit plans | $ 371 | $ 390 | $ 748 | $ 930 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Estimated Annual Effective Tax Rate Used to Calculate Income Tax Expense (Benefit) | 22.60% | 14.60% | ||
Federal statutory income tax rate, percent | 21.00% | 21.00% | ||
Income tax expense | $ (2,248) | $ (2,701) | $ (3,869) | $ (3,785) |
Income before income taxes | $ 9,622 | $ 7,783 | $ 17,331 | $ 15,344 |
Effective income tax rate reconciliation, percent | 23.40% | 34.70% | 22.30% | 24.70% |
Unrecognized Tax Benefits | $ 2,071 | $ 1,752 | $ 2,071 | $ 1,752 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 01, 2022 | Oct. 01, 2021 | Dec. 21, 2018 | Oct. 01, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Service period | 3 years | ||||||||
Granted (shares) | 2 | ||||||||
Intrinsic value, exercises in period | $ 6,873 | ||||||||
Fair value of options vested | 5,317 | ||||||||
Share-based Compensation expense | $ 6,068 | $ 3,214 | 11,402 | $ 6,290 | |||||
Non-cash share-based compensation | 5,386 | 3,214 | 10,589 | 6,233 | |||||
Compensation cost not yet recognized, period for recognition | $ 27,863 | 27,863 | |||||||
Proceeds from issuance of common stock | $ 5,274 | 13,430 | |||||||
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 11,297 | ||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Evoqua Water Technologies Corp. Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock awards vesting percentage | 25.00% | ||||||||
Contractual term of options | 10 years | ||||||||
Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity incentive plan, number of shares authorized (shares) | 11,083 | 11,083 | |||||||
Number of shares available for grant (in shares) | 2,177 | 2,177 | |||||||
Compensation cost not yet recognized, period for recognition | $ 6,565 | $ 6,565 | |||||||
Period for recognition for unrecognized compensation expense | 1 year 10 months 24 days | ||||||||
Employee Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares available for grant (in shares) | 3,950 | 3,950 | |||||||
Purchase price of stock, percentage | 85.00% | ||||||||
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 5,000 | ||||||||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 198 | $ 187 | $ 419 | $ 403 | |||||
Shares issued under ESPP | 48 | 60 | |||||||
Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||||
Special RSU | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation cost not yet recognized, period for recognition | $ 11,063 | $ 11,063 | |||||||
Period for recognition for unrecognized compensation expense | 2 years 3 months 18 days | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Period for recognition for unrecognized compensation expense | 2 years 2 months 12 days |
Share-Based Compensation (Stock
Share-Based Compensation (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Options | |||
Outstanding at beginning of the period (shares) | 5,090,000 | ||
Granted (shares) | 2,000 | ||
Exercised (shares) | (249,000) | ||
Forfeited (shares) | (28,000) | ||
Outstanding at end of the period (shares) | 4,815,000 | ||
Options exercisable (shares) | 3,752,000 | ||
Options vested and expected to vest (shares) | 4,805,000 | ||
Weighted Average Exercise Price/Share | |||
Weighted average exercise price, outstanding, beginning balance (in dollars per share) | $ 13.87 | ||
Weighted average exercise price, granted (in dollars per share) | 46.75 | ||
Weighted average exercise price, exercised (in dollars per share) | 15.87 | ||
Weighted average exercise price, forfeited (in dollars per share) | 20.76 | ||
Weighted average exercise price, outstanding, ending balance (in dollars per share) | 13.73 | ||
Weighted average exercise price, exercisable (in dollars per share) | 11.51 | ||
Weighted average exercise price, options vested and expected to vest (in dollars per share) | $ 13.71 | ||
Weighted Average Remaining Contractual Term | |||
Weighted average remaining contractual term, outstanding | 5 years 4 months 24 days | 5 years 10 months 24 days | |
Weighted average contractual term, exercisable | 4 years 7 months 6 days | ||
Weighted average remaining contractual term, options vested and expected to vest | 5 years 4 months 24 days | ||
Intrinsic value, outstanding | $ 160,085 | $ 120,611 | |
Intrinsic value, exercisable | 133,087 | ||
Intrinsic value, options vested and expected to vest | $ 159,838 |
Share-Based Compensation (Nonve
Share-Based Compensation (Nonvested Share Activity) (Details) | 6 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Shares | |
