Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MEG | |
Entity Registrant Name | Montrose Environmental Group, Inc. | |
Entity Central Index Key | 0001643615 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 29,711,566 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-39394 | |
Entity Tax Identification Number | 46-4195044 | |
Entity Incorporation State Country Code | DE | |
Entity Address Address Line1 | 5120 Northshore Drive | |
Entity Address City Or Town | North Little Rock | |
Entity Address State Or Province | AR | |
Entity Address Postal Zip Code | 72118 | |
City Area Code | 501 | |
Local Phone Number | 900-6400 | |
Security12b Title | Common Stock, par value $0.000004 per share | |
Security Exchange Name | NYSE |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and restricted cash | $ 93,566 | $ 146,741 |
Accounts receivable—net | 80,927 | 98,513 |
Contract assets | 60,444 | 40,139 |
Prepaid and other current assets | 10,890 | 8,465 |
Total current assets | 245,827 | 293,858 |
NON-CURRENT ASSETS: | ||
Property and equipment—net | 33,581 | 31,521 |
Operating lease right-of-use asset—net | 28,453 | 23,532 |
Finance lease right-of-use asset—net | 9,869 | 8,944 |
Goodwill | 318,413 | 311,944 |
Other intangible assets—net | 146,268 | 160,997 |
Other assets | 6,694 | 2,298 |
TOTAL ASSETS | 789,105 | 833,094 |
CURRENT LIABILITIES: | ||
Accounts payable and other accrued liabilities | 58,316 | 68,936 |
Accrued payroll and benefits | 20,477 | 25,971 |
Business acquisitions contingent consideration, current | 3,967 | 31,450 |
Current portion of operating lease liabilities | 8,130 | 6,888 |
Current portion of finance lease liabilities | 3,763 | 3,512 |
Current portion of long-term debt | 8,750 | 10,938 |
Total current liabilities | 103,403 | 147,695 |
NON-CURRENT LIABILITIES: | ||
Business acquisitions contingent consideration, long-term | 2,810 | 4,350 |
Other non-current liabilities | 22 | 100 |
Deferred tax liabilities—net | 5,766 | 4,006 |
Conversion option | 24,730 | 23,081 |
Operating lease liability—net of current portion | 20,841 | 16,859 |
Finance lease liability—net of current portion | 6,562 | 5,756 |
Long-term debt—net of deferred financing fees | 155,645 | 161,818 |
Total liabilities | 319,779 | 363,665 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY: | ||
Additional paid-in-capital | 485,030 | 464,143 |
Accumulated deficit | (168,685) | (147,678) |
Accumulated other comprehensive income | 53 | 36 |
Total stockholders’ equity | 316,398 | 316,501 |
TOTAL LIABILITIES, CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | 789,105 | 833,094 |
Convertible And Redeemable Series A-2 Preferred Stock | ||
NON-CURRENT LIABILITIES: | ||
REDEEMABLE SERIES PREFERRED STOCK | $ 152,928 | $ 152,928 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Common stock, par value | $ 0.000004 | $ 0.000004 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 29,707,503 | 29,619,921 |
Common stock, shares outstanding | 29,707,503 | 29,619,921 |
Convertible And Redeemable Series A-2 Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 17,500 | 17,500 |
Temporary equity, shares issued | 17,500 | 17,500 |
Temporary equity, shares outstanding | 17,500 | 17,500 |
Temporary equity, aggregate liquidation preference | $ 182.2 | $ 182.2 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
REVENUES | $ 130,312 | $ 132,578 | $ 404,902 | $ 402,619 |
COST OF REVENUES (exclusive of depreciation and amortization shown below) | 82,234 | 85,242 | 261,049 | 272,662 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 42,857 | 30,499 | 131,120 | 82,865 |
FAIR VALUE CHANGES IN BUSINESS ACQUISITIONS CONTINGENCIES | 59 | 0 | (3,472) | 24,035 |
DEPRECIATION AND AMORTIZATION | 11,504 | 11,471 | 35,928 | 33,145 |
(LOSS) INCOME FROM OPERATIONS | (6,342) | 5,366 | (19,723) | (10,088) |
OTHER INCOME (EXPENSE) | ||||
Other income (expense) | 1,814 | (516) | 4,618 | (1,909) |
Interest expense—net | (1,400) | (1,722) | (4,010) | (11,208) |
Total other income (expense) - net | 414 | (2,238) | 608 | (13,117) |
(LOSS) INCOME BEFORE (BENEFIT) EXPENSE FROM INCOME TAXES | (5,928) | 3,128 | (19,115) | (23,205) |
INCOME TAX (BENEFIT) EXPENSE | (208) | 902 | 1,892 | 648 |
NET (LOSS) INCOME | (5,720) | 2,226 | (21,007) | (23,853) |
EQUITY ADJUSTMENT FROM FOREIGN CURRENCY TRANSLATION | 20 | (74) | 17 | (17) |
COMPREHENSIVE (LOSS) INCOME | (5,700) | 2,152 | (20,990) | (23,870) |
CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK DIVIDEND | (4,100) | (4,100) | (12,300) | (12,300) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (9,820) | $ (1,874) | $ (33,307) | $ (36,153) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 29,691 | 26,220 | 29,677 | 25,798 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 29,691 | 26,220 | 29,677 | 25,798 |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - BASIC | $ (0.33) | $ (0.07) | $ (1.12) | $ (1.40) |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - DILUTED | $ (0.33) | $ (0.07) | $ (1.12) | $ (1.40) |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Convertible And Redeemable Series A-2 Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2020 | $ 137,145 | $ 259,427 | $ (122,353) | $ 71 | ||
Beginning balance, shares at Dec. 31, 2020 | 24,932,527 | |||||
Beginning balance at Dec. 31, 2020 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2020 | 17,500 | |||||
Net loss | (12,931) | (12,931) | ||||
Stock-based compensation | 1,805 | 1,805 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | (4,100) | ||||
Common stock issued | 4,456 | 4,456 | ||||
Common stock issued, shares | 506,330 | |||||
Accumulated other comprehensive income (loss) | 29 | 29 | ||||
Ending balance at Mar. 31, 2021 | 126,404 | 261,588 | (135,284) | 100 | ||
Ending balance, shares at Mar. 31, 2021 | 17,500 | |||||
Ending balance at Mar. 31, 2021 | $ 152,928 | |||||
Ending balance, shares at Mar. 31, 2021 | 25,438,857 | |||||
Beginning balance at Dec. 31, 2020 | 137,145 | 259,427 | (122,353) | 71 | ||
Beginning balance, shares at Dec. 31, 2020 | 24,932,527 | |||||
Beginning balance at Dec. 31, 2020 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2020 | 17,500 | |||||
Net loss | $ (23,853) | |||||
Dividend payment to the Series A-2 preferred shareholders | $ (12,300) | |||||
Common stock issued, shares | 1,593,317 | |||||
Ending balance at Sep. 30, 2021 | $ 145,698 | 291,850 | (146,206) | 54 | ||
Ending balance, shares at Sep. 30, 2021 | 17,500 | |||||
Ending balance at Sep. 30, 2021 | $ 152,928 | |||||
Ending balance, shares at Sep. 30, 2021 | 26,525,844 | |||||
Beginning balance at Mar. 31, 2021 | 126,404 | 261,588 | (135,284) | 100 | ||
Beginning balance, shares at Mar. 31, 2021 | 25,438,857 | |||||
Beginning balance at Mar. 31, 2021 | $ 152,928 | |||||
Beginning balance, shares at Mar. 31, 2021 | 17,500 | |||||
Net loss | (13,148) | (13,148) | ||||
Stock-based compensation | 2,417 | 2,417 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | (4,100) | ||||
Common stock issued | 27,460 | 27,460 | ||||
Common stock issued, shares | 669,331 | |||||
Accumulated other comprehensive income (loss) | 28 | 28 | ||||
Ending balance at Jun. 30, 2021 | 139,061 | 287,365 | (148,432) | 128 | ||
Ending balance, shares at Jun. 30, 2021 | 17,500 | |||||
Ending balance at Jun. 30, 2021 | $ 152,928 | |||||
Ending balance, shares at Jun. 30, 2021 | 26,108,188 | |||||
Net loss | 2,226 | 2,226 | ||||
Stock-based compensation | 2,365 | 2,365 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | $ (4,100) | (4,100) | |||
Common stock issued | $ 6,220 | 6,220 | ||||
Common stock issued, shares | 417,656 | 417,656 | ||||
Accumulated other comprehensive income (loss) | $ (74) | (74) | ||||
Ending balance at Sep. 30, 2021 | 145,698 | 291,850 | (146,206) | 54 | ||
Ending balance, shares at Sep. 30, 2021 | 17,500 | |||||
Ending balance at Sep. 30, 2021 | $ 152,928 | |||||
Ending balance, shares at Sep. 30, 2021 | 26,525,844 | |||||
Beginning balance at Dec. 31, 2021 | 316,501 | 464,143 | (147,678) | 36 | ||
Beginning balance, shares at Dec. 31, 2021 | 29,619,921 | |||||
Beginning balance at Dec. 31, 2021 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2021 | 17,500 | |||||
Net loss | (7,536) | (7,536) | ||||
Stock-based compensation | 10,425 | 10,425 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | (4,100) | ||||
Common stock issued | 429 | 429 | ||||
Common stock issued, shares | 55,896 | |||||
Accumulated other comprehensive income (loss) | 45 | 45 | ||||
Ending balance at Mar. 31, 2022 | 315,764 | 470,897 | (155,214) | 81 | ||
Ending balance, shares at Mar. 31, 2022 | 17,500 | |||||
Ending balance at Mar. 31, 2022 | $ 152,928 | |||||
Ending balance, shares at Mar. 31, 2022 | 29,675,817 | |||||
Beginning balance at Dec. 31, 2021 | 316,501 | 464,143 | (147,678) | 36 | ||
Beginning balance, shares at Dec. 31, 2021 | 29,619,921 | |||||
Beginning balance at Dec. 31, 2021 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2021 | 17,500 | |||||
Net loss | $ (21,007) | |||||
Dividend payment to the Series A-2 preferred shareholders | $ (12,300) | |||||
Common stock issued, shares | 87,582 | |||||
Ending balance at Sep. 30, 2022 | $ 316,398 | 485,030 | (168,685) | 53 | ||
Ending balance, shares at Sep. 30, 2022 | 17,500 | |||||
Ending balance at Sep. 30, 2022 | $ 152,928 | |||||
Ending balance, shares at Sep. 30, 2022 | 29,707,503 | |||||
Beginning balance at Mar. 31, 2022 | 315,764 | 470,897 | (155,214) | 81 | ||
Beginning balance, shares at Mar. 31, 2022 | 29,675,817 | |||||
Beginning balance at Mar. 31, 2022 | $ 152,928 | |||||
Beginning balance, shares at Mar. 31, 2022 | 17,500 | |||||
Net loss | (7,751) | (7,751) | ||||
Stock-based compensation | 10,932 | 10,932 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | (4,100) | ||||
Common stock issued | 54 | 54 | ||||
Common stock issued, shares | 3,575 | |||||
Accumulated other comprehensive income (loss) | (48) | (48) | ||||
Ending balance at Jun. 30, 2022 | 314,851 | 477,783 | (162,965) | 33 | ||
Ending balance, shares at Jun. 30, 2022 | 17,500 | |||||
Ending balance at Jun. 30, 2022 | $ 152,928 | |||||
Ending balance, shares at Jun. 30, 2022 | 29,679,392 | |||||
Net loss | (5,720) | (5,720) | ||||
Stock-based compensation | 11,018 | 11,018 | ||||
Dividend payment to the Series A-2 preferred shareholders | (4,100) | $ (4,100) | (4,100) | |||
Common stock issued | $ 329 | 329 | ||||
Common stock issued, shares | 28,111 | 28,111 | ||||
Accumulated other comprehensive income (loss) | $ 20 | 20 | ||||
Ending balance at Sep. 30, 2022 | $ 316,398 | $ 485,030 | $ (168,685) | $ 53 | ||
Ending balance, shares at Sep. 30, 2022 | 17,500 | |||||
Ending balance at Sep. 30, 2022 | $ 152,928 | |||||
Ending balance, shares at Sep. 30, 2022 | 29,707,503 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
OPERATING ACTIVITIES: | |||||
Net loss | $ (5,720) | $ 2,226 | $ (21,007) | $ (23,853) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
(Recovery) Provision for bad debt | (821) | 803 | $ 1,135 | ||
Depreciation and amortization | 11,504 | 11,471 | 35,928 | 33,145 | |
Amortization of right-of-use asset | 6,934 | 5,947 | |||
Stock-based compensation expense | 11,018 | 2,365 | 32,375 | 6,587 | |
Fair value changes in financial instruments | (4,664) | 1,651 | |||
Fair value changes in business acquisitions contingencies | 59 | 0 | (3,472) | 24,035 | |
Deferred income taxes | 1,892 | 232 | |||
Debt extinguishment costs | 4,052 | ||||
Other | 460 | 68 | |||
Changes in operating assets and liabilities—net of acquisitions: | |||||
Accounts receivable and contract assets | 7,301 | (12,503) | |||
Prepaid expenses and other current assets | (1,364) | (1,781) | |||
Accounts payable and other accrued liabilities | (12,943) | (3,422) | |||
Accrued payroll and benefits | (6,363) | 61 | |||
Payment of contingent consideration | (19,457) | (15,549) | |||
Change in operating leases | (6,634) | (5,765) | |||
Net cash (used in) provided by operating activities | 8,165 | 13,708 | |||
INVESTING ACTIVITIES: | |||||
Purchases of property and equipment | (5,414) | (5,405) | |||
Proceeds received from corporate owned insurance | 277 | ||||
Proprietary software development and other software costs | (397) | (241) | |||
Purchase price true ups | (439) | (8,562) | |||
Cash paid for acquisitions—net of cash acquired | (21,342) | (36,480) | |||
Net cash used in investing activities | (27,315) | (50,688) | |||
FINANCING ACTIVITIES: | |||||
Proceeds from line of credit | 109,000 | ||||
Payments on line of credit | (72,000) | ||||
Proceeds from term loans | 175,000 | ||||
Repayment of term loan | (8,751) | (173,905) | |||
Payment of contingent consideration | (10,722) | (9,605) | |||
Repayment of finance leases | (2,906) | (1,884) | |||
Debt issuance costs | (2,590) | ||||
Proceeds from issuance of common stock for exercised stock options | 812 | 6,032 | |||
Dividend payment to the Series A-2 shareholders | (12,300) | (12,300) | |||
Payments of deferred offering costs | (183) | ||||
Net cash (used in) provided by financing activities | (34,050) | 17,748 | |||
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (53,200) | (19,232) | |||
Foreign exchange impact on cash balance | 25 | 357 | |||
Beginning of year | 146,741 | 34,881 | 34,881 | ||
End of period | $ 93,566 | $ 16,006 | 93,566 | 16,006 | $ 146,741 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | |||||
Cash paid for interest | 4,852 | 4,649 | |||
Cash paid for income tax | 587 | 958 | |||
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||
Accrued purchases of property and equipment | 881 | 1,171 | |||
Property and equipment purchased under finance leases | 3,939 | 1,766 | |||
Common stock issued to acquire new businesses | 6,020 | ||||
Acquisitions unpaid contingent consideration | $ 6,777 | 35,352 | |||
Offering costs included in accounts payable and other accrued liabilities | 389 | ||||
Acquisitions contingent consideration paid in shares | $ 26,084 |
Description of the Business and
Description of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Basis of Presentation | 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Description of the Business —Montrose Environmental Group, Inc. (“Montrose” or the “Company”) is a corporation formed on November 2013 , under the laws of the State of Delaware. The Company has approximate ly 80 office s across the United States, Canada and Australia and approximately 2,800 employees a s of September 30, 2022. Montrose is an environmental services company serving the recurring environmental needs of a diverse client base, including Fortune 500 companies and federal, state and local governments through the following three segments: Assessment, Permitting and Response —Through its Assessment, Permitting and Response segment, Montrose provides scientific advisory and consulting services to support environmental assessments, environmental emergency response, and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects and development projects. The Company’s technical advisory and consulting offerings include regulatory compliance support and planning, environmental, ecosystem and toxicological assessments and support during responses to environmental disruption. Montrose helps clients navigate regulations at the local, state, provincial and federal levels. Measurement and Analysis —Through its Measurement and Analysis segment, Montrose’s teams test and analyze air, water and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna and human health. Montrose’s offerings include source and ambient air testing and monitoring, leak detection and repair and advanced analytical laboratory services such as air, storm water, wastewater and drinking water analysis. Remediation and Reuse —Through its Remediation and Reuse segment, Montrose provides clients with engineering, design, implementation and operations and maintenance services, primarily to treat contaminated water, remove contaminants from soil or create biogas from waste. The Company does not own the properties or facilities at which it implements these projects or the underlying liabilities, nor does it own material amounts of the equipment used in projects; instead, the Company assists clients in designing solutions, managing projects and mitigating their environmental risks and liabilities at their locations. Basis of Presentation —The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The unaudited condensed consolidated financial statements include all accounts of the Company and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2021 . Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All intercompany transactions, accounts and profits, have been eliminated in the unaudited condensed consolidated financial statements. Subsequent Events — The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the unaudited condensed consolidated financial statements. |
