Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 12, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36541 | ||
Entity Registrant Name | LIMBACH HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-5399422 | ||
Entity Address, Address Line One | 797 Commonwealth Drive | ||
Entity Address, Address Line Two | |||
Entity Address, City or Town | Warrendale | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 15086 | ||
City Area Code | 412 | ||
Local Phone Number | 359-2100 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | LMB | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 241 | ||
Entity Common Stock, Shares Outstanding | 11,131,702 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement relating to the registrant’s 2023 Annual Meeting of Stockholders to be filed hereafter are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001606163 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Crowe LLP |
Auditor Location | Oak Brook, Illinois |
Auditor Firm ID | 173 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 59,833 | $ 36,001 |
Restricted cash | 65 | 113 |
Accounts receivable (net of allowance for credit losses of $292 and net of allowance for doubtful accounts of $234 as of December 31, 2023 and 2022, respectively) | 97,755 | 124,442 |
Contract assets | 51,690 | 61,453 |
Advances to and equity in joint ventures, net | 12 | 12 |
Income tax receivable | 0 | 95 |
Other current assets | 7,645 | 3,874 |
Total current assets | 217,000 | 225,990 |
Property and equipment, net | 20,830 | 18,224 |
Intangible assets, net | 24,999 | 15,340 |
Goodwill | 16,374 | 11,370 |
Operating lease right-of-use assets | 19,727 | 18,288 |
Deferred tax asset | 5,179 | 4,829 |
Other assets | 330 | 515 |
Total assets | 304,439 | 294,556 |
Current liabilities: | ||
Current portion of long-term debt | 2,680 | 9,564 |
Current operating lease liabilities | 3,627 | 3,562 |
Accounts payable, including retainage | 65,268 | 75,122 |
Contract liabilities | 42,160 | 44,007 |
Accrued income taxes | 446 | 1,888 |
Accrued expenses and other current liabilities | 30,967 | 24,942 |
Total current liabilities | 145,148 | 159,085 |
Long-term debt | 19,631 | 21,528 |
Long-term operating lease liabilities | 16,037 | 15,643 |
Other long-term liabilities | 2,708 | 2,858 |
Total liabilities | 183,524 | 199,114 |
Commitments and contingencies (Note 13) | ||
Redeemable convertible preferred stock, net, par value $0.0001, $1,000,000 shares authorized, no shares issued and outstanding ($0 redemption value) | 0 | 0 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, issued 11,183,076 and 10,471,410, respectively; 11,003,424 and 10,291,758 outstanding, respectively | 1 | 1 |
Additional paid-in capital | 92,528 | 87,809 |
Treasury stock, at cost (179,652 shares at both period ends) | (2,000) | (2,000) |
Retained earnings | 30,386 | 9,632 |
Total stockholders’ equity | 120,915 | 95,442 |
Total liabilities and stockholders’ equity | $ 304,439 | $ 294,556 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Allowance for doubtful accounts | $ 292,000 | $ 234,000 |
Common stock, par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 11,183,076 | 10,471,410 |
Common stock, shares, outstanding (in shares) | 11,003,424 | 10,291,758 |
Treasury stock (in shares) | 179,652 | 179,652 |
Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 |
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 |
Redeemable convertible preferred stock, redemption value | $ 0 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 516,350 | $ 496,782 |
Cost of revenue | 397,060 | 403,041 |
Gross profit | 119,290 | 93,741 |
Operating expenses: | ||
Selling, general and administrative | 87,397 | 77,879 |
Change in fair value of contingent consideration | 729 | 2,285 |
Amortization of intangibles | 1,880 | 1,567 |
Total operating expenses | 90,006 | 81,731 |
Operating income | 29,284 | 12,010 |
Other (expenses) income: | ||
Interest expense | (2,046) | (2,144) |
Interest income | 1,217 | 0 |
Loss on early termination of operating lease | 0 | (849) |
Loss on early debt extinguishment | (311) | 0 |
(Loss) gain on change in fair value of interest rate swap | (124) | 310 |
Gain on disposition of property and equipment | 80 | 281 |
Total other expenses | (1,184) | (2,402) |
Income before income taxes | 28,100 | 9,608 |
Income tax provision | 7,346 | 2,809 |
Net income | $ 20,754 | $ 6,799 |
Net income per share: | ||
Basic (in usd per share) | $ 1.93 | $ 0.65 |
Diluted (in usd per share) | $ 1.76 | $ 0.64 |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 10,773,467 | 10,425,119 |
Diluted (in shares) | 11,812,098 | 10,676,534 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Number of Shares | Additional paid-in capital | Treasury stock, at cost | Retained earnings |
Beginning balance (in shares) at Dec. 31, 2021 | 10,304,242 | ||||
Treasury stock (in shares) at Dec. 31, 2021 | 0 | ||||
Beginning Balance at Dec. 31, 2021 | $ 87,838 | $ 1 | $ 85,004 | $ 0 | $ 2,833 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued related to vested restricted stock units (in shares) | 129,678 | ||||
Shares issued related to vested restricted stock units | 0 | ||||
Tax withholding related to vested restricted stock units | (148) | (148) | |||
Stock-based compensation | 2,742 | 2,742 | |||
Shares issued related to employee stock purchase plan (in shares) | 37,490 | ||||
Shares issued related to employee stock purchase plan | 211 | 211 | |||
Repurchase of common stock under Share Repurchase Program (in shares) | (179,652) | ||||
Repurchase of common stock under Share Repurchase Program | (2,000) | $ (2,000) | |||
Net income | $ 6,799 | 6,799 | |||
Ending balance (in shares) at Dec. 31, 2022 | 10,471,410 | ||||
Treasury stock (in shares) at Dec. 31, 2022 | (179,652) | (179,652) | |||
Ending Balance at Dec. 31, 2022 | $ 95,442 | $ 1 | 87,809 | $ (2,000) | 9,632 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued related to vested restricted stock units (in shares) | 251,699 | ||||
Shares issued related to vested restricted stock units | 0 | ||||
Tax withholding related to vested restricted stock units | (428) | (428) | |||
Stock-based compensation | 4,910 | 4,910 | |||
Shares issued related to employee stock purchase plan (in shares) | 17,661 | ||||
Shares issued related to employee stock purchase plan | 237 | 237 | |||
Shares issued related to the exercise of warrants (in shares) | 442,306 | 0 | |||
Shares issued related to the exercise of warrants | 0 | ||||
Net income | $ 20,754 | 20,754 | |||
Ending balance (in shares) at Dec. 31, 2023 | 11,183,076 | ||||
Treasury stock (in shares) at Dec. 31, 2023 | (179,652) | (179,652) | |||
Ending Balance at Dec. 31, 2023 | $ 120,915 | $ 1 | $ 92,528 | $ (2,000) | $ 30,386 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 20,754 | $ 6,799 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 8,244 | 8,158 |
Noncash operating lease expense | 3,824 | 4,260 |
Provision for credit losses / doubtful accounts | 431 | 292 |
Stock-based compensation expense | 4,910 | 2,742 |
Loss on early debt extinguishment | 311 | 0 |
Loss on early termination of operating lease | 0 | 849 |
Amortization of debt issuance costs | 79 | 138 |
Deferred income tax provision | (350) | (499) |
Gain on sale of property and equipment | (80) | (281) |
Loss (gain) on change in fair value of interest rate swap | 124 | (310) |
Loss on change in fair value of contingent consideration | 729 | 2,285 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 32,607 | (35,407) |
Contract assets | 10,397 | 22,410 |
Other current assets | (1,486) | 1,128 |
Accounts payable, including retainage | (10,909) | 11,282 |
Contract liabilities | (9,121) | 17,296 |
Income tax receivable | 95 | 19 |
Accrued income taxes | (1,442) | 1,387 |
Accrued expenses and other current liabilities | 2,867 | (2,934) |
Operating lease liabilities | (3,795) | (4,133) |
Payment of contingent consideration liability in excess of acquisition-date fair value | (1,224) | 0 |
Other long-term liabilities | 401 | (108) |
Net cash provided by operating activities | 57,366 | 35,373 |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 435 | 498 |
Purchase of property and equipment | (2,266) | (993) |
Net cash used in investing activities | (17,092) | (495) |
Cash flows from financing activities: | ||
Payments on Wintrust and A&R Wintrust Term Loans | (21,452) | (13,429) |
Proceeds from Wintrust Revolving Loan | 10,000 | 15,194 |
Payment on Wintrust Revolving Loan | 0 | (15,194) |
Proceeds from financing transaction | 0 | 5,400 |
Payments on financing liability | 0 | (49) |
Payment of contingent consideration liability up to acquisition-date fair value | (1,776) | 0 |
Repurchase of common stock under Share Repurchase Program | 0 | (2,000) |
Payments on finance leases | (2,733) | (2,734) |
Proceeds from contributions to employee stock purchase plan | 368 | 309 |
Taxes paid related to net-share settlement of equity awards | (847) | (417) |
Payments of debt issuance costs | (50) | (433) |
Net cash used in financing activities | (16,490) | (13,353) |
Increase (decrease) in cash, cash equivalents and restricted cash | 23,784 | 21,525 |
Cash, cash equivalents and restricted cash, beginning of year | 36,114 | 14,589 |
Cash, cash equivalents and restricted cash, end of year | 59,898 | 36,114 |
Noncash investing and financing transactions: | ||
Right of use assets obtained in exchange for new operating lease liabilities | 3,135 | 0 |
Right of use assets obtained in exchange for new finance lease liabilities | 5,219 | 2,634 |
Right of use assets disposed or adjusted modifying operating leases liabilities | 1,112 | 2,455 |
Right of use assets disposed or adjusted modifying finance leases liabilities | (93) | (77) |
Interest paid | 1,908 | 2,005 |
Cash paid for income taxes | 9,156 | 1,979 |
ACME Industrial piping LLC | ||
Cash flows from investing activities: | ||
Net of cash acquired | (4,883) | 0 |
Noncash investing and financing transactions: | ||
Earnout Payments | 1,514 | 0 |
Industrial Air Transaction | ||
Cash flows from investing activities: | ||
Net of cash acquired | (10,378) | 0 |
Noncash investing and financing transactions: | ||
Earnout Payments | $ 3,165 | $ 0 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Limbach Holdings, Inc. (the “Company,” “we” or “us”), a Delaware corporation headquartered in Warrendale, Pennsylvania, was formed on July 20, 2016 as a result of a business combination with Limbach Holdings LLC (“LHLLC”). The Company is a building systems solutions firm who strives to be an indispensable partner to building owners with mission critical building infrastructure. The Company’s focus is in six vertical markets: healthcare, industrial and manufacturing, data centers, life science, higher education and cultural and entertainment. The Company provides comprehensive facility services with expertise in the management and maintenance of mechanical, electrical, plumbing and controls systems who uniquely combines engineering solutions with field installation expertise to provide custom solutions. The Company has more than 1,400 team members in 19 offices across the eastern United States and operates primarily in the Northeast, Mid-Atlantic, Southeast and Midwest regions of the United States. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and based on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. Principles of Consolidation References in these financial statements to the Company refer collectively to the accounts of Limbach Holdings, Inc. and its wholly-owned subsidiaries, including LHLLC, Limbach Facility Services LLC (“LFS”), Limbach Company LLC (“LC LLC”), Limbach Company LP, Harper Limbach LLC, Harper Limbach Construction LLC, Limbach Facility & Project Solutions LLC, Jake Marshall, LLC (“JMLLC”), Coating Solutions, LLC (“CSLLC”), ACME Industrial Piping, LLC (“ACME”) and Industrial Air, LLC (“Industrial Air”) for all periods presented, unless otherwise indicated. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements for assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the reported period, and the accompanying notes. Management believes that its most significant estimates and assumptions have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. The Company’s significant estimates include estimates associated with revenue recognition on construction contracts, costs incurred through each balance sheet date, intangibles, property and equipment, fair value accounting for acquisitions, insurance reserves, income tax valuation allowances, fair value of contingent consideration arrangements and contingencies. If the underlying estimates and assumptions upon which the consolidated financial statements are based change in the future, actual amounts may differ from those included in the accompanying consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less when purchased and are carried at cost, which approximates fair value, due to their short-term maturities. The Company’s cash and cash equivalents consist principally of currency on hand, demand deposits at commercial banks, overnight repurchase agreements, amounts invested in highly liquid money market funds and U.S. Treasury Bills. At times, the Company’s cash deposits may exceed the amount of federal insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk beyond the normal credit risk associated with commercial banking relationships. See Note 9 – Fair Value Measurements for further information. Restricted Cash Restricted cash is cash held at a commercial bank in an imprest account held for the purpose of funding workers’ compensation and general liability claims against the Company. This amount is replenished either when depleted or at the beginning of each month. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 59,833 $ 36,001 Restricted cash 65 113 Total cash, cash equivalents and restricted cash $ 59,898 $ 36,114 Accounts Receivable and Allowance for Credit Losses On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326) , Measurement of Credit Losses on Financial Instruments. The carrying value of the receivables, net of the allowance for credit losses, represents their estimated net realizable value. The Company develops its allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables, using an aging method. Under the aging method, the Company assigns its accounts receivable to a level of delinquency and applies a loss rates to each class. Loss rates are determined based on historical loss experiences with customers, the consideration of a customer’s financial condition, current market economic conditions and a forecast of future economic conditions when appropriate. When the Company becomes aware of a customer’s inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the expected amount to be collected. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and an adjustment of the account receivable. The majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable as current assets. Based on assessments by management, allowances for credit losses were approximately $0.3 million and $0.2 million at December 31, 2023 and 2022, respectively. Joint Ventures The Company accounts for its participation in certain special purpose, project specific joint ventures under the equity method of accounting. The Company’s entry into these joint ventures is for the purpose of bidding, negotiating and completing specific projects. The Company and its joint venture partner(s) separately enter into their own sub-contracts with the joint venture for each party’s respective portion of the work. All revenue and expenses and the related contract assets and liabilities related to the Company’s sub-contract are recorded within the Company’s statements of operations and balance sheets, similarly to any other construction project. The joint venture itself does not accumulate any profits or losses, as the joint venture revenue is equal to the sum of the subcontracts it issues to the joint venture partners. The voting power and management of the joint ventures are shared equally by the joint venture partners, qualifying these entities for joint venture treatment under GAAP. The shared voting power and management responsibilities allow the Company to exercise significant influence without controlling the joint venture entity. As such, the Company applies the equity method of accounting as defined in ASC Topic 323, Investments – Equity Method and Joint Ventures . Revenue Recognition The Company’s revenue is primarily derived from construction-type and service contracts that generally range from three months to two years. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . ASC Topic 606 provides for a five-step model for recognizing revenue from contracts with customers as follows: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue Identify the contract with a customer. A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectability of consideration is probable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with its customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectability of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and its prior collection history with such customer. Identify the performance obligations in the contract . At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for purposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price. The transaction price represents the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to its customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. Such methods include: (a) the expected value method, whereby the amount of variable consideration to be recognized represents the sum of probability weighted amounts in a range of possible consideration amounts, and (b) the most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including historical, current, and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the most likely amount method is typically utilized in situations where a contract has only two possible outcomes. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts. Pending change orders represent one of the most common forms of variable consideration included within contract value and typically represent contract modifications for which a change in scope has been authorized or acknowledged by the Company’s customer but the final adjustment to contract price is yet to be negotiated. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied. Contract claims are another form of variable consideration which is common within its industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by the Company in connection with claims, such litigation costs are expensed as incurred, although it may seek to recover these costs. Allocate the transaction price to performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation. Recognize revenue as performance obligations are satisfied. Throughout the execution of its construction-type contracts, the Company recognizes revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company. Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Certain construction-type contracts include retention provisions to provide assurance to the Company’s customers that it will perform in accordance with the contract terms and are not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work by the customer. The Company has determined there are no significant financing components in its contracts during the years ended December 31, 2023 and 2022. For the Company’s service-type contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of its performance as the Company performs the service. For its fixed price service-type contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when the Company’s inputs are expended evenly, and the customer receives and consumes the benefits of its performance throughout the contract term. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Costs to fulfill its contracts (“pre-bid costs”) that are not expected to be recovered from the customer are expensed as incurred and included in selling, general and administrative expenses on its consolidated statements of operations. In accordance with industry practice, the Company classifies as current all assets and liabilities relating to the performance of contracts. See Note 4 – Revenue from Contracts with Customers for further information. Changes in Estimates on Construction Contracts The accuracy of the Company’s revenue and profit recognition in a given period depends on the accuracy of its estimates of the cost to complete each project. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include: • The completeness and accuracy of the original bid; • costs associated with scope changes; • expected, or actual, resolution terms for claims; • achievement of contract incentives; • changes in costs of labor and/or materials; • extended overhead and other costs due to owner, weather and other delays; • subcontractor performance issues; • changes in productivity expectations; • site conditions that differ from those assumed in the original bid; • changes from original design on design-build projects; • the availability and skill level of workers in the geographic location of the project; • a change in the availability and proximity of equipment and materials; • its ability to fully and promptly recover on claims and back charges for additional contract costs, and • the customer’s ability to properly administer the contract. Subsequent to the inception of a construction-type contract in the Company’s GCR and ODR segments, the transaction price could change for various reasons, including the executed or estimated amount of change orders and unresolved contract modifications and claims to or from owners. Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception. Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated. Changes are made to the transaction price from unapproved change orders to the extent the amount can be reasonably estimated and recovery is probable. On certain projects, the Company has submitted and has pending unresolved contract modifications and claims to recover additional costs and the associated profit, if applicable, to which it believes it is entitled under the terms of contracts with customers, subcontractors, vendors or others. The owners or their authorized representatives and/or other third parties may be in partial or full agreement with the modifications or claims, or may have rejected or disagree entirely or partially as to such entitlement. Changes are made to the transaction price from affirmative claims with customers to the extent that additional revenue on a claim settlement with a customer is probable and estimable. A reduction to costs related to claims with non-customers with whom the Company has a contractual arrangement (“back charges”) is recognized when the estimated recovery is probable and estimable. Recognizing claims and back charge recoveries requires significant judgments of certain factors including, but not limited to, dispute resolution developments and outcomes, anticipated negotiation results, and the cost of resolving such matters. The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit and gross profit margin from period to period. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Significant changes in cost estimates, particularly in the Company’s larger, more complex projects have had, and can in future periods have, a significant effect on its profitability. Management evaluates changes in estimates on a contract by contract basis and discloses significant changes, if material, in the notes to the consolidated financial statements. The cumulative catch-up method is used to account for revisions in estimates. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined. Goodwill and Impairment of Long-Lived Assets Goodwill is evaluated for impairment at least annually or whenever events or changes in circumstance indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may perform either a qualitative assessment of potential impairment or proceed directly to a quantitative assessment of potential impairment. The Company's qualitative assessment of potential impairment may result in the determination that a quantitative impairment analysis is not necessary. Under this elective process, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative assessment is not required. However, if the Company concludes otherwise, a quantitative impairment analysis is performed. If the Company chooses not to perform a qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then the Company will perform a quantitative assessment. In the case of a quantitative assessment, the Company estimates the fair value of the reporting unit with which the goodwill is associated and compares it to the carrying value. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. See Note 5 – Goodwill and Intangible Assets for further detail. The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable. With respect to property, plant and equipment and finite lived intangibles, asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require the Company to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, the Company recognizes an impairment equal to the excess of carrying value over fair value as determined by quoted market prices in active markets or present value techniques if quotes are unavailable. The determination of the fair value using present value techniques requires the Company to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes the Company makes to these projections and assumptions could result in significant revisions to its evaluations of recoverability and the recognition of additional impairments. See Note 5 – Goodwill and Intangible Assets for further discussion on impairments of long-lived assets. Intangible Assets The Company’s indefinite-lived intangible assets associated with its trade name are evaluated for impairment at least annually or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its indefinite-lived intangible asset are less than their carrying amount. The Company’s identifiable intangible assets with finite lives are either amortized over their useful lives or over the period the Company expects to receive the related economic benefit based upon estimated future cash flows. The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. See Note 5 – Goodwill and Intangible Assets for further discussion of the Company’s intangible assets. Property and Equipment, net Property and equipment, with the exception of the Company’s fleet vehicle finance leases, are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. For buildings and leasehold improvements, the Company’s useful lives range from 5 years to 40 years; for machinery and equipment, useful lives range from 3 years to 10 years. Expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements for the Company’s real estate operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. The following table summarizes the Company’s property and equipment: ( in thousands ) December 31, 2023 December 31, 2022 Land and improvements $ 400 $ 400 Buildings and leasehold improvements 10,997 10,489 Machinery and equipment 31,157 26,061 Finance leases - vehicles (1) 11,665 10,789 Gross property and equipment 54,219 47,739 Less: Accumulated amortization on finance leases (4,502) (6,001) Less: Accumulated depreciation (28,887) (23,514) Property and equipment, net of accumulated amortization and depreciation (2) $ 20,830 $ 18,224 (1) See additional information provided in Note 14 – Leases. (2) Includes net property and equipment of approximately $0.5 million and $2.1 million for the year ended December 31, 2023 related to assets acquired in the ACME Transaction and Industrial Air Transaction, respectively. Depreciation and amortization expense on property and equipment was $6.4 million and $6.6 million for the years ended December 31, 2023 and 2022, respectively. Leases A lease contract conveys the right to use an underlying asset for a period of time in exchange for consideration. At inception, the Company determines whether a contract contains a lease by determining if there is an identified asset and if the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Leases are classified as either operating or finance, based on the Company’s evaluation of certain criteria. With the exception of short-term leases (leases with an initial term of 12 months or less), at lease commencement, the Company measures and records a lease liability equal to the present value of the remaining lease payments, generally discounted using quoted borrowing rates on its secured debt as the implicit rate is not readily determinable on many of its real estate operating leases. For the Company’s fleet vehicles classified as financing leases, it uses the stated interest rate in the lease. On the lease commencement date, the amount of the right-of-use (“ROU”) assets consist of the following: • the amount of the initial measurement of the lease liability; • any lease payment made at or before the commencement date, minus any lease incentives received; and • any initial direct costs incurred. Most of the Company’s operating lease contracts have the option to extend or renew. The Company assesses the option for individual leases, and it generally considers the base term to be the term of lease contracts. See Note 14 – Leases for additional information. The Company periodically evaluates whether events and circumstances have occurred that indicate that the remaining balances of its ROU assets may not be recoverable. The Company uses estimates of future undiscounted cash flows, as well as other economic and business factors, to assess the recoverability of these assets. Deferred Financing Costs Deferred financing costs are deferred and amortized to interest expense using the effective interest rate method over the term of the related long-term debt agreement, and the straight-line method for the revolving credit agreement. Debt issuance costs related to the issuance and/or extension, as applicable, of the Company’s term loans are reflected as a direct reduction from the carrying amount of long-term debt. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an other asset. As a result of the early repayment of the A&R Wintrust Term Loan and certain changes to the members of the loan syndicate under the Second A&R Wintrust Credit Agreement (See Note 7 – Debt), the Company wrote off approximately $0.3 million of unamortized debt issuance costs, which are reported as a loss on early debt extinguishment on the Company's consolidated statements of operations. See Note 7 – Debt for additional information. Stock-Based Compensation Stock-based compensation awards granted to executives, employees, and non-employee directors are measured at fair value and recognized as an expense. For awards with service conditions only, the Company recognizes compensation expense on a graded vesting basis over the requisite service period for each separately vesting tranche of the award based on the closing market price of the Company’s common stock at the grant date. For awards with service and performance conditions, the Company recognizes compensation expense based on the closing market price of the Company’s common stock at the grant date using the straight-line method over the requisite service period. Estimates of compensation expense for an award with performance conditions are based on the probable outcome of the performance conditions. The cumulative effect of changes in the probability outcomes are recorded in the period in which the changes occur. The Company has elected to account for forfeitures as they occur to determine the amount of compensation expense to be recognized each period. See also Note 17 – Management Incentive Plans for further information. Income Taxes The provision for income taxes includes federal, state and local taxes. The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes , which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities and income or expense is recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in tax rates are recorded to deferred tax assets and liabilities and reflected in the provision for income taxes |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions ACME Transaction On July 3, 2023 (the “ACME Effective Date”), the Company, LFS and ACME, and the owner of ACME (the “ACME Seller”) entered into a Purchase Agreement (the “ACME Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in ACME from the ACME Seller (the “ACME Transaction”). The ACME Transaction closed on the ACME Effective Date. As a result of the ACME Transaction, ACME became a wholly-owned indirect subsidiary of the Company. ACME specializes in performing industrial maintenance, capital project work, and emergency services for specialty chemical and manufacturing clients, and is a leading mechanical solutions provider for hydroelectric producers. The acquisition expands the Company’s market share within its existing operating footprint, provides further exposure to an attractive customer base and supports the Company's continued ODR growth strategy. Total consideration paid by the Company for the ACME Transaction at closing was $5.0 million (the “ACME Closing Purchase Price”), consisting of cash paid to the ACME Seller, subject to typical adjustments for working capital. Of the consideration paid to the ACME Seller, approximately $0.4 million is being held in escrow for indemnification purposes. The purchase price is subject to customary post-closing adjustments. In addition, the ACME Seller may receive up to an aggregate of $2.5 million in cash, consisting of two individual tranches of $0.5 million and $2.0 million pursuant to the terms of the ACME Purchase Agreement, if the gross profit of ACME equals or exceeds (i) $2.0 million in the 12-month period beginning on the ACME Effective Date (the “First ACME Earnout Period”) or (ii) $2.5 million in the 12-month period beginning on the first anniversary of the ACME Effective Date (the “Second ACME Earnout Period” and together with the First ACME Earnout Period, the “ACME Earnout Payments”). Notwithstanding the foregoing, if ACME’s Adjusted EBITDA, as defined within the ACME Purchase Agreement, for calendar year 2023 equaled or exceeded $2.5 million then the Company would have been required to pay the ACME Seller $2.5 million, and the ACME Seller would not have been entitled to any further payment. This particular earnout condition was not met as of December 31, 2023. The Company recorded $0.5 million in acquisition-related expenses associated with professional fees related to the ACME Transaction during the year ended December 31, 2023, which are included in selling, general and administrative expense in the consolidated statements of operations. Allocation of Purchase Price. The ACME Transaction was accounted for as a business combination using the acquisition method. The following table summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of the ACME Effective Date, with any excess of purchase price over estimated fair value of the identified net assets acquired recorded as goodwill. As a result of the acquisition, the Company recognized $2.3 million of goodwill, all of which was allocated to the ODR segment and fully deductible for tax purposes. Such goodwill primarily related to anticipated future earnings. The fair value estimates for the assets acquired and liabilities assumed, as well as the Company's estimates and assumptions, were subject to change as the Company obtained additional information during the measurement period. During the measurement period, if the Company obtained new information regarding facts and circumstances that existed as of the ACME Effective Date that, if known, would have resulted in revised estimated values of those assets or liabilities, the Company would accordingly revise its fair value estimates and purchase price allocation. Measurement period adjustments are reflected as if the adjustments had been made as of the ACME Effective Date. The impact of all changes that do not qualify as measurement period adjustments would have been included in current period earnings. The Company finalized its purchase price allocation during the fourth quarter of 2023. The following table summarizes the allocation of the fair value of the assets and liabilities of the ACME Transaction as of the ACME Effective Date by the Company. (in thousands) Purchase Price Allocation Measurement Period Adjustments (1) Final Purchase Price Allocation Consideration: Cash $ 5,181 $ — $ 5,181 Earnout provision 1,121 393 1,514 Total Consideration 6,302 393 6,695 Fair value of assets acquired: Cash and cash equivalents 298 — 298 Accounts receivable 1,150 — 1,150 Contract assets 414 — 414 Property and equipment 488 — 488 Operating lease right-of-use assets 301 — 301 Intangible assets 2,300 500 2,800 Amount attributable to assets acquired 4,951 500 5,451 Fair value of liabilities assumed: Accounts payable, including retainage 170 — 170 Current operating lease liabilities 195 — 195 Accrued expenses and other current liabilities 138 — 138 Contract liabilities 373 — 373 Long-term operating lease liabilities 106 — 106 Amount attributable to liabilities assumed 982 — 982 Goodwill $ 2,333 $ (107) $ 2,226 (1) Measurement period adjustments recorded during the year-ended December 31, 2023 included changes in the purchase price allocation and total consideration, resulting in a net decrease of approximately $0.1 million to goodwill. The measurement period adjustments resulted primarily from valuation inputs pertaining to ACME’s intangible assets and earnout provision attributes based on facts and circumstances that existed, but were not known, as of the ACME acquisition date. For working capital items, such as cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and other current liabilities, ACME's carrying value was assumed to represent the fair value of these assets due to the current nature of the assets and liabilities. There was no difference between the contract value and fair value of accounts receivable acquired. In addition, the estimated fair value of property and equipment, which generally consists of vehicles, machinery, and equipment, was estimated to approximate its net book value. As part of the purchase price allocation, the Company identified certain definite-lived intangible assets associated with customer relationships with third-party customers and the acquired trade name and trademarks. The fair value of the customer relationships with third-party customers was determined using the multi-period excess earning method under the income approach. The multi-period excess earnings method is a variation of the discounted cash-flow analysis, which isolates the cash flows that can be associated with a single intangible asset and measures fair value by discounting it back to present value. The fair value of the acquired trade name and trademarks intangible asset was determined using an income approach, specifically known as the relief-from-royalty method. This method requires identifying the future revenue that would be generated by the trademark, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date. The royalty rate used in the valuation was based on a consideration of market rates for similar categories of assets. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The Company calculates amortization of the acquired intangible assets using the straight-line method over the estimated useful lives of each acquired intangible assets. Amortization expense recorded in the consolidated statements of operations for the period from the ACME Effective Date to December 31, 2023 was approximately $0.2 million. The estimated annual amortization expense is approximately $0.3 million for each of the next five years. Intangible assets, net as of December 31, 2023 are detailed below. (in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Weighted Average Useful Life (Years) Trade name and trademarks $ 200 $ (19) $ 181 4.8 Customer relationships 2,600 (150) 2,450 8.1 Total $ 2,800 $ (169) $ 2,631 7.9 The aforementioned contingent ACME Earnout Payments are associated with the achievement of specified gross profit milestones. The Company estimated that the fair value of the ACME Earnout Payments was approximately $1.5 million at the date of acquisition, inclusive of certain measurement period adjustments, of which the majority of this balance was included in other long-term liabilities in the Company’s consolidated balance sheet. The Company determined the initial fair value of the ACME Earnout Payments based on the Monte Carlo Simulation method, which represented a Level 3 measurement. As of the ACME Effective Date, the ACME Earnout Payments associated with the ACME Transaction were valued utilizing discount rates of 12.96% and 21.64%. The discount rates were calculated using the build-up method with a risk-free rate commensurate with the term of the ACME Earnout Payments based on the U.S. Treasury Constant Maturity Yield and certain metric risk premiums determined with reference to a long-term risk free rate, a weighted average cost of capital and certain adjustments for operational leverage. Subsequent to the Effective Date, the ACME Earnout Payments are re-measured at fair value each reporting period. Changes in the estimated fair value of the contingent payments subsequent to the acquisition date are recognized immediately in earnings. See Note 9 for further information. Industrial Air Transaction On November 1, 2023 (the “IA Effective Date”), the Company, LFS and Industrial Air, and the owner of Industrial Air (the “IA Seller”) entered into a Purchase Agreement (the “IA Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Industrial Air from the IA Seller (the “Industrial Air Transaction”). The Industrial Air Transaction closed on the IA Effective Date. As a result of the Industrial Air Transaction, Industrial Air became a wholly-owned indirect subsidiary of the Company. Industrial Air serves industrial customers throughout the Southeast United States and along the Eastern seaboard, focusing on delivering engineered air handling systems, including air conditioning and air filtration, along with controls systems and maintenance work. In addition, Industrial Air manufactures a wide range of components for air conditioning and filtration systems. The Industrial Air Transaction provides the Company with a presence in an attractive and growing geographic market, where the acquired entity has a strong ODR customer base and supports the Company’s continued ODR growth strategy. Total consideration paid by the Company for the Industrial Air Transaction at closing was $13.5 million (the “IA Closing Purchase Price”), consisting of cash paid to the IA Seller, subject to typical adjustments for working capital. Of the consideration paid to the IA Seller, approximately $1.4 million is being held in escrow for indemnification purposes. The purchase price is subject to customary post-closing adjustments. In addition, the IA Seller may receive up to an aggregate of $6.5 million in cash, consisting of two individual tranches of $3.0 million and $3.5 million pursuant to the terms of the Industrial Air Purchase Agreement, if the gross profit of Industrial Air equals or exceeds (i) $7.6 million in the 12-month period beginning on the IA Effective Date (the “First IA Earnout Period”) or (ii) $8.8 million in the 12-month period beginning on the first anniversary of the IA Effective Date (the “Second IA Earnout Period” and together with the First IA Earnout Period, the “IA Earnout Payments”). However, if the gross profit of Industrial Air is less than $7.6 million but exceeds $6.6 million during the First IA Earnout Period then the IA Seller shall receive a portion of the deferred payment made on a pro rata basis. Similarly, if the gross profit of Industrial Air is less than $8.8 million but exceeds $7.8 million during the Second IA Earnout Period then the IA Seller shall receive a portion of the deferred payment made on a pro rata basis. The Company recorded $0.5 million in acquisition-related expenses associated with professional fees related to the Industrial Air Transaction during the year ended December 31, 2023, which are included in selling, general and administrative expense in the consolidated statements of operations. Allocation of Purchase Price. The Industrial Air Transaction was accounted for as a business combination using the acquisition method. The following table summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of the IA Effective Date, with any excess of purchase price over estimated fair value of the identified net assets acquired recorded as goodwill. As a result of the acquisition, the Company recognized $2.8 million of goodwill, all of which was allocated to the ODR segment and fully deductible for tax purposes. Such goodwill primarily related to anticipated future earnings. The Company's accounting for this acquisition is preliminary. The fair value estimates for the assets acquired and liabilities assumed, as well as the Company's estimates and assumptions are subject to change as the Company obtains additional information during the measurement period. During the measurement period, if the Company obtains new information regarding facts and circumstances that existed as of the IA Effective Date that, if known, would have resulted in revised estimated values of those assets or liabilities, the Company will accordingly revise its fair value estimates and purchase price allocation. Measurement period adjustments are reflected as if the adjustments had been made as of the IA Effective Date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings. The Company expects to finalize its purchase price allocation within one year of the IA Effective Date. The Company continues to analyze and assess relevant information necessary to determine, recognize and record at fair value the assets acquired and liabilities assumed. The following table summarizes the preliminary allocation of the fair value of the assets and liabilities of the Industrial Air Transaction as of the IA Effective Date by the Company. (in thousands) Purchase Price Allocation Consideration: Cash $ 11,527 Earnout provision 3,165 Total Consideration 14,692 Fair value of assets acquired: Cash and cash equivalents 1,149 Accounts receivable 5,200 Inventory 1,290 Contract assets 220 Other current assets 993 Property and equipment 1,447 Operating lease right-of-use assets (1) 3,756 Intangible assets 8,720 Amount attributable to assets acquired 22,775 Fair value of liabilities assumed: Accounts payable, including retainage 885 Current operating lease liabilities 475 Contract liabilities 6,900 Accrued expenses and other current liabilities 347 Long-term operating lease liabilities 2,254 Amount attributable to liabilities assumed 10,861 Goodwill $ 2,778 (1) As a result of the Industrial Air Transaction, the Company recognized a $1.0 million below-market lease, which was recorded as an increase to the Company’s operating lease right-of-use assets on its consolidated balance sheet as of the IA Effective Date. The below-market lease will be amortized to amortization expense over the remaining lease term. For working capital items, such as cash and cash equivalents, accounts receivable, inventory, other current assets, accounts payable, and accrued expenses and other current liabilities, Industrial Air's carrying value was assumed to represent the fair value of these assets due to the current nature of the assets and liabilities. There was no difference between the contract value and fair value of accounts receivable acquired. In addition, the estimated fair value of property and equipment, which generally consists of machinery, equipment and leasehold improvements, was estimated to approximate its net book value. As part of the purchase price allocation, the Company identified certain definite-lived intangible assets associated with customer relationships with third-party customers, the acquired trade name and trademarks, acquired intellectual property, acquired backlog and a below market lease agreement. The fair values of the customer relationships with third-party customers and acquired backlog were determined using the multi-period excess earning method under the income approach. The multi-period excess earnings method is a variation of the discounted cash-flow analysis, which isolates the cash flows that can be associated with a single intangible asset and measures fair value by discounting it back to present value. The fair value of the acquired trade name, trademarks and intellectual property intangible assets were determined using an income approach, specifically known as the relief-from-royalty method. This method requires identifying the future revenue that would be generated by the trade name, trademark and intellectual property, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date. The royalty rate used in the valuation was based on a consideration of market rates for similar categories of assets. The fair value of the below-market lease was determined by comparing the difference between the annual lease contract rent over the remaining contractual term to a market rate cash flow stream, discounted to the present value. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The Company calculates amortization of the acquired intangible assets using the straight-line method over the estimated useful lives of each acquired intangible assets. Amortization expense recorded in the consolidated statements of operations for the period from the Industrial Air Effective Date to December 31, 2023 was approximately $0.5 million. The estimated annual amortization expense is approximately $2.2 million for 2024 and $0.9 million each of the next four years. Intangible assets, net as of December 31, 2023 are detailed below. (in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Weighted Average Useful Life (Years) Trade name, trademarks and intellectual property $ 2,710 $ (58) $ 2,652 7.6 Customer relationships 4,390 (99) 4,291 7.2 Backlog 1,620 (324) 1,296 0.6 Total $ 8,720 $ (481) $ 8,239 6.3 The aforementioned contingent IA Earnout Payments are associated with the achievement of specified gross profit milestones. The Company estimated that the fair value of the IA Earnout Payments was approximately $3.2 million at the date of acquisition, of which the majority of this balance was included in other long-term liabilities in the Company’s consolidated balance sheet as of December 31, 2023. The Company determined the initial fair value of the IA Earnout Payments based on the Monte Carlo Simulation method, which represented a Level 3 measurement. As of the Industrial Air Effective Date, the IA Earnout Payments associated with the Industrial Air Transaction were valued utilizing a discount rate of 13.68%. The discount rate was calculated using the build-up method with a risk-free rate commensurate with the term of the IA Earnout Payments based on the U.S. Treasury Constant Maturity Yield and certain metric risk premiums determined with reference to a long-term risk free rate, a weighted average cost of capital and certain adjustments for operational leverage. Subsequent to the IA Effective Date, the IA Earnout Payments are re-measured at fair value each reporting period. Changes in the estimated fair value of the contingent payments subsequent to the acquisition date are recognized immediately in earnings. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company generates revenue from construction type contracts, primarily consisting of fixed-price contracts, to deliver mechanical, plumbing, and electrical construction services to its customers. The duration of its contracts generally ranges from three months to two years. Revenue from fixed price contracts is recognized on the cost-to-cost method, measured by the relationship of total cost incurred to total estimated contract costs. Revenue from time and materials contracts is recognized as services are performed. The Company believes that its extensive experience in mechanical, plumbing, and electrical projects, and its internal cost review procedures during the bidding process, enable it to reasonably estimate costs and mitigate the risk of cost overruns on fixed price contracts. The Company generally invoices customers on a monthly basis, based on a schedule of values that breaks down the contract amount into discrete billing items. Costs and estimated earnings in excess of billings on uncompleted contracts are recorded as a contract asset until billable under the contract terms. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as a contract liability until the related revenue is recognizable. The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle. Contract assets Contract assets include amounts due under retainage provisions and costs and estimated earnings in excess of billings on uncompleted contracts. The components of the contract asset balances as of the respective dates were as follows: (in thousands) December 31, 2023 December 31, 2022 Change Contract assets Costs and estimated earnings in excess of billings on uncompleted contracts $ 29,247 $ 33,573 $ (4,326) Retainage receivable 22,443 27,880 (5,437) Total contract assets $ 51,690 $ 61,453 $ (9,763) Retainage receivable represents amounts invoiced to customers where payments have been partially withheld, typically 10%, pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion. Contract assets represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Contract assets result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC Topic 606, but a portion of the revenue recorded cannot be currently billed due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. The current estimated net realizable value on such items as recorded in contract assets and contract liabilities in the consolidated balance sheets was $19.5 million and $28.5 million as of December 31, 2023 and 2022, respectively. The Company currently anticipates that the majority of such amounts will be approved or executed within one year. The resolution of those claims and unapproved change orders that may require litigation or other forms of dispute resolution proceedings may delay the timing of billing beyond one year. Contract liabilities Contract liabilities include billings in excess of contract costs and provisions for losses. The components of the contract liability balances as of the respective dates were as follows: (in thousands) December 31, 2023 December 31, 2022 Change Contract liabilities Billings in excess of costs and estimated earnings on uncompleted contracts $ 41,987 $ 43,806 $ (1,819) Provisions for losses 173 201 (28) Total contract liabilities $ 42,160 $ 44,007 $ (1,847) Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Provisions for losses are recognized in the consolidated statements of operations at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds its estimated total revenue. The net (overbilling) underbilling position for contracts in process consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Revenue earned on uncompleted contracts $ 551,120 $ 678,014 Less: Billings to date (563,860) (688,247) Net (overbilling) underbilling $ (12,740) $ (10,233) (in thousands) December 31, 2023 December 31, 2022 Costs and estimated earnings in excess of billings on uncompleted contracts $ 29,247 $ 33,573 Billings in excess of costs and estimated earnings on uncompleted contracts (41,987) (43,806) Net (overbilling) underbilling $ (12,740) $ (10,233) Revisions in Contract Estimates The Company recorded revisions in its contract estimates for certain GCR and ODR projects. During the year ended December 31, 2023, the Company recorded material gross profit write-ups on two GCR projects for a total of $2.2 million and two material GCR project gross profit write-downs for a total of $1.3 million that had a net gross profit impact of $0.5 million or more. During the year ended December 31, 2023, the Company recorded a material gross profit write-down on one ODR segment project for a total of $1.0 million. During the year ended December 31, 2022, the Company recorded material gross profit write-ups of $3.0 million on three GCR projects and four material GCR project gross profit write-downs for a total of $2.8 million that had a net gross profit impact of $0.5 million or more. There were no material write-ups or write-downs within the ODR segment during the year ended December 31, 2022. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. As of December 31, 2023, the aggregate amount of the transaction prices allocated to the remaining performance obligations of the Company's GCR and ODR segment contracts were $186.9 million and $127.3 million, respectively. The Company currently estimates that 83% and 95% of its GCR and ODR segment remaining performance obligations as of December 31, 2023, respectively, will be recognized as revenue during 2024, with the substantial majority of remaining performance obligations to be recognized within 24 months, although the timing of the Company’s performance is not always under its control. Additionally, the difference between remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s ODR agreements under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill was $16.4 million and $11.4 million as of December 31, 2023 and 2022, respectively, and is entirely associated with the Company's ODR segment. The Company tests its goodwill and indefinite-lived intangible assets allocated to its reporting units for impairment annually on October 1, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its reporting units and indefinite-lived intangible asset are less than their carrying amount. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessments results in a more-likely-than-not determination or if a qualitative assessment is not performed. On October 1, 2023, the Company performed a qualitative assessment. In conducting that qualitative assessment, the Company analyzed a variety of events or factors that may influence the fair value of the reporting unit or indefinite-life intangible, including, but not limited to: if applicable; changes in the carrying amount of the reporting unit or indefinite-life intangible; actual and projected revenue and operating margin; relevant market data for both the Company and its peer companies; industry outlooks; macroeconomic conditions; liquidity; changes in key personnel; and the Company's competitive position. Significant judgment was used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting units or indefinite-life intangible is less than its carrying value. No impairment losses were identified as a result of its qualitative assessment during the year ended December 31, 2023. During the fourth quarter of 2022, the Company performed a quantitative impairment assessment for its ODR reporting unit in which the Company determined that the fair value of the ODR reporting unit was greater than its respective carrying value. No impairment to goodwill was recorded as a result of the annual assessment. The following table summarizes the carrying amount of goodwill associated with the Company's segments for the years ended December 31, 2023 and 2022. (in thousands) GCR ODR Total Goodwill as of January 1, 2022 $ — $ 11,370 $ 11,370 Goodwill as of December 31, 2022 — 11,370 11,370 Goodwill associated with the ACME Transaction (1) — 2,226 2,226 Goodwill associated with the Industrial Air Transaction — 2,778 2,778 Goodwill as of December 31, 2023 $ — $ 16,374 $ 16,374 (1) Includes certain adjustments, net, to preliminary estimates of fair value within the measurement period of up to one-year from the date of the ACME Transaction. Measurement period adjustments, net, relate primarily to an increase in certain definite-lived intangible assets, partially offset by an increase in total consideration associated with the earnout provision. See Note 3 – Acquisitions for further information. Intangible Assets The Company reviews intangible assets with definite lives subject to amortization whenever events or changes in circumstances (triggering events) indicate that the carrying amount of an asset may not be recoverable. Intangible assets with definite lives subject to amortization are amortized on a straight-line or accelerated basis with estimated useful lives ranging from 1 to 15 years. Events or circumstances that might require impairment testing include the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, a significant decline in stock price, or a significant adverse change in the Company’s business climate or regulations affecting the Company. The Company did not recognize an impairment charge on its indefinite-lived intangible asset for the years ended December 31, 2023 and 2022. Definite-lived and indefinite-lived intangible assets consist of the following: (in thousands) Gross Accumulated Net intangible December 31, 2023 Amortized intangible assets: Customer relationships $ 15,320 $ (5,249) $ 10,071 Backlog 2,560 (1,264) 1,296 Trade name, trademarks and intellectual property 4,250 (578) 3,672 Total amortized intangible assets 22,130 (7,091) 15,039 Unamortized intangible assets: Trade name – Limbach (1) 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 32,090 $ (7,091) $ 24,999 (1) The Company has determined that its trade name has an indefinite useful life. The Limbach trade name has been in existence since the Company’s founding in 1901 and therefore is an established brand within the industry. (in thousands) Gross Accumulated Net intangible December 31, 2022 Amortized intangible assets: Customer relationships $ 8,330 $ (4,288) $ 4,042 Backlog 940 (643) 297 Trade name 1,340 (299) 1,041 Total amortized intangible assets 10,610 (5,230) 5,380 Unamortized intangible assets: Trade name – Limbach 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (5,230) $ 15,340 Total amortization expense for the Company’s definite-lived intangible assets was $1.9 million and $1.6 million for the years ended December 31, 2023 and 2022, respectively. The estimated remaining useful lives of definite-lived intangible assets are as follows: Intangible Asset Amortization Method Weighted Average Remaining Useful Life (Years) Customer relationships Straight line / Pattern of economic benefit 6.9 Trade name, trademarks and intellectual property Straight line 6.6 Backlog Straight line 0.6 Estimated amortization expense is as follows for the years ending December 31: (in thousands) Estimated Amortization Expense 2024 $ 3,444 2025 2,110 2026 2,081 2027 2,056 2028 1,860 2029 and thereafter 3,488 Total $ 15,039 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are comprised of the following: ( in thousand s) December 31, 2023 December 31, 2022 Accrued payroll and related liabilities $ 5,561 $ 4,545 Accrued bonus and commissions 12,254 9,682 Accrued insurance liabilities 1,007 715 Accrued job costs 2,710 1,913 Assurance-type warranty liabilities 1,500 1,581 Estimated loss contingency 650 2,182 Earnout Payments accrued, current 5,719 2,859 Other accrued liabilities 1,566 1,465 Total $ 30,967 $ 24,942 The Company’s construction-type contracts regularly include warranties to end customers that guarantee the work performed against defects in workmanship and the material it supplies. These standard warranties are assurance-type warranties and do not offer any additional services. Therefore, these assurance-type warranties are not considered separate performance obligations and the expected cost of assurance-type warranties are accrued as an expense within cost of revenue. The Company’s reconciliation of assurance-type warranties are as follows: ( in thousand s) December 31, 2023 December 31, 2022 Balance at the beginning of the period $ 1,581 $ 3,310 Accruals for warranties issued 261 302 Accruals related to pre-existing warranties (including changes in estimates) 932 (494) Settlements made (1,274) (1,537) Balance at the end of the period $ 1,500 $ 1,581 The Company also offers service-type warranties on certain construction-type projects. These service-type warranties were not accounted for as a separate performance obligation prior to the adoption of ASC Topic 606. Upon adoption of ASC Topic 606, the Company allocated a portion of the contract's transaction price to the service-type warranty based on its estimated standalone selling price. The accounting for service-type warranties under ASC Topic 606 did not have a material impact to the consolidated financial statements as of December 31, 2023 and 2022. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consists of the following obligations as of: ( in thousand s) December 31, 2023 December 31, 2022 A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 $ — $ 21,453 A&R Wintrust Revolving Loan 10,000 — Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 7,347 4,954 Financing liability 5,351 5,351 Total debt $ 22,698 $ 31,758 Less – Current portion of long-term debt (2,680) (9,564) Less – Unamortized discount and debt issuance costs (387) (666) Long-term debt $ 19,631 $ 21,528 Maturities of long-term debt and finance leases at December 31, 2023 are as follows: ( in thousands ) 2024 $ 2,653 2025 2,039 2026 1,650 2027 845 2028 and thereafter 15,512 Total $ 22,698 Wintrust Term and Revolving Loans On February 24, 2021, LFS, LHLLC and the direct and indirect subsidiaries of LFS from time to time included as parties to the agreement (the “Wintrust Guarantors”) entered into a credit agreement (the “Wintrust Credit Agreement”) by and among LFS, LHLLC, Wintrust Guarantors, the lenders party thereto from time to time, Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively, “Wintrust”), as administrative agent and L/C issuer, Bank of the West as documentation agent, M&T Bank as syndication agent, and Wintrust as lead arranger and sole book runner. In accordance with the terms of the Wintrust Credit Agreement, Lenders provided to LFS (i) a $30.0 million senior secured term loan (the “Wintrust Term Loan”); and (ii) a $25.0 million senior secured revolving credit facility with a $5.0 million sublimit for the issuance of letters of credit (the “Wintrust Revolving Loan” and, together with the Wintrust Term Loan, the “Wintrust Loans”). Proceeds of the Wintrust Loans were used to refinance certain existing indebtedness, finance working capital and other general corporate purposes and fund certain fees and expenses associated with the closing of the Wintrust Loans. The Wintrust Revolving Loan initially bore interest, at LFS’s option, at either LIBOR (with a 0.25% floor) plus 3.5% or a base rate (with a 3.0% floor) plus 0.50%, subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA (earnings before interest, income taxes, depreciation and amortization) of LFS and its subsidiaries for the most recently ended four fiscal quarters. The Wintrust Term Loan initially bore interest, at LFS’s option, at either LIBOR (with a 0.25% floor) plus 4.0% or a base rate (with a 3.0% floor) plus 1.00%, subject to a 50 (for LIBOR) or 75 (for base rate) basis point step-down based on the Senior Leverage Ratio (as defined below). LFS initially was required to make principal payments on the Wintrust Term Loan in $0.5 million installments on the last business day of each month commencing on March 31, 2021 with a final payment of all principal and interest not sooner paid on the Wintrust Term Loan due and payable on February 24, 2026. In conjunction with the Jake Marshall Transaction, the Company entered into an amendment to the Wintrust Credit Agreement (the “A&R Wintrust Credit Agreement”). In accordance with the terms of the A&R Credit Agreement, Lenders provided to LFS (i) a $35.5 million senior secured term loan (the “A&R Wintrust Term Loan”); and (ii) a $25 million senior secured revolving credit facility with a $5 million sublimit for the issuance of letters of credit (the “A&R Wintrust Revolving Loan” and, together with the Term Loan, the “A&R Wintrust Loans”). The overall Wintrust Term Loan commitment under the A&R Wintrust Credit Agreement was recast at $35.5 million in connection with the A&R Credit Agreement. A portion of the A&R Wintrust Term Loan commitment was used to fund the closing purchase price of the Jake Marshall Transaction. The A&R Credit Agreement was also amended to: (i) permit the Company to undertake the Jake Marshall Transaction, (ii) make certain adjustments to the covenants under the A&R Credit Agreement (which were largely done to make certain adjustments for the Jake Marshall Transaction), (iii) allow for the Jake Marshall Earnout Payments under the Jake Marshall Transaction, and (iv) make other corresponding changes to the A&R Credit Agreement. The A&R Wintrust Revolving Loan bore interest, at LFS’s option, at either the Term SOFR (as defined in the A&R Credit Agreement) (with a 0.15% floor) plus 3.60%, 3.76% or 3.92% for a tenor of one month, three months or six months, respectively, or a base rate (as set forth in the A&R Credit Agreement) (with a 3.0% floor) plus 0.50%, subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters (the “Senior Leverage Ratio”). The A&R Wintrust Term Loan bore interest, at LFS’s option, at either Term SOFR (with a 0.15% floor) plus 4.10%, 4.26% or 4.42% for a tenor of one month, three months or six months, respectively, or a base rate (with a 3.0% floor) plus 1.00%, subject to a 50 (for Term SOFR) or 75 (for base rate) basis point step-down based on the Senior Leverage Ratio. The A&R Wintrust Term Loan was payable through a combination of (i) monthly installments of approximately $0.6 million due on the last business day of each month commencing on December 31, 2021, (ii) annual Excess Cash Flow payments as defined in the A&R Wintrust Credit Agreement, which are due 120 days after the last day of the Company's fiscal year and (iii) Net Claim Proceeds from Legacy Claims as defined in the A&R Wintrust Credit Agreement. Subject to defaults and remedies under the A&R Credit Agreement, the final payment of all principal and interest not sooner paid on the A&R Wintrust Term Loan was due and payable on February 24, 2026. Subject to defaults and remedies under the A&R Credit Agreement, the A&R Wintrust Revolving Loan would have matured and become due and payable by LFS on February 24, 2026. During the second quarter of 2022, the Company made certain Excess Cash Flow and Net Claim Proceeds payments of $3.3 million and $2.1 million, respectively, which concurrently reduced the outstanding A&R Wintrust Term Loan balance. In addition, during the third quarter of 2022, the Company made a Net Claim Proceeds payment of $0.6 million, which was also applied against the outstanding A&R Wintrust Term Loan balance. The A&R Wintrust Loans were secured by (i) a valid, perfected and enforceable lien of the administrative agent on the ownership interests held by each of LFS and Wintrust Guarantors in their respective subsidiaries; and (ii) a valid, perfected and enforceable lien of the administrative agent on each of LFS and Wintrust Guarantors’ personal property, fixtures and real estate, subject to certain exceptions and limitations. Additionally, the re-payment of the A&R Wintrust Loans shall be jointly and severally guaranteed by each Wintrust Guarantor. The A&R Credit Agreement contained representations and warranties, covenants and events of default that are customary for facilities of this type, as more particularly described in the A&R Credit Agreement. The A&R Wintrust Loans also contain three financial maintenance covenants, including (i) a requirement to have as of the last day of each quarter for the senior leverage ratio of the Company and its subsidiaries not to exceed an amount beginning at 2.00 to 1.00, (ii) a fixed charge coverage ratio of not less than 1.20 to 1.00 as of the last day of each fiscal quarter, commencing with the fiscal quarter ending December 31, 2021, and (iii) no unfinanced capital expenditures, except for unfinanced capital expenditures in the ordinary course of business not exceeding in the aggregate $4.0 million during any fiscal year; and no default or event of default (as defined by the agreement) has occurred and is continuing, 50% of any portion of this annual limit, if not expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next following fiscal year as stipulated by the agreement. LFS and its affiliates maintain various commercial and service relationships with certain members of the syndicate and their affiliates in the ordinary course of business. On May 5, 2022, the Company, LFS and LHLLC entered into a first amendment and waiver to the A&R Wintrust Credit Agreement (the “First Amendment to the A&R Wintrust Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent. The First Amendment to the A&R Wintrust Credit Agreement modifies certain definitions within the A&R Wintrust Credit Agreement, and make other corresponding changes, including: (i) the definition of “EBITDA” to allow for the recognition of certain restructuring charges and lease breakage costs not previously specified, (ii) the definition of “Excess Cash Flow” to exclude the aggregate amount of the Earnout Payments paid in cash, (iii) the definition of “Total Funded Debt” to exclude certain capitalized lease obligations for real estate based on the approval of each lender and (iv) the definition of “Disposition” to include a clause for the sale and leaseback of certain real property based on the approval of each lender. In July 2022, the Company entered into an interest rate swap agreement to manage the risk associated with a portion of its variable-rate long-term debt. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The new swap agreement became effective on July 14, 2022 and will terminate on July 31, 2027. The notional amount of the swap agreement is $10.0 million with a fixed interest rate of 3.12%. If the one-month SOFR (as defined in the A&R Credit Agreement) is above the fixed rate, the counterparty pays the Company, and if the one-month SOFR is less than the fixed rate, the Company pays the counterparty, the difference between the fixed rate of 3.12% and one-month SOFR. The Company has not designated this instrument as a hedge for accounting purposes. As a result, the change in fair value of the derivative instrument is recognized directly in earnings on the Company's consolidated statements of operations as a gain or loss on interest rate swap. Refer to Note 9 for further information regarding this interest rate swap. On September 28, 2022, the Company, LFS and LHLLC entered into a second amendment and waiver to the amended and restated Wintrust credit agreement (the “Second Amendment to the A&R Wintrust Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent. The Second Amendment to the A&R Wintrust Credit Agreement incorporates certain restricted payment provisions, among other things, to permit LFS to repurchase shares under the Company’s Share Repurchase Program (as defined in Note 8 – Equity). On May 5, 2023, LFS, LHLLC and the direct and indirect subsidiaries of LFS from time to time included as parties to the agreement entered into the Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent, which amends and restates the A&R Wintrust Credit Agreement. In accordance with the Second A&R Credit Agreement (i) lenders provided to LFS a $50.0 million senior secured revolving credit facility with a $5.0 million sublimit for the issuance of letters of credit, an increase of $25.0 million over the A&R Wintrust Revolving Loan, with a maturity date of February 24, 2028 (the “Second A&R Wintrust Revolving Loan”), and (ii) LFS repaid the then outstanding principal balance of the A&R Wintrust Term Loan using proceeds of the Second A&R Wintrust Revolving Loan. Prior to the execution of this agreement, the Company repaid $9.6 million of the then outstanding balance under the A&R Term Loan with cash on hand. As a result of the early repayment of the A&R Wintrust Term Loan and certain changes to the members of the loan syndicate under the Second A&R Wintrust Credit Agreement, the Company wrote off approximately $0.3 million of unamortized debt issuance costs, which are reported as a loss on early debt extinguishment on the Company's condensed consolidated statements of operations. Prior to its repayment on May 5, 2023 and as of December 31, 2022, the interest rate in effect on the non-hedged portion of the A&R Wintrust Term Loan was 9.25% and 8.50%, respectively. For the period from January 1, 2023 through May 5, 2023, the Company incurred interest on the A&R Wintrust Term Loan at a weighted average annual interest rate of 8.76%. For the year ended December 31, 2022, the Company incurred interest on the A&R Wintrust Term Loan at a weighted average annual interest rate of 5.68%. The Second A&R Wintrust Revolving Loan bears interest, at LFS’s option, at either the Term SOFR (as defined in the Second A&R Credit Agreement) (with a 0.15% floor) plus 3.10% or the Prime Rate (as defined in the Second A&R Credit Agreement) (with a 3.0% floor), subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters. The Second A&R Wintrust Revolving Loan is secured by (i) a valid, perfected and enforceable lien of the administrative agent on the ownership interests held by each of LFS and Wintrust Guarantors in their respective subsidiaries; and (ii) a valid, perfected and enforceable lien of the administrative agent on each of LFS and Wintrust Guarantors’ personal property, fixtures and real estate, subject to certain exceptions and limitations. Additionally, the re-payment of the Second A&R Wintrust Revolving Loan is jointly and severally guaranteed by each Wintrust Guarantor. The Second A&R Credit Agreement contains representations and warranties, covenants and events of default that are customary for facilities of this type, as more particularly described in the Second A&R Credit Agreement. The Second A&R Wintrust Revolving Loan also contains three financial maintenance covenants, including (i) a requirement to have as of the last day of each quarter for the senior leverage ratio of LFS and its subsidiaries not to exceed an amount beginning at 2.00 to 1.00, (ii) a fixed charge coverage ratio of not less than 1.20 to 1.00 as of the last day of each fiscal quarter, commencing with the fiscal quarter ending March 31, 2023, and (iii) no unfinanced capital expenditures, except for unfinanced capital expenditures in the ordinary course of business not exceeding in the aggregate $4.0 million during any fiscal year; and no default or event of default (as defined in the Second A&R Credit Agreement) has occurred and is continuing, 50% of any portion of this annual limit, if not expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next following fiscal year as stipulated by the agreement. As of December 31, 2023, the Company had $10.0 million in borrowings outstanding under the Second A&R Wintrust Revolving Loan. During the year ended December 31, 2023, the maximum outstanding borrowings under either the Company's revolving loan arrangements at any time was $10.0 million and the average daily balance was approximately $6.6 million. For the year ended December 31, 2023, the Company incurred interest on the Second A&R Wintrust Revolving Loan at a weighted average annual interest rate of 5.72%, inclusive of the net impact associated with the Company's interest rate swap arrangement. As of December 31, 2022, the Company had no borrowings outstanding under the A&R Wintrust Revolving Loan. During the year ended December 31, 2022, the maximum outstanding borrowings under the A&R Wintrust Revolving Loan at any time was $9.4 million and the average daily balance was approximately $0.1 million. For the year ended December 31. 2022, the Company incurred interest on the A&R Wintrust Revolving Loan at a weighted average annual interest rate of 4.78%. At December 31, 2023, the Company had irrevocable letters of credit in the amount of $4.1 million with its lender to secure obligations under its self-insurance program. The following is a summary of the applicable margin and commitment fees payable on the available A&R Wintrust Term Loan and A&R Wintrust Revolving Loan credit commitment: Level Senior Leverage Ratio Applicable Margin for SOFR Revolver loans Applicable Margin for Applicable Margin for commitment fee I Greater than 1.00 to 1.00 3.10 % — % 0.25 % II Less than or equal to 1.00 to 1.00 2.60 % (0.50) % 0.25 % As of December 31, 2023, the Company was in compliance with all financial maintenance covenants as required by the Second A&R Credit Agreement. Sale-Leaseback Financing Transaction On September 29, 2022, LC LLC and Royal Oak Acquisitions, LLC (the “Purchaser”) consummated the purchase of the real property under a sale and leaseback transaction, with an aggregate value of approximately $7.8 million (a purchase price of approximately $5.4 million and $2.4 million in tenant improvement allowances), pursuant to a purchase agreement under which the Purchaser purchased from LC LLC the Company’s facility and real property in Pontiac, MI (collectively, the “Pontiac Facility”). In connection with the sale and leaseback transaction, LC LLC and Featherstone St Pontiac MI LLC (the “Landlord”) entered into a Lease Agreement (the “Lease Agreement”), dated September 29, 2022 (the “Lease Effective Date”) for the Pontiac Facility. Commencing on the Lease Effective Date, pursuant to the Lease Agreement, LC LLC has leased the Pontiac Facility, subject to the terms and conditions of the Lease Agreement. The Lease Agreement provides for a term of 25 years (the “Primary Term”). The Lease Agreement also provides LC LLC with the option to extend the Primary Term by two separate renewal terms of 5 years each (each a “Renewal Term”). Under the terms of the Lease Agreement, the Company’s annual minimum rent is $499,730, payable in monthly installments, subject to annual increases of approximately 2.5% each year under the Primary Term and for each year under the Renewal Terms, if exercised. LC LLC has a one-time option to terminate the Lease Agreement effective on the last day of the fifteenth lease year by providing written notice to the Landlord as more fully set forth in the Lease Agreement. The one-time termination option of the Lease Agreement would require LC LLC to pay to the Landlord a termination fee of approximately $1.7 million. Pursuant to the terms and conditions set forth in the Lease Agreement, the Landlord has agreed to provide LC LLC with a tenant improvement allowance in an amount up to $2.4 million. LC LLC is responsible for the initial capital outlay and completion of the agreed upon improvement work. The Landlord will subsequently reimburse LC LLC for such items up to the stated allowance amount. The Company accounted for the sale and leaseback arrangement as a financing transaction in accordance with ASC Topic 842, “ Leases ,” as the Lease Agreement was determined to be a finance lease. The Company concluded the Lease Agreement met the qualifications to be classified as a finance lease due to the significance of the present value of the lease payments, using an implicit rate of 11.11% to reflect the Company’s incremental borrowing rate associated with the $5.4 million purchase price as of the Lease Agreement date, compared to the fair value of the Pontiac Facility. The implicit rate associated with the aggregate purchase value, inclusive of tenant improvement allowances, was 6.53% as of the Lease Agreement date. The presence of a finance lease indicates that control of the Pontiac Facility has not transferred to the Purchaser and, as such, the transaction was deemed a failed sale-leaseback and must be accounted for as a financing arrangement. As a result of this determination, the Company is viewed as having received the sale proceeds from the Purchaser in the form of a hypothetical loan collateralized by its leased facilities. The hypothetical loan is payable as principal and interest in the form of “lease payments” to the Purchaser. Principal repayments are recorded as a reduction to the financing liability. The Company will not derecognize the Pontiac Facility from its books for accounting purposes until the lease ends. No gain or loss was recognized under GAAP related to the sale and leaseback arrangement. As of December 31, 2023 , the financing liability was $5.0 million, net of issuance costs, which was recognized within other long-term debt on the Company's consolidated balance sheets. For the year ended December 31, 2023 and 2022 , $0.5 million and less than $0.1 million of |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity The Company’s second amended and restated certificate of incorporation currently authorizes the issuance of 100,000,000 shares of common stock, par value $0.0001, and 1,000,000 shares of preferred stock, par value $0.0001. Warrants In conjunction with the Company's initial public offering, the Company issued Public Warrants, Private Warrants and $15 Exercise Price Sponsor Warrants. The Company issued certain Merger Warrants and Additional Merger Warrants in conjunction with the Company's business combination with LHLLC in July 2016 (the “Business Combination”). On July 20, 2021, the Public Warrants, Private Warrants, and Additional Merger Warrants expired by their terms. During 2023, 600,000 $15 Exercise Price Sponsor Warrants and 606,476 Merger Warrants (each defined below) were exercised on a cashless basis by the holders of the warrants, which resulted in the warrants being converted into 167,564 and 274,742 shares of the Company's common stock, respectively. The remaining 23,167 unexercised Merger Warrants expired by their terms on July 20, 2023. The following table summarizes the underlying shares of common stock with respect to outstanding warrants: December 31, 2023 December 31, 2022 $15 Exercise Price Sponsor Warrants (1)(2) — 600,000 Merger Warrants (3)(4) — 629,643 Total — 1,229,643 (1) Exercisable for one share of common stock at an exercise price of $15.00 per share (“$15 Exercise Price Sponsor Warrants”). (2) Issued under a warrant agreement dated July 15, 2014, between Continental Stock Transfer and Trust Company, as warrant agent, and the Company. (3) Exercisable for one share of common stock at an exercise price of $12.50 per share (“Merger Warrants”). (4) Issued to the sellers of LHLLC. Incentive Plan Upon the consummation of the Company’s Business Combination, the Company adopted an omnibus incentive plan (the “Omnibus Incentive Plan”) pursuant to which equity awards may be granted thereunder. On March 25, 2022, the Board of Directors approved certain additional amendments to the Company's Omnibus Incentive Plan (the “2022 Amended and Restated Omnibus Incentive Plan”) to increase the number of shares of the Company's common stock that may be issued pursuant to awards by 350,000, for a total of 2,600,000 shares, and extended the term of the plan so that it will expire on the tenth anniversary of the date the stockholders approve the 2022 Amended and Restated Omnibus Incentive Plan. The amendments were approved by the Company's stockholders at the Annual Meeting held on June 22, 2022. On March 29, 2023, the Board of Directors approved certain amendments to the Company's Omnibus Incentive Plan (the “2023 Amended and Restated Omnibus Incentive Plan”) to increase the number of shares of the Company's common stock that may be issued pursuant to awards by 450,000, for a total of 3,050,000 shares, and extended the term of the plan so that it will expire on the tenth anniversary of the date the stockholders approve the 2023 Amended and Restated Omnibus Incentive Plan. The amendments were acted upon by the Company's stockholders at the Annual Meeting held on June 22, 2023. See Note 17 – Management Incentive Plans for a discussion of the Company's management incentive plans for RSUs granted, vested, forfeited and remaining unvested. Share Repurchase Program In September 2022, the Company announced that its Board of Directors approved a share repurchase program (the “Share Repurchase Program”) to repurchase shares of its common stock for an aggregate purchase price not to exceed $2.0 million. The share repurchase authority was valid through September 29, 2023. Share repurchases may have been executed through various means, including, without limitation, open market transactions, privately negotiated transactions or by other means in accordance with federal securities laws. The Share Repurchase Program did not obligate the Company to acquire any particular amount of common stock, and the program may have been suspended or terminated by the Company at any time at its discretion without prior notice. Through September 29, 2023, the Company has made share repurchases of approximately $2.0 million under its Share Repurchase Program. Employee Stock Purchase Plan Upon approval of the Company's stockholders on May 30, 2019, the Company adopted the Limbach Holdings, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”). On January 1, 2020, the ESPP went into effect. The ESPP enables eligible employees, as defined by the ESPP, the right to purchase the Company’s common stock through payroll deductions during consecutive subscription periods at a purchase price of 85% of the fair market value of a common share at the end of each offering period. Annual purchases by participants are limited to the number of whole shares that can be purchased by an amount equal to ten percent of the participant's compensation or $5,000, whichever is less. Each offering period of the ESPP lasts six months, commencing on January 1st and July 1st of each year. The amounts collected from participants during a subscription period are used on the exercise date to purchase full shares of common stock. Participants may withdraw from an offering before the exercise date and obtain a refund of amounts withheld through payroll deductions. Compensation cost, representing the 15% discount applied to the fair market value of common stock, is recognized on a straight-line basis over the six-month vesting period during which employees perform related services. Under the ESPP, 500,000 shares are authorized to be issued. For the years ended December 31, 2023 and 2022, the Company issued 17,661 and 37,490 shares of its common stock, respectively, to participants in the ESPP who contributed to the plan during these periods. As of December 31, 2023, 388,956 shares remain available for future issuance under the ESPP. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company believes that the carrying amounts of its financial instruments, including cash and cash equivalents, trade accounts receivable and accounts payable, consist primarily of instruments without extended maturities, which approximate fair value primarily due to their short-term maturities and low risk of counterparty default. The Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents. Cash equivalents as of December 31, 2023 consisted of overnight repurchase agreements in which cash from the Company's main operating checking account is invested overnight in highly liquid, short term investments, one U.S. Treasury Bill and certain investments in money market funds sponsored by a large financial institution. The Company had no such investments as of December 31, 2022. For the year ended December 31, 2023, the Company recognized interest income in the aggregate of approximately $1.2 million associated with its overnight repurchase agreements, U.S. Treasury Bills and money market funds, respectively. The Company has not experienced any losses in its cash and cash equivalents and management believes the Company is not exposed to significant credit risk with respect to such accounts. Fair Value at Reporting Date Using (in thousands) December 31, 2023 Level 1 Level 2 Level 3 Cash equivalents: Overnight repurchase agreements $ 43,959 $ 43,959 U.S. Treasury Bills 10,000 10,000 $ — $ — Money market fund 3,750 3,750 — — Total $ 57,709 $ 57,709 $ — $ — Second A&R Wintrust Revolving Loan The Company also believes that the carrying value of the Second A&R Wintrust Revolving Loan approximates its respective fair value due to the variable rate on such debt. As of December 31, 2023, the Company determined that the fair value of the Second A&R Wintrust Revolving Loan was $10.0 million. Such fair value was determined using discounted estimated future cash flows using level 3 inputs. Earnout Payments As a part of the total consideration for the Jake Marshall Transaction, the former owners of JMLLC and CSLLC may receive up to an aggregate of $6.0 million in cash, consisting of two tranches of $3.0 million, as defined in the purchase agreement, if the gross profit of the acquired companies equals or exceeds $10.0 million in (i) the approximately 12-month period from closing through December 31, 2022 (the “2022 Jake Marshall Earnout Period”) or (ii) fiscal year 2023 (the “2023 Jake Marshall Earnout Period”), respectively (collectively, the “Jake Marshall Earnout Payments”). To the extent, however, that the gross profit of the acquired companies is less than $10.0 million, but exceeds $8.0 million, during any of the 2022 Jake Marshall Earnout Period or 2023 Jake Marshall Earnout Period, the $3.0 million amount will be prorated for such period. The Company initially recognized $3.1 million in contingent consideration, of which the entire balance was included in other long-term liabilities in the Company’s condensed consolidated balance sheets on December 2, 2021. The fair value of contingent Jake Marshall Earnout Payments is based on generating growth rates on the projected gross margins of the acquired entities and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. In April 2023, the Company made a $3.0 million payment to the former owners of JMLLC and CSLLC related to the 2022 Jake Marshall Earnout Period. As a part of the total consideration for the ACME Transaction, the Company recognized $1.5 million in contingent consideration on the ACME Effective Date. The fair value of contingent ACME Earnout Payments is based on generating growth rates on the projected gross margins of ACME and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. The Company determined the initial fair value of the ACME Earnout Payments based on the Monte Carlo Simulation method, which represented a Level 3 measurement. As of the Effective Date, the ACME Earnout Payments associated with the ACME Transaction were valued utilizing discount rates between 12.96% and 21.64%. The discount rates were calculated using the build-up method with a risk-free rate commensurate with the term of the ACME Earnout Payments based on the U.S. Treasury Constant Maturity Yield and certain metric risk premiums determined with reference to a long-term risk free rate, a weighted average cost of capital and certain adjustments for operational leverage. As a part of the total consideration for the Industrial Air Transaction, the Company recognized $3.2 million in contingent consideration on the IA Effective Date. The fair value of contingent IA Earnout Payments is based on generating growth rates on the projected gross margins of Industrial Air and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. The Company determined the initial fair value of the IA Earnout Payments based on the Monte Carlo Simulation method, which represented a Level 3 measurement. As of the IA Effective Date, the IA Earnout Payments associated with the Industrial Air Transaction were valued utilizing a discount rate of 13.68%. The discount rates were calculated using the build-up method with a risk-free rate commensurate with the term of the IA Earnout Payments based on the U.S. Treasury Constant Maturity Yield and certain metric risk premiums determined with reference to a long-term risk free rate, a weighted average cost of capital and certain adjustments for operational leverage. Based on the Company’s ongoing assessment of the fair value of contingent earnout liabilities, the Company recorded a net increase in the estimated fair value of such liabilities of $0.7 million and $2.3 million for the years ended December 31, 2023 and 2022, respectively, which was presented in change in fair value of contingent consideration in the Company's consolidated statements of operations. The Company determined the fair value of the earnout payments by utilizing the Monte Carlo Simulation method, which represents a Level 3 measurement. The following table presents the carrying values of the Company's contingent earnout payment obligations included in the accompanying condensed consolidated balance sheets, which approximated fair value at December 31, 2023 and 2022. Fair Value at Reporting Date Using (in thousands) December 31, 2023 Level 1 Level 2 Level 3 Accrued expenses and other current liabilities: 2023 Jake Marshall Earnout Period $ 3,000 $ — $ — $ 3,000 First ACME Earnout Period 429 — — 429 First IA Earnout Period 2,290 — $ — 2,290 Other long-term liabilities: Second ACME Earnout Period 1,188 — — 1,188 Second IA Earnout Period 875 — — 875 Total $ 7,782 $ — $ — $ 7,782 Fair Value at Reporting Date Using December 31, 2022 Level 1 Level 2 Level 3 Accrued expenses and other current liabilities: 2022 Jake Marshall Earnout Period (1) $ 2,859 $ — $ — $ 2,859 Other long-term liabilities: — 2023 Jake Marshall Earnout Period 2,515 — — 2,515 Total $ 5,374 $ — $ — $ 5,374 (1) In April 2023, the Company made a $3.0 million payment to the former owners of JMLLC and CSLLC related to the 2022 Jake Marshall Earnout Period. Interest Rate Swap |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earning per Share Earnings per Share The Company calculates earnings per share in accordance with ASC Topic 260 - Earnings Per Share (“EPS”) . Basic earnings per common share applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding and assumed to be outstanding. Diluted EPS assumes the dilutive effect of outstanding common stock warrants, shares issued in conjunction with the Company’s ESPP (defined in Note 8) and restricted stock units (“RSUs”), all using the treasury stock method. The following table sets forth the computation of the basic and diluted earnings per share attributable to the Company's common shareholders for the years ended December 31, 2023 and 2022: For the Years Ended (in thousands, except per share amounts) December 31, 2023 December 31, 2022 EPS numerator: Net income $ 20,754 $ 6,799 EPS denominator: Weighted average shares outstanding – basic 10,773 10,425 In-the-money warrants 249 — Nonvested restricted stock units 789 247 Employee stock purchase plan 1 5 Weighted average shares outstanding – diluted 11,812 10,677 EPS: Basic $ 1.93 $ 0.65 Diluted $ 1.76 $ 0.64 The following table summarizes the securities that were antidilutive or out-of-the-money, and therefore, were not included in the computations of diluted income per common share: For the Years Ended December 31, 2023 December 31, 2022 Out-of-the-money warrants — 1,229,643 Performance and market-based RSUs (1) 95 — Employee stock purchase plan 1,044 1,573 Total 1,139 1,231,216 (1) For the year ended December 31, 2022, certain market-based awards were not included in the computation of diluted income per common share because the market conditions were not satisfied during the periods and would not be satisfied if the reporting date was at the end of the contingency period. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is taxed as a C Corporation. Provision for Income Taxes The Company’s provision for income taxes relating to continuing operations consists of the following: For the Years Ended (in thousands) December 31, 2023 December 31, 2022 Current tax provision U.S. Federal $ 5,851 $ 2,613 State and local 1,845 695 Total current tax provision 7,696 3,308 Deferred tax provision U.S. Federal (253) (584) State and local (97) 85 Total deferred tax provision (350) (499) Income tax provision $ 7,346 $ 2,809 The provision for income taxes for the years ended December 31, 2023 and 2022 resulted in effective tax rates on continuing operations of 26.1% and 29.2%, respectively. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows: For the Years Ended December 31, 2023 2022 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal tax effect 4.8 % 6.4 % Stock based compensation – restricted stock (1.1) % 1.4 % Return to provision adjustment (0.2) % (0.1) % Permanent differences 1.4 % 1.3 % Tax credits (0.5) % (0.9) % Other 0.6 % — % Effective tax rate 26.1 % 29.2 % The Company is subject to taxation in various jurisdictions. The Company’s 2020 through 2022 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2020 and forward. Deferred Tax Assets (Liabilities) The significant components of deferred tax assets (liabilities) were as follows: As of As of December 31, (in thousands) 2023 2022 Deferred tax assets: Accrued expenses $ 699 $ 950 Allowance for doubtful accounts 74 60 Intangibles 435 463 Goodwill 3,057 3,301 Startup costs 57 68 Stock-based compensation 1,804 1,066 Research and development expenses 1,276 640 Lease liabilities 6,193 6,280 Accrued bonuses and commissions 424 253 Total deferred tax assets 14,019 13,081 Deferred tax liabilities: Fixed assets (3,413) (3,248) Right-of-use assets (4,566) (4,684) Percentage of completion (814) (241) Interest (47) (79) Total deferred tax liabilities (8,840) (8,252) Net deferred tax asset $ 5,179 $ 4,829 In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. After giving consideration to these factors, management concluded that it was more likely than not that the deferred tax assets would be fully realized, and as a result, no valuation allowance against the deferred tax assets was deemed necessary at December 31, 2023 and 2022. At December 31, 2023 and 2022, the Company had no net operating loss carryforwards. Liabilities for Uncertain Tax Positions The Company had no unrecognized tax benefits as of December 31, 2023 and 2022. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments As discussed in Note 1, the Company operates in two segments (i) GCR, in which the Company generally manages new construction or renovation projects that involve primarily mechanical, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) ODR, in which the Company provides maintenance or service primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company's CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer. In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the GCR work performed at branches into one GCR reportable segment and all of the ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation. On January 17, 2023, the Company announced its planned transition succession, pursuant to which Charles A. Bacon III stepped down as President and Chief Executive Officer on March 28, 2023, and Michael M. McCann, the Company’s former Executive Vice President and Chief Operating Officer, was appointed President and Chief Executive Officer. Following the transition, the Company revised its segment presentation to align with how Mr. McCann assesses performance and makes resource allocation decisions for its operating segments, which is based on segment revenue and segment gross profit. Selling, general and administrative ("SG&A") expenses are no longer reported on a segment basis as the Company's current CODM does not review discrete segment financial information for SG&A in order to assess performance. Interest expense is not allocated to segments because of the corporate management of debt service. The Company restated segment information for the historical periods presented herein to conform to the current presentation. This change in segment presentation does not affect the Company’s consolidated statements of operations, balance sheets or statements of cash flows. All of the Company’s identifiable assets are located in the United States, which is where the Company is domiciled. The Company does not have sales outside of the United States. For the year ended December 31, 2023, no GCR or ODR segment customers accounted for 10% or more of the Company’s consolidated total revenue. For the year ended December 31, 2022, one GCR segment customer accounted for approximately 11% of consolidated total revenue. Consolidated segment information for the periods presented is as follows: For the Years Ended December 31, (in thousands) 2023 2022 Statement of Operations Data: Revenue: GCR $ 254,392 $ 280,379 ODR 261,958 216,403 Total revenue 516,350 496,782 Gross profit: GCR 43,200 38,622 ODR 76,090 55,119 Total gross profit 119,290 93,741 Selling, general and administrative (1) 87,397 77,879 Change in fair value of contingent consideration 729 2,285 Amortization of intangibles 1,880 1,567 Operating income $ 29,284 $ 12,010 Interest expense (2,046) (2,144) Interest income 1,217 — Loss on early termination of operating lease — (849) Loss on early debt extinguishment (311) — (Loss) gain on change in fair value of interest rate swap (124) 310 Gain on disposition of property and equipment 80 281 Total unallocated amounts (1,184) (2,402) Total consolidated income before income taxes $ 28,100 $ 9,608 (1) Included within selling, general and administrative expenses was $4.9 million and $2.7 million of stock based compensation expense for the years ended December 31, 2023 and 2022, respectively. The Company does not identify capital expenditures and total assets by segment in its internal financial reports due in part to the shared use of a centralized fleet of vehicles and specialized equipment. Interest expense is also not allocated to segments because of the Company’s corporate management of debt service, including interest. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal . The Company is continually engaged in administrative proceedings, arbitrations, and litigation with owners, general contractors, suppliers, employees, former employees and other unrelated parties, all arising in the ordinary courses of business. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the consolidated financial statements. In the opinion of the Company’s management, the current belief is that the results of these actions will not have a material adverse effect on the financial position, results of operations, or cash flows of the Company. On January 23, 2020, plaintiff, Bernards Bros. Inc. (“Bernards”), filed a complaint against the Company in Superior Court of the State of California for the County of Los Angeles. The complaint alleges that the Company’s Southern California business unit refused to honor a proposal made to Bernards to act as a subcontractor on a construction project, and that, as a result of the wrongful failure to honor the proposal, Bernards suffered damages in excess of $3.0 million plus interest, including alleged increased costs for hiring a different subcontractor to perform the work. The Company has vigorously defended the suit. Per the agreement of the Company and Bernards, in January 2022, the Court appointed a private referee to manage the case and adjudicate the dispute. A trial took place before the referee in January 2023, and on April 30, 2023, the referee issued an Amended Statement of Decision awarding Bernards approximately $2.2 million. As of December 31, 2022, the Company had determined that a loss was probable, and, as such, recorded an estimated loss contingency in the amount of $2.2 million, which is included in accrued expenses and other current liabilities reported within the Company’s consolidated balance sheets. In addition, the estimated loss contingency was recorded within selling, general and administrative expenses on the Company’s consolidated statements of operations. In November 2023, the parties settled the Bernard’s matter, resulting in the Company paying Bernards $2.2 million. Surety. The terms of its construction contracts frequently require that the Company obtain from surety companies, and provide to its customers, payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety Bonds secure its payment and performance obligations under such contracts, and the Company has agreed to indemnify the surety companies for amounts, if any, paid by them in respect of Surety Bonds issued on its behalf. In addition, at the request of labor unions representing certain of the Company's employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, the Company's bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2023, the Company had approximately $90.9 million in surety bonds outstanding. The Surety Bonds are issued by surety companies in return for premiums, which vary depending on the size and type of bond. Collective Bargaining Agreements. Many of the Company’s craft labor employees are covered by collective bargaining agreements. The agreements require the Company to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If the Company withdraws from any of the multi-employer pension plans or if the plans were to otherwise become underfunded, the Company could incur additional liabilities related to these plans. Although the Company has been informed that some of the multi-employer pension plans to which it contributes have been classified as “critical” status, the Company is not currently aware of any significant liabilities related to this issue. Self-insurance . The Company is substantially self-insured for workers’ compensation and general liability claims, in the view of the relatively high per-incident deductibles the Company absorbs under its insurance arrangements for these risks. The Company purchases workers’ compensation and general liability insurance under policies with per-incident deductibles of $250,000 per occurrence and a $3.9 million maximum aggregate deductible loss limit per year. Losses incurred over primary policy limits are covered by umbrella and excess policies up to specified limits with multiple excess insurers. The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as current and non-current liabilities. The liability is determined by establishing a reserve for each reported claim on a case-by-case basis based on the nature of the claim and historical loss experience for similar claims plus an allowance for the cost of incurred but not reported claims. The current portion of the liability is included in accrued expenses and other current liabilities on the consolidated balance sheets. The non-current portion of the liability is included in other long-term liabilities on the consolidated balance sheets. The Company is self-insured related to medical and dental claims under policies with annual per-claimant and annual aggregate stop-loss limits. The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as a current liability in accrued expenses and other current liabilities. The components of the self-insurance liability as of December 31, 2023 and 2022 are as follows: (in thousands) December 31, 2023 December 31, 2022 Current liability — workers' compensation and general liability $ 188 $ 158 Current liability — medical and dental 819 557 Non-current liability 645 343 Total liability $ 1,652 $ 1,058 Restricted cash $ 65 $ 113 The restricted cash balance represents an imprest cash balance set aside for the funding of workers' compensation and general liability insurance claims. This amount is replenished either when depleted or at the beginning of each month. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases real estate, trucks and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term. The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased vehicles. For all leased asset classes, the Company has elected to not separate non-lease components from lease components and will account for each separate lease component and non-lease component associated with the lease as a single lease component. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. For the Company’s leased vehicles, the Company uses the interest rate implicit in its leases with the lessor to discount lease payments at the lease commencement date. When the implicit rate is not readily available, as is the case with the Company’s real estate leases, the Company uses quoted borrowing rates on its secured debt. Related Party Lease Agreements. In conjunction with the closing of the Jake Marshall Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of JMLLC who became a full-time employee of the Company. The lease term is ten years and includes an option to extend the lease for two successive periods of two years each through November 2035. Base rent for the term of the lease is $37,500 per month for the first five years with payment commencing on January 1, 2022. The fixed rent payment is escalated to $45,000 per month for years 6 through 10 of the lease term. Fixed rent payments for the extension term shall be increased from $45,000 by the percentage increase, if any, in the consumer price index from the lease commencement date. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. In conjunction with the closing of the ACME Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of ACME who became a full-time employee of the Company. The lease term of the lease runs through December 31, 2024 and includes an option to extend the lease for one successive period of one year through December 2025. Base rent for the term of the lease is $17,000 per month for the first six months with payment commencing on July 1, 2023. The fixed rent payment is escalated to $18,000 per month for the twelve month period ending December 31, 2024. Fixed rent payments for the extension term shall be increased to $19,000. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. In conjunction with the closing of the Industrial Air Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of Industrial Air who became a full-time employee of the Company. The lease term of the lease runs through August 31, 2026 and includes an option to extend the lease for two successive periods of three years each through August 2032. Base rent for the term of the lease is $26,500 per month for the first thirty-three months with payment commencing on November 1, 2023. The fixed rent payment is escalated to $27,563 per month for the first three year extension period ending August 31, 2029 and to $28,941 per month for the second three year extension period ending on August 31, 2032. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. Southern California Sublease . In June 2021, the Company entered into a sublease agreement with a third party for the entire ground floor of its leased space in Southern California, consisting of 71,787 square feet. Under the terms of the sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.6 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The initial lease term commenced in September 2021 and continues through April 30, 2027. As of December 31, 2023, the Company remains obligated under the original lease for such office space and, in the event the sublessee of such office space fails to satisfy its obligations under the sublease, the Company would be required to satisfy its obligations directly to the landlord under such original lease. In addition, during the first quarter of 2022, the Company entered into an amendment to the aforementioned sublease agreement, which, among other things, expanded the sublease premises to include the entire second floor of its leased space in Southern California, consisting of 16,720 square feet. Under the terms of the amended sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.8 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The amended sublease term commenced in March 2022 and continues through April 30, 2027. For the years ended December 31, 2023 and 2022, the Company recorded $1.2 million and $1.1 million of income in selling, general and administrative expenses Pittsburgh Lease Termination . In March, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) to terminate, effective March 31, 2022, the lease associated with the Company’s office space located in Pittsburgh, Pennsylvania, which previously served as its corporate headquarters. Absent the Lease Termination Agreement, the lease would have expired in accordance with its terms in July 2025. Pursuant to the Lease Termination Agreement, in exchange for allowing the Company to terminate the lease early, the Company agreed to pay a termination fee in the aggregate of approximately $0.7 million in 16 equal monthly installments commencing on April 1, 2022. The Company recognized the full termination fee expense during the first quarter of 2022. In connection with the lease termination, the Company recognized a gain of $0.1 million associated with the derecognition of the operating lease right-of-use asset and corresponding operating lease liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvements and moving expenses. The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2023 December 31, 2022 Assets Operating Operating lease right-of-use assets (1)(2) $ 19,727 $ 18,288 Finance Property and equipment, net (3)(4) 9,561 7,402 Total lease assets $ 29,288 $ 25,690 Liabilities Current Operating Current operating lease liabilities $ 3,627 $ 3,562 Finance Current portion of long-term debt 2,680 2,135 Noncurrent Operating Long-term operating lease liabilities 16,037 15,643 Finance Long-term debt (5) 10,018 8,170 Total lease liabilities $ 32,362 $ 29,510 (1) Operating lease assets are recorded net of accumulated amortization of $13.6 million and $12.2 million at December 31, 2023 and 2022, respectively. (2) As a result of the Industrial Air Transaction, the Company recognized a $1.0 million below-market lease, which was recorded as an increase to the Company’s operating lease right-of-use assets on its consolidated balance sheet at December 31, 2023. The below-market lease will be amortized to amortization expense over the remaining lease term. (3) Finance lease assets are recorded net of accumulated amortization of $4.5 million and $6.0 million at December 31, 2023 and 2022, respectively. (4) Includes approximately $2.4 million and $2.6 million of net property assets associated with the Company's Pontiac Facility at December 31, 2023 and 2022, respectively. (5) Includes approximately $5.4 million associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. The following table summarizes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2023 December 31, 2022 Operating lease cost Cost of revenue (1) $ 2,184 $ 2,627 Operating lease cost Selling, general and administrative (1) 2,550 2,555 Finance lease cost: Amortization Cost of revenue (2) 2,753 2,687 Interest Interest expense, net (2) 384 264 Total lease cost $ 7,871 $ 8,133 (1) Operating lease costs recorded in cost of revenue includes $0.4 million and $0.5 million of variable lease costs for the years ended December 31, 2023 and 2022, respectively. In addition, $0.5 million of variable lease costs are included in selling, general and administrative expenses for both years ended December 31, 2023 and 2022, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.7 million and $3.8 million of variable leases costs for the years ended December 31, 2023 and 2022, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2023 and 2022. The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of December 31, 2023 were as follows (in thousands): Finance Lease Obligations Operating Lease Obligations Year ending: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Total Operating Sublease Receipts (2) 2024 $ 3,041 $ 515 $ 3,556 $ 3,682 $ 981 $ 4,663 $ 912 2025 2,284 528 2,812 3,478 765 4,243 939 2026 1,768 542 2,310 3,383 770 4,153 967 2027 872 555 1,427 2,318 871 3,189 326 2028 122 569 691 1,376 871 2,247 — Thereafter 48 13,733 13,780 844 4,997 5,841 — Total minimum lease payments 8,135 16,442 24,576 15,081 9,255 24,336 $ 3,145 Financing Component (3) (788) (11,090) (11,878) (2,499) (2,173) (4,672) Net present value of minimum lease payments 7,347 5,351 12,698 12,582 7,082 19,664 Less: current portion of finance and operating lease obligations (2,680) — (2,680) (3,009) (618) (3,627) Long-term finance and operating lease obligations $ 4,667 $ 5,351 $ 10,018 $ 9,573 $ 6,464 $ 16,037 (1) Associated with the aforementioned related party leases entered into with former members of JMLLC, ACME and Industrial Air. (2) Associated with the aforementioned third party sublease. (3) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. The following is a summary of the lease terms and discount rates as of: December 31, 2023 December 31, 2022 Weighted average lease term (in years): Operating 6.54 6.98 Finance (1) 3.10 2.73 Weighted average discount rate: Operating 6.74 % 4.76 % Finance (1) 5.33 % 5.06 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,705 $ 5,055 Operating cash flows from finance leases 343 264 Financing cash flows from finance leases 2,737 2,734 Right-of-use assets exchanged for lease liabilities Operating leases $ 3,135 $ — Finance leases 5,219 2,634 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 1,112 $ 2,455 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (93) $ (77) |
Leases | Leases The Company leases real estate, trucks and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term. The Company's arrangements include certain non-lease components such as common area and other maintenance for leased real estate, as well as mileage, fuel and maintenance costs related to leased vehicles. For all leased asset classes, the Company has elected to not separate non-lease components from lease components and will account for each separate lease component and non-lease component associated with the lease as a single lease component. The Company does not guarantee any residual value in its lease agreements, and there are no material restrictions or covenants imposed by lease arrangements. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. For the Company’s leased vehicles, the Company uses the interest rate implicit in its leases with the lessor to discount lease payments at the lease commencement date. When the implicit rate is not readily available, as is the case with the Company’s real estate leases, the Company uses quoted borrowing rates on its secured debt. Related Party Lease Agreements. In conjunction with the closing of the Jake Marshall Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of JMLLC who became a full-time employee of the Company. The lease term is ten years and includes an option to extend the lease for two successive periods of two years each through November 2035. Base rent for the term of the lease is $37,500 per month for the first five years with payment commencing on January 1, 2022. The fixed rent payment is escalated to $45,000 per month for years 6 through 10 of the lease term. Fixed rent payments for the extension term shall be increased from $45,000 by the percentage increase, if any, in the consumer price index from the lease commencement date. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. In conjunction with the closing of the ACME Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of ACME who became a full-time employee of the Company. The lease term of the lease runs through December 31, 2024 and includes an option to extend the lease for one successive period of one year through December 2025. Base rent for the term of the lease is $17,000 per month for the first six months with payment commencing on July 1, 2023. The fixed rent payment is escalated to $18,000 per month for the twelve month period ending December 31, 2024. Fixed rent payments for the extension term shall be increased to $19,000. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. In conjunction with the closing of the Industrial Air Transaction, the Company entered into an operating lease for certain land and facilities owned by a former member of Industrial Air who became a full-time employee of the Company. The lease term of the lease runs through August 31, 2026 and includes an option to extend the lease for two successive periods of three years each through August 2032. Base rent for the term of the lease is $26,500 per month for the first thirty-three months with payment commencing on November 1, 2023. The fixed rent payment is escalated to $27,563 per month for the first three year extension period ending August 31, 2029 and to $28,941 per month for the second three year extension period ending on August 31, 2032. In addition, under the agreement, the Company is required to pay its share of estimated property taxes and operating expenses, both of which are variable lease expenses. Southern California Sublease . In June 2021, the Company entered into a sublease agreement with a third party for the entire ground floor of its leased space in Southern California, consisting of 71,787 square feet. Under the terms of the sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.6 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The initial lease term commenced in September 2021 and continues through April 30, 2027. As of December 31, 2023, the Company remains obligated under the original lease for such office space and, in the event the sublessee of such office space fails to satisfy its obligations under the sublease, the Company would be required to satisfy its obligations directly to the landlord under such original lease. In addition, during the first quarter of 2022, the Company entered into an amendment to the aforementioned sublease agreement, which, among other things, expanded the sublease premises to include the entire second floor of its leased space in Southern California, consisting of 16,720 square feet. Under the terms of the amended sublease agreement, the sublessee is obligated to pay the Company base rent of approximately $0.8 million per year, which is subject to a 3.0% annual rent increase, plus certain operating expenses and other costs. The amended sublease term commenced in March 2022 and continues through April 30, 2027. For the years ended December 31, 2023 and 2022, the Company recorded $1.2 million and $1.1 million of income in selling, general and administrative expenses Pittsburgh Lease Termination . In March, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) to terminate, effective March 31, 2022, the lease associated with the Company’s office space located in Pittsburgh, Pennsylvania, which previously served as its corporate headquarters. Absent the Lease Termination Agreement, the lease would have expired in accordance with its terms in July 2025. Pursuant to the Lease Termination Agreement, in exchange for allowing the Company to terminate the lease early, the Company agreed to pay a termination fee in the aggregate of approximately $0.7 million in 16 equal monthly installments commencing on April 1, 2022. The Company recognized the full termination fee expense during the first quarter of 2022. In connection with the lease termination, the Company recognized a gain of $0.1 million associated with the derecognition of the operating lease right-of-use asset and corresponding operating lease liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvements and moving expenses. The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2023 December 31, 2022 Assets Operating Operating lease right-of-use assets (1)(2) $ 19,727 $ 18,288 Finance Property and equipment, net (3)(4) 9,561 7,402 Total lease assets $ 29,288 $ 25,690 Liabilities Current Operating Current operating lease liabilities $ 3,627 $ 3,562 Finance Current portion of long-term debt 2,680 2,135 Noncurrent Operating Long-term operating lease liabilities 16,037 15,643 Finance Long-term debt (5) 10,018 8,170 Total lease liabilities $ 32,362 $ 29,510 (1) Operating lease assets are recorded net of accumulated amortization of $13.6 million and $12.2 million at December 31, 2023 and 2022, respectively. (2) As a result of the Industrial Air Transaction, the Company recognized a $1.0 million below-market lease, which was recorded as an increase to the Company’s operating lease right-of-use assets on its consolidated balance sheet at December 31, 2023. The below-market lease will be amortized to amortization expense over the remaining lease term. (3) Finance lease assets are recorded net of accumulated amortization of $4.5 million and $6.0 million at December 31, 2023 and 2022, respectively. (4) Includes approximately $2.4 million and $2.6 million of net property assets associated with the Company's Pontiac Facility at December 31, 2023 and 2022, respectively. (5) Includes approximately $5.4 million associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. The following table summarizes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2023 December 31, 2022 Operating lease cost Cost of revenue (1) $ 2,184 $ 2,627 Operating lease cost Selling, general and administrative (1) 2,550 2,555 Finance lease cost: Amortization Cost of revenue (2) 2,753 2,687 Interest Interest expense, net (2) 384 264 Total lease cost $ 7,871 $ 8,133 (1) Operating lease costs recorded in cost of revenue includes $0.4 million and $0.5 million of variable lease costs for the years ended December 31, 2023 and 2022, respectively. In addition, $0.5 million of variable lease costs are included in selling, general and administrative expenses for both years ended December 31, 2023 and 2022, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.7 million and $3.8 million of variable leases costs for the years ended December 31, 2023 and 2022, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2023 and 2022. The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of December 31, 2023 were as follows (in thousands): Finance Lease Obligations Operating Lease Obligations Year ending: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Total Operating Sublease Receipts (2) 2024 $ 3,041 $ 515 $ 3,556 $ 3,682 $ 981 $ 4,663 $ 912 2025 2,284 528 2,812 3,478 765 4,243 939 2026 1,768 542 2,310 3,383 770 4,153 967 2027 872 555 1,427 2,318 871 3,189 326 2028 122 569 691 1,376 871 2,247 — Thereafter 48 13,733 13,780 844 4,997 5,841 — Total minimum lease payments 8,135 16,442 24,576 15,081 9,255 24,336 $ 3,145 Financing Component (3) (788) (11,090) (11,878) (2,499) (2,173) (4,672) Net present value of minimum lease payments 7,347 5,351 12,698 12,582 7,082 19,664 Less: current portion of finance and operating lease obligations (2,680) — (2,680) (3,009) (618) (3,627) Long-term finance and operating lease obligations $ 4,667 $ 5,351 $ 10,018 $ 9,573 $ 6,464 $ 16,037 (1) Associated with the aforementioned related party leases entered into with former members of JMLLC, ACME and Industrial Air. (2) Associated with the aforementioned third party sublease. (3) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. The following is a summary of the lease terms and discount rates as of: December 31, 2023 December 31, 2022 Weighted average lease term (in years): Operating 6.54 6.98 Finance (1) 3.10 2.73 Weighted average discount rate: Operating 6.74 % 4.76 % Finance (1) 5.33 % 5.06 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,705 $ 5,055 Operating cash flows from finance leases 343 264 Financing cash flows from finance leases 2,737 2,734 Right-of-use assets exchanged for lease liabilities Operating leases $ 3,135 $ — Finance leases 5,219 2,634 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 1,112 $ 2,455 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (93) $ (77) |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement Plan The Company maintains a 401(k) plan for eligible, participating employees. The Company contributes an amount equal to 100% of an employee’s salary reduction contributions up to 4% of such employee’s compensation in a given year, as defined by the plan and subject to IRS limitations. The Company’s mandatory contributions were $2.6 million for the year ended December 31, 2023, as compared to $2.4 million for the year ended December 31, 2022. The Company may make a discretionary profit sharing contribution to the 401(k) plan in accordance with plan provisions. The Company has full discretion to determine whether to make such a contribution, and the amount of such contribution. In order to share in the profit sharing contribution, employees must have satisfied the 401(k) Plan’s eligibility requirements and be employed on the last day of the year. Employees are not required to contribute any money to the 401(k) Plan in order to qualify for the Company profit sharing contribution. Any discretionary profit sharing contribution would be divided among participants eligible to share in the contribution for the year in the same proportion that the participant’s pay bears to the total pay of all participants. This means the amount allocated to each eligible participant’s account would, as a percentage of pay, be the same. No discretionary profit sharing contributions were made for the years ended December 31, 2023 or 2022. |
Multiemployer Pension Plans