Unvested at beginning of period | shares | 1,901,000 |
Granted (shares) | shares | 2,000 |
Vested (shares) | shares | (812,000) |
Forfeited (shares) | shares | (28,000) |
Unvested at end of period | shares | 1,063,000 |
Weighted Average Grant Date Fair Value/Share | |
Weighted average grant date fair value, nonvested, beginning balance (in dollars per share) | $ / shares | $ 6.69 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 24.22 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 6.55 |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 6.60 |
Weighted average grant date fair value, nonvested, ending balance (in dollars per share) | $ / shares | $ 6.87 |
Share-Based Compensation (RSU A
Share-Based Compensation (RSU Activity) (Details) shares in Thousands | 6 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Shares | |
Forfeited | shares | 28 |
Options exercisable (shares) | shares | 3,752 |
Weighted Average Grant Date Fair Value/Share | |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | $ 6.60 |
Weighted average exercise price, options vested and expected to vest (in dollars per share) | $ / shares | $ 13.71 |
Restricted Stock Units (RSUs) | |
Shares | |
Outstanding at beginning of the period (shares) | shares | 1,209 |
Granted | shares | 321 |
Vested in period (shares) | shares | (417) |
Forfeited | shares | 27 |
Outstanding at beginning of the period | shares | 1,086 |
Options exercisable (shares) | shares | 1,049 |
Weighted Average Grant Date Fair Value/Share | |
Weighted average grant date fair value, nonvested, equity instruments other than options, beginning of the period (in dollar per share) | $ / shares | $ 22.77 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 45.10 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 21.09 |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 23.73 |
Weighted average grant date fair value, nonvested, equity instruments other than options, end of the period (in dollar per share) | $ / shares | 29.99 |
Weighted average exercise price, options vested and expected to vest (in dollars per share) | $ / shares | $ 29.64 |
Special RSU | |
Shares | |
Outstanding at beginning of the period (shares) | shares | 469 |
Granted | shares | 124 |
Outstanding at beginning of the period | shares | 593 |
Options exercisable (shares) | shares | 546 |
Weighted Average Grant Date Fair Value/Share | |
Weighted average grant date fair value, nonvested, equity instruments other than options, beginning of the period (in dollar per share) | $ / shares | $ 16.92 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 52.50 |
Weighted average grant date fair value, nonvested, equity instruments other than options, end of the period (in dollar per share) | $ / shares | 23.39 |
Weighted average exercise price, options vested and expected to vest (in dollars per share) | $ / shares | $ 23.28 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | Mar. 31, 2022country |
Risks and Uncertainties [Abstract] | |
Number of countries in which entity operates | 9 |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule of Letters of Credit and Surety Bonds) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | |
Other Commitments [Line Items] | |||
Revolving credit capacity | $ 60,000 | $ 60,000 | $ 60,000 |
Remaining revolving credit capacity | 50,396 | 50,396 | 49,888 |
Surety Bond | |||
Other Commitments [Line Items] | |||
Surety capacity | 252,225 | 252,225 | 250,000 |
Surety issuances | 122,086 | 122,086 | 147,845 |
Remaining surety available | $ 130,139 | 130,139 | 102,155 |
Minimum | Surety Bond | |||
Other Commitments [Line Items] | |||
Letter of Credit, Guarantee, Bond Commitments, Expiration Period | 12 months | ||
Maximum | Surety Bond | |||
Other Commitments [Line Items] | |||
Letter of Credit, Guarantee, Bond Commitments, Expiration Period | 10 years | ||
Letter of Credit | |||
Other Commitments [Line Items] | |||
Letters of credit outstanding, amount | $ 9,604 | 9,604 | 10,112 |
Remaining revolving credit capacity | $ 119,396 | $ 119,396 | $ 302,888 |
Debt Instrument, Maturity Date | Mar. 20, 2030 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Payables and Accruals [Abstract] | ||
Salaries, wages, and other benefits | $ 60,552 | $ 79,110 |
Obligation under operating leases | 14,668 | 13,316 |
Obligation under finance leases | 12,263 | 12,093 |
Third party commissions | 10,563 | 10,031 |