Summary of New Accounting Prono
Summary of New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Summary of New Accounting Pronouncements | 2. SUMMARY OF NEW ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements —Through the end of the year ended December 31, 2021, the Company qualified as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and therefore has historically taken advantage of certain exemptions from various public company reporting requirements, including delaying adoption of new or revised accounting standards until those standards apply to private companies. The Company elected to use this extended transition period under the JOBS Act. The adoption dates discussed below are based on the Company no longer qualifying as an emerging growth company. In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption is permitted. The new guidance was adopted as of January 1, 2022 and did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted —In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements, but does not expect adoption to have a material impact on its consolidated financial statements. The future impact of this new guidance will be primarily a function of the facts and circumstances specific to any acquisitions consummated after adoption and therefore cannot be predicted prior to or at the time of adoption. |
Revenues and Accounts Receivabl
Revenues and Accounts Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Revenues And Accounts Receivable [Abstract] | |
Revenues and Accounts Receivable | 3. REVENUES AND ACCOUNTS RECEIVABLE The Company’s main revenue sources derive from the following revenue streams: Assessment, Permitting and Response Revenues —Assessment, Permitting and Response revenues are generated from multidisciplinary environmental consulting services. The majority of the contracts are fixed-price or time and material based. Measurement and Analysis Revenues —Measurement and Analysis revenues are generated from emissions sampling, testing and reporting services, leak detection services, ambient air monitoring services and laboratory testing services. The majority of the contracts are fixed-price or time-and-materials based. Remediation and Reuse Revenues —Remediation and Reuse revenues are generated from engineering, design, implementation and operating and maintenance (“O&M”) services primarily to treat contaminated water, remove contaminants from soil or create biogas from waste. Engineering, design and implementation contracts are predominantly fixed-fee and time-and-materials based. Services on the majority of O&M contracts are provided under long-term fixed-fee contracts. Disaggregation of Revenue —The Company disaggregates revenue by its operating segments . The Company believes disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, and uncertainty of revenue and cash flows are affected by economic factors. Disaggregated revenue disclosures are provided in Note 18. Contract Balances —The Company presents contract balances for unbilled receivables (contract assets), as well as customer advances, deposits and deferred revenue (contract liabilities) within contract assets and accounts payable and accrued expenses, respectively, on the unaudited condensed consolidated statements of financial position. Amounts are generally billed at periodic intervals (e.g. weekly, bi-weekly or monthly) as work progresses in accordance with agreed-upon contractual terms. The Company utilizes the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component as the period between when the Company transfers services to a customer and when the customer pays for those services is one year or less. Amounts recorded as unbilled receivables are generally for services the Company is not entitled to bill based on the passage of time. Under certain contracts, billing occurs subsequent to revenue recognition, resulting in contract assets. The Company sometimes receives advances or deposits from customers before revenue is recognized, resulting in contract liabilities. The following table presents the Company’s contract balances: September 30, December 31, 2022 2021 Contract assets $ 60,444 $ 40,139 Contract liabilities 23,270 27,907 Contract assets acquired through business acquisitions amounted to $ 1.3 million and $ 0.5 million as of September 30, 2022 and December 31, 2021, respectively. Contract liabilities acquired through business acquisitions amounted to zero and $ 0.5 million as of September 30, 2022 and December 31, 2021, respectively. Revenue recognized during the three and nine months ended September 30, 2022, included in the contract liabilities balance at the beginning of the year was $ 10.3 million and $ 23.6 million, respectively. The revenue recognized from the contract liabilities consisted of the Company satisfying performance obligations during the normal course of business. The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied in prior periods during the three and nine months ended September 30, 2022 was not material. Remaining Unsatisfied Performance Obligations —Remaining unsatisfied performance obligations represent the total dollar value of work to be performed on contracts awarded and in progress. The amount of remaining unsatisfied performance obligations increases with new contracts or additions to existing contracts and decreases as revenue is recognized on existing contracts. Contracts are included in the amount of remaining unsatisfied performance obligations when an enforceable agreement has been reached. As of September 30, 2022 and December 31, 2021, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $ 92.0 million and $ 108.7 million, respectively. As of September 30, 2022, the Company expected to recognize approximately $ 67.8 million of this amount as revenue within a year and $ 24.2 million the year after . Accounts Receivable, Net —The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business. Accounts receivable, net consisted of the following: September 30, December 31, Accounts receivable, invoiced $ 82,649 $ 101,709 Accounts receivable, other 544 1,385 Allowance for doubtful accounts ( 2,266 ) ( 4,581 ) Accounts receivable—net $ 80,927 $ 98,513 As of September 30, 2022, the Company did no t have any customers that exceeded 10.0 % of its gross accounts receivable. As of December 31, 2021, the Company had one customer who accounted for 23.1 % of its gross accounts receivable. For the three and nine months ended September 30, 2022, the Company had one customer who accounted for 11.1 % and 14.8 % of revenue, respectively. During the three months ended September 30, 2021, the Company did no t have any customers that exceeded 10.0 % of revenue. During the nine months ended September 30, 2021, the Company had three customers who accounted for 12.1 %, 11.4 % and 10.7 % of revenue. T he Company performs ongoing credit evaluations and based on past collection experience, the Company believes that the receivable balances from these largest customers do not represent a significant credit risk. Accounts receivable are shown on the face of the consolidated statements of financial position, net of an allowance for doubtful accounts. The allowance for doubtful accounts is established at the origination of an account in accordance with ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). ASC 326 requires the Company to estimate the lifetime expected credit losses on such instruments and to record an allowance to offset the receivables. In determining the allowance for doubtful accounts, the Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends. The allowance for doubtful accounts consisted of the following: Beginning Bad Debt Charged to Other (1) Ending Nine months ended September 30, 2022 $ 4,581 $ ( 821 ) $ ( 1,621 ) $ 127 $ 2,266 Year ended December 31, 2021 4,265 1,135 ( 1,548 ) 729 4,581 ____________________ (1) This amount consists of additions to the allowance due to business acquisitions. |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | 4. PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets consisted of the following: September 30, December 31, 2022 2021 Deposits $ 1,402 $ 843 Prepaid expenses 4,708 4,675 Supplies 3,686 2,439 Income tax receivable 1,094 508 Prepaid and other current assets $ 10,890 $ 8,465 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost or estimated fair value for assets acquired through business combinations. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term, including options that are deemed to be reasonably assured, or the estimated useful life of the improvement. Property and equipment, net, consisted of the following: Estimated September 30, December 31, Useful Life 2022 2021 Lab and test equipment 7 years $ 19,975 $ 18,581 Vehicles 5 years 5,642 5,414 Equipment 3 - 7 years 38,446 35,148 Furniture and fixtures 7 years 2,895 2,844 Leasehold improvements 7 years 8,535 7,268 Aircraft 10 years 931 931 Building 39 years 2,975 2,975 79,399 73,161 Land 725 725 Construction in progress 2,566 2,342 Less accumulated depreciation ( 49,109 ) ( 44,707 ) Total property and equipment— $ 33,581 $ 31,521 Total depreciation expense included in the unaudited condensed consolidated statements of operations was $ 1.7 million and $ 5.3 million for the three and nine months ended September 30, 2022, respectively, and $ 1.8 million and $ 4.8 million for the three and nine months ended September 30, 2021 , respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | 6. LEASES In June 2021, with an effective adoption date of January 1, 2021, the Company adopted ASU 2016-02 using the modified retrospective approach, which permits application of this guidance at the beginning of the period of adoption. Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has finance leases for its vehicle and equipment leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years , and in some instances include one or more options to renew. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases. Finance and operating lease assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease. The Company calculates the present value of its finance and operating leases using an estimated incremental borrowing rate (“IBR”), which requires judgment. For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. For all other leases, the Company estimates the IBR based on the stated interest rate on the contract. Since many of the inputs used to calculate the rate implicit in the leases are not readily determinable from the lessee’s perspective, the Company will not use the implicit interest rate. Certain leases contain variable payments, these payments are expensed as incurred and not included in the Company’s operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance and are excluded from the present value of the Company’s lease obligations. Effective January 1, 2021, the Company recognized operating lease right-of-use assets, current operating lease liabilities and operating lease liabilities, net of current portion of $ 24.6 million, $ 7.3 million and $ 17.3 million, respectively. The Company also recognized finance lease right-of-use assets, current finance lease liabilities and finance lease liabilities, net of current portion of $ 7.2 million, $ 2.9 million and $ 4.6 million, respectively. The Company does not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets. The components of lease expense were as follows: For the Three Months Ended September 30, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 2,542 $ 2,203 Variable lease cost Selling, general and administrative expense 354 120 Total operating lease cost 2,896 2,323 Finance lease cost Amortization of right of use assets Depreciation and amortization 1,075 825 Interest on lease liabilities Interest expense—net 116 97 Total finance lease cost 1,191 922 Total lease cost $ 4,087 $ 3,245 For the Nine Months Ended September 30, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 7,472 $ 6,398 Variable lease cost Selling, general and administrative expense 911 329 Total operating lease cost 8,383 6,727 Finance lease cost Amortization of right of use assets Depreciation and amortization 3,026 2,391 Interest on lease liabilities Interest expense—net 335 300 Total finance lease cost 3,361 2,691 Total lease cost $ 11,744 $ 9,418 Supplemental cash flows information related to leases was as follows: For the Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in operating leases $ 7,171 $ 6,273 Operating cash flows used in finance leases 335 300 Financing cash flows used in finance leases 2,906 2,367 Lease liabilities arising from new ROU assets Operating leases 11,786 5,078 Finance leases 3,939 2,719 Weighted average remaining lease terms and weighted average discount rates were: September 30, 2022 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.56 3.32 Weighted average discount rate 2.58 % 5.27 % September 30, 2021 Operating Leases Finance Leases Weighted average remaining lease term (years) 5.22 2.80 Weighted average discount rate 2.62 % 4.95 % The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year: Operating Leases Finance Leases Remainder of 2022 $ 2,447 $ 1,181 2023 8,295 3,871 2024 6,595 2,781 2025 4,680 1,881 2026 and thereafter 8,733 1,570 Total undiscounted future minimum lease payments 30,750 11,284 Less imputed interest ( 1,779 ) ( 959 ) Total discounted future minimum lease payments $ 28,971 $ 10,325 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Business Acquisitions | 7. BUSINESS ACQUISITIONS In line with the Company’s strategic growth initiatives, the Company acquired certain businesses during the nine months ended September 30, 2022 and during the year ended December 31, 2021. The results of each of those acquired businesses are included in the unaudited condensed consolidated financial statements beginning on the acquisition date. Each transaction qualified as an acquisition of a business and was accounted for as a business combination. All acquisitions resulted in the recognition of goodwill. The Company paid these premiums resulting in such goodwill for a number of reasons, including expected synergies from combining operations of the acquiree and the Company while also growing the Company’s customer base, acquiring assembled workforces, expanding its presence in certain markets and expanding and advancing its product and service offerings. The Company recorded the assets acquired and liabilities assumed at their acquisition date fair value, with the difference between the fair value of the net assets acquired and the acquisition consideration reflected as goodwill. The identifiable intangible assets for significant acquisitions are valued using the excess earnings method discounted cash flow approach for customer relationships, the relief from royalty method for trade names, the patent and external proprietary software, the “with and without” method for covenants not to compete and the replacement cost method for the internal proprietary software by incorporating Level 3 inputs as described under the