Multiemployer Pension Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Multiemployer Pension Plans | Multiemployer Pension Plans The Company participates in approximately 40 multiemployer pension plans (“MEPPs”) that provide pension benefits to certain union employees in accordance with various collective bargaining agreements (“CBAs”). As of December 31, 2023, approximately 54% of the Company’s employees are members of collective bargaining units. As one of many employers who are obligated to contribute to these MEPPs, the Company is responsible with the other participating employers for any unfunded pension liabilities. The Company’s contributions to a particular MEPP are established by the applicable CBAs; however, the Company’s required contributions to a MEPP may increase based on the funded status of the individual MEPP and the legal requirements of the Pension Protection Act of 2006 (the “PPA”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) to improve their funded status. Factors that could impact the funded status of a MEPP include, without limitation, investment performance, changes in participant demographics, a decline in the number of actively employed covered employees, a decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions. If a contributing employer stops contributing to a MEPP, the unfunded obligations of the MEPP may be borne by the remaining contributing employers. Assets contributed to an individual MEPP are pooled with contributions made by other contributing employers; the pooled assets will be used to provide benefits to the Company’s employees and the employees of the other contributing employers. A FIP or RP requires a particular MEPP to adopt measures to correct its underfunded status. These measures may include, but are not limited to an increase in a contributing employer’s contribution rate, or changes to the benefits paid to retirees. In addition, the PPA requires that a 5% surcharge be levied on employer contributions for the first year commencing shortly after the date the employer receives notice that the MEPP is in critical status and a 10% surcharge on each succeeding year until a CBA is in place with terms and conditions consistent with the RP. If a MEPP has unfunded pension liabilities, the Company could be obligated to make additional payments to a MEPP if the Company either ceases to have an obligation to contribute to the MEPP under a CBA or significantly reduces the Company’s contributions to the MEPP because they reduce the number of employees who are covered by the relevant MEPP for various reasons, including, but not limited to, layoffs or closure of a subsidiary. The amount of such payments (known as a complete or partial withdrawal liability) would equal the Company’s proportionate share of the MEPPs unfunded vested benefits. Based on the information available to the Company from the MEPPs, the Company believes that some of the MEPPs to which they contribute are underfunded and are in “critical” or “endangered” status as those terms are defined by the PPA. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPPs’ current financial situation, the Company is unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether the Company’s participation in these MEPPs could have a material adverse impact on its financial condition, results of operations or liquidity. The nature and diversity of the Company’s business may result in volatility of the amount of contributions to a particular MEPP for any given period. That is because, in any given market, the Company could be working on a significant project and/or projects, which could result in an increase in the direct labor force and a corresponding increase in contributions to the MEPP(s) dictated by the applicable CBA. When that particular project(s) finishes and is not replaced, the level of direct labor would also decrease, as would the level of contributions to the particular MEPP(s). Additionally, the level of contributions to a particular MEPP could also be affected by the terms of the CBA, which could require at a particular time, an increase in the contribution rate and/or surcharges. Total contributions to the various union construction industry MEPP, welfare, training and other benefits programs in accordance with the CBAs were $31.8 million for the year ended December 31, 2023, as compared to $31.3 million for the year ended December 31, 2022. Of these amounts, total contributions to MEPPs accounted for $11.6 million and $12.6 million for the years ended December 31, 2023 and 2022, respectively. The following table presents the MEPPs in which the Company participates. Additionally, this table also lists the PPA Zone Status for MEPPs as the critical status (red zone-less than 65% funded), the endangered status (yellow-less than 80% funded), the seriously endangered status (orange-less than 80% funded and projects a credit balance deficit within seven years) or neither critical or endangered status (green-greater than 80% funded). The zone status represents the most recent available information for the respective MEPP, which in certain circumstances is 2022 for the 2023 year. These dates may not correspond with the Company’s calendar year contributions. The zone status is based on information received from the MEPPs and is certified by the MEPPs’ actuaries. The “FIP/RP Status” column indicates MEPPs for which a financial improvement plan (FIP) or rehabilitation plan (RP) has been adopted or implemented. Pension Fund EIN/Pension PPA Zone Status FIP/RP Status Contributions (in Contributions Surcharge Expiration date 2023 2022 2023 2022 Plumbers and Pipefitters Local Union No. 43 Pension Fund 62-6101288 / 001 Green Green N/A $ 1,500 $ 1,205 Yes No June-24 Pipefitters Local 636 Defined Benefit Pension Fund 38-3009873 / 001 Green Green N/A 1,439 1,483 No No May-26 Sheet Metal Workers Local Union No. 80 Pension Fund 38-6105633 / 001 Green Green N/A 1,255 1,245 Yes No May-26 Plumbers Local No 98 Defined Benefit Pension Fund 38-3031916 / 001 Green Yellow Implemented 1,175 1,371 Yes No May-25 Pipefitters Union Local No. 537 Pension Fund 51-6030859 / 001 Green Green N/A 1,140 1,204 No No Aug-25 Sheet Metal Workers Local 98 Pension Fund 31-6171213 / 001 Green Green N/A 830 1,232 Yes No May 23 Steamfitters Local Union No. 420 Pension Fund 23-2004424 / 001 Red Red Implemented 633 537 No No Apr-26 Plumbers & Pipefitters Local No 189 Pension Plan 31-0894807 / 001 Green Green N/A 592 596 Yes No May-25 United Association National Pension Fund 52-6152779 / 001 Green Green N/A 579 525 No No Ranging from May-23 - May-27 Sheet Metal Workers' National Pension Fund 52-6112463 / 001 Green Green N/A 540 792 No No Ranging from May-23 – Apr-26 Heating, Piping and Refrigeration Pension Fund 52-1058013 / 001 Green Green N/A 295 609 No No Jul-25 Plumbers & Pipefitters of Local Union No. 333 Pension Fund 38-3545518 / 005 Green Green N/A 345 393 Yes No May-27 Plumbers & Steamfitters Local 577 Pension Plan 31-6134953 /001 Red Red Implemented 330 316 Yes No May-26 Ironworkers Local 704 Pension Fund 62-6098036 / 001 Green Green N/A 236 46 No No Apr-26 Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 / 001 Green Green N/A 178 247 No No May-24 Sheet Metal Workers Local 7, Zone 1 Pension Plan 38-6234066 / 001 Green Yellow N/A 113 8 No No Apr-26 Steamfitters Local #449 Pension Plan 25-6032401 / 001 Green Green N/A 87 103 No No May-26 Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan 22-6109064 / 001 Green Green N/A 83 65 No No Jul-27 National Electrical Benefit Fund 53-0181657 / 001 Green Green N/A 65 81 No No May-24 United Association Local Union No. 322 Pension Plan 21-6016638 / 001 Red Red Implemented 27 25 No Yes Apr-24 Plumbers Local Union No. 690 Pension Fund 23-6405018 / 001 Green Green N/A 25 25 No No Apr-24 Airconditioning and Refrigeration Industry Retirement Trust Fund 95-6035386 / 001 Green Green N/A 8 74 No No Aug-24 Plumbers Union Local No. 12 Pension 04-6023174 / 001 Green Green N/A 5 14 No No Aug-25 Southern California Pipe Trades Retirement Fund 51-6108443 / 001 Green Green N/A 4 130 No No Aug-26 Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada 95-6052257 / 001 Green Yellow Implemented — 139 No No Jun-24 Laborers District Council Pension and Disability Trust Fund No. 2 52-0749130 / 001 Green Green N/A — 10 No No Oct-25 All other plans (13 and 11 as of December 31, 2023 and 2022, respectively) 153 103 Total Contributions $ 11,637 $ 12,578 |
Management Incentive Plans
Management Incentive Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Management Incentive Plans | Management Incentive Plans The Company initially adopted the Omnibus Incentive Plan on July 20, 2016 for the purpose of: (a) encouraging the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives; (b) giving participants an incentive for excellence in individual performance; (c) promoting teamwork among participants; and (d) giving the Company a significant advantage in attracting and retaining key employees, directors and consultants. To accomplish such purposes, the Omnibus Incentive Plan, and such subsequent amendments to the Omnibus Incentive Plan, provides that the Company may grant options, stock appreciation rights, restricted shares, RSUs, performance-based awards (including performance-based restricted shares and restricted stock units), other share based awards, other cash-based awards or any combination of the foregoing. Following the approval of the 2023 Amended and Restated Omnibus Incentive Plan, the Company has reserved 3,050,000 shares of its common stock for issuance. The number of shares issued or reserved pursuant to the Omnibus Incentive Plan will be adjusted by the plan administrator, as they deem appropriate and equitable, as a result of stock splits, stock dividends, and similar changes in the Company’s common stock. In connection with the grant of an award, the plan administrator may provide for the treatment of such award in the event of a change in control. All awards are made in the form of shares only. Service-Based Awards The Company grants service-based stock awards in the form of RSUs. Service-based RSUs granted to executives, employees, and non-employee directors vest ratably, on an annual basis, over three years and in the case of certain awards to non-employee directors, one year. The grant date fair value of the service-based awards was equal to the closing market price of the Company’s common stock on the date of grant. For the years ended December 31, 2023 and 2022, the Company recognized $1.5 million and $1.6 million of stock-based compensation expense related to outstanding service-based RSUs, respectively. The following table summarizes the Company’s service-based RSU activity: Awards Weighted-Average Unvested at January 1, 2022 266,089 $ 8.45 Granted 184,941 8.97 Vested (146,151) 7.78 Forfeited (24,604) 9.43 Unvested at December 31, 2022 280,275 $ 9.06 Granted 164,413 11.94 Vested (163,354) 8.58 Forfeited (42,131) 10.63 Unvested at December 31, 2023 239,203 $ 11.09 Performance-Based Awards The Company grants performance-based restricted stock units (“PRSUs”) under which shares of the Company’s common stock may be earned based on the Company’s performance compared to defined metrics. The number of shares earned under a performance award may vary from zero to 150% of the target shares awarded, based upon the Company’s performance compared to the metrics. The metrics used for the grant are determined by the Company’s Compensation Committee of the Board of Directors and are based on internal measures such as the achievement of certain predetermined adjusted EBITDA, EPS growth and EBITDA margin performance goals over a three-year period. The Company recognizes stock-based compensation expense for these awards over the vesting period based on the projected probability of achievement of the performance conditions as of the end of each reporting period during the performance period and may periodically adjust the recognition of such expense, as necessary, in response to any changes in the Company’s forecasts with respect to the performance conditions. For the years ended December 31, 2023 and 2022, the Company recognized $3.4 million and $1.2 million, respectively, of stock-based compensation expense related to outstanding PRSUs. The following table summarizes the Company’s PRSU activity: Awards Weighted-Average Unvested at January 1, 2022 280,700 $ 9.46 Granted 258,363 7.18 Vested — — Forfeited (41,123) 8.98 Unvested at December 31, 2022 497,940 $ 8.32 Granted 289,092 12.77 Performance factor adjustment (1) (121,827) 4.29 Vested 32,327 4.29 Forfeited (116,911) 9.81 Unvested at December 31, 2023 580,621 $ 10.85 (1) Performance-based awards covering the three year period ended December 31, 2022 were paid out in the first quarter of 2023 based on the approval of the Company's Compensation Committee. The performance factor during the measurement period used to determine compensation payouts was 136.13% of the pre-defined metric target of 100%, which resulted in a positive performance factor adjustment and the issuance of 32,327 of additional awards associated with the original grant. Market-Based Awards The vesting of the Company's market-based RSU (“MRSUs”) was contingent upon the Company’s closing price of a share of the Company's common stock on the Nasdaq Capital market, or such other applicable principal securities exchange or quotation system, achieving at least $18.00 over a period of eighty Directors of the Company approved amendments to modify the MRSUs to extend the measurement period to July 16, 2022. In addition to the market performance-based vesting condition, the vesting of such restricted stock unit was subject to continued employment from August 1, 2017 through the later of July 31, 2019 or the date on which the Compensation Committee certifies the achievement of the performance goal. The Company accounted for this amendment as a Type I modification and recognized approximately $0.2 million of incremental stock-based compensation expense over 1.26 years from the modification date based on an updated Monte Carlo simulation model. These awards expired on July 16, 2022 as the MRSU award market condition was not achieved. Stock-Based Compensation Expense Total recognized stock-based compensation expense amounted to $4.9 million and $2.7 million for the years ended December 31, 2023 and 2022, respectively. The aggregate fair value as of the vest date of RSUs that vested during the years ended December 31, 2023 and 2022 was $3.8 million and $1.3 million, respectively. Total unrecognized stock-based compensation expense related to unvested RSUs which are probable of vesting amounted to $3.5 million at December 31, 2023. These costs are expected to be recognized over a weighted average period of 1.64 years. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 13, 2024, LFS, LHLLC, and other designated parties entered into a first amendment to the Second A&R Wintrust Credit Agreement (the “First Amendment to the Second A&R Wintrust Credit Agreement”) with the lenders party thereto and Wintrust, as administrative agent. The First Amendment to the Second A&R Wintrust Credit Agreement makes certain amendments to the Second A&R Wintrust Credit Agreement, including: (i) modifying the definition of “L/C Sublimit” to increase the sublimit for the issuance of letters of credit from $5.0 million to $10.0 million, (ii) removing the requirement to deliver a Borrowing Base Certificate if outstanding Revolving Loans and Letters of Credit (as such terms are defined in the Second A&R Wintrust Credit Agreement) do not exceed $30.0 million, and (iii) removing certain financial covenants that restrict the Company’s ability to make Unfinanced Capital Expenditures (as defined in the Second A&R Wintrust Credit Agreement). |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net income | $ 20,754 | $ 6,799 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and based on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. |
Principles of Consolidation | Principles of Consolidation References in these financial statements to the Company refer collectively to the accounts of Limbach Holdings, Inc. and its wholly-owned subsidiaries, including LHLLC, Limbach Facility Services LLC (“LFS”), Limbach Company LLC (“LC LLC”), Limbach Company LP, Harper Limbach LLC, Harper Limbach Construction LLC, Limbach Facility & Project Solutions LLC, Jake Marshall, LLC (“JMLLC”), Coating Solutions, LLC (“CSLLC”), ACME Industrial Piping, LLC (“ACME”) and Industrial Air, LLC (“Industrial Air”) for all periods presented, unless otherwise indicated. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements for assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the reported period, and the accompanying notes. Management believes that its most significant estimates and assumptions have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. The Company’s significant estimates include estimates associated with revenue recognition on construction contracts, costs incurred through each balance sheet date, intangibles, property and equipment, fair value accounting for acquisitions, insurance reserves, income tax valuation allowances, fair value of contingent consideration arrangements and contingencies. If the underlying estimates and assumptions upon which the consolidated financial statements are based change in the future, actual amounts may differ from those included in the accompanying consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less when purchased and are carried at cost, which approximates fair value, due to their short-term maturities. The Company’s cash and cash equivalents consist principally of currency on hand, demand deposits at commercial banks, overnight repurchase agreements, amounts invested in highly liquid money market funds and U.S. Treasury Bills. At times, the Company’s cash deposits may exceed the amount of federal insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk beyond the normal credit risk associated with commercial banking relationships. See Note 9 – Fair Value Measurements for further information. |
Restricted Cash | Restricted Cash Restricted cash is cash held at a commercial bank in an imprest account held for the purpose of funding workers’ compensation and general liability claims against the Company. This amount is replenished either when depleted or at the beginning of each month. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Credit Losses On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326) |
Joint Ventures | Joint Ventures The Company accounts for its participation in certain special purpose, project specific joint ventures under the equity method of accounting. The Company’s entry into these joint ventures is for the purpose of bidding, negotiating and completing specific projects. The Company and its joint venture partner(s) separately enter into their own sub-contracts with the joint venture for each party’s respective portion of the work. All revenue and expenses and the related contract assets and liabilities related to the Company’s sub-contract are recorded within the Company’s statements of operations and balance sheets, similarly to any other construction project. The joint venture itself does not accumulate any profits or losses, as the joint venture revenue is equal to the sum of the subcontracts it issues to the joint venture partners. The voting power and management of the joint ventures are shared equally by the joint venture partners, qualifying these entities for joint venture treatment under GAAP. The shared voting power and management responsibilities allow the Company to exercise significant influence without controlling the joint venture entity. As such, the Company applies the equity method of accounting as defined in ASC Topic 323, Investments – Equity Method and Joint Ventures . |
Revenue Recognition | Revenue Recognition The Company’s revenue is primarily derived from construction-type and service contracts that generally range from three months to two years. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . ASC Topic 606 provides for a five-step model for recognizing revenue from contracts with customers as follows: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue Identify the contract with a customer. A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectability of consideration is probable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with its customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectability of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and its prior collection history with such customer. Identify the performance obligations in the contract . At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for purposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price. The transaction price represents the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to its customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. Such methods include: (a) the expected value method, whereby the amount of variable consideration to be recognized represents the sum of probability weighted amounts in a range of possible consideration amounts, and (b) the most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including historical, current, and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the most likely amount method is typically utilized in situations where a contract has only two possible outcomes. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts. Pending change orders represent one of the most common forms of variable consideration included within contract value and typically represent contract modifications for which a change in scope has been authorized or acknowledged by the Company’s customer but the final adjustment to contract price is yet to be negotiated. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied. Contract claims are another form of variable consideration which is common within its industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by the Company in connection with claims, such litigation costs are expensed as incurred, although it may seek to recover these costs. Allocate the transaction price to performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation. Recognize revenue as performance obligations are satisfied. Throughout the execution of its construction-type contracts, the Company recognizes revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company. Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Certain construction-type contracts include retention provisions to provide assurance to the Company’s customers that it will perform in accordance with the contract terms and are not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work by the customer. The Company has determined there are no significant financing components in its contracts during the years ended December 31, 2023 and 2022. For the Company’s service-type contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of its performance as the Company performs the service. For its fixed price service-type contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when the Company’s inputs are expended evenly, and the customer receives and consumes the benefits of its performance throughout the contract term. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Costs to fulfill its contracts (“pre-bid costs”) that are not expected to be recovered from the customer are expensed as incurred and included in selling, general and administrative expenses on its consolidated statements of operations. In accordance with industry practice, the Company classifies as current all assets and liabilities relating to the performance of contracts. See Note 4 – Revenue from Contracts with Customers for further information. Changes in Estimates on Construction Contracts The accuracy of the Company’s revenue and profit recognition in a given period depends on the accuracy of its estimates of the cost to complete each project. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include: • The completeness and accuracy of the original bid; • costs associated with scope changes; • expected, or actual, resolution terms for claims; • achievement of contract incentives; • changes in costs of labor and/or materials; • extended overhead and other costs due to owner, weather and other delays; • subcontractor performance issues; • changes in productivity expectations; • site conditions that differ from those assumed in the original bid; • changes from original design on design-build projects; • the availability and skill level of workers in the geographic location of the project; • a change in the availability and proximity of equipment and materials; • its ability to fully and promptly recover on claims and back charges for additional contract costs, and • the customer’s ability to properly administer the contract. Subsequent to the inception of a construction-type contract in the Company’s GCR and ODR segments, the transaction price could change for various reasons, including the executed or estimated amount of change orders and unresolved contract modifications and claims to or from owners. Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception. Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated. Changes are made to the transaction price from unapproved change orders to the extent the amount can be reasonably estimated and recovery is probable. On certain projects, the Company has submitted and has pending unresolved contract modifications and claims to recover additional costs and the associated profit, if applicable, to which it believes it is entitled under the terms of contracts with customers, subcontractors, vendors or others. The owners or their authorized representatives and/or other third parties may be in partial or full agreement with the modifications or claims, or may have rejected or disagree entirely or partially as to such entitlement. Changes are made to the transaction price from affirmative claims with customers to the extent that additional revenue on a claim settlement with a customer is probable and estimable. A reduction to costs related to claims with non-customers with whom the Company has a contractual arrangement (“back charges”) is recognized when the estimated recovery is probable and estimable. Recognizing claims and back charge recoveries requires significant judgments of certain factors including, but not limited to, dispute resolution developments and outcomes, anticipated negotiation results, and the cost of resolving such matters. The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit and gross profit margin from period to period. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Significant changes in cost estimates, particularly in the Company’s larger, more complex projects have had, and can in future periods have, a significant effect on its profitability. Management evaluates changes in estimates on a contract by contract basis and discloses significant changes, if material, in the notes to the consolidated financial statements. The cumulative catch-up method is used to account for revisions in estimates. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined. The Company generates revenue from construction type contracts, primarily consisting of fixed-price contracts, to deliver mechanical, plumbing, and electrical construction services to its customers. The duration of its contracts generally ranges from three months to two years. Revenue from fixed price contracts is recognized on the cost-to-cost method, measured by the relationship of total cost incurred to total estimated contract costs. Revenue from time and materials contracts is recognized as services are performed. The Company believes that its extensive experience in mechanical, plumbing, and electrical projects, and its internal cost review procedures during the bidding process, enable it to reasonably estimate costs and mitigate the risk of cost overruns on fixed price contracts. The Company generally invoices customers on a monthly basis, based on a schedule of values that breaks down the contract amount into discrete billing items. Costs and estimated earnings in excess of billings on uncompleted contracts are recorded as a contract asset until billable under the contract terms. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as a contract liability until the related revenue is recognizable. The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle. Retainage receivable represents amounts invoiced to customers where payments have been partially withheld, typically 10%, pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion. Contract assets represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Contract assets result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC Topic 606, but a portion of the revenue recorded cannot be currently billed due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. Additionally, the difference between remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s ODR agreements under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. |
Goodwill and Impairment of Long-Lived Assets | Goodwill and Impairment of Long-Lived Assets Goodwill is evaluated for impairment at least annually or whenever events or changes in circumstance indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may perform either a qualitative assessment of potential impairment or proceed directly to a quantitative assessment of potential impairment. The Company's qualitative assessment of potential impairment may result in the determination that a quantitative impairment analysis is not necessary. Under this elective process, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative assessment is not required. However, if the Company concludes otherwise, a quantitative impairment analysis is performed. If the Company chooses not to perform a qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then the Company will perform a quantitative assessment. In the case of a quantitative assessment, the Company estimates the fair value of the reporting unit with which the goodwill is associated and compares it to the carrying value. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. See Note 5 – Goodwill and Intangible Assets for further detail. The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable. With respect to property, plant and equipment and finite lived intangibles, asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require the Company to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, the Company recognizes an impairment equal to the excess of carrying value over fair value as determined by quoted market prices in active markets or present value techniques if quotes are unavailable. The determination of the fair value using present value techniques requires the Company to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes the Company makes to these projections and assumptions could result in significant revisions to its evaluations of recoverability and the recognition of additional impairments. See Note 5 – Goodwill and Intangible Assets for further discussion on impairments of long-lived assets. |
Intangible Assets | Intangible Assets The Company’s indefinite-lived intangible assets associated with its trade name are evaluated for impairment at least annually or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its indefinite-lived intangible asset are less than their carrying amount. The Company’s identifiable intangible assets with finite lives are either amortized over their useful lives or over the period the Company expects to receive the related economic benefit based upon estimated future cash flows. The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. |
Property and Equipment, net | Property and Equipment, net Property and equipment, with the exception of the Company’s fleet vehicle finance leases, are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. For buildings and leasehold improvements, the Company’s useful lives range from 5 years to 40 years; for machinery and equipment, useful lives range from 3 years to 10 years. Expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements for the Company’s real estate operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. |
Leases | Leases A lease contract conveys the right to use an underlying asset for a period of time in exchange for consideration. At inception, the Company determines whether a contract contains a lease by determining if there is an identified asset and if the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Leases are classified as either operating or finance, based on the Company’s evaluation of certain criteria. With the exception of short-term leases (leases with an initial term of 12 months or less), at lease commencement, the Company measures and records a lease liability equal to the present value of the remaining lease payments, generally discounted using quoted borrowing rates on its secured debt as the implicit rate is not readily determinable on many of its real estate operating leases. For the Company’s fleet vehicles classified as financing leases, it uses the stated interest rate in the lease. On the lease commencement date, the amount of the right-of-use (“ROU”) assets consist of the following: • the amount of the initial measurement of the lease liability; • any lease payment made at or before the commencement date, minus any lease incentives received; and • any initial direct costs incurred. Most of the Company’s operating lease contracts have the option to extend or renew. The Company assesses the option for individual leases, and it generally considers the base term to be the term of lease contracts. See Note 14 – Leases for additional information. The Company periodically evaluates whether events and circumstances have occurred that indicate that the remaining balances of its ROU assets may not be recoverable. The Company uses estimates of future undiscounted cash flows, as well as other economic and business factors, to assess the recoverability of these assets. |