Frontier Purchase Right liability | 10,396 | 0 |
Taxes, other than income | 6,811 | 4,575 |
Provision for litigation | 6,153 | 2,938 |
Insurance liabilities | 3,557 | 3,720 |
Severance payments | 888 | 304 |
Fair value of liability derivatives | 33 | 554 |
Earn-outs related to acquisitions | 25 | 150 |
Other | 32,601 | 33,576 |
Accrued expenses and other liabilities | $ 158,510 | $ 160,367 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other liabilities |
Business Segments (Details)
Business Segments (Details) $ in Thousands | Oct. 29, 2018segment | Mar. 31, 2022USD ($)segment | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Sep. 30, 2021USD ($) |
Segment Reporting [Abstract] | ||||||||
Number of reportable segments | segment | 3 | 2 | 2 | |||||
Segment Reporting Information [Line Items] | ||||||||
Total revenue | $ 426,728 | $ 346,564 | $ 792,996 | $ 668,757 | ||||
Operating profit (loss) | 19,572 | 16,178 | 33,860 | 32,412 | ||||
Interest expense | (9,950) | (8,395) | (16,529) | (17,068) | ||||
Income before income taxes | 9,622 | 7,783 | 17,331 | 15,344 | ||||
Income tax (expense) benefit | (2,248) | (2,701) | (3,869) | (3,785) | ||||
Net income | 7,374 | $ 6,088 | 5,082 | $ 6,477 | 13,462 | 11,559 | ||
Assets | 2,132,561 | 2,132,561 | $ 1,868,891 | |||||
Integrated Solutions and Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from product sales and services | 294,840 | 224,134 | 539,886 | |||||
Applied Product Technologies | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from product sales and services | 131,888 | 122,430 | 253,110 | |||||
Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from product sales and services | 32,632 | 27,746 | 62,437 | 45,887 | ||||
Intersegment Eliminations | Integrated Solutions and Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from product sales and services | 9,659 | 4,069 | 18,189 | 6,105 | ||||
Intersegment Eliminations | Applied Product Technologies | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from product sales and services | 22,973 | 23,677 | 44,248 | 39,782 | ||||
Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenue | 459,360 | 374,310 | 855,433 | 714,644 | ||||
Operating Segments | Integrated Solutions and Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenue | 304,499 | 228,203 | 558,075 | 444,956 | ||||
Revenue from product sales and services | 294,840 | 224,134 | 539,886 | 438,851 | ||||
Operating profit (loss) | 38,105 | 30,784 | 73,405 | 57,141 | ||||
Assets | 1,119,669 | 1,119,669 | 887,265 | |||||
Operating Segments | Applied Product Technologies | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenue | 154,861 | 146,107 | 297,358 | 269,688 | ||||
Revenue from product sales and services | 131,888 | 122,430 | 253,110 | 229,906 | ||||
Operating profit (loss) | 22,993 | 18,103 | 40,820 | 31,483 | ||||
Assets | 651,991 | 651,991 | 656,362 | |||||
Corporate, Non-Segment | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Operating profit (loss) | (41,526) | $ (32,709) | (80,365) | $ (56,212) | ||||
Assets | $ 360,901 | $ 360,901 | $ 325,264 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||||
Numerator for basic and diluted earnings per common share—Net income attributable to Evoqua Water Technologies Corp. | $ 7,330 | $ 5,036 | $ 13,317 | $ 11,469 |
Denominator: | ||||
Denominator for basic net income per common share—weighted average shares | 120,942 | 118,882 | 120,785 | 118,882 |
Effect of dilutive securities: | ||||
Share‑based compensation | 4,012 | 3,041 | 4,145 | 3,393 |
Denominator for diluted net income per common share—adjusted weighted average shares | 124,954 | 121,923 | 124,930 | 122,275 |
Basic income per common share | $ 0.06 | $ 0.04 | $ 0.11 | $ 0.10 |
Diluted income per common share | $ 0.06 | $ 0.04 | $ 0.11 | $ 0.09 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Apr. 01, 2022 | Mar. 31, 2022 | Apr. 08, 2021 | Oct. 01, 2019 |
Frontier | ||||
Subsequent Event [Line Items] | ||||
Percentage of voting interests acquired | 68.00% | 8.00% | 60.00% | |
Subsequent Event | Frontier | ||||
Subsequent Event [Line Items] | ||||
Effective date of acquisition | Apr. 1, 2022 | |||
Payments to acquire businesses | $ 10,396 | |||
Percentage of voting interests acquired | 32.00% | |||
Subsequent Event | Treated Water Outsourcing | ||||
Subsequent Event [Line Items] | ||||
Effective date of acquisition | Apr. 1, 2022 | |||
Payments to acquire businesses | $ 1,099 | |||
Percentage of voting interests acquired | 50.00% |