fair value hierarchy of ASC 820. These unobservable inputs reflect the Company’s own assumptions about which assumptions market participants would use in pricing an asset on a non-recurring basis. These assets will be amortized over their respective estimated useful lives. Other purchase price obligations (primarily deferred purchase price liabilities and target working capital liabilities or receivables) are included on the unaudited condensed consolidated statements of financial position in accounts payable and other accrued liabilities, other non-current liabilities or accounts receivable-net in the case of working capital deficits. Contingent consideration outstanding from acquisitions are included on the unaudited condensed consolidated statements of financial position in business acquisition contingent consideration, current or in business acquisitions contingent consideration, long-term. The contingent consideration elements of the purchase price of the acquisitions are related to earn-outs which are based on the expected achievement of revenue or earnings thresholds as of the date of the acquisition and for which the maximum potential amount is limited. The Company considers several factors when determining whether or not contingent consideration liabilities are part of the purchase price, including the following: (i) the valuation of its acquisitions is not supported solely by the initial consideration paid, (ii) the former stockholders of acquired companies that remain as key employees receive compensation other than contingent consideration payments at a reasonable level compared with the compensation of the Company’s other key employees and (iii) contingent consideration payments are not affected by employment termination. The Company reviews and assesses the estimated fair value of contingent consideration at each reporting period. The Company may be required to make up to $ 8.5 million in aggregate earn-out payments between the years 2023 and 2026 in connection with certain of its business acquisitions, up to $ 3.0 million of which may be paid in cash. Transaction costs related to business combinations totaled $ 0.4 million and $ 1.4 million for the three and nine months ended September 30, 2022, respectively, and $ 0.9 million and $ 1.7 million for the three and nine months ended September 30, 2021, respectively. These costs are expensed within selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. Acquisitions Completed During the Nine Months Ended September 30, 2022 Environmental Standards, Inc. (“EnvStd”) —In January 2022, the Company completed the acquisition of Environmental Standards, Inc. by acquiring 100.0 % of its common stock. EnvStd is a provider of environmental consulting services. EnvStd is based in Valley Forge, PA with satellite locations nationwide. The upfront cash payment made to acquire EnvStd was funded through cash on hand. Industrial Automation Group, Inc. (“IAG”) —In January 2022, the Company completed the acquisition of Industrial Automation Group, Inc. by acquiring certain of its employees and a covenant not to compete. The upfront cash payment made to acquire IAG was funded through cash on hand. IAG is based in Atlanta, GA. TriAD Environmental Consultants, Inc. (“TriAD”) —In August 2022, the Company completed the acquisition of TriAD Environmental Consultants, Inc. by acquiring 100.0 % of its common stock. TriAD is a provider of environmental consulting services. TriAD is based in Nashville, TN. The upfront cash payment made to acquire TriAD was funded through cash on hand. AirKinetics, Inc. (“AirKinetics”) —In September 2022, the Company completed the acquisition of AirKinetics, Inc. by acquiring 100.0 % of its common stock. AirKinetics is a provider of emissions testing services. AirKinetics is based in Anaheim, CA. The upfront cash payment made to acquire AirKinetics was funded through cash on hand. The following table summarizes the elements of the purchase price of the acquisitions completed during the nine months ended September 30, 2022: Cash Common Other Contingent Contingent Total EnvStd $ 14,473 $ — $ 521 $ 1,166 $ — $ 16,160 All other 2022 acquisitions 7,650 — 472 50 — 8,172 Total $ 22,123 $ — $ 993 $ 1,216 $ — $ 24,332 The other purchase price components of the EnvStd purchase price consist of a surplus working capital amount, which will be finalized in the fourth quarter of 2022 and a seller make-whole for taxes related to a 338(h)(10) election. The other purchase price components of all the other acquisitions purchase price mainly consist of surplus/deficit working capital amounts. The preliminary purchase price attributable to the acquisitions was allocated as follows: EnvStd All Other 2022 Acquisitions Total Cash $ 295 $ 486 $ 781 Accounts receivable and contract assets 5,200 1,846 7,046 Other current assets 456 19 475 Current assets 5,951 2,351 8,302 Property and equipment 168 11 179 Operating lease right-of-use asset—net 2,895 215 3,110 Customer relationships 5,807 2,714 8,521 Trade names 1,010 251 1,261 Covenants not to compete 269 394 663 Goodwill 4,107 2,965 7,072 Total assets 20,207 8,901 29,108 Current liabilities 1,719 619 2,338 Operating lease liability—net of 2,328 110 2,438 Total liabilities 4,047 729 4,776 Purchase price $ 16,160 $ 8,172 $ 24,332 The weighted average useful lives for the acquired companies’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete EnvStd 7 2 5 All other 2022 acquisitions 7 2 5 Goodwill associated with the EnvStd and IAG acquisitions are deductible for income tax purposes. For the acquisitions completed during the nine months ended September 30, 2022, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2022 includes revenue of $ 5.6 million and $ 13.2 million, respectively, and pre-tax income of $ 1.0 million and $ 1.7 million, respectively, related to these acquisitions. EnvStd is included in the Company’s Assessment, Permitting and Response segment, IAG and TriAD are included in the Remediation and Reuse segment and AirKinetics is included in the Measurement and Analysis segment. Acquisitions Completed During the Year Ended December 31, 2021 MSE Group, LLC (“MSE”) —In January 2021, the Company completed the acquisition of MSE Group, LLC by acquiring 100.0 % of its membership interests. MSE is a provider of environmental assessment, permitting and remediation services primarily to the U.S. federal government. MSE is based in Orlando, FL with additional offices in Tampa, Orlando, Jacksonville, San Antonio, TX, and Wilmington, NC, and satellite locations nationwide. The upfront cash payment made to acquire MSE was funded through cash on hand and the common stock portion of the purchase price was funded through the issuance of 71,740 shares of common stock. Vista Analytical Laboratory, Inc. (“Vista”) —In June 2021, the Company completed the acquisition of Vista Analytical Laboratory, Inc. (“Vista”) by acquiring 100.0 % of its common stock. Vista provides specialty analytical services related to Per- and polyfluoroalkyl substances (“PFAS”) and other semi-volatile organic compounds. Vista is based in Dorado Hills, CA. The upfront cash payment made to acquire Vista was funded through cash on hand and the common stock portion of the purchase price was funded through the issuance of 9,322 shares of common stock. Environmental Intelligence, LLC (“EI”) —In July 2021, the Company completed the acquisition of Environmental Intelligence, LLC (“EI”) by acquiring 100.0 % of its membership interests. EI provides environmental consulting services and is recognized for its innovative work in wildlife mitigation and biological assessments. EI is based in Laguna Beach, CA and enhances Montrose’s ecological planning and service capabilities in California and the US West Coast. The upfront cash payment made to acquire EI was funded through cash on hand and the common stock portion of the purchase price was funded through the issuance of 43,100 shares of common stock. SensibleIoT, LLC (“Sensible”) —In August, 2021, the Company completed the business acquisition of SensibleIoT, LLC (“Sensible”) by acquiring 100.0 % of its membership interests. Sensible is a technology platform that connects sensors and sources of environment data to a central, proprietary database that enables real-time client interaction. Sensible provides Montrose with an advanced ability to integrate environmental services and enhance environmental data analytics for clients. The upfront cash payment made to acquire Sensible was funded through cash on hand and the common stock portion of the purchase price was funded through the issuance of 19,638 shares of common stock. Environmental Chemistry, Inc. (“ECI”) —In October 2021, the Company completed the business acquisition of Environmental Chemistry, Inc. (“ECI”) by acquiring 100.0 % of its common stock. ECI provides a full suite of environmental laboratory analytical services to industrial, governmental, and engineering/consulting clients. Combined with the Company’s existing Houston, TX laboratory, ECI (located also in Houston, TX) will enable Montrose to provide air, water and soil analytical services in the gulf coast region. The upfront cash payment made to acquire ECI was funded through cash on hand. Horizon Water and Environment, LLC (“Horizon”) — In November 2021, the Company completed the business acquisition of Horizon Water and Environment, LLC (“Horizon”) by acquiring 100.0 % of its membership interests. Horizon is an environmental consulting firm specializing in planning, watershed science, and environmental compliance for water and natural resource projects. The upfront cash payment made to acquire Horizon was funded through cash on hand and the common stock portion of the purchase price was funded through the issuance of 34,921 shares of common stock. The following table summarizes the elements of the purchase price of the acquisitions completed during the year ended December 31, 2021: Cash Common Other Contingent Contingent Total MSE $ 9,082 $ 2,271 $ 10,701 $ 1,551 $ 253 $ 23,858 EI 20,721 2,274 ( 63 ) — — 22,932 All other 2021 acquisitions 29,683 3,775 1,228 1,250 4,350 40,286 Total $ 59,486 $ 8,320 $ 11,866 $ 2,801 $ 4,603 $ 87,076 The other purchase price components of the MSE purchase price consist of a surplus working capital amount on the date of close, a seller make-whole for taxes related to a 338(h)(10) election, an integration payment liability and a purchase price true up related to MSE’s financial performance in the fourth quarter of 2020. The other purchase price components of the EI purchase price consist of a surplus working capital amount on the date of close. The other purchase price components of all the other acquisitions purchase price mainly consist of surplus/deficit working capital amounts and 338(h)(10) election liabilities. The purchase price attributable to the acquisitions was allocated as follows: MSE EI All other 2021 Total Cash $ 2,810 $ 250 $ 693 $ 3,753 Accounts receivable 2,980 4,675 4,133 11,788 Other current assets 31 84 289 404 Current assets 5,821 5,009 5,115 15,945 Property and equipment 513 32 1,168 1,713 Operating lease right-of-use asset—net 740 106 2,233 3,079 Customer relationships 8,720 10,073 12,830 31,623 Trade names 521 996 1,958 3,475 Covenants not to compete 922 511 1,248 2,681 Acquired Technology — — 321 321 Goodwill 8,176 8,960 19,569 36,705 Total assets 25,413 25,687 44,442 95,542 Current liabilities 1,007 2,719 2,351 6,077 Operating lease liability—net of 548 36 1,805 2,389 Total liabilities 1,555 2,755 4,156 8,466 Purchase price $ 23,858 $ 22,932 $ 40,286 $ 87,076 The weighted average useful lives for the acquired companies’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete Developed Technology MSE 2 - 7 2 5 n/a EI 10 5 5 n/a All other 2021 acquisitions 10 n/a- 3 n/a- 5 n/a- 5 Goodwill associated with all of these acquisitions is deductible for income tax purposes. For the acquisitions completed during the year ended December 31, 2021, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2021 includes revenue of $ 11.9 million and $ 19.7 million, respectively, and pre-tax (loss) of $( 0.2 ) million and zero , respectively, related to the acquisitions completed prior to September 30, 2021. MSE is included in the Company’s Remediation and Reuse segment, Vista, Sensible and ECI are included in the Company’s Measurement and Analysis segment and EI and Horizon are included in the Company's Assessment, Permitting and Response segment. Supplemental Unaudited Pro-Forma — The unaudited condensed consolidated financial information summarized in the following table gives effect to the 2022 and the 2021 acquisitions discussed above assuming they occurred on January 1, 2021. These unaudited consolidated pro forma operating results do not assume any impact from revenue, cost or other operating synergies that are expected or may have been realized as a result of the acquisitions. These unaudited consolidated pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the acquisitions occurred on January 1, 2021, nor does the information purport to reflect results for any future period. For the Three Months Ended September 30, 2022 2021 (Unaudited) As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 130,312 $ 1,202 $ 131,514 $ 132,578 $ 9,457 $ 142,035 Net (loss) income ( 5,720 ) 290 ( 5,430 ) 2,226 1,479 3,705 For the Nine Months Ended September 30, 2022 2021 (Unaudited) As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 404,902 $ 6,422 $ 411,324 $ 402,619 $ 39,819 $ 442,438 Net (loss) income ( 21,007 ) 832 ( 20,175 ) ( 23,853 ) 6,848 ( 17,005 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8. GOODWILL AND INTANGIBLE ASSETS Amounts related to goodwill are as follows: Assessment, Measurement Remediation Total Balance as of December 31, 2021 $ 176,541 $ 83,770 $ 51,633 $ 311,944 Goodwill acquired during the period 4,764 2,158 150 7,072 Acquisitions measurement period adjustments ( 899 ) 296 — ( 603 ) Balance as of September 30, 2022 $ 180,406 $ 86,224 $ 51,783 $ 318,413 Amounts related to finite-lived intangible assets are as follows: September 30, 2022 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 - 15 years $ 204,926 $ 90,572 $ 114,354 Covenants not to compete 4 - 5 years 33,286 27,523 5,763 Trade names 1 - 5 years 21,673 17,442 4,231 Proprietary software 3 - 5 years 22,469 14,719 7,750 Patent 16 years 17,479 3,309 14,170 Total other intangible assets $ 299,833 $ 153,565 $ 146,268 December 31, 2021 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 - 15 years $ 196,323 $ 74,010 $ 122,313 Covenants not to compete 4 - 5 years 32,622 25,113 7,509 Trade names 1 - 5 years 20,403 15,139 5,264 Proprietary software 3 - 5 years 22,077 11,155 10,922 Patent 16 years 17,479 2,490 14,989 Total other intangible assets $ 288,904 $ 127,907 $ 160,997 Intangible assets with finite lives are stated at cost, less accumulated amortization and impairment losses, if any. These intangible assets are amortized using the straight-line method over the estimated useful lives of the assets. Amortization expense was $ 8.7 million and $ 27.6 million for the three and nine months ended September 30, 2022, respectively, and $ 8.9 million and $ 25.9 million for the three and nine months ended September 30, 2021, respectively. Future amortization expense is estimated to be as follows for each of the five following years and thereafter: December 31, 2022 (remaining) 8,135 2023 28,163 2024 23,588 2025 16,897 2026 and thereafter 69,485 Total $ 146,268 |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | 9. ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES Accounts payable and other accrued liabilities consisted of the following: September 30, December 31, 2022 2021 Accounts payable $ 19,023 $ 24,167 Accrued expenses 12,312 14,906 Other business acquisitions purchase 505 502 Contract liabilities 23,270 27,907 Other current liabilities 3,206 1,454 Total accounts payable and $ 58,316 $ 68,936 |