Deferred Financing Costs and Debt Discount | Deferred Financing Costs Deferred financing costs are deferred and amortized to interest expense using the effective interest rate method over the term of the related long-term debt agreement, and the straight-line method for the revolving credit agreement. Debt issuance costs related to the issuance and/or extension, as applicable, of the Company’s term loans are reflected as a direct reduction from the carrying amount of long-term debt. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an other asset. As a result of the early repayment of the A&R Wintrust Term Loan and certain changes to the members of the loan syndicate under the Second A&R Wintrust Credit Agreement (See Note 7 – Debt), the Company wrote off approximately $0.3 million of unamortized debt issuance costs, which are reported as a loss on early debt extinguishment on the Company's consolidated statements of operations. See Note 7 – Debt for additional information. |
Stock-Based Compensation | Stock-Based Compensation |
Income Taxes | Income Taxes The provision for income taxes includes federal, state and local taxes. The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes , which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities and income or expense is recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in tax rates are recorded to deferred tax assets and liabilities and reflected in the provision for income taxes during the period that includes the enactment date. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, scheduling of anticipated reversals of taxable temporary differences, and considering prudent and feasible tax planning strategies. Any interest or penalties incurred related to unrecognized tax benefits are recorded as tax expense in the provision for income tax expense line item of the accompanying consolidated statements of operations. The consolidated financial statements reflect expected future tax consequences of such positions presuming the taxing authorities have full knowledge of the position and all relevant facts, but without considering time values. |
Fair Value Measurements | Fair Value Measurements The Company measures the fair value of financial assets and liabilities in accordance with ASC Topic 820 - Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 — inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date; • Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities; and • Level 3 — unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. See also Note 9 – Fair Value Measurements for further information. |
Recently Adopted Accounting Standards and Recent Accounting Pronouncements | Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial instruments, including trade receivables and off-balance sheet credit exposure. Under this guidance, an entity is required to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. This ASU also requires disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. The Company adopted ASU 2016-13 on January 1, 2023 using the modified retrospective method, whereby the guidance was applied prospectively as of the date of adoption and prior periods are not restated. The adoption of this ASU did not have a material impact on the Company's financial position or results of operations. The Company assessed the scope of its financial assets and determined that the guidance associated with ASU 2016-13 is relevant to its trade accounts receivable and contract assets, including retainage. The Company’s trade receivables include amounts from work completed in which it has billed or has an unconditional right to bill its customers. The majority of the Company’s trade receivables are contractually due in less than a year. The Company further assessed the guidance based on its segment portfolio of receivables. While the Company’s construction-type GCR and ODR financial assets are often in the same subset of customers and industries, the Company’s construction-type related project work is typically bonded and the customers to which they perform work are well-known, solvent and have no history of receivable write-offs. On the contrary, the Company’s service-type work, in particular its ODR core service work, is smaller in nature and is usually more susceptible to customer write-offs. As such, there is greater risk of credit loss on the Company’s ODR-related service-type receivables. The Company’s contract assets include amounts due under retainage provisions and costs and estimated earnings in excess of billings on uncompleted contracts. The Company has policies and procedures in place where it reviews claims and change orders on a quarterly basis to determine legal entitlement and recoverability in accordance with ASC 606. As such, the Company has determined the risk of credit loss on its contracts assets to be remote. As discussed above, the Company develops its allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its ODR-related service-type receivables, using an aging method. Under the aging method, the Company assigns its accounts receivable to a level of delinquency and applies a loss rates to each class. Loss rates are determined based on historical loss experiences with customers, the consideration of a customer’s financial condition, current market economic conditions and a forecast of future economic conditions when appropriate. When the Company becomes aware of a customer's inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the expected amount to be collected. As part of the Company’s analysis of expected credit losses, it may analyze receivables with customers on an individual basis in situations where such accounts receivables exhibit unique risk characteristics and are not expected to experience similar losses to the rest of their class. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). This update requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements. The FASB has issued ASU 2020-04, Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020. This new guidance provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform, on financial reporting. The risk of termination of the London Interbank Offered Rate (LIBOR), has caused regulators to undertake reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based that are less susceptible to manipulation. ASU 2020-04 was effective between March 12, 2020 and December 31, 2022. However, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, extending the sunset date under Topic 848 from December 31, 2022 to December 31, 2024 to align the temporary accounting relief guidance with the expected LIBOR cessation date of June 30, 2023. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) : Scope. The amendments in this update refine the scope for certain optional expedients and exceptions for contract modifications and hedge accounting to apply to derivative contracts and certain hedging relationships affected by the discounting transition. As a result of ASU 2022-06, an entity may now elect to apply the amendments in this update from the beginning of an interim period beginning as of March 12, 2020, through December 31, 2024. The Company has evaluated the impact of adopting the reference rate reform guidance (both ASU 2020-04 and ASU 2021-01) on its consolidated financial statements and has determined that these pronouncements did not have a significant impact. As discussed in Note 7, the A&R Credit Agreement removed LIBOR as a benchmark rate and now utilizes SOFR (as defined in the A&R Credit Agreement) as its replacement. During the second quarter of 2023, the Company entered into the Second A&R Credit Agreement, which also utilizes SOFR as a benchmark rate. In addition, the Company’s interest rate swap utilizes SOFR as its benchmark rate. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity and amends the scope guidance for contracts in an entity's own equity. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The guidance is effective for all entities for fiscal years beginning after March 31, 2024, albeit early adoption is permitted no earlier than fiscal years beginning after December 15, 2020. Management is currently assessing the impact of this pronouncement on its consolidated financial statements. |
Earnings per Share | Earnings per Share The Company calculates earnings per share in accordance with ASC Topic 260 - Earnings Per Share (“EPS”) . Basic earnings per common share applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding and assumed to be outstanding. Diluted EPS assumes the dilutive effect of outstanding common stock warrants, shares issued in conjunction with the Company’s ESPP (defined in Note 8) and restricted stock units (“RSUs”), all using the treasury stock method. |
Operating Segments | Operating Segments As discussed in Note 1, the Company operates in two segments (i) GCR, in which the Company generally manages new construction or renovation projects that involve primarily mechanical, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) ODR, in which the Company provides maintenance or service primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company's CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer. In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the GCR work performed at branches into one GCR reportable segment and all of the ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation. On January 17, 2023, the Company announced its planned transition succession, pursuant to which Charles A. Bacon III stepped down as President and Chief Executive Officer on March 28, 2023, and Michael M. McCann, the Company’s former Executive Vice President and Chief Operating Officer, was appointed President and Chief Executive Officer. Following the transition, the Company revised its segment presentation to align with how Mr. McCann assesses performance and makes resource allocation decisions for its operating segments, which is based on segment revenue and segment gross profit. Selling, general and administrative ("SG&A") expenses are no longer reported on a segment basis as the Company's current CODM does not review discrete segment financial information for SG&A in order to assess performance. Interest expense is not allocated to segments because of the corporate management of debt service. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 59,833 $ 36,001 Restricted cash 65 113 Total cash, cash equivalents and restricted cash $ 59,898 $ 36,114 |
Schedule of Property and Equipment | The following table summarizes the Company’s property and equipment: ( in thousands ) December 31, 2023 December 31, 2022 Land and improvements $ 400 $ 400 Buildings and leasehold improvements 10,997 10,489 Machinery and equipment 31,157 26,061 Finance leases - vehicles (1) 11,665 10,789 Gross property and equipment 54,219 47,739 Less: Accumulated amortization on finance leases (4,502) (6,001) Less: Accumulated depreciation (28,887) (23,514) Property and equipment, net of accumulated amortization and depreciation (2) $ 20,830 $ 18,224 (1) See additional information provided in Note 14 – Leases. (2) Includes net property and equipment of approximately $0.5 million and $2.1 million for the year ended December 31, 2023 related to assets acquired in the ACME Transaction and Industrial Air Transaction, respectively. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Allocation of Fair Value of Assets and Liabilities | The following table summarizes the allocation of the fair value of the assets and liabilities of the ACME Transaction as of the ACME Effective Date by the Company. (in thousands) Purchase Price Allocation Measurement Period Adjustments (1) Final Purchase Price Allocation Consideration: Cash $ 5,181 $ — $ 5,181 Earnout provision 1,121 393 1,514 Total Consideration 6,302 393 6,695 Fair value of assets acquired: Cash and cash equivalents 298 — 298 Accounts receivable 1,150 — 1,150 Contract assets 414 — 414 Property and equipment 488 — 488 Operating lease right-of-use assets 301 — 301 Intangible assets 2,300 500 2,800 Amount attributable to assets acquired 4,951 500 5,451 Fair value of liabilities assumed: Accounts payable, including retainage 170 — 170 Current operating lease liabilities 195 — 195 Accrued expenses and other current liabilities 138 — 138 Contract liabilities 373 — 373 Long-term operating lease liabilities 106 — 106 Amount attributable to liabilities assumed 982 — 982 Goodwill $ 2,333 $ (107) $ 2,226 (1) Measurement period adjustments recorded during the year-ended December 31, 2023 included changes in the purchase price allocation and total consideration, resulting in a net decrease of approximately $0.1 million to goodwill. The measurement period adjustments resulted primarily from valuation inputs pertaining to ACME’s intangible assets and earnout provision attributes based on facts and circumstances that existed, but were not known, as of the ACME acquisition date. The following table summarizes the preliminary allocation of the fair value of the assets and liabilities of the Industrial Air Transaction as of the IA Effective Date by the Company. (in thousands) Purchase Price Allocation Consideration: Cash $ 11,527 Earnout provision 3,165 Total Consideration 14,692 Fair value of assets acquired: Cash and cash equivalents 1,149 Accounts receivable 5,200 Inventory 1,290 Contract assets 220 Other current assets 993 Property and equipment 1,447 Operating lease right-of-use assets (1) 3,756 Intangible assets 8,720 Amount attributable to assets acquired 22,775 Fair value of liabilities assumed: Accounts payable, including retainage 885 Current operating lease liabilities 475 Contract liabilities 6,900 Accrued expenses and other current liabilities 347 Long-term operating lease liabilities 2,254 Amount attributable to liabilities assumed 10,861 Goodwill $ 2,778 (1) |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net as of December 31, 2023 are detailed below. (in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Weighted Average Useful Life (Years) Trade name and trademarks $ 200 $ (19) $ 181 4.8 Customer relationships 2,600 (150) 2,450 8.1 Total $ 2,800 $ (169) $ 2,631 7.9 Intangible assets, net as of December 31, 2023 are detailed below. (in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Weighted Average Useful Life (Years) Trade name, trademarks and intellectual property $ 2,710 $ (58) $ 2,652 7.6 Customer relationships 4,390 (99) 4,291 7.2 Backlog 1,620 (324) 1,296 0.6 Total $ 8,720 $ (481) $ 8,239 6.3 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Components of Contract Asset and Liability Balances | The components of the contract asset balances as of the respective dates were as follows: (in thousands) December 31, 2023 December 31, 2022 Change Contract assets Costs and estimated earnings in excess of billings on uncompleted contracts $ 29,247 $ 33,573 $ (4,326) Retainage receivable 22,443 27,880 (5,437) Total contract assets $ 51,690 $ 61,453 $ (9,763) (in thousands) December 31, 2023 December 31, 2022 Change Contract liabilities Billings in excess of costs and estimated earnings on uncompleted contracts $ 41,987 $ 43,806 $ (1,819) Provisions for losses 173 201 (28) Total contract liabilities $ 42,160 $ 44,007 $ (1,847) |
Schedule of Contracts in Progress | The net (overbilling) underbilling position for contracts in process consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Revenue earned on uncompleted contracts $ 551,120 $ 678,014 Less: Billings to date (563,860) (688,247) Net (overbilling) underbilling $ (12,740) $ (10,233) (in thousands) December 31, 2023 December 31, 2022 Costs and estimated earnings in excess of billings on uncompleted contracts $ 29,247 $ 33,573 Billings in excess of costs and estimated earnings on uncompleted contracts (41,987) (43,806) Net (overbilling) underbilling $ (12,740) $ (10,233) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The following table summarizes the carrying amount of goodwill associated with the Company's segments for the years ended December 31, 2023 and 2022. (in thousands) GCR ODR Total Goodwill as of January 1, 2022 $ — $ 11,370 $ 11,370 Goodwill as of December 31, 2022 — 11,370 11,370 Goodwill associated with the ACME Transaction (1) — 2,226 2,226 Goodwill associated with the Industrial Air Transaction — 2,778 2,778 Goodwill as of December 31, 2023 $ — $ 16,374 $ 16,374 (1) Includes certain adjustments, net, to preliminary estimates of fair value within the measurement period of up to one-year from the date of the ACME Transaction. Measurement period adjustments, net, relate primarily to an increase in certain definite-lived intangible assets, partially offset by an increase in total consideration associated with the earnout provision. See Note 3 – Acquisitions for further information. |
Schedule of Definite-lived and Indefinite-lived Intangible Assets | Definite-lived and indefinite-lived intangible assets consist of the following: (in thousands) Gross Accumulated Net intangible December 31, 2023 Amortized intangible assets: Customer relationships $ 15,320 $ (5,249) $ 10,071 Backlog 2,560 (1,264) 1,296 Trade name, trademarks and intellectual property 4,250 (578) 3,672 Total amortized intangible assets 22,130 (7,091) 15,039 Unamortized intangible assets: Trade name – Limbach (1) 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 32,090 $ (7,091) $ 24,999 (1) The Company has determined that its trade name has an indefinite useful life. The Limbach trade name has been in existence since the Company’s founding in 1901 and therefore is an established brand within the industry. (in thousands) Gross Accumulated Net intangible December 31, 2022 Amortized intangible assets: Customer relationships $ 8,330 $ (4,288) $ 4,042 Backlog 940 (643) 297 Trade name 1,340 (299) 1,041 Total amortized intangible assets 10,610 (5,230) 5,380 Unamortized intangible assets: Trade name – Limbach 9,960 — 9,960 Total unamortized intangible assets 9,960 — 9,960 Total amortized and unamortized assets, excluding goodwill $ 20,570 $ (5,230) $ 15,340 |
Schedule of Estimated Remaining Useful Lives of Definite-lived Intangible Assets | The estimated remaining useful lives of definite-lived intangible assets are as follows: Intangible Asset Amortization Method Weighted Average Remaining Useful Life (Years) Customer relationships Straight line / Pattern of economic benefit 6.9 Trade name, trademarks and intellectual property Straight line 6.6 Backlog Straight line 0.6 |
Schedule of Estimated Amortization Expense | Estimated amortization expense is as follows for the years ending December 31: (in thousands) Estimated Amortization Expense 2024 $ 3,444 2025 2,110 2026 2,081 2027 2,056 2028 1,860 2029 and thereafter 3,488 Total $ 15,039 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities are comprised of the following: ( in thousand s) December 31, 2023 December 31, 2022 Accrued payroll and related liabilities $ 5,561 $ 4,545 Accrued bonus and commissions 12,254 9,682 Accrued insurance liabilities 1,007 715 Accrued job costs 2,710 1,913 Assurance-type warranty liabilities 1,500 1,581 Estimated loss contingency 650 2,182 Earnout Payments accrued, current 5,719 2,859 Other accrued liabilities 1,566 1,465 Total $ 30,967 $ 24,942 |
Schedule of Reconciliation of Assurance-type Warranties | reconciliation of assurance-type warranties are as follows: ( in thousand s) December 31, 2023 December 31, 2022 Balance at the beginning of the period $ 1,581 $ 3,310 Accruals for warranties issued 261 302 Accruals related to pre-existing warranties (including changes in estimates) 932 (494) Settlements made (1,274) (1,537) Balance at the end of the period $ 1,500 $ 1,581 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following obligations as of: ( in thousand s) December 31, 2023 December 31, 2022 A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 $ — $ 21,453 A&R Wintrust Revolving Loan 10,000 — Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 7,347 4,954 Financing liability 5,351 5,351 Total debt $ 22,698 $ 31,758 Less – Current portion of long-term debt (2,680) (9,564) Less – Unamortized discount and debt issuance costs (387) (666) Long-term debt $ 19,631 $ 21,528 |
Schedule of Maturities of Long-term Debt and Finance Leases | Maturities of long-term debt and finance leases at December 31, 2023 are as follows: ( in thousands ) 2024 $ 2,653 2025 2,039 2026 1,650 2027 845 2028 and thereafter 15,512 Total $ 22,698 |
Schedule of Applicable Margin and Fees Payable | The following is a summary of the applicable margin and commitment fees payable on the available A&R Wintrust Term Loan and A&R Wintrust Revolving Loan credit commitment: Level Senior Leverage Ratio Applicable Margin for SOFR Revolver loans Applicable Margin for Applicable Margin for commitment fee I Greater than 1.00 to 1.00 3.10 % — % 0.25 % II Less than or equal to 1.00 to 1.00 2.60 % (0.50) % 0.25 % |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Outstanding Warrants | The following table summarizes the underlying shares of common stock with respect to outstanding warrants: December 31, 2023 December 31, 2022 $15 Exercise Price Sponsor Warrants (1)(2) — 600,000 Merger Warrants (3)(4) — 629,643 Total — 1,229,643 (1) Exercisable for one share of common stock at an exercise price of $15.00 per share (“$15 Exercise Price Sponsor Warrants”). (2) Issued under a warrant agreement dated July 15, 2014, between Continental Stock Transfer and Trust Company, as warrant agent, and the Company. (3) Exercisable for one share of common stock at an exercise price of $12.50 per share (“Merger Warrants”). (4) Issued to the sellers of LHLLC. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Nonrecurring | Fair Value at Reporting Date Using (in thousands) December 31, 2023 Level 1 Level 2 Level 3 Cash equivalents: Overnight repurchase agreements $ 43,959 $ 43,959 U.S. Treasury Bills 10,000 10,000 $ — $ — Money market fund 3,750 3,750 — — Total $ 57,709 $ 57,709 $ — $ — The following table presents the carrying values of the Company's contingent earnout payment obligations included in the accompanying condensed consolidated balance sheets, which approximated fair value at December 31, 2023 and 2022. Fair Value at Reporting Date Using (in thousands) December 31, 2023 Level 1 Level 2 Level 3 Accrued expenses and other current liabilities: 2023 Jake Marshall Earnout Period $ 3,000 $ — $ — $ 3,000 First ACME Earnout Period 429 — — 429 First IA Earnout Period 2,290 — $ — 2,290 Other long-term liabilities: Second ACME Earnout Period 1,188 — — 1,188 Second IA Earnout Period 875 — — 875 Total $ 7,782 $ — $ — $ 7,782 Fair Value at Reporting Date Using December 31, 2022 Level 1 Level 2 Level 3 Accrued expenses and other current liabilities: 2022 Jake Marshall Earnout Period (1) $ 2,859 $ — $ — $ 2,859 Other long-term liabilities: — 2023 Jake Marshall Earnout Period 2,515 — — 2,515 Total $ 5,374 $ — $ — $ 5,374 (1) In April 2023, the Company made a $3.0 million payment to the former owners of JMLLC and CSLLC related to the 2022 Jake Marshall Earnout Period. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the basic and diluted earnings per share attributable to the Company's common shareholders for the years ended December 31, 2023 and 2022: For the Years Ended (in thousands, except per share amounts) December 31, 2023 December 31, 2022 EPS numerator: Net income $ 20,754 $ 6,799 EPS denominator: Weighted average shares outstanding – basic 10,773 10,425 In-the-money warrants 249 — Nonvested restricted stock units 789 247 Employee stock purchase plan 1 5 Weighted average shares outstanding – diluted 11,812 10,677 EPS: Basic $ 1.93 $ 0.65 Diluted $ 1.76 $ 0.64 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the securities that were antidilutive or out-of-the-money, and therefore, were not included in the computations of diluted income per common share: For the Years Ended December 31, 2023 December 31, 2022 Out-of-the-money warrants — 1,229,643 Performance and market-based RSUs (1) 95 — Employee stock purchase plan 1,044 1,573 Total 1,139 1,231,216 (1) For the year ended December 31, 2022, certain market-based awards were not included in the computation of diluted income per common share because the market conditions were not satisfied during the periods and would not be satisfied if the reporting date was at the end of the contingency period. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The Company’s provision for income taxes relating to continuing operations consists of the following: For the Years Ended (in thousands) December 31, 2023 December 31, 2022 Current tax provision U.S. Federal $ 5,851 $ 2,613 State and local 1,845 695 Total current tax provision 7,696 3,308 Deferred tax provision U.S. Federal (253) (584) State and local (97) 85 Total deferred tax provision (350) (499) Income tax provision $ 7,346 $ 2,809 |
Schedule of Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows: For the Years Ended December 31, 2023 2022 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal tax effect 4.8 % 6.4 % Stock based compensation – restricted stock (1.1) % 1.4 % Return to provision adjustment (0.2) % (0.1) % Permanent differences 1.4 % 1.3 % Tax credits (0.5) % (0.9) % Other 0.6 % — % Effective tax rate 26.1 % 29.2 % |
Schedule of Deferred Tax Assets (Liabilities) | The significant components of deferred tax assets (liabilities) were as follows: As of As of December 31, (in thousands) 2023 2022 Deferred tax assets: Accrued expenses $ 699 $ 950 Allowance for doubtful accounts 74 60 Intangibles 435 463 Goodwill 3,057 3,301 Startup costs 57 68 Stock-based compensation 1,804 1,066 Research and development expenses 1,276 640 Lease liabilities 6,193 6,280 Accrued bonuses and commissions 424 253 Total deferred tax assets 14,019 13,081 Deferred tax liabilities: Fixed assets (3,413) (3,248) Right-of-use assets (4,566) (4,684) Percentage of completion (814) (241) Interest (47) (79) Total deferred tax liabilities (8,840) (8,252) Net deferred tax asset $ 5,179 $ 4,829 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Consolidated segment information for the periods presented is as follows: For the Years Ended December 31, (in thousands) 2023 2022 Statement of Operations Data: Revenue: GCR $ 254,392 $ 280,379 ODR 261,958 216,403 Total revenue 516,350 496,782 Gross profit: GCR 43,200 38,622 ODR 76,090 55,119 Total gross profit 119,290 93,741 Selling, general and administrative (1) 87,397 77,879 Change in fair value of contingent consideration 729 2,285 Amortization of intangibles 1,880 1,567 Operating income $ 29,284 $ 12,010 Interest expense (2,046) (2,144) Interest income 1,217 — Loss on early termination of operating lease — (849) Loss on early debt extinguishment (311) — (Loss) gain on change in fair value of interest rate swap (124) 310 Gain on disposition of property and equipment 80 281 Total unallocated amounts (1,184) (2,402) Total consolidated income before income taxes $ 28,100 $ 9,608 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Self-insurance | The components of the self-insurance liability as of December 31, 2023 and 2022 are as follows: (in thousands) December 31, 2023 December 31, 2022 Current liability — workers' compensation and general liability $ 188 $ 158 Current liability — medical and dental 819 557 Non-current liability 645 343 Total liability $ 1,652 $ 1,058 Restricted cash $ 65 $ 113 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheets Information | The following table summarizes the lease amounts included in the Company’s consolidated balance sheets as of December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Balance Sheets December 31, 2023 December 31, 2022 Assets Operating Operating lease right-of-use assets (1)(2) $ 19,727 $ 18,288 Finance Property and equipment, net (3)(4) 9,561 7,402 Total lease assets $ 29,288 $ 25,690 Liabilities Current Operating Current operating lease liabilities $ 3,627 $ 3,562 Finance Current portion of long-term debt 2,680 2,135 Noncurrent Operating Long-term operating lease liabilities 16,037 15,643 Finance Long-term debt (5) 10,018 8,170 Total lease liabilities $ 32,362 $ 29,510 (1) Operating lease assets are recorded net of accumulated amortization of $13.6 million and $12.2 million at December 31, 2023 and 2022, respectively. (2) As a result of the Industrial Air Transaction, the Company recognized a $1.0 million below-market lease, which was recorded as an increase to the Company’s operating lease right-of-use assets on its consolidated balance sheet at December 31, 2023. The below-market lease will be amortized to amortization expense over the remaining lease term. (3) Finance lease assets are recorded net of accumulated amortization of $4.5 million and $6.0 million at December 31, 2023 and 2022, respectively. (4) Includes approximately $2.4 million and $2.6 million of net property assets associated with the Company's Pontiac Facility at December 31, 2023 and 2022, respectively. (5) Includes approximately $5.4 million associated with the Company's sale and leaseback financing transaction. See Note 7 for further detail. |
Schedule of Lease Costs, Terms and Discount Rates | The following table summarizes the lease costs included in the Company’s consolidated statements of operations for the years ended December 31, 2023 and 2022: (in thousands) Classification on the Consolidated Statements of Operations December 31, 2023 December 31, 2022 Operating lease cost Cost of revenue (1) $ 2,184 $ 2,627 Operating lease cost Selling, general and administrative (1) 2,550 2,555 Finance lease cost: Amortization Cost of revenue (2) 2,753 2,687 Interest Interest expense, net (2) 384 264 Total lease cost $ 7,871 $ 8,133 (1) Operating lease costs recorded in cost of revenue includes $0.4 million and $0.5 million of variable lease costs for the years ended December 31, 2023 and 2022, respectively. In addition, $0.5 million of variable lease costs are included in selling, general and administrative expenses for both years ended December 31, 2023 and 2022, respectively. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes $3.7 million and $3.8 million of variable leases costs for the years ended December 31, 2023 and 2022, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. No variable lease costs were recorded in selling, general and administrative expenses for the years ended December 31, 2023 and 2022. The following is a summary of the lease terms and discount rates as of: December 31, 2023 December 31, 2022 Weighted average lease term (in years): Operating 6.54 6.98 Finance (1) 3.10 2.73 Weighted average discount rate: Operating 6.74 % 4.76 % Finance (1) 5.33 % 5.06 % (1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 7 – Debt for further detail. |
Schedule of Future Minimum Commitment for Finance Leases | The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of December 31, 2023 were as follows (in thousands): Finance Lease Obligations Operating Lease Obligations Year ending: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Total Operating Sublease Receipts (2) 2024 $ 3,041 $ 515 $ 3,556 $ 3,682 $ 981 $ 4,663 $ 912 2025 2,284 528 2,812 3,478 765 4,243 939 2026 1,768 542 2,310 3,383 770 4,153 967 2027 872 555 1,427 2,318 871 3,189 326 2028 122 569 691 1,376 871 2,247 — Thereafter 48 13,733 13,780 844 4,997 5,841 — Total minimum lease payments 8,135 16,442 24,576 15,081 9,255 24,336 $ 3,145 Financing Component (3) (788) (11,090) (11,878) (2,499) (2,173) (4,672) Net present value of minimum lease payments 7,347 5,351 12,698 12,582 7,082 19,664 Less: current portion of finance and operating lease obligations (2,680) — (2,680) (3,009) (618) (3,627) Long-term finance and operating lease obligations $ 4,667 $ 5,351 $ 10,018 $ 9,573 $ 6,464 $ 16,037 (1) Associated with the aforementioned related party leases entered into with former members of JMLLC, ACME and Industrial Air. (2) Associated with the aforementioned third party sublease. (3) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. |
Schedule of Future Minimum Commitment for Operating Leases | The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of December 31, 2023 were as follows (in thousands): Finance Lease Obligations Operating Lease Obligations Year ending: Vehicles Pontiac Facility Total Finance Non-Related Party Related Party (1) Total Operating Sublease Receipts (2) 2024 $ 3,041 $ 515 $ 3,556 $ 3,682 $ 981 $ 4,663 $ 912 2025 2,284 528 2,812 3,478 765 4,243 939 2026 1,768 542 2,310 3,383 770 4,153 967 2027 872 555 1,427 2,318 871 3,189 326 2028 122 569 691 1,376 871 2,247 — Thereafter 48 13,733 13,780 844 4,997 5,841 — Total minimum lease payments 8,135 16,442 24,576 15,081 9,255 24,336 $ 3,145 Financing Component (3) (788) (11,090) (11,878) (2,499) (2,173) (4,672) Net present value of minimum lease payments 7,347 5,351 12,698 12,582 7,082 19,664 Less: current portion of finance and operating lease obligations (2,680) — (2,680) (3,009) (618) (3,627) Long-term finance and operating lease obligations $ 4,667 $ 5,351 $ 10,018 $ 9,573 $ 6,464 $ 16,037 (1) Associated with the aforementioned related party leases entered into with former members of JMLLC, ACME and Industrial Air. (2) Associated with the aforementioned third party sublease. (3) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. |
Schedule of Supplemental Cash Flow Information | The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Year Ended December 31, (in thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,705 $ 5,055 Operating cash flows from finance leases 343 264 Financing cash flows from finance leases 2,737 2,734 Right-of-use assets exchanged for lease liabilities Operating leases $ 3,135 $ — Finance leases 5,219 2,634 Right-of-use assets disposed or adjusted modifying operating leases liabilities $ 1,112 $ 2,455 Right-of-use assets disposed or adjusted modifying finance leases liabilities $ (93) $ (77) |
Multiemployer Pension Plans (Ta