Accrued Payroll and Benefits
Accrued Payroll and Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Statement of Financial Position [Abstract] | |
Accrued Payroll and Benefits | 10. ACCRUED PAYROLL AND BENEFITS Accrued payroll and benefits consisted of the following: September 30, December 31, 2022 2021 Accrued bonuses $ 7,036 $ 13,438 Accrued paid time off 1,309 1,144 Accrued payroll 7,749 6,547 Accrued other 4,383 4,842 Total accrued payroll and benefits $ 20,477 $ 25,971 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. INCOME TAXES The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting (“ASC 270”), and ASC 740. The Company’s effective tax rate (“ETR”) from continuing operations was 3.5 % and ( 9.9 )% for the three and nine months ended September 30, 2022, respectively, and 28.8 % and ( 2.8 )% for th e three and nine months ended September 30, 2021, respectively. Income tax (benefit) expense recorded by the Company during the three and nine months ended September 30, 2022 was $ ( 0.2 ) million and $ 1.9 million, respectively. The income tax expense recorded by the Company during the three and nine months ended September 30, 2021 was $ 0.9 million and $ 0.6 million, respectively. The difference between the ETR and federal statutory rate of 21.0 % is primarily attributable to items recorded for U.S. GAAP but permanently disallowed for U.S. federal income tax purposes, recognition of a U.S. federal and state valuation allowance and state and foreign income tax provisions. A valuation allowance is recorded when it is more-likely-than-not some of the Company’s deferred tax assets may not be realized. Significant judgment is applied when assessing the need for a valuation allowance and the Company considers future taxable income, reversals of existing deferred tax assets and liabilities and ongoing prudent and feasible tax planning strategies, in making such assessment. As of September 30, 2022, the Company’s U.S. federal, state and various foreign net deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance is maintained. The Company records uncertain tax positions in accordance with ASC 740, on the basis of a two-step process in which (i) the Company determines whether it is more likely than not a tax position will be sustained on the basis of the technical merits of such position and (ii) for those tax positions meeting the more-likely-than-not recognition threshold, the Company would recognize the largest amount of tax benefit that is more than 50.0% likely to be realized upon ultimate settlement with the related tax authority. The Company has determined it has no uncertain tax positions as of September 30, 2022 . The Company classifies interest and penalties recognized on uncertain tax positions as a component of income tax expense. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 12. DEBT Debt consisted of the following: September 30, December 31, 2022 2021 Term loan facility $ 166,250 $ 175,000 Revolving line of credit — — Less deferred debt issuance costs ( 1,855 ) ( 2,244 ) Total debt 164,395 172,756 Less current portion of long-term debt ( 8,750 ) ( 10,938 ) Long-term debt, less current portion $ 155,645 $ 161,818 Deferred Financing Costs —Costs relating to debt issuance have been deferred and are presented as discounted against the underlying debt instrument. These costs are amortized to interest expense over the terms of the underlying debt instruments. 2021 Credit Facility —On April 27, 2021 , the Company entered into a Senior Secured Credit Agreement providing for a $ 300.0 million credit facility comprised of a $ 175.0 million term loan and a $ 125.0 million revolving line of credit (the “2021 Credit Facility”), and used a portion of the proceeds from the 2021 Credit Facility to repay all amounts outstanding under the 2020 Credit Facility (as defined below). The 2021 revolving credit facility includes a $ 20.0 million sublimit for the issuance of letters of credit. Subject to certain exceptions, all amounts under the 2021 Credit Facility will become due on April 27, 2026 . The Company has the option to borrow incremental term loans or request an increase in the aggregate commitments under the revolving credit facility up to an aggregate amount of $ 150.0 million subject to the satisfaction of certain conditions. The 2021 Credit Facility term loan must be repaid in quarterly installments and shall amortize at the following future quarterly rates: Date Quarterly Installment Rate December 31, 2022 1.25 % March 31, 2023 1.25 % June 30, 2023 1.25 % September 30, 2023 1.25 % December 31, 2023 1.88 % March 31, 2024 1.88 % June 30, 2024 1.88 % September 30, 2024 1.88 % December 31, 2024 1.88 % March 31, 2025 1.88 % June 30, 2025 1.88 % September 30, 2025 1.88 % December 31, 2025 2.50 % March 31, 2026 2.50 % April 27, 2026 Remaining balance Repayments of quarterly installments were scheduled to begin with the quarter ended December 31, 2021. The first quarterly installment repayment, amounting to $ 2.2 million, was billed and charged by the lenders in January 2022. Exclusive of the payment made in respect of the quarter ended December 31, 2021, the three quarterly installment repayments for the nine months ended September 30, 2022 amounted to $ 6.6 million. The 2021 Credit Facility term loan and the revolver bear interest subject to the Company’s leverage ratio and LIBOR as follows: Pricing Tier Consolidated Senior Credit Facilities Senior Credit Facilities Commitment Letter of Credit Fee 1 ≥ 3.75 x to 1.0 2.50 % 1.50 % 0.25 % 2.50 % 2 < 3.75 x to 1.0 but ≥ 3.25 to 1.0 2.25 1.25 0.23 2.25 3 < 3.25 x to 1.0 but ≥ 2.50 to 1.0 2.00 1.00 0.20 2.00 4 < 2.50 x to 1.0 but ≥ 1.75 to 1.0 1.75 0.75 0.15 1.75 5 < 1.75 x to 1.0 1.50 0.50 0.15 1.50 On January 27, 2022, the Company entered into an interest rate swap transaction fixing the floating component of the interest rate on $ 100.0 million of borrowings to 1.39 % until January 27, 2025 . Additionally, effective September 1, 2022, the Company received an interest rate reduction of 0.05 % under the 2021 Credit Facility based on the Company’s achievement of certain sustainability and environmental, social and governance related objectives as provided for in the 2021 Credit Facility. The 2021 Credit Facility includes a number of covenants imposing certain restrictions on the Company’s business, including, among other things, restrictions on the Company’s ability, subject to certain exceptions and baskets, to incur indebtedness, incur liens on its assets, agree to any additional negative pledges, pay dividends or repurchase stock, limit the ability of its subsidiaries to pay dividends or distribute assets, make investments, enter into any transaction of merger or consolidation, liquidate, wind-up or dissolve, or convey any part of its business, assets or property, or acquire the business, property or assets of another person, enter into sale and leaseback transactions, enter into certain transactions with affiliates, engage in any material line of business substantially different from those engaged on the closing date, modify the terms of indebtedness subordinated to the loans incurred under the 2021 Credit Facility and modify the terms of its organizational documents. The 2021 Credit Facility also includes financial covenants requiring the Company to remain below a maximum total net leverage ratio of 4.25 times, which steps down to 4.00 times beginning with the fiscal quarter ending December 31, 2022 through and including the fiscal quarter ending September 30, 2023 and then to 3.75 times beginning with the fiscal quarter ending December 31, 2023, and a minimum fixed charge coverage ratio of 1.25 times. As of September 30, 2022, the Company’s consolidated total leverage ratio (as defined in the 2021 Credit Facility) was 1.2 times and the Company was in compliance with all covenants under the 2021 Credit Facility. The 2021 Credit Facility requires customary mandatory prepayments of the term loan and revolver and cash collateralization of letters of credit, subject to customary exceptions, including 100.0 % of the proceeds of debt not permitted by the 2021 Credit Facility, 100.0 % of the proceeds of certain dispositions, subject to customary reinvestment rights, where applicable, and 100.0 % of insurance or condemnation proceeds, subject to customary reinvestment rights, where applicable. The 2021 Credit Facility also includes customary events of default and related acceleration and termination rights. The weighted average interest rate on the 2021 Credit Facility for the nine months ended September 30, 2022 was 2.9 %. The Company’s obligations under the 2021 Credit Facility are guaranteed by certain of the Company’s existing and future direct and indirect subsidiaries, and such obligations are secured by substantially all of the Company’s assets, including the capital stock or other equity interests in those subsidiaries. 2020 Credit Facility —On April 13, 2020, the Company entered into a Unitranche Credit Agreement (the “2020 Credit Facility”) providing for a $ 225.0 million credit facility comprised of a $ 175.0 million term loan and a $ 50.0 million revolving credit facility. The 2020 Credit facility was repaid in full in in April 2021. The resulting loss on extinguishment upon repayment of the 2020 Credit Facility in April 2021, amounted to $ 4.1 million, of which $ 1.0 million was related to fees paid and $ 3.1 related to unamortized debt issuance costs. Total loss on extinguishment is recorded in interest expense, net within the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021. Equipment Line of Credit — In the first quarter of 2022, the Company entered into a new $ 10.0 million equipment leasing facility for the purchase of equipment and related freight, installation costs and taxes paid. Any unused capacity on this equipment leasing facility expires on December 30, 2022 . Interest on the line of credit is determined based on a three-year swap rate at the time of funding. Equipment leased through this line of credit meets the finance lease criteria as per ASC 842 and accordingly is accounted for as finance lease right-of-use assets and a finance lease liabilities (Note 6). The following is a schedule of the aggregate annual maturities of long-term debt presented on the unaudited condensed consolidated statement of financial position, based on the terms of the 2021 Credit Facility: September 30, 2023 $ 8,750 2024 13,125 2025 13,125 2026 131,250 Total $ 166,250 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The following financial instruments are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): September 30, December 31, 2022 2021 Interest rate swap $ 6,313 $ — Total assets $ 6,313 $ — Business acquisitions contingent consideration, $ 3,967 $ 31,450 Business acquisitions contingent consideration, 2,810 4,350 Conversion option 24,730 23,081 Total liabilities $ 31,507 $ 58,881 The estimated fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instrument. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis: Interest Total Business Business Conversion Total Balance—at January 1, 2021 $ — $ — $ 49,902 $ 4,565 $ 20,886 $ 75,353 Acquisitions — — 1,000 6,004 — 7,004 Changes in fair value included in earnings — — 13,774 10,261 1,651 25,686 Payment of contingent consideration — — ( 50,154 ) — — ( 50,154 ) Reclass of long term to short term — — 16,630 ( 16,630 ) — — Balance—at September 30, 2021 $ — $ — $ 31,152 $ 4,200 $ 22,537 $ 57,889 Balance—at January 1, 2022 $ — — $ 31,450 $ 4,350 $ 23,081 $ 58,881 Acquisitions — — — 1,216 — 1,216 Changes in fair value included in earnings 6,313 6,313 330 ( 390 ) 1,649 1,589 Payment of contingent consideration — — ( 30,179 ) — — ( 30,179 ) Reclass of long term to short term — — 2,366 ( 2,366 ) — — Balance—at September 30, 2022 $ 6,313 $ 6,313 $ 3,967 $ 2,810 $ 24,730 $ 31,507 Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3): Interest Rate Swap —The interest rate swap fair value is estimated based on a mid-market price for the swap as of the close of business of the reporting period. The fair value is prepared by discounting future cash flows of the swap to arrive at a current value of the swap. Forward curves and volatility levels inputs are determined on the basis of observable market inputs when available and on the basis of estimates when observable market inputs are not available. The Company does not apply hedge accounting but instead recognizes the instrument at fair value on the unaudited condensed consolidated statement of financial position within other assets, with changes in fair value recognized in earnings in each reporting period. The change in fair value of $ 2.3 million and $ 6.3 million for the three and nine months ended September 30, 2022 , respectively was recognized as a component of other expense on the Company's unaudited condensed consolidated statements of operations. Business Acquisitions Contingent Consideration —The fair value of the contingent consideration payable associated with the acquisition of CTEH, MSE and Sensible was determined using a Monte Carlo simulation of earnings in a risk-neutral Geometric Brownian Motion framework. The fair value of the contingent consideration payable associated with the acquisition of EnvStd was determined using a Probabilistic (Scenario Based) method. The fair values of the contingent consideration payables for the other acquisitions were calculated based on expected target achievement amounts, which are measured quarterly and then subsequently adjusted to actuals at the target measurement date. The method used to price these liabilities is considered level 3 due to the subjective nature of the unobservable inputs used to determine the fair value. The input is the expected achievement of earn-out thresholds. Conversion Option —Upon the Company’s initial public offering ("IPO"), the fair value of the conversion option associated with the issuance of the Convertible and Redeemable Series A-2 Preferred Stock (Note 15) was estimated using a “with-and-without” method. The “with-and-without” methodology considers the value of the security on an as-is basis and then without the embedded conversion premium. The difference between the two scenarios is the implied fair value of the embedded derivative. The unobservable input is the required rate of return on the Series A-2. The considerable quantifiable inputs in the valuation relate to the timing of conversions or redemptions. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. COMMITMENTS AND CONTINGENCIES Leases —The Company leases office facilities over various terms expiring through 2031. Certain of these operating leases contain rent escalation clauses. The Company also has office equipment leases that expire through 2027 (Note 6 and 12). Other Commitments —The Company has commitments under the 2021 Credit Facility, its equipment line of credit and its lease obligations (Note 6 and 12). Contingencies —The Company is subject to purchase price contingencies related to earn-outs associated with certain acquisitions (Note 7 and 13). Legal —In the normal course of business, the Company is at times subject to pending and threatened legal actions. In management’s opinion, any potential loss resulting from the resolution of these matters is not expected to have a material effect on the unaudited condensed consolidated results of operations, financial position or cash flows of the Company. |
Convertible and Redeemable Seri
Convertible and Redeemable Series A-2 Preferred Stock | 9 Months Ended |
Sep. 30, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Convertible and Redeemable Series A-2 Preferred Stock | 15. CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK On April 13, 2020, the Company entered into an agreement to issue 17,500 shares of the Convertible and Redeemable Series A-2 Preferred Stock with a par value of $ 0.0001 per share and a detachable warrant to purchase shares of the Company’s common stock with a 10-year life, in exchange for gross proceeds of $ 175.0 million, net of $ 1.3 million debt issuance costs. Before the Company’s IPO, each share of Convertible and Redeemable Series A-2 Preferred Stock accrued dividends at the rate of 15.0 % per annum, with respect to dividends that were paid in cash, and 14.2 % per annum, with respect to dividends that were accrued. The Company paid dividends on shares of the Convertible and Redeemable Series A-2 Preferred Stock of $ 4.1 million during both the three months ended September 30, 2022 and September 30, 2021, and $ 12.3 million during both the nine months ended September 30, 2022 and September 30, 2021. At issuance, the Company determined that the Convertible and Redeemable Series A-2 Preferred Stock and the detachable warrant, were required to be accounted for separately. Upon the Company’s IPO, the Convertible and Redeemable Series A-2 Preferred Stock terms automatically updated to the following: (i) no mandatory redemption, (ii) no stated value cash repayment obligation other than in the event of certain defined liquidation events, (iii) only redeemable at the Company’s option, (iv) the instrument became convertible into common stock beginning on the four year anniversary of issuance at a 15.0 % discount to the common stock market price (with a limit of $ 60.0 million in stated value of Convertible and Redeemable Series A-2 Preferred Stock eligible to be converted in any 60-day period prior to the seventh anniversary of issuance and the amount of stated value of the Convertible and Redeemable Series A-2 Preferred Stock eligible for conversion limited to $ 60.0 million during year 5 and $ 120.0 million (which includes the aggregate amount of the stated value of the Convertible and Redeemable Series A-2 Preferred Stock and any accrued but unpaid dividends added to such stated value of any shares of Convertible and Redeemable Series A-2 Preferred Stock converted in year 5) during year 6), (v) the dividend rate stepped down to 9.0 % per year with required quarterly cash payments, (vi) in an event of noncompliance, the dividend rate shall increase to 12.0 % per annum for the first 90-day period from and including the date the noncompliance event occurred, and thereafter shall increase to 14.0 % per annum, (vii) the debt incurrence test ratio increased to 4.5 times, (viii) the total leverage cap covenant was removed, and (ix) minimum repayment amount dropped down from $ 50.0 million to $ 25.0 million. The Company may, at its option on any one or more dates, redeem all or a minimum portion (the lesser of (i) $ 25.0 million in aggregate stated value of the Convertible and Redeemable Series A-2 Preferred Stock and (ii) all of the Convertible and Redeemable Series A-2 Preferred Stock then outstanding) of the outstanding Convertible and Redeemable Series A-2 Preferred Stock in cash. With respect to any redemption of any share of the Convertible and Redeemable Series A-2 Preferred Stock prior to the third-year anniversary, the Company is subject to a make whole penalty in which the holders of the Convertible and Redeemable Series A-2 Preferred Stock are guaranteed a minimum repayment equal to outstanding redeemed stated value plus three years of dividends accrued or accruable thereon. The Convertible and Redeemable Series A-2 Preferred Stock does not meet the definition of a liability pursuant to “ASC 480- Distinguishing Liabilities from Equity.” However, as (i) the instrument is redeemable upon a change of control as defined in the certificate of designations governing the terms of the Convertible and Redeemable Series A-2 Preferred Stock, and (ii) the Company cannot assert it would have sufficient authorized and unissued shares of common stock to settle all future conversion requests due to the variable conversion terms, the instrument is redeemable upon the occurrence of events that are not solely within the control of the Company, and therefore the Company classifies the Convertible and Redeemable Series A-2 Preferred Stock as mezzanine equity. Subsequent adjustment of the carrying value of the instrument is required if the instrument is probable of becoming redeemable. As of September 30, 2022, the Company has determined that a change of control is not probable. Additionally, as of September 30, 2022, the Company has determined that it is not probable that there will be a future conversion request that the Company is unable to settle with authorized and issued shares based on the Company’s current stock price and available shares as well as the Company’s monitoring efforts to ensure there are a sufficient number of shares available to settle any conversion request. Therefore, as of September 30, 2022, the Company has determined that the instrument is not probable of becoming redeemable, and does not believe subsequent adjustment of the carrying value of the instrument will be necessary. The Convertible and Redeemable Series A-2 Preferred Stock had an aggregate liquidation preference of $ 182.2 million as of September 30, 2022 and December 31, 2021. The Convertible and Redeemable Series A-2 Preferred Stock contains embedded features that are required to be bifurcated and are subject to separate accounting treatment from the instrument itself. At issuance, these embedded features consisted of (i) a contingent dividend feature associated with the decrease in the dividend rate upon an IPO and (ii) a conversion option of the preferred shares to shares of common stock beginning on the fourth-year anniversary of the issuance date. Upon the Company’s IPO, the embedded derivative only consisted of the conversion option. As of September 30, 2022 and December 31, 2021, this conversion embedded feature had a net fair value of $ 24.7 million and $ 23.1 million, r espectively. The change in value of $ 0.5 million and $ 1.6 million for the three and nine months ended September 30, 2022, respectively , was recorded to other expense. |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 16. STOCKHOLDERS’ EQUITY Authorized Capital Stock— The Company was authorized to issue 190,000,000 shares of common stock, with a par value of $ 0.000004 per share as of September 30, 2022 and December 31, 2021. Warrants— In May 2015, the Company issued warrants to acquire 116,350 shares of Common Stock at a price of approximately $ 17.19 per share to the placement agent as consideration for backstopping the financing completed in May 2015. These warrants were exercised in full as a cashless transaction during the first quarter of 2021. As a result of this cashless transaction, the resulting number of shares issued was 67,713 shares. Common Stock Issuances — The Company issued the following shares of common stock: Three Months Ended September 30, 2022 2021 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions — $ — $ — 62,738 $ 52.18 $ 3,274 Exercise of options 28,111 11.70 329 354,918 8.30 2,946 Total 28,111 $ 11.70 $ 329 417,656 $ 14.89 $ 6,220 Nine Months Ended September 30, 2022 2021 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions — $ — $ — 143,800 $ 41.86 $ 6,020 Exercise of warrants (1) — — — 67,713 17.19 — Exercise of options 62,293 13.04 812 779,068 7.74 6,032 Restricted shares, net (1) 25,289 66.58 — 38,929 31.31 — Payment of earn-out liability — — — 539,607 46.33 25,000 Payment of purchase price — — — 24,200 44.81 1,084 Total 87,582 $ 28.50 $ 812 1,593,317 $ 25.43 $ 38,136 (1) Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock. Employee Equity Incentive Plans —The Company has two plans under which stock-based awards have been issued: (i) the Montrose Amended & Restated 2017 Stock Incentive Plan (“2017 Plan”) and (ii) the Montrose Amended & Restated 2013 Stock Option Plan (“2013 Plan”) (collectively the “Plans”). As of September 30, 2022, and September 30, 2021, there was $ 152.5 million and $ 15.0 million, respect ively, of total unrecognized stock compensation expense related to unvested options, restricted stock and stock appreciation rights granted under the Plans. Such unrecognized expense is expected to be recognized over a weighted-average four year period. The following number of shares were authorized to be issued and available for grant: September 30, 2022 2017 Plan 2013 Plan Total Shares authorized to be issued 5,140,112 2,037,019 7,177,131 Shares available for grant (1) 364,949 — 364,949 September 30, 2021 2017 Plan 2013 Plan Total Shares authorized to be issued 3,944,750 2,047,269 5,992,019 Shares available for grant 1,593,287 — 1,593,287 (1) In January 2022 the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information regarding the December 2021 grant. Total stock compensation expense for the Plans was as follows: Three Months Ended September 30, 2022 2021 2017 plan 2013 2017 plan 2013 Options Restricted SARs Options Total Options Restricted Options Total Cost of revenue $ 404 $ — $ — $ — $ 404 $ 282 $ — $ — $ 282 Selling, general and 2,216 6,083 2,315 — 10,614 1,844 237 2 2,083 Total $ 2,620 $ 6,083 $ 2,315 $ — $ 11,018 $ 2,126 $ 237 $ 2 $ 2,365 Nine Months Ended September 30, 2022 2021 2017 plan 2013 2017 plan 2013 Options Restricted SARs Options Total Options Restricted Options Total Cost of revenue $ 1,069 $ — $ — $ — $ 1,069 $ 1,178 $ — $ 10 $ 1,188 Selling, general and 6,449 17,892 6,965 — 31,306 4,638 749 11 5,399 Total $ 7,518 $ 17,892 $ 6,965 $ — $ 32,375 $ 5,816 $ 749 $ 21 $ 6,587 Montrose Amended & Restated 2017 Stock Incentive Plan Restricted Stock Awards and Restricted Stock Units— The Company issues restricted stock awards ("RSAs") to certain 2017 Plan participants as Director’s compensation. There were zero RSAs granted during both the three months ended September 30, 2022 and September 30, 2021, respectively. There were 10,920 and 19,066 RSAs grant ed during the nine months ended September 30, 2022 and September 30, 2021 , respectively. These RSAs vest one year from the date of grant, or, in each case, in full upon a change in control, subject to the participant’s continued service as a Director throughout such date, or u pon retirement. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. During the year ended December 31, 2021, the Board of Directors approved the grant of 1,671,391 restricted stock units (“RSUs”) to certain executives and selected employees of the Company under the 2017 Plan. These RSUs represent the right to receive one share of the Company’s common stock upon vesting. These incentives were designed by the Board, in coordination with the Company’s compensation advisors, to (i) retain selected employees of the Company for a minimum of 5 years , (ii) reward selected employees for the Company’s significant outperformance and stockholder value creation in 2021, and (iii) provide incentives to selected employees of the Company to accelerate value creation for stockholders and other stakeholders over the next five-year period . With respect to 1,355,182 RSUs, 50.0 % will vest on each of the 4th and 5th anniversaries of the date of grant, subject to continued service through each such date. With respect to the remaining 316,209 RSUs (“The Performance-Vested RSUs”), 50.0 % will vest on each of the 4th and 5th anniversaries of the date of grant, subject to continued service through each such date and further subject to Company achieving $ 90.0 million in adjusted EBITDA (as reported) for any trailing twelve-month period from and after December 31, 2022. If the Performance Criteria is not met prior to the 4th anniversary of the date of grant, none of the Performance-Vested RSUs will vest at such time, and if the Performance Criteria is subsequently met prior to the 5th anniversary of the date of grant, all of the Performance-Vested RSUs will vest at such time, subject to continued service through such date. If the Performance Criteria is not met by the 5th anniversary of the date of grant, all of the Performance-Vested RSUs will be forfeited. During 2021 and 2022, the Board of Directors approved the creation of certain supplemental incentive plans (“SI Plans”) for selected employees to reward exceptional performance. These SI Plans provide supplemental bonus opportunities payable in RSUs under the 2017 Plan upon meeting certain financial performance targets. There were 95,404 RSUs issued under these SI Plans during the nine months ended September 30, 2022 an d zero RSUs i ssued under these SI plans during the nine months ended September 30, 2021. These RSUs vest four years from the date of grant, subject to continued service through such date. During 2021, the Board approved and reserved for future issuance an aggregate of 135,517 RSUs (the “Future RSU Pool”) to be granted under the 2017 Plan to certain of its executives and selected employees. Final determination and allocation of the awards under the Future RSU Pool will be determined on December 16, 2025 based on individual performance and continued service through such date. Any RSUs granted under the Future RSU Pool will vest on December 16, 2026, subject to continued service through such date. RSA and RSU activity was as follows: Nine Months Ended September 30, 2022 2021 Shares Average Price per Share Fair Value Shares Average Price per Share Fair Value Awards granted 106,324 $ 46.82 $ 4,978 19,066 $ 36.99 $ 705 There were no awards granted during the three months ended September 30, 2022 and September 30, 2021. There were an aggregate of zero and 25,289 shares underlying RSAs and RSUs that became fully vested and were released as unrestricted shares of common stock during the three and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2021, there were an aggregate o f zero and 38,929 shares u nderlying RSAs that became fully vested and were released as unrestricted shares of common stock, respectively. There was an aggregate of 2,064,197 an d 286,239 shares underlying outstanding RSA and RSU awards as of September 30, 2022 and September 30, 2021, respectively. There were no forfeitures of RSAs or RSUs during the three and nine months ended September 30, 2022 and September 30, 2021. Stock Appreciation Rights— During the year ended December 31, 2021, the Board of Directors approved the grant of 3,000,000 units of stock appreciation rights (“SARs”) to certain executives and selected employees under the 2017 Plan. These SARs represent the right to receive, upon exercise, a payment equal to the excess of (a) the fair market value of one share of the Company’s common stock, over (b) an exercise price of $ 66.79 , payable, at the Company’s election, in cash or shares of common stock. These SARs vest on the 5th anniversary of the date of grant based on achievement of performance hurdles over a five year period, subject to continued service on the vesting date. The performance hurdles shall be deemed achieved if the average trading price per share of the Company’s common stock equals or exceeds the following stock prices: SARs Stock Price Performance Hurdle Portion of SARs Subject to Performance Hurdle $ 133.58 1/3 $ 166.98 1/3 $ 200.37 1/3 The performance hurdles shall be deemed achieved if the average trading price per share of the Company’s common stock equals or exceeds the applicable stock price performance hurdle set forth above for the trading days falling in a consecutive 20-day period prior to the vesting date. The SARs expire 10 years after the grant date. The fair value of these SARs at the grant date was $ 46.0 million. The weighted average remaining contract life of these SARs as of September 30, 2022 was 9.21 years. Options —O ptions issued to all optionees under the 2017 Plan vest over four years from the date of issuance (or earlier vesting start date, as determined by the Board of Directors) as follows: one half on the second anniversary of date of grant and the remaining half on the fourth anniversary of the date of grant, with the exception of certain annual grants to certain executive officers, which vest annually over a 3-year and 1-year period. The following summarizes