Multiemployer Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Multiemployer Plans | The following table presents the MEPPs in which the Company participates. Additionally, this table also lists the PPA Zone Status for MEPPs as the critical status (red zone-less than 65% funded), the endangered status (yellow-less than 80% funded), the seriously endangered status (orange-less than 80% funded and projects a credit balance deficit within seven years) or neither critical or endangered status (green-greater than 80% funded). The zone status represents the most recent available information for the respective MEPP, which in certain circumstances is 2022 for the 2023 year. These dates may not correspond with the Company’s calendar year contributions. The zone status is based on information received from the MEPPs and is certified by the MEPPs’ actuaries. The “FIP/RP Status” column indicates MEPPs for which a financial improvement plan (FIP) or rehabilitation plan (RP) has been adopted or implemented. Pension Fund EIN/Pension PPA Zone Status FIP/RP Status Contributions (in Contributions Surcharge Expiration date 2023 2022 2023 2022 Plumbers and Pipefitters Local Union No. 43 Pension Fund 62-6101288 / 001 Green Green N/A $ 1,500 $ 1,205 Yes No June-24 Pipefitters Local 636 Defined Benefit Pension Fund 38-3009873 / 001 Green Green N/A 1,439 1,483 No No May-26 Sheet Metal Workers Local Union No. 80 Pension Fund 38-6105633 / 001 Green Green N/A 1,255 1,245 Yes No May-26 Plumbers Local No 98 Defined Benefit Pension Fund 38-3031916 / 001 Green Yellow Implemented 1,175 1,371 Yes No May-25 Pipefitters Union Local No. 537 Pension Fund 51-6030859 / 001 Green Green N/A 1,140 1,204 No No Aug-25 Sheet Metal Workers Local 98 Pension Fund 31-6171213 / 001 Green Green N/A 830 1,232 Yes No May 23 Steamfitters Local Union No. 420 Pension Fund 23-2004424 / 001 Red Red Implemented 633 537 No No Apr-26 Plumbers & Pipefitters Local No 189 Pension Plan 31-0894807 / 001 Green Green N/A 592 596 Yes No May-25 United Association National Pension Fund 52-6152779 / 001 Green Green N/A 579 525 No No Ranging from May-23 - May-27 Sheet Metal Workers' National Pension Fund 52-6112463 / 001 Green Green N/A 540 792 No No Ranging from May-23 – Apr-26 Heating, Piping and Refrigeration Pension Fund 52-1058013 / 001 Green Green N/A 295 609 No No Jul-25 Plumbers & Pipefitters of Local Union No. 333 Pension Fund 38-3545518 / 005 Green Green N/A 345 393 Yes No May-27 Plumbers & Steamfitters Local 577 Pension Plan 31-6134953 /001 Red Red Implemented 330 316 Yes No May-26 Ironworkers Local 704 Pension Fund 62-6098036 / 001 Green Green N/A 236 46 No No Apr-26 Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 / 001 Green Green N/A 178 247 No No May-24 Sheet Metal Workers Local 7, Zone 1 Pension Plan 38-6234066 / 001 Green Yellow N/A 113 8 No No Apr-26 Steamfitters Local #449 Pension Plan 25-6032401 / 001 Green Green N/A 87 103 No No May-26 Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan 22-6109064 / 001 Green Green N/A 83 65 No No Jul-27 National Electrical Benefit Fund 53-0181657 / 001 Green Green N/A 65 81 No No May-24 United Association Local Union No. 322 Pension Plan 21-6016638 / 001 Red Red Implemented 27 25 No Yes Apr-24 Plumbers Local Union No. 690 Pension Fund 23-6405018 / 001 Green Green N/A 25 25 No No Apr-24 Airconditioning and Refrigeration Industry Retirement Trust Fund 95-6035386 / 001 Green Green N/A 8 74 No No Aug-24 Plumbers Union Local No. 12 Pension 04-6023174 / 001 Green Green N/A 5 14 No No Aug-25 Southern California Pipe Trades Retirement Fund 51-6108443 / 001 Green Green N/A 4 130 No No Aug-26 Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada 95-6052257 / 001 Green Yellow Implemented — 139 No No Jun-24 Laborers District Council Pension and Disability Trust Fund No. 2 52-0749130 / 001 Green Green N/A — 10 No No Oct-25 All other plans (13 and 11 as of December 31, 2023 and 2022, respectively) 153 103 Total Contributions $ 11,637 $ 12,578 |
Management Incentive Plans (Tab
Management Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RSUs | |
Schedule of Share-based Awards Activity | The following table summarizes the Company’s service-based RSU activity: Awards Weighted-Average Unvested at January 1, 2022 266,089 $ 8.45 Granted 184,941 8.97 Vested (146,151) 7.78 Forfeited (24,604) 9.43 Unvested at December 31, 2022 280,275 $ 9.06 Granted 164,413 11.94 Vested (163,354) 8.58 Forfeited (42,131) 10.63 Unvested at December 31, 2023 239,203 $ 11.09 |
PRSUs | |
Schedule of Share-based Awards Activity | The following table summarizes the Company’s PRSU activity: Awards Weighted-Average Unvested at January 1, 2022 280,700 $ 9.46 Granted 258,363 7.18 Vested — — Forfeited (41,123) 8.98 Unvested at December 31, 2022 497,940 $ 8.32 Granted 289,092 12.77 Performance factor adjustment (1) (121,827) 4.29 Vested 32,327 4.29 Forfeited (116,911) 9.81 Unvested at December 31, 2023 580,621 $ 10.85 (1) Performance-based awards covering the three year period ended December 31, 2022 were paid out in the first quarter of 2023 based on the approval of the Company's Compensation Committee. The performance factor during the measurement period used to determine compensation payouts was 136.13% of the pre-defined metric target of 100%, which resulted in a positive performance factor adjustment and the issuance of 32,327 of additional awards associated with the original grant. |
Business and Organization (Deta
Business and Organization (Details) | 12 Months Ended |
Dec. 31, 2023 teamMember office segment market | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of markets | market | 6 |
Number of team members (more than) | teamMember | 1,400 |
Number of offices | office | 19 |
Number of operating segments | segment | 2 |
Service period | 2 years |
Significant Accounting Polici_4
Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 59,833 | $ 36,001 | |
Restricted cash | 65 | 113 | |
Total cash, cash equivalents and restricted cash | $ 59,898 | $ 36,114 | $ 14,589 |
Significant Accounting Polici_5
Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 05, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Cash and Cash Equivalents [Line Items] | |||
Allowance for doubtful accounts | $ 292 | $ 234 | |
Depreciation and amortization | 6,400 | $ 6,600 | |
Revolving Credit Facility | Line of Credit | A&R Wintrust Revolving Loan | |||
Cash and Cash Equivalents [Line Items] | |||
Write-off of unamortized discount and financing costs | $ 300 | $ 300 | |
Minimum | |||
Cash and Cash Equivalents [Line Items] | |||
Term of service contract | 3 months | ||
Minimum | Buildings and leasehold improvements | |||
Cash and Cash Equivalents [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Minimum | Machinery and equipment | |||
Cash and Cash Equivalents [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum | |||
Cash and Cash Equivalents [Line Items] | |||
Term of service contract | 2 years | ||
Maximum | Buildings and leasehold improvements | |||
Cash and Cash Equivalents [Line Items] | |||
Property, plant and equipment, useful life | 40 years | ||
Maximum | Machinery and equipment | |||
Cash and Cash Equivalents [Line Items] | |||
Property, plant and equipment, useful life | 10 years |
Significant Accounting Polici_6
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Finance leases - vehicles | $ 11,665 | $ 10,789 |
Gross property and equipment | 54,219 | 47,739 |
Less: Accumulated amortization on finance leases | (4,502) | (6,001) |
Less: Accumulated depreciation | (28,887) | (23,514) |
Property and equipment, net of accumulated depreciation and amortization | 20,830 | 18,224 |
ACME Industrial piping LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 500 | |
Industrial Air Transaction | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,100 | |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 400 | 400 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 10,997 | 10,489 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 31,157 | $ 26,061 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Nov. 01, 2023 USD ($) payment | Jul. 03, 2023 USD ($) payment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||
Amortization of intangibles | $ 1,880 | $ 1,567 | ||
Estimated annual amortization expense year one | 3,444 | |||
Estimated annual amortization expense year two | 2,110 | |||
Estimated annual amortization expense year three | 2,081 | |||
Estimated annual amortization expense year four | 2,056 | |||
Estimated annual amortization expense year five | 1,860 | |||
Estimated annual amortization expense after year five | 3,488 | |||
ACME Industrial piping LLC | ||||
Business Acquisition [Line Items] | ||||
Consideration paid at closing | $ 5,000 | |||
Amount of consideration paid held in escrow for indemnification purposes | 400 | |||
Earnout payments | 2,500 | 1,500 | ||
Acquisition-related expenses | 500 | |||
Goodwill associated with acquisition | 2,226 | |||
Amortization of intangibles | 200 | |||
Estimated annual amortization expense year one | 300 | |||
Estimated annual amortization expense year two | 300 | |||
Estimated annual amortization expense year three | 300 | |||
Estimated annual amortization expense year four | 300 | |||
Estimated annual amortization expense year five | 300 | |||
ACME Industrial piping LLC | Level 3 | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | 1,500 | |||
ACME Industrial piping LLC | ODR | ||||
Business Acquisition [Line Items] | ||||
Goodwill fully deductible for tax purposes | 2,300 | |||
Goodwill associated with acquisition | $ 2,300 | 2,226 | ||
ACME Industrial piping LLC | Maximum | Level 3 | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Earnout payments, measurement input | 0.2164 | |||
ACME Industrial piping LLC | Minimum | Level 3 | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Earnout payments, measurement input | 0.1296 | |||
ACME Industrial piping LLC | 2023 Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | $ 2,000 | |||
Number of earnout tranches | payment | 2 | |||
Earnout period | 12 months | |||
ACME Industrial piping LLC | 2023 Earnout Period | Maximum | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | $ 2,500 | |||
ACME Industrial piping LLC | 2022 Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | $ 500 | |||
Number of earnout tranches | payment | 2 | |||
Earnout period | 12 months | |||
ACME Industrial piping LLC | 2022 Earnout Period | Maximum | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | $ 2,000 | |||
Industrial Air Transaction | ||||
Business Acquisition [Line Items] | ||||
Consideration paid at closing | $ 13,500 | |||
Amount of consideration paid held in escrow for indemnification purposes | 1,400 | |||
Earnout payments | 6,500 | 3,200 | ||
Acquisition-related expenses | 500 | |||
Goodwill associated with acquisition | 2,778 | |||
Amortization of intangibles | 500 | |||
Estimated annual amortization expense year one | 2,200 | |||
Estimated annual amortization expense year two | 900 | |||
Estimated annual amortization expense year three | 900 | |||
Estimated annual amortization expense year four | 900 | |||
Estimated annual amortization expense year five | 900 | |||
Industrial Air Transaction | Level 3 | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | 3,200 | |||
Industrial Air Transaction | ODR | ||||
Business Acquisition [Line Items] | ||||
Goodwill fully deductible for tax purposes | 2,800 | |||
Goodwill associated with acquisition | $ 2,800 | $ 2,778 | ||
Industrial Air Transaction | Maximum | Level 3 | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Earnout payments, measurement input | 0.1368 | |||
Industrial Air Transaction | 2023 Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | $ 3,500 | |||
Number of earnout tranches | payment | 2 | |||
Earnout period | 12 months | |||
Industrial Air Transaction | 2023 Earnout Period | Maximum | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | $ 8,800 | |||
Industrial Air Transaction | 2022 Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Earnout payments | $ 3,000 | |||
Number of earnout tranches | payment | 2 | |||
Earnout period | 12 months | |||
Industrial Air Transaction | 2022 Earnout Period | Maximum | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | $ 7,600 | |||
Industrial Air Transaction | 2022 Earnout Period | Maximum | First IA Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | 7,600 | |||
Industrial Air Transaction | 2022 Earnout Period | Maximum | Second IA Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | 8,800 | |||
Industrial Air Transaction | 2022 Earnout Period | Minimum | First IA Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | 6,600 | |||
Industrial Air Transaction | 2022 Earnout Period | Minimum | Second IA Earnout Period | ||||
Business Acquisition [Line Items] | ||||
Gross profits from acquired companies | $ 7,800 |
Acquisitions - Allocation of Pu
Acquisitions - Allocation of Purchase Price of Assets and Liabilities from ACME Industrial piping LLC (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Nov. 01, 2023 | Jul. 03, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value of liabilities assumed: | ||||||
Goodwill | $ 16,374 | $ 16,374 | $ 11,370 | $ 11,370 | ||
ACME Industrial piping LLC | ||||||
Consideration: | ||||||
Cash | $ 5,181 | 5,181 | ||||
Earnout provision | 1,121 | 1,514 | ||||
Measurement Period Adjustments, Earnout provision | 393 | |||||
Total Consideration | 6,302 | 6,695 | ||||
Measurement Period Adjustments, Total Consideration | 393 | |||||
Fair value of assets acquired: | ||||||
Cash and cash equivalents | 298 | 298 | 298 | |||
Accounts receivable | 1,150 | 1,150 | 1,150 | |||
Contract assets | 414 | 414 | 414 | |||
Property and equipment | 488 | 488 | 488 | |||
Operating lease right-of-use assets | 301 | 301 | 301 | |||
Intangible assets | 2,300 | 2,800 | 2,800 | |||
Measurement Period Adjustments, Intangible assets | 500 | |||||
Amount attributable to assets acquired | 4,951 | 5,451 | 5,451 | |||
Measurement Period Adjustments, Amount attributable to assets acquired | 500 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable, including retainage | 170 | 170 | 170 | |||
Current operating lease liabilities | 195 | 195 | 195 | |||
Contract liabilities | 373 | 373 | 373 | |||
Accrued expenses and other current liabilities | 138 | 138 | 138 | |||
Long-term operating lease liabilities | 106 | 106 | 106 | |||
Amount attributable to liabilities assumed | 982 | 982 | 982 | |||
Goodwill | $ 2,333 | 2,226 | $ 2,226 | |||
Measurement Period Adjustments, Goodwill | $ (107) | |||||
Industrial Air Transaction | ||||||
Consideration: | ||||||
Cash | $ 11,527 | |||||
Earnout provision | 3,165 | |||||
Total Consideration | 14,692 | |||||
Fair value of assets acquired: | ||||||
Cash and cash equivalents | 1,149 | |||||
Accounts receivable | 5,200 | |||||
Inventory | 1,290 | |||||
Contract assets | 220 | |||||
Other current assets | 993 | |||||
Property and equipment | 1,447 | |||||
Operating lease right-of-use assets | 3,756 | |||||
Intangible assets | 8,720 | |||||
Amount attributable to assets acquired | 22,775 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable, including retainage | 885 | |||||
Current operating lease liabilities | 475 | |||||
Contract liabilities | 6,900 | |||||
Accrued expenses and other current liabilities | 347 | |||||
Long-term operating lease liabilities | 2,254 | |||||
Amount attributable to liabilities assumed | 10,861 | |||||
Goodwill | 2,778 | |||||
Below-market lease | $ 1,000 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 22,130 | $ 10,610 |
Accumulated amortization | (7,091) | (5,230) |
Total | 15,039 | 5,380 |
Trade name, trademarks and intellectual property | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | 4,250 | |
Accumulated amortization | (578) | |
Total | 3,672 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | 15,320 | 8,330 |
Accumulated amortization | (5,249) | (4,288) |
Total | 10,071 | $ 4,042 |
ACME Industrial piping LLC | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | 2,800 | |
Accumulated amortization | (169) | |
Total | $ 2,631 | |
Weighted Average Useful Life (Years) | 7 years 10 months 24 days | |
ACME Industrial piping LLC | Trade name and trademarks | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 200 | |
Accumulated amortization | (19) | |
Total | $ 181 | |
Weighted Average Useful Life (Years) | 4 years 9 months 18 days | |
ACME Industrial piping LLC | Customer relationships | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 2,600 | |
Accumulated amortization | (150) | |
Total | $ 2,450 | |
Weighted Average Useful Life (Years) | 8 years 1 month 6 days | |
Industrial Air Transaction | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 8,720 | |
Accumulated amortization | (481) | |
Total | $ 8,239 | |
Weighted Average Useful Life (Years) | 6 years 3 months 18 days | |
Industrial Air Transaction | Trade name, trademarks and intellectual property | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 2,710 | |
Accumulated amortization | (58) | |
Total | $ 2,652 | |
Weighted Average Useful Life (Years) | 7 years 7 months 6 days | |
Industrial Air Transaction | Customer relationships | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 4,390 | |
Accumulated amortization | (99) | |
Total | $ 4,291 | |
Weighted Average Useful Life (Years) | 7 years 2 months 12 days | |
Industrial Air Transaction | Backlog | ||
Business Acquisition [Line Items] | ||
Gross carrying amount | $ 1,620 | |
Accumulated amortization | (324) | |
Total | $ 1,296 | |
Weighted Average Useful Life (Years) | 7 months 6 days |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) project | Dec. 31, 2022 USD ($) project | |
Disaggregation of Revenue [Line Items] | ||
Term of revenue contracts | three months to two years | |
Percentage completed of certain milestones | 10% | |
Net amount of unresolved change orders and claims | $ 19.5 | $ 28.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months | |
GCR | ||
Disaggregation of Revenue [Line Items] | ||
Number of projects with write downs | project | 2 | 3 |
Total net gross profits write ups (downs) | $ 2.2 | $ 3 |
Total net gross profits write ups (downs) | project | 2 | 4 |
Total gross profit write downs | $ (1.3) | $ (2.8) |
Revision amount of gross profit contract estimates (more than) | 0.5 | $ 0.5 |
GCR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 186.9 | |
Revenue, remaining performance obligation, percentage | 83% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
GCR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, percentage | 17% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
ODR | ||
Disaggregation of Revenue [Line Items] | ||
Number of projects with write downs | project | 1 | |
Total net gross profits write ups (downs) | $ (1) | |
ODR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 127.3 | |
Revenue, remaining performance obligation, percentage | 95% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |
ODR | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, percentage | 10% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Components of Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Contract assets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 29,247 | $ 33,573 |
Retainage receivable | 22,443 | 27,880 |
Contract assets | 51,690 | 61,453 |
Change in costs in excess of billings and estimated earnings | (4,326) | |
Change in retainage receivable | (5,437) | |
Change in total contract assets | (9,763) | |
Contract liabilities | ||
Billings in excess of costs and estimated earnings on uncompleted contracts | 41,987 | 43,806 |
Provisions for losses | 173 | 201 |
Total contract liabilities | 42,160 | $ 44,007 |
Change in billings in excess of costs and estimated earnings | (1,819) | |
Change in provisions for losses | (28) | |
Change in total contract liabilities | $ (1,847) |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Contracts In Progress (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Revenue earned on uncompleted contracts | $ 551,120 | $ 678,014 |
Less: Billings to date | (563,860) | (688,247) |
Net (overbilling) underbilling | (12,740) | (10,233) |
Costs and estimated earnings in excess of billings on uncompleted contracts | 29,247 | 33,573 |
Billings in excess of costs and estimated earnings on uncompleted contracts | $ (41,987) | $ (43,806) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 11,370,000 | $ 16,374,000 | $ 11,370,000 | $ 11,370,000 |
Impairment of intangible assets | 0 | 0 | ||
Amortization of intangibles | $ 1,880,000 | $ 1,567,000 | ||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 1 year | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 15 years | |||
ODR | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 01, 2023 | Jul. 03, 2023 | Dec. 31, 2023 | |
Goodwill [Roll Forward] | |||
Beginning Balance | $ 11,370 | ||
Ending Balance | 16,374 | ||
ACME Industrial piping LLC | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | 2,226 | ||
Ending Balance | $ 2,333 | 2,226 | |
Industrial Air Transaction | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | 2,778 | ||
Ending Balance | $ 2,778 | ||
GCR | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 0 | ||
Ending Balance | 0 | ||
GCR | ACME Industrial piping LLC | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | 0 | ||
GCR | Industrial Air Transaction | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | 0 | ||
ODR | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 11,370 | ||
Ending Balance | 16,374 | ||
ODR | ACME Industrial piping LLC | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | $ 2,300 | 2,226 | |
ODR | Industrial Air Transaction | |||
Goodwill [Roll Forward] | |||
Goodwill associated with acquisition | $ 2,800 | $ 2,778 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Definite-lived and Indefinite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amortized intangible assets: | ||
Gross carrying amount | $ 22,130 | $ 10,610 |
Accumulated amortization | (7,091) | (5,230) |
Total | 15,039 | 5,380 |
Unamortized intangible assets: | ||
Gross carrying amount | 9,960 | 9,960 |
Net intangible assets, excluding goodwill | 9,960 | 9,960 |
Intangible Assets, Gross (Excluding Goodwill), Total | 32,090 | 20,570 |
Accumulated amortization | (7,091) | (5,230) |
Intangible Assets, Net (Excluding Goodwill), Total | 24,999 | 15,340 |
Trade Names | ||
Unamortized intangible assets: | ||
Gross carrying amount | 9,960 | 9,960 |
Net intangible assets, excluding goodwill | 9,960 | 9,960 |
Customer relationships | ||
Amortized intangible assets: | ||
Gross carrying amount | 15,320 | 8,330 |
Accumulated amortization | (5,249) | (4,288) |
Total | 10,071 | 4,042 |
Unamortized intangible assets: | ||
Accumulated amortization | (5,249) | (4,288) |
Backlog | ||
Amortized intangible assets: | ||
Gross carrying amount | 2,560 | 940 |
Accumulated amortization | (1,264) | (643) |
Total | 1,296 | 297 |
Unamortized intangible assets: | ||
Accumulated amortization | (1,264) | (643) |
Trade name, trademarks and intellectual property | ||
Amortized intangible assets: | ||
Gross carrying amount | 4,250 | |
Accumulated amortization | (578) | |
Total | 3,672 | |
Unamortized intangible assets: | ||
Accumulated amortization | $ (578) | |
Trade Names | ||
Amortized intangible assets: | ||
Gross carrying amount | 1,340 | |
Accumulated amortization | (299) | |
Total | 1,041 | |
Unamortized intangible assets: | ||
Accumulated amortization | $ (299) |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Remaining Useful Lives of Definite-Lived Intangible Assets (Details) | Dec. 31, 2023 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 6 years 10 months 24 days |
Trade name, trademarks and intellectual property | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 6 years 7 months 6 days |
Backlog | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 7 months 6 days |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 3,444 | |
2025 | 2,110 | |
2026 | 2,081 | |
2027 | 2,056 | |
2028 | 1,860 | |
2029 and thereafter | 3,488 | |
Total | $ 15,039 | $ 5,380 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related liabilities | $ 5,561 | $ 4,545 |
Accrued bonus and commissions | 12,254 | 9,682 |
Accrued insurance liabilities | 1,007 | 715 |
Accrued job costs | 2,710 | 1,913 |
Assurance-type warranty liabilities | 1,500 | 1,581 |
Estimated loss contingency | 650 | 2,182 |
Earnout Payments accrued, current | 5,719 | 2,859 |
Other accrued liabilities | 1,566 | 1,465 |
Total | $ 30,967 | $ 24,942 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Reconciliation of Assurance-type Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at the beginning of the period | $ 1,581 | $ 3,310 |
Accruals for warranties issued | 261 | 302 |
Accruals related to pre-existing warranties (including changes in estimates) | 932 | (494) |
Settlements made | (1,274) | (1,537) |
Balance at the end of the period | $ 1,500 | $ 1,581 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 | $ 12,698 | |
Total debt | 22,698 | $ 31,758 |
Less – Current portion of long-term debt | (2,680) | (9,564) |
Less – Unamortized discount and debt issuance costs | (387) | (666) |
Long-term debt | 19,631 | 21,528 |
Loss on early debt extinguishment | 311 | 0 |
Prepayment penalty and other extinguishment costs | 1,776 | 0 |
Vehicles | ||
Debt Instrument [Line Items] | ||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 | 7,347 | 4,954 |
Building | ||
Debt Instrument [Line Items] | ||
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 | $ 5,351 | 5,351 |
Minimum | ||
Debt Instrument [Line Items] | ||
Finance leases, interest rate | 3.96% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Finance leases, interest rate | 8.60% | |
Term Loan | A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | 21,453 |
Revolving Credit Facility | A&R Wintrust Revolving Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 10,000 | $ 0 |
Debt - Maturities of Long-Term
Debt - Maturities of Long-Term Debt and Finance Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 2,653 | |
2025 | 2,039 | |
2026 | 1,650 | |
2027 | 845 | |
2028 and thereafter | 15,512 | |
Total debt | $ 22,698 | $ 31,758 |
Debt - Wintrust Term and Revolv
Debt - Wintrust Term and Revolving Loans (Details) | 3 Months Ended | 12 Months Ended | ||||||
Jul. 03, 2023 USD ($) covenant | May 05, 2023 USD ($) covenant | Feb. 24, 2021 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | |
Interest Rate Swap | ||||||||
Debt Instrument [Line Items] | ||||||||
Notional amount | $ 10,000,000 | |||||||
Fixed interest rate | 3.12% | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, effective percentage | 9.25% | 8.50% | ||||||
Debt weighted average annual interest rate | 8.76% | |||||||
Debt instrument, interest rate during period | 5.68% | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | $ 50,000,000 | $ 30,000,000 | ||||||
Debt installment payments | $ 500,000 | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate step-down adjustment | 0.0050 | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate step-down adjustment | 0.0075 | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | Minimum | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.25% | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3% | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | Maximum | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 4% | |||||||
A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | Line of Credit | Revolving Credit Facility | Maximum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 1% | |||||||
A&R Wintrust Revolving Loan | Term Loan | Revolving Credit Facility | Jake Marshall Transaction | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||||||
A&R Wintrust Revolving Loan | Term Loan | Sublimit for Letters of Credit | Jake Marshall Transaction | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | 5,000,000 | ||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | $ 25,000,000 | ||||||
Repayments of debt | 9,600,000 | |||||||
Write-off of unamortized discount and financing costs | $ 300,000 | $ 300,000 | ||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.50% | |||||||
Variable rate step-down adjustment | 0.0050 | 50 | 0.0050 | |||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | SOFR | One month | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3.60% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | SOFR | Three months | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3.76% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | SOFR | Six months | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3.92% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Minimum | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.25% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3% | 3% | 3% | |||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Minimum | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.15% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.15% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Maximum | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3.50% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Maximum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.50% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Revolving Credit Facility | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3.10% | |||||||
A&R Wintrust Revolving Loan | Line of Credit | Sublimit for Letters of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||||||
A&R Wintrust Term Loan | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt installment payments | $ 600,000 | |||||||
Annual excess cash flow payments credit agreement period | 120 days | |||||||
Excess cash flow payments | $ 3,300,000 | |||||||
Net claim proceeds payments | $ 600,000 | $ 2,100,000 | ||||||
A&R Wintrust Term Loan | Term Loan | Jake Marshall Transaction | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | $ 35,500,000 | |||||||
A&R Wintrust Term Loan | Line of Credit | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 1% | |||||||
Variable rate step-down adjustment | 0.0075 | |||||||
A&R Wintrust Term Loan | Line of Credit | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate step-down adjustment | 0.0050 | |||||||
A&R Wintrust Term Loan | Line of Credit | SOFR | One month | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 4.10% | |||||||
A&R Wintrust Term Loan | Line of Credit | SOFR | Three months | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 4.26% | |||||||
A&R Wintrust Term Loan | Line of Credit | SOFR | Six months | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 4.42% | |||||||
A&R Wintrust Term Loan | Line of Credit | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 3% | |||||||
A&R Wintrust Term Loan | Line of Credit | Minimum | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread over variable rate | 0.15% | |||||||
A&R Wintrust Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of financial covenants | covenant | 3 | 3 | ||||||
Leverage ratio | 200% | 200% | ||||||
Coverage ratio | 1.20 | 1.20 | ||||||
Aggregate amount of unfinanced capital expenditures during any fiscal year | $ 0 | $ 0 | ||||||
Limit annual percentage of unfinanced capital expenditures | 50% | 50% | ||||||
Maximum outstanding borrowings during the period | $ 10,000,000 | $ 9,400,000 | ||||||
Weighted average annual interest rate | 5.72% | 4.78% | ||||||
A&R Wintrust Loans | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate amount of unfinanced capital expenditures during any fiscal year | $ 4,000,000 | $ 4,000,000 | ||||||
Amount drawn under credit agreement | $ 10,000,000 | $ 0 | ||||||
Average daily balance of borrowings outstanding | 6,600,000 | $ 100,000 | ||||||
Wintrust Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Letters of credit | $ 4,100,000 |
Debt - Applicable Margin and Co
Debt - Applicable Margin and Commitment Fees Payable (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Level I | |
Debt Instrument [Line Items] | |
Senior Leverage Ratio | 100% |
Level I | A&R Wintrust Revolving Loan | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | 3.10% |
Level I | A&R Wintrust Revolving Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | 0% |
Level I | A&R Wintrust Revolving Loan | Eurodollar | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | 0.25% |
Level II | |
Debt Instrument [Line Items] | |
Senior Leverage Ratio | 100% |
Level II | A&R Wintrust Revolving Loan | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | 2.60% |
Level II | A&R Wintrust Revolving Loan | Prime Rate | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | (0.50%) |
Level II | A&R Wintrust Revolving Loan | Eurodollar | |
Debt Instrument [Line Items] | |
Applicable Margin for Loans | 0.25% |
Debt - Sale-Leaseback Financing
Debt - Sale-Leaseback Financing Transactions (Details) | 12 Months Ended | ||
Sep. 29, 2022 USD ($) renewalTerm | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Disclosure [Abstract] | |||
Purchase of property under sale and leaseback transaction | $ 7,800,000 | $ 2,400,000 | $ 2,600,000 |
Purchase price | 5,400,000 | 5,400,000 | |
Tenant improvement allowance | $ 2,400,000 | ||
Lease agreement, term | 25 years | ||
Lease agreement, number of renewal terms | renewalTerm | 2 | ||
Lease agreement, renewal term | 5 years | ||
Sale leaseback transaction, annual minimum rent | $ 499,730 | ||
Annual increase rate | 2.50% | ||
Termination fee | $ 1,700,000 | ||
Discount rate | 11.11% | ||
Tenant Improvement allowance, implicit rate | 6.53% | ||