the options activity of the 2017 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of January 1, 2021 1,840,229 $ 23 $ 12 9.09 $ 15,598 Granted 264,470 40 22 — — Forfeited/ cancelled ( 29,025 ) 28 — — — Expired ( 1,250 ) 18 — — — Exercised ( 66,875 ) 22 — — 2,078 Outstanding as of September 30, 2021 2,007,549 25 14 8.53 73,724 Outstanding as of January 1, 2022 2,036,729 $ 26 $ 14 8.30 $ 91,030 Granted 664,784 44 16 — — Forfeited/ cancelled ( 60,167 ) 36 — — — Exercised ( 26,258 ) 22 — — 671 Outstanding as of September 30, 2022 2,615,088 $ 30 $ 15 8.04 $ 18,784 Exercisable at September 30, 2022 1,010,302 26 — 7.48 9,966 The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation: September 30, September 30, 2022 2021 Common stock value (per share) $ 43.72 $ 39.83 Expected volatility 33.45 58.34 Risk-free interest rate 1.94 % 0.77 % Expected life (years) 6.45 6.32 Forfeiture rate None None Dividend rate None None Montrose Amended & Restated 2013 Stock Option Plan — The following summarizes the activity of the 2013 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of January 1, 2021 1,787,869 $ 6 $ 1 5.40 $ 43,867 Expired ( 625 ) 6 — — — Exercised ( 710,568 ) 6 — — 33,480 Outstanding as of September 30, 2021 1,076,676 6 2 4.65 59,532 Outstanding as of January 1, 2022 897,674 $ 6 $ 2 4.37 $ 57,529 Expired ( 125 ) 6 — — — Exercised ( 36,035 ) 6 — — 1,425 Outstanding as of September 30, 2022 861,514 $ 6 $ 2 3.61 $ 23,448 Exercisable at September 30, 2022 861,514 6 — 3.61 23,448 Total shares outstanding from exercised options were 1,271,383 shares a nd 1,028,268 shares as of September 30, 2022 and September 30, 2021, respectively. Common Stock Reserved for Future Issuances — The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: September 30, 2022 2021 Montrose 2013 Stock Incentive Plan 861,514 2,047,269 Montrose 2017 Stock Incentive Plan (1) 7,757,995 3,944,750 Total 8,619,509 5,992,019 (1) In January 2022, the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. The Company expects to have sufficient shares available under the 2017 Plan to satisfy the future settlement of outstanding awards. Shares reserved for future issuance include 3,000,000 shares underlying the 3,000,000 performance SARs granted in December 2021 that are subject to vesting based on the achievement of certain market conditions. Assuming achievement at the highest price performance hurdle, approximately 2,000,000 shares of common stock would be issued upon vesting of these performance SARs. To date, none of the market conditions have been achieved. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 17. NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during each period. The Convertible and Redeemable Series A-2 Preferred Stock is considered a participating security during the applicable period. Net losses are not allocated to the Convertible and Redeemable Series A-2 stockholders, as they were not contractually obligated to share in the Company’s losses. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding for the period using the treasury-stock method or the as-converted method. Potentially dilutive shares are comprised of RSAs, RSUs, SARs and shares of common stock underlying stock options outstanding under the Plans. During the three and nine months ended September 30, 2022 and September 30, 2021, there is no difference in the number of shares used to calculate basic and diluted shares outstanding during the applicable period due to the Company’s net loss attributable to common stockholders and potentially dilutive shares being anti-dilutive. The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company: Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except for net loss per share) 2022 2021 2022 2021 Net (loss) income $ ( 5,720 ) $ 2,226 $ ( 21,007 ) $ ( 23,853 ) Convertible and redeemable series A-2 preferred ( 4,100 ) ( 4,100 ) ( 12,300 ) ( 12,300 ) Net loss attributable to common stockholders ( 9,820 ) ( 1,874 ) ( 33,307 ) ( 36,153 ) Weighted-average common shares outstanding – 29,691 26,220 29,677 25,798 Net loss per share attributable to common $ ( 0.33 ) $ ( 0.07 ) $ ( 1.12 ) $ ( 1.40 ) The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: September 30, 2022 2021 Stock options 3,476,602 1,686,688 Restricted stock 1,777,958 28,623 SARs 3,000,000 — |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 18. SEGMENT INFORMATION The Company has three operating and reportable segments: Assessment, Permitting and Response, Measurement and Analysis and Remediation and Reuse. These segments are monitored separately by management for performance against budget and prior year and are consistent with internal financial reporting. The Company’s operating segments are organized based upon primary services provided, the nature of the production process, their type of customers, methods used to distribute the products and the nature of the regulatory environment. Segment Adjusted EBITDA is the primary measure of operating performance for all three operating segments. Segment Adjusted EBITDA is the calculated Company’s Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”), adjusted to exclude certain transactions such as stock-based compensation, acquisition costs and fair value changes in financial instruments, amongst others. The Chief Operating Decision Maker (“CODM”) does not review segment assets as a measure of segment performance. Corporate and Other includes costs associated with general corporate overhead (including executive, legal, finance, safety, human resources, marketing and IT related costs) that are not directly related to supporting operations. Overhead costs that are directly related to supporting operations (such as insurance, software, licenses, shared services and payroll processing costs) are allocated to the operating segments on a basis that reasonably approximates an estimate of the use of these services. Segment revenues and Adjusted EBITDA consisted of the following: Three Months Ended September 30, 2022 2021 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 46,414 $ 9,820 $ 63,412 $ 15,719 Measurement and Analysis 43,754 8,483 38,752 8,283 Remediation and Reuse 40,144 7,010 30,414 5,472 Total Operating Segments 130,312 25,313 132,578 29,474 Corporate and Other — ( 6,940 ) — ( 7,987 ) Total $ 130,312 $ 18,373 $ 132,578 $ 21,487 Nine Months Ended September 30, 2022 2021 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 142,051 $ 30,252 $ 209,379 $ 46,379 Measurement and Analysis 125,739 21,852 111,309 22,634 Remediation and Reuse 137,112 22,059 81,931 12,262 Total Operating Segments 404,902 74,163 402,619 81,275 Corporate and Other — ( 22,826 ) — ( 22,026 ) Total $ 404,902 $ 51,337 $ 402,619 $ 59,249 Presented below is a reconciliation of the Company’s segment measure to net loss: For the Three Months For the Nine Months 2022 2021 2022 2021 Total $ 18,373 $ 21,487 $ 51,337 $ 59,249 Interest expense, net ( 1,400 ) ( 1,722 ) ( 4,010 ) ( 11,208 ) Income tax benefit (expense) 208 ( 902 ) ( 1,892 ) ( 648 ) Depreciation and amortization ( 11,504 ) ( 11,471 ) ( 35,928 ) ( 33,145 ) Stock-based compensation ( 11,018 ) ( 2,365 ) ( 32,375 ) ( 6,587 ) Start-up losses and investment in new services ( 1,278 ) ( 1,186 ) ( 2,949 ) ( 3,276 ) Acquisition costs ( 368 ) ( 913 ) ( 1,354 ) ( 1,656 ) Fair value changes in financial instruments 1,808 ( 531 ) 4,664 ( 1,651 ) Fair value changes in business acquisition ( 59 ) — 3,472 ( 24,035 ) Expenses related to financing transactions — — ( 7 ) ( 50 ) Other losses or expenses (1) ( 482 ) ( 171 ) ( 1,965 ) ( 846 ) Net (loss) income $ ( 5,720 ) $ 2,226 $ ( 21,007 ) $ ( 23,853 ) (1) In 2022, amounts include costs associated with the closing of a lab and severance costs related to a restructuring within our soil remediation business. In 2021, amounts include non-operational charges incurred due to the remeasurement of finance leases as a result of the adoption of ASC 842 and costs related to the implementation of a new ERP. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 19. RELATED-PARTY TRANSACTIONS The Company did no t have any related party transactions during the three and nine months ended September 30, 2022 and September 30, 2021 . |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 20. DEFINED CONTRIBUTION PLAN On January 1, 2014, the Company established the Montrose Environmental Group 401(k) Savings Plan (the “401(k) Savings Plan”). As of September 30, 2022, and December 31, 2021 , plan participants may defer up to 85.0 % of their eligible wages for the year, up to the Internal Revenue Service dollar limit and catch-up contribution allowed by law. Prior to May 22, 2020, the Company provided employer matching contributions equal to 100.0 % of the first 3.0 % of the participant’s compensation and 50.0 % of the participant’s elective deferrals that exceed 3.0 % but do not exceed 4.0 % of the participant’s compensation. Beginning on May 22, 2020, the Company temporarily ceased making employer contributions. Employer contributions were reinstated beginning on April 23, 2021. Employer contributions under the 401(k) Savings Plan wer e $ 1.2 million and $ 4.6 million for the three and nine months ended September 30, 2022, respectively, and $ 0.8 million and $ 1.6 million for the three and nine months ended September 30, 2021 , and are included within selling, general, and administrative expense on the unaudited condensed consolidated statements of operations. |
Description of the Business a_2
Description of the Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation —The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The unaudited condensed consolidated financial statements include all accounts of the Company and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2021 . Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All intercompany transactions, accounts and profits, have been eliminated in the unaudited condensed consolidated financial statements. |
Recently Adopted Accounting Pronouncements /Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements —Through the end of the year ended December 31, 2021, the Company qualified as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and therefore has historically taken advantage of certain exemptions from various public company reporting requirements, including delaying adoption of new or revised accounting standards until those standards apply to private companies. The Company elected to use this extended transition period under the JOBS Act. The adoption dates discussed below are based on the Company no longer qualifying as an emerging growth company. In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption is permitted. The new guidance was adopted as of January 1, 2022 and did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted —In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements, but does not expect adoption to have a material impact on its consolidated financial statements. The future impact of this new guidance will be primarily a function of the facts and circumstances specific to any acquisitions consummated after adoption and therefore cannot be predicted prior to or at the time of adoption. |
Revenues and Accounts Receiva_2
Revenues and Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenues And Accounts Receivable [Abstract] | |
Schedule of Contract Balances | The following table presents the Company’s contract balances: September 30, December 31, 2022 2021 Contract assets $ 60,444 $ 40,139 Contract liabilities 23,270 27,907 |
Schedule of Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consisted of the following: September 30, December 31, Accounts receivable, invoiced $ 82,649 $ 101,709 Accounts receivable, other 544 1,385 Allowance for doubtful accounts ( 2,266 ) ( 4,581 ) Accounts receivable—net $ 80,927 $ 98,513 |
Schedule of Allowance for Doubtful Accounts | The allowance for doubtful accounts consisted of the following: Beginning Bad Debt Charged to Other (1) Ending Nine months ended September 30, 2022 $ 4,581 $ ( 821 ) $ ( 1,621 ) $ 127 $ 2,266 Year ended December 31, 2021 4,265 1,135 ( 1,548 ) 729 4,581 ____________________ (1) This amount consists of additions to the allowance due to business acquisitions. |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consisted of the following: September 30, December 31, 2022 2021 Deposits $ 1,402 $ 843 Prepaid expenses 4,708 4,675 Supplies 3,686 2,439 Income tax receivable 1,094 508 Prepaid and other current assets $ 10,890 $ 8,465 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net, consisted of the following: Estimated September 30, December 31, Useful Life 2022 2021 Lab and test equipment 7 years $ 19,975 $ 18,581 Vehicles 5 years 5,642 5,414 Equipment 3 - 7 years 38,446 35,148 Furniture and fixtures 7 years 2,895 2,844 Leasehold improvements 7 years 8,535 7,268 Aircraft 10 years 931 931 Building 39 years 2,975 2,975 79,399 73,161 Land 725 725 Construction in progress 2,566 2,342 Less accumulated depreciation ( 49,109 ) ( 44,707 ) Total property and equipment— $ 33,581 $ 31,521 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows: For the Three Months Ended September 30, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 2,542 $ 2,203 Variable lease cost Selling, general and administrative expense 354 120 Total operating lease cost 2,896 2,323 Finance lease cost Amortization of right of use assets Depreciation and amortization 1,075 825 Interest on lease liabilities Interest expense—net 116 97 Total finance lease cost 1,191 922 Total lease cost $ 4,087 $ 3,245 For the Nine Months Ended September 30, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 7,472 $ 6,398 Variable lease cost Selling, general and administrative expense 911 329 Total operating lease cost 8,383 6,727 Finance lease cost Amortization of right of use assets Depreciation and amortization 3,026 2,391 Interest on lease liabilities Interest expense—net 335 300 Total finance lease cost 3,361 2,691 Total lease cost $ 11,744 $ 9,418 |
Summary of Supplemental Cash Flow Information Related To Leases | Supplemental cash flows information related to leases was as follows: For the Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in operating leases $ 7,171 $ 6,273 Operating cash flows used in finance leases 335 300 Financing cash flows used in finance leases 2,906 2,367 Lease liabilities arising from new ROU assets Operating leases 11,786 5,078 Finance leases 3,939 2,719 |
Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates | Weighted average remaining lease terms and weighted average discount rates were: September 30, 2022 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.56 3.32 Weighted average discount rate 2.58 % 5.27 % September 30, 2021 Operating Leases Finance Leases Weighted average remaining lease term (years) 5.22 2.80 Weighted average discount rate 2.62 % 4.95 % |
Schedule of Maturities of Lease Liabilities | The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year: Operating Leases Finance Leases Remainder of 2022 $ 2,447 $ 1,181 2023 8,295 3,871 2024 6,595 2,781 2025 4,680 1,881 2026 and thereafter 8,733 1,570 Total undiscounted future minimum lease payments 30,750 11,284 Less imputed interest ( 1,779 ) ( 959 ) Total discounted future minimum lease payments $ 28,971 $ 10,325 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisition [Line Items] | |
Summary of Supplemental Unaudited Pro-Forma Information | The unaudited condensed consolidated financial information summarized in the following table gives effect to the 2022 and the 2021 acquisitions discussed above assuming they occurred on January 1, 2021. These unaudited consolidated pro forma operating results do not assume any impact from revenue, cost or other operating synergies that are expected or may have been realized as a result of the acquisitions. These unaudited consolidated pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the acquisitions occurred on January 1, 2021, nor does the information purport to reflect results for any future period. For the Three Months Ended September 30, 2022 2021 (Unaudited) As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 130,312 $ 1,202 $ 131,514 $ 132,578 $ 9,457 $ 142,035 Net (loss) income ( 5,720 ) 290 ( 5,430 ) 2,226 1,479 3,705 For the Nine Months Ended September 30, 2022 2021 (Unaudited) As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 404,902 $ 6,422 $ 411,324 $ 402,619 $ 39,819 $ 442,438 Net (loss) income ( 21,007 ) 832 ( 20,175 ) ( 23,853 ) 6,848 ( 17,005 ) |
EnvStd, IAG, TriAD and AirKinetics | |
Business Acquisition [Line Items] | |
Summary of Elements of Purchase Price of Acquisitions | The following table summarizes the elements of the purchase price of the acquisitions completed during the nine months ended September 30, 2022: Cash Common Other Contingent Contingent Total EnvStd $ 14,473 $ — $ 521 $ 1,166 $ — $ 16,160 All other 2022 acquisitions 7,650 — 472 50 — 8,172 Total $ 22,123 $ — $ 993 $ 1,216 $ — $ 24,332 |
Summary of Purchase Price Attributable to Acquisitions | The preliminary purchase price attributable to the acquisitions was allocated as follows: EnvStd All Other 2022 Acquisitions Total Cash $ 295 $ 486 $ 781 Accounts receivable and contract assets 5,200 1,846 7,046 Other current assets 456 19 475 Current assets 5,951 2,351 8,302 Property and equipment 168 11 179 Operating lease right-of-use asset—net 2,895 215 3,110 Customer relationships 5,807 2,714 8,521 Trade names 1,010 251 1,261 Covenants not to compete 269 394 663 Goodwill 4,107 2,965 7,072 Total assets 20,207 8,901 29,108 Current liabilities 1,719 619 2,338 Operating lease liability—net of 2,328 110 2,438 Total liabilities 4,047 729 4,776 Purchase price $ 16,160 $ 8,172 $ 24,332 |
Weighted Average Useful Lives for Acquired Identifiable Intangible Assets | The weighted average useful lives for the acquired companies’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete EnvStd 7 2 5 All other 2022 acquisitions 7 2 5 |
MSE Group, Vista, EI, Sensible, ECI, Horizon | |
Business Acquisition [Line Items] | |
Summary of Elements of Purchase Price of Acquisitions | The following table summarizes the elements of the purchase price of the acquisitions completed during the year ended December 31, 2021: Cash Common Other Contingent Contingent Total MSE $ 9,082 $ 2,271 $ 10,701 $ 1,551 $ 253 $ 23,858 EI 20,721 2,274 ( 63 ) — — 22,932 All other 2021 acquisitions 29,683 3,775 1,228 1,250 4,350 40,286 Total $ 59,486 $ 8,320 $ 11,866 $ 2,801 $ 4,603 $ 87,076 |
Summary of Purchase Price Attributable to Acquisitions | The purchase price attributable to the acquisitions was allocated as follows: MSE EI All other 2021 Total Cash $ 2,810 $ 250 $ 693 $ 3,753 Accounts receivable 2,980 4,675 4,133 11,788 Other current assets 31 84 289 404 Current assets 5,821 5,009 5,115 15,945 Property and equipment 513 32 1,168 1,713 Operating lease right-of-use asset—net 740 106 2,233 3,079 Customer relationships 8,720 10,073 12,830 31,623 Trade names 521 996 1,958 3,475 Covenants not to compete 922 511 1,248 2,681 Acquired Technology — — 321 321 Goodwill 8,176 8,960 19,569 36,705 Total assets 25,413 25,687 44,442 95,542 Current liabilities 1,007 2,719 2,351 6,077 Operating lease liability—net of 548 36 1,805 2,389 Total liabilities 1,555 2,755 4,156 8,466 Purchase price $ 23,858 $ 22,932 $ 40,286 $ 87,076 |
Weighted Average Useful Lives for Acquired Identifiable Intangible Assets | The weighted average useful lives for the acquired companies’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete Developed Technology MSE 2 - 7 2 5 n/a EI 10 5 5 n/a All other 2021 acquisitions 10 n/a- 3 n/a- 5 n/a- 5 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amounts Related to Goodwill | Amounts related to goodwill are as follows: Assessment, Measurement Remediation Total Balance as of December 31, 2021 $ 176,541 $ 83,770 $ 51,633 $ 311,944 Goodwill acquired during the period 4,764 2,158 150 7,072 Acquisitions measurement period adjustments ( 899 ) 296 — ( 603 ) Balance as of September 30, 2022 $ 180,406 $ 86,224 $ 51,783 $ 318,413 |
Schedule of Amounts Related to Finite-Lived Intangible Assets | Amounts related to finite-lived intangible assets are as follows: September 30, 2022 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 - 15 years $ 204,926 $ 90,572 $ 114,354 Covenants not to compete 4 - 5 years 33,286 27,523 5,763 Trade names 1 - 5 years 21,673 17,442 4,231 Proprietary software 3 - 5 years 22,469 14,719 7,750 Patent 16 years 17,479 3,309 14,170 Total other intangible assets $ 299,833 $ 153,565 $ 146,268 December 31, 2021 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 - 15 years $ 196,323 $ 74,010 $ 122,313 Covenants not to compete 4 - 5 years 32,622 25,113 7,509 Trade names 1 - 5 years 20,403 15,139 5,264 Proprietary software 3 - 5 years 22,077 11,155 10,922 Patent 16 years 17,479 2,490 14,989 Total other intangible assets $ 288,904 $ 127,907 $ 160,997 |
Schedule of Future Amortization Expense | Future amortization expense is estimated to be as follows for each of the five following years and thereafter: December 31, 2022 (remaining) 8,135 2023 28,163 2024 23,588 2025 16,897 2026 and thereafter 69,485 Total $ 146,268 |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following: September 30, December 31, 2022 2021 Accounts payable $ 19,023 $ 24,167 Accrued expenses 12,312 14,906 Other business acquisitions purchase 505 502 Contract liabilities 23,270 27,907 Other current liabilities 3,206 1,454 Total accounts payable and $ 58,316 $ 68,936 |
Accrued Payroll and Benefits (T
Accrued Payroll and Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Statement of Financial Position [Abstract] | |
Schedule of Accrued Payroll and Benefits | Accrued payroll and benefits consisted of the following: September 30, December 31, 2022 2021 Accrued bonuses $ 7,036 $ 13,438 Accrued paid time off 1,309 1,144 Accrued payroll 7,749 6,547 Accrued other 4,383 4,842 Total accrued payroll and benefits $ 20,477 $ 25,971 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: September 30, December 31, 2022 2021 Term loan facility $ 166,250 $ 175,000 Revolving line of credit — — Less deferred debt issuance costs ( 1,855 ) ( 2,244 ) Total debt 164,395 172,756 Less current portion of long-term debt ( 8,750 ) ( 10,938 ) Long-term debt, less current portion $ 155,645 $ 161,818 |
Summary of Term Loan Amortization | The 2021 Credit Facility term loan must be repaid in quarterly installments and shall amortize at the following future quarterly rates: Date Quarterly Installment Rate December 31, 2022 1.25 % March 31, 2023 1.25 % June 30, 2023 1.25 % September 30, 2023 1.25 % December 31, 2023 1.88 % March 31, 2024 1.88 % June 30, 2024 1.88 % September 30, 2024 1.88 % December 31, 2024 1.88 % March 31, 2025 1.88 % June 30, 2025 1.88 % September 30, 2025 1.88 % December 31, 2025 2.50 % March 31, 2026 2.50 % April 27, 2026 Remaining balance |
Summary of 2021 Credit Facility Interest Rate Subject to Leverage Ratio and LIBOR | The 2021 Credit Facility term loan and the revolver bear interest subject to the Company’s leverage ratio and LIBOR as follows: Pricing Tier Consolidated Senior Credit Facilities Senior Credit Facilities Commitment Letter of Credit Fee 1 ≥ 3.75 x to 1.0 2.50 % 1.50 % 0.25 % 2.50 % 2 < 3.75 x to 1.0 but ≥ 3.25 to 1.0 2.25 1.25 0.23 2.25 3 < 3.25 x to 1.0 but ≥ 2.50 to 1.0 2.00 1.00 0.20 2.00 4 < 2.50 x to 1.0 but ≥ 1.75 to 1.0 1.75 0.75 0.15 1.75 5 < 1.75 x to 1.0 1.50 0.50 0.15 1.50 |
Schedule of Aggregate Annual Maturities of Long-Term Debt | The following is a schedule of the aggregate annual maturities of long-term debt presented on the unaudited condensed consolidated statement of financial position, based on the terms of the 2021 Credit Facility: September 30, 2023 $ 8,750 2024 13,125 2025 13,125 2026 131,250 Total $ 166,250 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following financial instruments are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): September 30, December 31, 2022 2021 Interest rate swap $ 6,313 $ — Total assets $ 6,313 $ — Business acquisitions contingent consideration, $ 3,967 $ 31,450 Business acquisitions contingent consideration, 2,810 4,350 Conversion option 24,730 23,081 Total liabilities $ 31,507 $ 58,881 The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis: Interest Total Business Business Conversion Total Balance—at January 1, 2021 $ — $ — $ 49,902 $ 4,565 $ 20,886 $ 75,353 Acquisitions — — 1,000 6,004 — 7,004 Changes in fair value included in earnings — — 13,774 10,261 1,651 25,686 Payment of contingent consideration — — ( 50,154 ) — — ( 50,154 ) Reclass of long term to short term — — 16,630 ( 16,630 ) — — Balance—at September 30, 2021 $ — $ — $ 31,152 $ 4,200 $ 22,537 $ 57,889 Balance—at January 1, 2022 $ — — $ 31,450 $ 4,350 $ 23,081 $ 58,881 Acquisitions — — — 1,216 — 1,216 Changes in fair value included in earnings 6,313 6,313 330 ( 390 ) 1,649 1,589 Payment of contingent consideration — — ( 30,179 ) — — ( 30,179 ) Reclass of long term to short term — — 2,366 ( 2,366 ) — — Balance—at September 30, 2022 $ 6,313 $ 6,313 $ 3,967 $ 2,810 $ 24,730 $ 31,507 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Issued Shares of Common Stock | The Company issued the following shares of common stock: Three Months Ended September 30, 2022 2021 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions — $ — $ — 62,738 $ 52.18 $ 3,274 Exercise of options 28,111 11.70 329 354,918 8.30 2,946 Total 28,111 $ 11.70 $ 329 417,656 $ 14.89 $ 6,220 Nine Months Ended September 30, 2022 2021 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions — $ — $ — 143,800 $ 41.86 $ 6,020 Exercise of warrants (1) — — — 67,713 17.19 — Exercise of options 62,293 13.04 812 779,068 7.74 6,032 Restricted shares, net (1) 25,289 66.58 — 38,929 31.31 — Payment of earn-out liability — — — 539,607 46.33 25,000 Payment of purchase price — — — 24,200 44.81 1,084 Total 87,582 $ 28.50 $ 812 1,593,317 $ 25.43 $ 38,136 (1) Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock. |
Schedule of Share Authorized to be Issue and Available for Grant | The following number of shares were authorized to be issued and available for grant: September 30, 2022 2017 Plan 2013 Plan Total Shares authorized to be issued 5,140,112 2,037,019 7,177,131 Shares available for grant (1) 364,949 — 364,949 September 30, 2021 2017 Plan 2013 Plan Total Shares authorized to be issued 3,944,750 2,047,269 5,992,019 Shares available for grant 1,593,287 — 1,593,287 (1) In January 2022 the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information regarding the December 2021 grant. |
Schedule of Stock Compensation Expense | Total stock compensation expense for the Plans was as follows: Three Months Ended September 30, 2022 2021 2017 plan 2013 2017 plan 2013 Options Restricted SARs Options Total Options Restricted Options Total Cost of revenue $ 404 $ — $ — $ — $ 404 $ 282 $ — $ — $ 282 Selling, general and 2,216 6,083 2,315 — 10,614 1,844 237 2 2,083 Total $ 2,620 $ 6,083 $ 2,315 $ — $ 11,018 $ 2,126 $ 237 $ 2 $ 2,365 Nine Months Ended September 30, 2022 2021 2017 plan 2013 2017 plan 2013 Options Restricted SARs Options Total Options Restricted Options Total Cost of revenue $ 1,069 $ — $ — $ — $ 1,069 $ 1,178 $ — $ 10 $ 1,188 Selling, general and 6,449 17,892 6,965 — 31,306 4,638 749 11 5,399 Total $ 7,518 $ 17,892 $ 6,965 $ — $ 32,375 $ 5,816 $ 749 $ 21 $ 6,587 |
Summary of Performance Hurdles | The performance hurdles shall be deemed achieved if the average trading price per share of the Company’s common stock equals or exceeds the following stock prices: SARs Stock Price Performance Hurdle Portion of SARs Subject to Performance Hurdle $ 133.58 1/3 $ 166.98 1/3 $ 200.37 1/3 |
Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model | The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation: September 30, September 30, 2022 2021 Common stock value (per share) $ 43.72 $ 39.83 Expected volatility 33.45 58.34 Risk-free interest rate 1.94 % 0.77 % Expected life (years) 6.45 6.32 Forfeiture rate None None Dividend rate None None |
Schedule of Common Stock Reserved for Future Issuance | The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: September 30, 2022 2021 Montrose 2013 Stock Incentive Plan 861,514 2,047,269 Montrose 2017 Stock Incentive Plan (1) 7,757,995 3,944,750 Total 8,619,509 5,992,019 (1) In January 2022, the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. The Company expects to have sufficient shares available under the 2017 Plan to satisfy the future settlement of outstanding awards. Shares reserved for future issuance include 3,000,000 shares underlying the 3,000,000 performance SARs granted in December 2021 that are subject to vesting based on the achievement of certain market conditions. Assuming achievement at the highest price performance hurdle, approximately 2,000,000 shares of common stock would be issued upon vesting of these performance SARs. To date, none of the market conditions have been achieved. |
Montrose Amended & Restated 2017 Stock Incentive Plan | |
Schedule of Restricted Stock Activity | RSA and RSU activity was as follows: Nine Months Ended September 30, 2022 2021 Shares Average Price per Share Fair Value Shares Average Price per Share Fair Value Awards granted 106,324 $ 46.82 $ 4,978 19,066 $ 36.99 $ 705 |
Summary of Stock Option Activity | The following summarizes the options activity of the 2017 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of January 1, 2021 1,840,229 $ 23 $ 12 9.09 $ 15,598 Granted 264,470 40 22 — — Forfeited/ cancelled ( 29,025 ) 28 — — — Expired ( 1,250 ) 18 — — — Exercised ( 66,875 ) 22 — — 2,078 Outstanding as of September 30, 2021 2,007,549 25 14 8.53 73,724 Outstanding as of January 1, 2022 2,036,729 $ 26 $ 14 8.30 $ 91,030 Granted 664,784 44 16 — — Forfeited/ cancelled ( 60,167 ) 36 — — — Exercised ( 26,258 ) 22 — — 671 Outstanding as of September 30, 2022 2,615,088 $ 30 $ 15 8.04 $ 18,784 Exercisable at September 30, 2022 1,010,302 26 — 7.48 9,966 |
Montrose Amended and Restated 2013 Stock Option Plan | |
Summary of Stock Option Activity | The following summarizes the activity of the 2013 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of January 1, 2021 1,787,869 $ 6 $ 1 5.40 $ 43,867 Expired ( 625 ) 6 — — — Exercised ( 710,568 ) 6 — — 33,480 Outstanding as of September 30, 2021 1,076,676 6 2 4.65 59,532 Outstanding as of January 1, 2022 897,674 $ 6 $ 2 4.37 $ 57,529 Expired ( 125 ) 6 — — — Exercised ( 36,035 ) 6 — — 1,425 Outstanding as of September 30, 2022 861,514 $ 6 $ 2 3.61 $ 23,448 Exercisable at September 30, 2022 861,514 6 — 3.61 23,448 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company: Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except for net loss per share) 2022 2021 2022 2021 Net (loss) income $ ( 5,720 ) $ 2,226 $ ( 21,007 ) $ ( 23,853 ) Convertible and redeemable series A-2 preferred ( 4,100 ) ( 4,100 ) ( 12,300 ) ( 12,300 ) Net loss attributable to common stockholders ( 9,820 ) ( 1,874 ) ( 33,307 ) ( 36,153 ) Weighted-average common shares outstanding – 29,691 26,220 29,677 25,798 Net loss per share attributable to common $ ( 0.33 ) $ ( 0.07 ) $ ( 1.12 ) $ ( 1.40 ) |
Equity Shares Excluded from Calculation of Diluted Loss Per Share Attributable to Common Stockholders | The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: September 30, 2022 2021 Stock options 3,476,602 1,686,688 Restricted stock 1,777,958 28,623 SARs 3,000,000 — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Components of Segment Revenues and Adjusted EBITDA | Segment revenues and Adjusted EBITDA consisted of the following: Three Months Ended September 30, 2022 2021 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 46,414 $ 9,820 $ 63,412 $ 15,719 Measurement and Analysis 43,754 8,483 38,752 8,283 Remediation and Reuse 40,144 7,010 30,414 5,472 Total Operating Segments 130,312 25,313 132,578 29,474 Corporate and Other — ( 6,940 ) — ( 7,987 ) Total $ 130,312 $ 18,373 $ 132,578 $ 21,487 Nine Months Ended September 30, 2022 2021 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 142,051 $ 30,252 $ 209,379 $ 46,379 Measurement and Analysis 125,739 21,852 111,309 22,634 Remediation and Reuse 137,112 22,059 81,931 12,262 Total Operating Segments 404,902 74,163 402,619 81,275 Corporate and Other — ( 22,826 ) — ( 22,026 ) Total $ 404,902 $ 51,337 $ 402,619 $ 59,249 |