Sale leaseback transaction, gain or loss recognized | 0 | ||
Financing liability | 5,000,000 | ||
Financing interest expense | $ 500,000 | $ 100,000 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Mar. 29, 2023 | Mar. 25, 2022 | Jan. 01, 2020 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 20, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||||
Common stock, par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | |||||||
Preferred stock, par or stated value per share (in usd per shares) | $ 0.0001 | |||||||
Warrants outstanding (in shares) | 0 | 1,229,643 | ||||||
Share Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Repurchase of common stock | $ 2,000,000 | |||||||
Number of shares acquired (in shares) | 2,000,000 | |||||||
2022 Amended And Restated Omnibus Incentive Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Increase in number of shares that may be issued (in shares) | 350,000 | |||||||
Common stock, capital shares reserved for future issuance (in shares) | 2,600,000 | |||||||
2023 Amended And Restated Omnibus Incentive Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Increase in number of shares that may be issued (in shares) | 450,000 | |||||||
Common stock, capital shares reserved for future issuance (in shares) | 3,050,000 | |||||||
ESPP | Employee Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Purchase price of common stock, percent of fair market value | 85% | |||||||
Maximum contribution percentage | 10% | |||||||
Maximum contribution amount | $ 5,000 | |||||||
Offering period | 6 months | |||||||
Discount percentage from market price, beginning of purchase period | 15% | |||||||
Vesting period | 6 months | |||||||
Number of shares authorized to be issued (in shares) | 500,000 | |||||||
Number of stock issued (in shares) | 17,661 | 37,490 | ||||||
Shares available for future grants (in shares) | 388,956 | |||||||
$15 Exercise Price Sponsor Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant exercise price (in usd per share) | $ 15 | |||||||
Stock redeemed or called during period, shares | 600,000 | |||||||
Merger Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant exercise price (in usd per share) | $ 12.50 | $ 12.50 | ||||||
Stock redeemed or called during period, shares | 606,476 | |||||||
Number of warrants exercised (in shares) | 274,742 | |||||||
Warrants outstanding (in shares) | 0 | 629,643 | ||||||
Sponsor Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrants exercised (in shares) | 167,564 | |||||||
unexercised Merger Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants outstanding (in shares) | 23,167 |
Equity - Outstanding Warrants (
Equity - Outstanding Warrants (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 0 | 1,229,643 |
$15 Exercise Price Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 0 | 600,000 |
Number of warrants per each share of common stock (in shares) | 1 | 1 |
Warrant exercise price (in usd per share) | $ 15 | $ 15 |
Merger Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 0 | 629,643 |
Number of warrants per each share of common stock (in shares) | 1 | 1 |
Warrant exercise price (in usd per share) | $ 12.50 | $ 12.50 |
$15 Exercise Price Sponsor Warrants | ||
Class of Stock [Line Items] | ||
Warrant exercise price (in usd per share) | $ 15 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 01, 2023 USD ($) payment | Jul. 03, 2023 USD ($) payment | Dec. 02, 2021 USD ($) payment | Apr. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) approach | Dec. 31, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest income | $ 1,217 | $ 0 | ||||
Payment for contingent consideration liability | $ 3,000 | |||||
Change in fair value of contingent consideration | 729 | 2,285 | ||||
Interest Rate Swap | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gain (loss) on change in fair value of interest rate swap | (100) | 300 | ||||
Other Noncurrent Liabilities | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of the interest rate swap | 200 | |||||
Jake Marshall Transaction | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 6,000 | |||||
Change in fair value of contingent consideration | 700 | $ 2,300 | ||||
Jake Marshall Transaction | 2023 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 3,000 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
Jake Marshall Transaction | 2023 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 10,000 | |||||
Jake Marshall Transaction | 2023 Earnout Period | Minimum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | 8,000 | |||||
Jake Marshall Transaction | 2022 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 3,000 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
Jake Marshall Transaction | 2022 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 10,000 | |||||
Jake Marshall Transaction | 2022 Earnout Period | Minimum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | 8,000 | |||||
ACME Industrial piping LLC | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 2,500 | 1,500 | ||||
ACME Industrial piping LLC | 2023 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 2,000 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
ACME Industrial piping LLC | 2023 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 2,500 | |||||
ACME Industrial piping LLC | 2022 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 500 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
ACME Industrial piping LLC | 2022 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 2,000 | |||||
Industrial Air Transaction | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 6,500 | 3,200 | ||||
Industrial Air Transaction | 2023 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 3,500 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
Industrial Air Transaction | 2023 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 8,800 | |||||
Industrial Air Transaction | 2022 Earnout Period | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 3,000 | |||||
Number of earnout tranches | payment | 2 | |||||
Earnout period | 12 months | |||||
Industrial Air Transaction | 2022 Earnout Period | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gross profits from acquired companies | $ 7,600 | |||||
Level 1 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest income | $ 1,200 | |||||
Level 3 | Jake Marshall Transaction | Earnout Payments | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of earnout payments | $ 3,100 | |||||
Level 3 | ACME Industrial piping LLC | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 1,500 | |||||
Level 3 | ACME Industrial piping LLC | Maximum | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | 0.2164 | |||||
Level 3 | ACME Industrial piping LLC | Maximum | Earnout Payments | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | approach | 0.2164 | |||||
Level 3 | ACME Industrial piping LLC | Minimum | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | 0.1296 | |||||
Level 3 | ACME Industrial piping LLC | Minimum | Earnout Payments | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | approach | 0.1296 | |||||
Level 3 | Industrial Air Transaction | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments | $ 3,200 | |||||
Level 3 | Industrial Air Transaction | Maximum | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | 0.1368 | |||||
Level 3 | Industrial Air Transaction | Maximum | Earnout Payments | Measurement Input, Discount Rate | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earnout payments, measurement input | approach | 0.1368 | |||||
Level 3 | A&R Wintrust Term Loan - term loan payable in quarterly installments of principal, (commencing in December 2021) plus interest through February 2026 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | $ 10,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Cash and Cash Equivalents (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | $ 57,709 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 57,709 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Overnight repurchase agreements | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 43,959 |
Overnight repurchase agreements | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 43,959 |
Overnight repurchase agreements | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | |
Overnight repurchase agreements | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | |
U.S. Treasury Bills | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 10,000 |
U.S. Treasury Bills | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 10,000 |
U.S. Treasury Bills | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
U.S. Treasury Bills | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Money market fund | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 3,750 |
Money market fund | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 3,750 |
Money market fund | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Money market fund | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | $ 0 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Values of the Company's Contingent Earnout Payment Obligations (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | $ 1,566 | $ 1,465 | |
Other long-term liabilities: | 7,782 | 5,374 | |
Payment for contingent consideration liability | $ 3,000 | ||
Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | 0 | |
Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | 0 | |
Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 7,782 | 5,374 | |
2023 Jake Marshall Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 3,000 | ||
Other long-term liabilities: | 2,515 | ||
2023 Jake Marshall Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
Other long-term liabilities: | 0 | ||
2023 Jake Marshall Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
Other long-term liabilities: | 0 | ||
2023 Jake Marshall Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 3,000 | ||
Other long-term liabilities: | 2,515 | ||
First ACME Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 429 | ||
First ACME Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
First ACME Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
First ACME Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 429 | ||
First IA Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 2,290 | ||
First IA Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
First IA Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
First IA Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 2,290 | ||
Second ACME Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 1,188 | ||
Second ACME Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | ||
Second ACME Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | ||
Second ACME Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 1,188 | ||
Second IA Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 875 | ||
Second IA Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | ||
Second IA Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | 0 | ||
Second IA Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Other long-term liabilities: | $ 875 | ||
2022 Jake Marshall Earnout Period | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 2,859 | ||
2022 Jake Marshall Earnout Period | Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
2022 Jake Marshall Earnout Period | Level 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | 0 | ||
2022 Jake Marshall Earnout Period | Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Accrued expenses and other current liabilities: | $ 2,859 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
EPS numerator: | ||
Net income | $ 20,754 | $ 6,799 |
EPS denominator: | ||
Weighted average shares outstanding – basic (in shares) | 10,773,467 | 10,425,119 |
In-the-money warrants (in shares) | 249,000 | 0 |
Weighted average shares outstanding – diluted (in shares) | 11,812,098 | 10,676,534 |
EPS: | ||
Basic (in usd per share) | $ 1.93 | $ 0.65 |
Diluted (in usd per share) | $ 1.76 | $ 0.64 |
Restricted Stock Units | ||
EPS denominator: | ||
Incremental shares attributable to share-based payments (in shares) | 789,000 | 247,000 |
Employee Stock | ||
EPS denominator: | ||
Incremental shares attributable to share-based payments (in shares) | 1,000 | 5,000 |
Earnings per Share - Schedule_2
Earnings per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,139 | 1,231,216 |
Out-of-the-money warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 1,229,643 |
Performance and market-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 95 | 0 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,044 | 1,573 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current tax provision | ||
U.S. Federal | $ 5,851 | $ 2,613 |
State and local | 1,845 | 695 |
Total current tax provision | 7,696 | 3,308 |
Deferred tax provision | ||
U.S. Federal | (253) | (584) |
State and local | (97) | 85 |
Total deferred tax provision | (350) | (499) |
Income tax provision | $ 7,346 | $ 2,809 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Effective tax rate | 26.10% | 29.20% | |
Valuation allowance against deferred tax assets | $ 0 | $ 0 | |
Unrecognized tax benefits | 0 | $ 0 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21% | 21% |
State income taxes, net of federal tax effect | 4.80% | 6.40% |
Stock based compensation – restricted stock | (1.10%) | 1.40% |
Return to provision adjustment | (0.20%) | (0.10%) |
Permanent differences | 1.40% | 1.30% |
Tax credits | (0.50%) | (0.90%) |
Other | 0.60% | 0% |
Effective tax rate | 26.10% | 29.20% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Accrued expenses | $ 699 | $ 950 |
Allowance for doubtful accounts | 74 | 60 |
Intangibles | 435 | 463 |
Goodwill | 3,057 | 3,301 |
Startup costs | 57 | 68 |
Stock-based compensation | 1,804 | 1,066 |
Research and development expenses | 1,276 | 640 |
Lease liabilities | 6,193 | 6,280 |
Accrued bonuses and commissions | 424 | 253 |
Total deferred tax assets | 14,019 | 13,081 |
Deferred tax liabilities: | ||
Fixed assets | (3,413) | (3,248) |
Right-of-use assets | (4,566) | (4,684) |
Percentage of completion | (814) | (241) |
Interest | (47) | (79) |
Total deferred tax liabilities | (8,840) | (8,252) |
Net deferred tax asset | $ 5,179 | $ 4,829 |
Operating Segments - Narrative
Operating Segments - Narrative (Details) - segment | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue, Major Customer [Line Items] | ||
Number of operating segments | 2 | |
GCR | ||
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | 1 | |
GCR | Revenue, Segment Benchmark | Customer Concentration Risk | Customer One | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 11% | |
ODR | ||
Revenue, Major Customer [Line Items] | ||
Number of reportable segments | 1 |
Operating Segments - Segment In
Operating Segments - Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 516,350 | $ 496,782 |
Gross profit | 119,290 | 93,741 |
Selling, general and administrative | 87,397 | 77,879 |
Change in fair value of contingent consideration | 729 | 2,285 |
Amortization of intangibles | 1,880 | 1,567 |
Operating income | 29,284 | 12,010 |
Interest expense | (2,046) | (2,144) |
Interest income | 1,217 | 0 |
Loss on early termination of operating lease | 0 | (849) |
Loss on early debt extinguishment | (311) | 0 |
(Loss) gain on change in fair value of interest rate swap | (124) | 310 |
Gain on disposition of property and equipment | 80 | 281 |
Total unallocated amounts | (1,184) | (2,402) |
Income before income taxes | 28,100 | 9,608 |
Operating Segments | GCR | ||
Segment Reporting Information [Line Items] | ||
Revenue | 254,392 | 280,379 |
Gross profit | 43,200 | 38,622 |
Operating Segments | ODR | ||
Segment Reporting Information [Line Items] | ||
Revenue | 261,958 | 216,403 |
Gross profit | 76,090 | 55,119 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Selling, general and administrative | $ 4,900 | $ 2,700 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||
Jan. 23, 2020 | Nov. 30, 2023 | Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | |||||
Estimated loss contingency | $ 650 | $ 2,182 | |||
Payment to acquire workers' compensation and general liability insurance | 250 | ||||
Malpractice insurance, annual coverage limit | 3,900 | ||||
Surety Bond | |||||
Loss Contingencies [Line Items] | |||||
Long-term debt | $ 90,900 | ||||
Bernards Bros vs. Limbach Holdings, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount awarded to other party | $ 2,200 | ||||
Pending Litigation | Bernards | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, damages sought, value | $ 3,000 | ||||
Settled Litigation | Bernards Bros vs. Limbach Holdings, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Payments for legal settlements | $ 2,200 |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Self-Insurance (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Current liability — workers' compensation and general liability | $ 188 | $ 158 |
Current liability — medical and dental | 819 | 557 |
Non-current liability | 645 | 343 |
Total liability | 1,652 | 1,058 |
Restricted cash | $ 65 | $ 113 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 02, 2021 USD ($) extension renewal_option | Mar. 31, 2022 USD ($) ft² installment | Jun. 30, 2021 USD ($) ft² | Mar. 31, 2022 USD ($) ft² installment | Dec. 31, 2023 USD ($) extension | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Lease termination fee | $ 700,000 | |||||
Lease termination fee payable, number of installments | installment | 16 | 16 | ||||
Gain on derecognition of lease assets and liabilities | $ 100,000 | |||||
Loss on disposal of leasehold improvement | 100,000 | |||||
Ground Floor Space | Southern California Region | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Subleased area (in sq ft) | ft² | 16,720 | 71,787 | 16,720 | |||
Sublease annual base rent | $ 600,000 | $ 800,000 | ||||
Sublease annual base rent increase percentage | 3% | 3% | ||||
Sublease income | $ 1,200,000 | $ 1,100,000 | ||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative | Selling, general and administrative | ||||
Jake Marshall Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of lease extensions | extension | 2 | |||||
Lease term | 10 years | |||||
Term of lease extensions | 2 years | |||||
ACME Industrial piping LLC | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of lease extensions | extension | 1 | |||||
Term of lease extensions | 1 year | |||||
Real Estate Leases | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of lease extensions | extension | 1 | |||||
For the first 5 years | Jake Marshall Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 5 years | |||||
Monthly base rent | $ 37,500 | |||||
For the first 5 years | ACME Industrial piping LLC | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 6 months | |||||
Monthly base rent | $ 17,000 | |||||
For the first 5 years | Industrial Air Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 33 months | |||||
Term of lease extensions | 3 years | |||||
Monthly base rent | $ 26,500 | |||||
Extension period | 3 years | |||||
Number of renewal options | renewal_option | 2 | |||||
For years 6 through 10 | Jake Marshall Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 5 years | |||||
Monthly base rent | $ 45,000 | |||||
For years 6 through 10 | ACME Industrial piping LLC | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 6 months | |||||
Monthly base rent | $ 18,000 | |||||
For years 6 through 10 | Industrial Air Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 33 months | |||||
Monthly base rent | $ 27,563 | |||||
Extension period | 3 years | |||||
Lease Contractual Term Three | ACME Industrial piping LLC | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Monthly base rent | $ 19,000 | |||||
Lease Contractual Term Three | Industrial Air Transaction | Land and facilities | Full-time Employee | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Monthly base rent | $ 28,941 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheets Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 29, 2022 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 19,727 | $ 18,288 | |
Property and equipment, net | 9,561 | 7,402 | |
Total lease assets | 29,288 | 25,690 | |
Current operating lease liabilities | $ 3,627 | $ 3,562 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt and Lease Obligation, Current | Long-Term Debt and Lease Obligation, Current | |
Current portion of long-term debt | $ 2,680 | $ 2,135 | |
Long-term operating lease liabilities | $ 16,037 | $ 15,643 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt | |
Long-term finance and operating lease obligations | $ 10,018 | $ 8,170 | |
Total lease liabilities | 32,362 | 29,510 | |
Operating lease, accumulated amortization | 13,600 | 12,200 | |
Below-market lease | 1,000 | ||
Finance lease, accumulated amortization | 4,502 | 6,001 | |
Purchase of property under sale and leaseback transaction | 2,400 | $ 2,600 | $ 7,800 |
Purchase price | $ 5,400 | $ 5,400 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Finance lease cost, amortization, cost of revenue | $ 2,753 | $ 2,687 |
Finance lease cost, interest expense, net | 384 | 264 |
Total lease cost | 7,871 | 8,133 |
Cost of revenue | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2,184 | 2,627 |
Cost of revenue | Operating Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 400 | 500 |
Cost of revenue | Finance Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 3,700 | 3,800 |
Selling, general and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2,550 | 2,555 |
Selling, general and administrative expenses | Operating Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | 500 | |
Selling, general and administrative expenses | Finance Lease | ||
Lessee, Lease, Description [Line Items] | ||
Variable lease costs | $ 0 | $ 0 |
Leases - Future Minimum Lease C
Leases - Future Minimum Lease Commitments For Finance and Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finance Lease Obligations | ||
2024 | $ 3,556 | |
2025 | 2,812 | |
2026 | 2,310 | |
2027 | 1,427 | |
2028 | 691 | |
Thereafter | 13,780 | |
Total minimum lease payments | 24,576 | |
Financing Component | (11,878) | |
Net present value of minimum lease payments | 12,698 | |
Less: current portion of finance and operating lease obligations | (2,680) | $ (2,135) |
Long-term finance and operating lease obligations | 10,018 | 8,170 |
Operating Lease Obligations | ||
2024 | 4,663 | |
2025 | 4,243 | |
2026 | 4,153 | |
2027 | 3,189 | |
2028 | 2,247 | |
Thereafter | 5,841 | |
Total minimum lease payments | 24,336 | |
Financing Component | (4,672) | |
Net present value of minimum lease payments | 19,664 | |
Less: current portion of finance and operating lease obligations | (3,627) | (3,562) |
Long-term operating lease liabilities | 16,037 | 15,643 |
Sublease Receipts | ||
2024 | 912 | |
2025 | 939 | |
2026 | 967 | |
2027 | 326 | |
2028 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 3,145 | |
Non-Related Party | ||
Operating Lease Obligations | ||
2024 | 3,682 | |
2025 | 3,478 | |
2026 | 3,383 | |
2027 | 2,318 | |
2028 | 1,376 | |
Thereafter | 844 | |
Total minimum lease payments | 15,081 | |
Financing Component | (2,499) | |
Net present value of minimum lease payments | 12,582 | |
Less: current portion of finance and operating lease obligations | (3,009) | |
Long-term operating lease liabilities | 9,573 | |
Related Party | ||
Operating Lease Obligations | ||
2024 | 981 | |
2025 | 765 | |
2026 | 770 | |
2027 | 871 | |
2028 | 871 | |
Thereafter | 4,997 | |
Total minimum lease payments | 9,255 | |
Financing Component | (2,173) | |
Net present value of minimum lease payments | 7,082 | |
Less: current portion of finance and operating lease obligations | (618) | |
Long-term operating lease liabilities | 6,464 | |
Vehicles | ||
Finance Lease Obligations | ||
2024 | 3,041 | |
2025 | 2,284 | |
2026 | 1,768 | |
2027 | 872 | |
2028 | 122 | |
Thereafter | 48 | |
Total minimum lease payments | 8,135 | |
Financing Component | (788) | |
Net present value of minimum lease payments | 7,347 | 4,954 |
Less: current portion of finance and operating lease obligations | (2,680) | |
Long-term finance and operating lease obligations | 4,667 | |
Building | ||
Finance Lease Obligations | ||
2024 | 515 | |
2025 | 528 | |
2026 | 542 | |
2027 | 555 | |
2028 | 569 | |
Thereafter | 13,733 | |
Total minimum lease payments | 16,442 | |
Financing Component | (11,090) | |
Net present value of minimum lease payments | 5,351 | $ 5,351 |
Less: current portion of finance and operating lease obligations | 0 | |
Long-term finance and operating lease obligations | $ 5,351 |
Leases - Terms and Discount Rat
Leases - Terms and Discount Rates (Details) | Sep. 29, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted average lease term (in years): | |||
Operating | 6 years 6 months 14 days | 6 years 11 months 23 days | |
Finance | 3 years 1 month 6 days | 2 years 8 months 23 days | |
Weighted average discount rate: | |||
Operating | 6.74% | 4.76% | |
Finance | 5.33% | 5.06% | |
Lease agreement, term | 25 years | ||
Discount rate | 11.11% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 4,705 | $ 5,055 |
Operating cash flows from finance leases | 343 | 264 |
Financing cash flows from finance leases | 2,737 | 2,734 |
Right-of-use assets exchanged for lease liabilities | ||
Right of use assets obtained in exchange for new operating lease liabilities | 3,135 | 0 |
Right of use assets obtained in exchange for new finance lease liabilities | 5,219 | 2,634 |
Right of use assets disposed or adjusted modifying operating leases liabilities | 1,112 | 2,455 |
Right of use assets disposed or adjusted modifying finance leases liabilities | $ (93) | $ (77) |
Retirement Plan (Details)
Retirement Plan (Details) - Supplemental Employee Retirement Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 100% | |
Defined contribution plan, maximum annual contributions per employee, percent | 4% | |
Defined contribution plan, employer discretionary contribution amount | $ 2,600,000 | $ 2,400,000 |
Defined contribution plan, employer discretionary profit sharing contribution amount | $ 0 | $ 0 |
Multiemployer Pension Plans - N
Multiemployer Pension Plans - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) plan | Dec. 31, 2022 USD ($) | |
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 54% | |
Multiemployer plan, contributions | $ 11,637 | $ 12,578 |
CBAs | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plan, contributions | $ 31,800 | 31,300 |
MEPP | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans number of employer | plan | 40 | |
MEPP | CBAs | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plan, contributions | $ 11,600 | $ 12,600 |
MEPP | PPA | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 5% | |
MEPP | CBA | ||
Multiemployer Plans [Line Items] | ||
Multiemployer plans surcharge percentage | 10% |
Multiemployer Pension Plans - (
Multiemployer Pension Plans - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Multiemployer Plans [Line Items] | ||
Contributions | $ 11,637 | $ 12,578 |
Pipefitters Local 636 Defined Benefit Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,439 | 1,483 |
Plumbers Local No 98 Defined Benefit Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,175 | 1,371 |
Sheet Metal Workers Local Union No. 80 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,255 | 1,245 |
Sheet Metal Workers Local 98 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 830 | 1,232 |
Plumbers and Pipefitters Local Union No. 43 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,500 | 1,205 |
Pipefitters Union Local No. 537 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 1,140 | 1,204 |
Sheet Metal Workers' National Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 540 | 792 |
Heating, Piping and Refrigeration Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 295 | 609 |
Plumbers & Pipefitters Local No 189 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 592 | 596 |
Steamfitters Local Union No. 420 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 633 | 537 |
United Association National Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 579 | 525 |
Plumbers & Pipefitters of Local Union No. 333 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 345 | 393 |
Plumbers & Steamfitters Local 577 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 330 | 316 |
Electrical Workers Local No. 26 Pension Trust Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 178 | 247 |
Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada | ||
Multiemployer Plans [Line Items] | ||
Contributions | 0 | 139 |
Southern California Pipe Trades Retirement Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 4 | 130 |
Steamfitters Local #449 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 87 | 103 |
National Electrical Benefit Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 65 | 81 |
Airconditioning and Refrigeration Industry Retirement Trust Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 8 | 74 |
Refrigeration, Air Conditioning & Service Division (UA-NJ) Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 83 | 65 |
Plumbers Local Union No. 690 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 25 | 25 |
United Association Local Union No. 322 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 27 | 25 |
Plumbers Union Local No. 12 Pension | ||
Multiemployer Plans [Line Items] | ||
Contributions | 5 | 14 |
Laborers District Council Pension and Disability Trust Fund No. 2 | ||
Multiemployer Plans [Line Items] | ||
Contributions | 0 | 10 |
Sheet Metal Workers Local 7, Zone 1 Pension Plan | ||
Multiemployer Plans [Line Items] | ||
Contributions | 113 | 8 |
Ironworkers Local 704 Pension Fund | ||
Multiemployer Plans [Line Items] | ||
Contributions | 236 | 46 |
All other plans | ||
Multiemployer Plans [Line Items] | ||
Contributions | $ 153 | $ 103 |
Management Incentive Plans - Na
Management Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 4,910 | $ 2,742 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Stock-based compensation expense | $ 1,500 | 1,600 |
RSUs | Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
PRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Stock-based compensation expense | $ 3,400 | 1,200 |
PRSUs | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares to be issued under grant | 0% | |
PRSUs | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares to be issued under grant | 150% | |
Market-Based Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance target, price per share (in dollars per share) | $ 18 | |
Number of consecutive trading days within performance period to meet target share price | 80 days | |
Performance period | 3 years | |
MRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense | $ 200 | |
Period to recognized stock-based compensation expense | 1 year 3 months 3 days | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense | $ 3,500 | |
Period to recognized stock-based compensation expense | 1 year 7 months 20 days | |
Aggregate fair value of vested awards | $ 3,800 | $ 1,300 |
2021 Amended and Restated Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, capital shares reserved for future issuance (in shares) | 3,050,000 |
Management Incentive Plans - RS
Management Incentive Plans - RSUs Activity (Details) - RSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Awards | ||
Unvested, beginning balance (in shares) | 280,275 | 266,089 |
Granted (in shares) | 164,413 | 184,941 |
Vested (in shares) | 163,354 | 146,151 |
Forfeited (in shares) | (42,131) | (24,604) |
Unvested, ending balance (in shares) | 239,203 | 280,275 |
Weighted-Average Grant Date Fair Values | ||
Unvested, beginning balance (in usd per share) | $ 9.06 | $ 8.45 |
Granted (in usd per share) | 11.94 | 8.97 |
Vested (in usd per share) | 8.58 | 7.78 |
Forfeited (in usd per share) | 10.63 | 9.43 |
Unvested, ending balance (in usd per share) | $ 11.09 | $ 9.06 |
Management Incentive Plans - PR
Management Incentive Plans - PRSUs Activity (Details) - PRSUs - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Awards | |||
Unvested, beginning balance (in shares) | 497,940 | 497,940 | 280,700 |
Granted (in shares) | 289,092 | 258,363 | |
Performance factor adjustment (in shares) | 32,327 | (121,827) | |
Vested (in shares) | 32,327 | 0 | |
Forfeited (in shares) | (116,911) | (41,123) | |
Unvested, ending balance (in shares) | 580,621 | 497,940 | |
Weighted-Average Grant Date Fair Values | |||
Unvested, beginning balance (in usd per share) | $ 8.32 | $ 8.32 | $ 9.46 |
Granted (in usd per share) | 12.77 | 7.18 | |
Performance factor adjustment (in dollars per share) | 4.29 | ||
Vested (in usd per share) | 4.29 | 0 | |
Forfeited (in usd per share) | 9.81 | 8.98 | |
Unvested, ending balance (in usd per share) | $ 10.85 | $ 8.32 | |
Performance factor (percent) | 136.13% | ||
Pre-defined metric target, (percent) | 100% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Term Loan - Sublimit for Letters of Credit - A&R Wintrust Revolving Loan - USD ($) $ in Millions | Mar. 13, 2024 | Mar. 12, 2024 |
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 10 | $ 5 |
Threshold for borrowing base certificate | $ 30 |
Uncategorized Items - lmb-20231
Label | Element | Value |
General Contractor (Construction Manager) Relationships Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 0 |
Owner Direct Relationships Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 11,370,000 |