Reconciliation of Segment Measure to Net Loss | Presented below is a reconciliation of the Company’s segment measure to net loss: For the Three Months For the Nine Months 2022 2021 2022 2021 Total $ 18,373 $ 21,487 $ 51,337 $ 59,249 Interest expense, net ( 1,400 ) ( 1,722 ) ( 4,010 ) ( 11,208 ) Income tax benefit (expense) 208 ( 902 ) ( 1,892 ) ( 648 ) Depreciation and amortization ( 11,504 ) ( 11,471 ) ( 35,928 ) ( 33,145 ) Stock-based compensation ( 11,018 ) ( 2,365 ) ( 32,375 ) ( 6,587 ) Start-up losses and investment in new services ( 1,278 ) ( 1,186 ) ( 2,949 ) ( 3,276 ) Acquisition costs ( 368 ) ( 913 ) ( 1,354 ) ( 1,656 ) Fair value changes in financial instruments 1,808 ( 531 ) 4,664 ( 1,651 ) Fair value changes in business acquisition ( 59 ) — 3,472 ( 24,035 ) Expenses related to financing transactions — — ( 7 ) ( 50 ) Other losses or expenses (1) ( 482 ) ( 171 ) ( 1,965 ) ( 846 ) Net (loss) income $ ( 5,720 ) $ 2,226 $ ( 21,007 ) $ ( 23,853 ) (1) In 2022, amounts include costs associated with the closing of a lab and severance costs related to a restructuring within our soil remediation business. In 2021, amounts include non-operational charges incurred due to the remeasurement of finance leases as a result of the adoption of ASC 842 and costs related to the implementation of a new ERP. |
Description of the Business a_3
Description of the Business and Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 Employee Segment Office | |
Description Of Business And Basis Of Presentation [Line Items] | |
Entity formation, month and year | 2013-11 |
Number of offices in which entity operates | Office | 80 |
Entity number of employees | Employee | 2,800 |
Number of operating segments | Segment | 3 |
Summary of New Accounting Pro_2
Summary of New Accounting Pronouncements - Additional Information (Details) - Accounting Standards Update 2020-06 | Sep. 30, 2022 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Revenues and Accounts Receiva_3
Revenues and Accounts Receivable - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenues And Accounts Receivable [Abstract] | ||
Contract assets | $ 60,444 | $ 40,139 |
Contract liabilities | $ 23,270 | $ 27,907 |
Revenues and Accounts Receiva_4
Revenues and Accounts Receivable - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) Customer | Sep. 30, 2021 Customer | Sep. 30, 2022 USD ($) Customer | Sep. 30, 2021 Customer | Dec. 31, 2021 USD ($) | |
Accounts Notes And Loans Receivable [Line Items] | |||||
Contracts assets acquired through business acquisitions | $ 1.3 | $ 0.5 | |||
Contract liabilities acquired through business acquisitions | 0 | 0.5 | |||
Contract with customer liabilities, revenue recognized | $ 10.3 | 23.6 | |||
Revenue remaining performance obligations | $ 92 | $ 92 | $ 108.7 | ||
Customer Concentration Risk | Accounts Receivable | Customer One | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 23.10% | ||||
Customer Concentration Risk | Accounts Receivable | Significant Customer | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 10% | ||||
Number of customers | Customer | 0 | ||||
Customer Concentration Risk | Revenue | Customer One | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 12.10% | ||||
Customer Concentration Risk | Revenue | Significant Customer | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 11.10% | 14.80% | 10% | ||
Number of customers | Customer | 1 | 0 | 1 | 3 | |
Customer Concentration Risk | Revenue | Customer Two | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 11.40% | ||||
Customer Concentration Risk | Revenue | Customer Three | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Concentration risk percentage | 10.70% |
Revenues and Accounts Receiva_5
Revenues and Accounts Receivable - Additional Information (Details1) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 92 | $ 108.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 67.8 | |
Revenue remaining performance obligations, satisfaction period | 3 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 24.2 | |
Revenue remaining performance obligations, satisfaction period |
Revenues and Accounts Receiva_6
Revenues and Accounts Receivable - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenues And Accounts Receivable [Abstract] | |||
Accounts receivable, invoiced | $ 82,649 | $ 101,709 | |
Accounts receivable, other | 544 | 1,385 | |
Allowance for doubtful accounts | (2,266) | (4,581) | $ (4,265) |
Accounts receivable—net | $ 80,927 | $ 98,513 |
Revenues and Accounts Receiva_7
Revenues and Accounts Receivable - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Revenues And Accounts Receivable [Abstract] | ||||
Beginning Balance | $ 4,581 | $ 4,265 | $ 4,265 | |
Bad Debt (Recovery) Expense | (821) | $ 803 | 1,135 | |
Charged to Allowance | (1,621) | (1,548) | ||
Other | [1] | 127 | 729 | |
Ending Balance | $ 2,266 | $ 4,581 | ||
[1] This amount consists of additions to the allowance due to business acquisitions. |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits | $ 1,402 | $ 843 |
Prepaid expenses | 4,708 | 4,675 |
Supplies | 3,686 | 2,439 |
Income tax receivable | 1,094 | 508 |
Prepaid and other current assets | $ 10,890 | $ 8,465 |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 79,399 | $ 73,161 |
Less accumulated depreciation | (49,109) | (44,707) |
Total property and equipment— net | $ 33,581 | 31,521 |
Lab and test equipment | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 19,975 | 18,581 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Property and equipment, gross | $ 5,642 | 5,414 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 38,446 | 35,148 |
Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 2,895 | 2,844 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 8,535 | 7,268 |
Aircraft | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 10 years | |
Property and equipment, gross | $ 931 | 931 |
Building | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 39 years | |
Property and equipment, gross | $ 2,975 | 2,975 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 725 | 725 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 2,566 | $ 2,342 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property Plant And Equipment [Line Items] | ||||
Depreciation expense | $ 1.7 | $ 1.8 | $ 5.3 | $ 4.8 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Lessee Lease Description [Line Items] | |||
Operating lease right-of-use assets | $ 28,453 | $ 23,532 | $ 24,600 |
Current operating lease liabilities | 8,130 | 6,888 | 7,300 |
Operating lease liabilities, net of current portion | 20,841 | 16,859 | 17,300 |
Finance lease right-of-use assets | 9,869 | 8,944 | 7,200 |
Current finance lease liabilities | 3,763 | 3,512 | 2,900 |
Finance lease liabilities, net of current portion | $ 6,562 | $ 5,756 | $ 4,600 |
Minimum | |||
Lessee Lease Description [Line Items] | |||
Lessee operating and finance lease term | 1 year | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Lessee operating and finance lease term | 15 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee Lease Description [Line Items] | ||||
Total operating lease cost | $ 2,896 | $ 2,323 | $ 8,383 | $ 6,727 |
Total finance lease cost | 1,191 | 922 | 3,361 | 2,691 |
Total lease cost | 4,087 | 3,245 | 11,744 | 9,418 |
Selling, General and Administrative Expenses | ||||
Lessee Lease Description [Line Items] | ||||
Lease cost | 2,542 | 2,203 | 7,472 | 6,398 |
Variable lease cost | 354 | 120 | 911 | 329 |
Depreciation and Amortization | ||||
Lessee Lease Description [Line Items] | ||||
Amortization of right of use assets | 1,075 | 825 | 3,026 | 2,391 |
Interest Expense, Net | ||||
Lessee Lease Description [Line Items] | ||||
Interest on lease liabilities | $ 116 | $ 97 | $ 335 | $ 300 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related To Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||
Operating cash flows used in operating leases | $ 7,171 | $ 6,273 |
Operating cash flows used in finance leases | 335 | 300 |
Financing cash flows used in finance leases | 2,906 | 2,367 |
Operating leases | 11,786 | 5,078 |
Finance leases | $ 3,939 | $ 2,719 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Details) | Sep. 30, 2022 | Sep. 30, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term, Operating Leases | 4 years 6 months 21 days | 5 years 2 months 19 days |
Weighted average remaining lease term, Finance Leases | 3 years 3 months 25 days | 2 years 9 months 18 days |
Weighted average discount rate, Operating Leases | 2.58% | 2.62% |
Weighted average discount rate, Finance Leases | 5.27% | 4.95% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
Operating Leases, Remainder of 2022 | $ 2,447 |
Operating Leases, 2023 | 8,295 |
Operating Leases, 2024 | 6,595 |
Operating Leases, 2025 | 4,680 |
Operating Leases, 2026 and thereafter | 8,733 |
Operating Leases, Total undiscounted future minimum lease payments | 30,750 |
Operating Leases, Less imputed interest | (1,779) |
Operating Leases, Total discounted future minimum lease payments | 28,971 |
Finance Leases, Remainder of 2022 | 1,181 |
Finance Leases, 2023 | 3,871 |
Finance Leases, 2024 | 2,781 |
Finance Leases, 2025 | 1,881 |
Finance Leases, 2026 and thereafter | 1,570 |
Finance Leases, Total undiscounted future minimum lease payments | 11,284 |
Finance Leases, Less imputed interest | (959) |
Finance Leases, Total discounted future minimum lease payments | $ 10,325 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Jun. 30, 2021 | Jan. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Aug. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | |
Business Acquisition [Line Items] | |||||||||||||
Transaction costs related to business combinations | $ 368,000 | $ 913,000 | $ 1,354,000 | $ 1,656,000 | |||||||||
Number of common stock shares issued in connection with business acquisition | 62,738 | 143,800 | |||||||||||
Business combination, paid in cash | 22,123,000 | $ 59,486,000 | |||||||||||
EnvStd | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Business combination, paid in cash | $ 14,473,000 | ||||||||||||
TriAD | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
AirKinetics | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | 100% | |||||||||||
MSE Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Number of common stock shares issued in connection with business acquisition | 71,740 | ||||||||||||
Vista | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Number of common stock shares issued in connection with business acquisition | 9,322 | ||||||||||||
EI | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Number of common stock shares issued in connection with business acquisition | 43,100 | ||||||||||||
Business combination, paid in cash | $ 20,721,000 | ||||||||||||
Sensible | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Number of common stock shares issued in connection with business acquisition | 19,638 | ||||||||||||
ECI | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Horizon | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of interests acquired | 100% | ||||||||||||
Number of common stock shares issued in connection with business acquisition | 34,921 | ||||||||||||
MSE Group, EI, Vista and Sensible | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue | $ 11,900,000 | $ 19,700,000 | |||||||||||
Pre-tax income (loss) | $ (200,000) | $ 0 | |||||||||||
EnvStd and IAG | 2026 Earn Out | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, earn-out payment, maximum | $ 8,500,000 | $ 8,500,000 | |||||||||||
Business combination, paid in cash | 3,000,000 | ||||||||||||
EnvStd, IAG, TriAD and AirKinetics | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue | 5,600,000 | 13,200,000 | |||||||||||
Pre-tax income (loss) | $ 1,000,000 | $ 1,700,000 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Elements of Purchase Price of Acquisitions (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Cash | $ 22,123 | $ 59,486 |
Common Stock | 8,320 | |
Other Purchase Price Components Current | 993 | 11,866 |
Contingent Consideration Current | 1,216 | 2,801 |
Contingent Consideration Long Term | 4,603 | |
Total Purchase Price | 24,332 | 87,076 |
EnvStd | ||
Business Acquisition [Line Items] | ||
Cash | 14,473 | |
Other Purchase Price Components Current | 521 | |
Contingent Consideration Current | 1,166 | |
Total Purchase Price | 16,160 | |
All Other 2022 Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash | 7,650 | |
Other Purchase Price Components Current | 472 | |
Contingent Consideration Current | 50 | |
Total Purchase Price | $ 8,172 | |
MSE Group | ||
Business Acquisition [Line Items] | ||
Cash | 9,082 | |
Common Stock | 2,271 | |
Other Purchase Price Components Current | 10,701 | |
Contingent Consideration Current | 1,551 | |
Contingent Consideration Long Term | 253 | |
Total Purchase Price | 23,858 | |
EI | ||
Business Acquisition [Line Items] | ||
Cash | 20,721 | |
Common Stock | 2,274 | |
Other Purchase Price Components Current | (63) | |
Total Purchase Price | 22,932 | |
All Other 2021 Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash | 29,683 | |
Common Stock | 3,775 | |
Other Purchase Price Components Current | 1,228 | |
Contingent Consideration Current | 1,250 | |
Contingent Consideration Long Term | 4,350 | |
Total Purchase Price | $ 40,286 |
Business Acquisitions - Summa_2
Business Acquisitions - Summary of Purchase Price Attributable to Acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Cash | $ 781 | $ 3,753 |
Accounts receivable and contract assets | 7,046 | |
Accounts receivable | 11,788 | |
Other current assets | 475 | 404 |
Current assets | 8,302 | 15,945 |
Property and equipment | 179 | 1,713 |
Operating lease right-of-use asset-net | 3,110 | 3,079 |
Goodwill | 7,072 | 36,705 |
Total assets | 29,108 | 95,542 |
Current liabilities | 2,338 | 6,077 |
Operating lease liability-net of current portion | 2,438 | 2,389 |
Total liabilities | 4,776 | 8,466 |
Purchase price | 24,332 | 87,076 |
EnvStd | ||
Business Acquisition [Line Items] | ||
Cash | 295 | |
Accounts receivable and contract assets | 5,200 | |
Other current assets | 456 | |
Current assets | 5,951 | |
Property and equipment | 168 | |
Operating lease right-of-use asset-net | 2,895 | |
Goodwill | 4,107 | |
Total assets | 20,207 | |
Current liabilities | 1,719 | |
Operating lease liability-net of current portion | 2,328 | |
Total liabilities | 4,047 | |
Purchase price | 16,160 | |
All Other 2022 Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash | 486 | |
Accounts receivable and contract assets | 1,846 | |
Other current assets | 19 | |
Current assets | 2,351 | |
Property and equipment | 11 | |
Operating lease right-of-use asset-net | 215 | |
Goodwill | 2,965 | |
Total assets | 8,901 | |
Current liabilities | 619 | |
Operating lease liability-net of current portion | 110 | |
Total liabilities | 729 | |
Purchase price | 8,172 | |
MSE Group | ||
Business Acquisition [Line Items] | ||
Cash | 2,810 | |
Accounts receivable | 2,980 | |
Other current assets | 31 | |
Current assets | 5,821 | |
Property and equipment | 513 | |
Operating lease right-of-use asset-net | 740 | |
Goodwill | 8,176 | |
Total assets | 25,413 | |
Current liabilities | 1,007 | |
Operating lease liability-net of current portion | 548 | |
Total liabilities | 1,555 | |
Purchase price | 23,858 | |
EI | ||
Business Acquisition [Line Items] | ||
Cash | 250 | |
Accounts receivable | 4,675 | |
Other current assets | 84 | |
Current assets | 5,009 | |
Property and equipment | 32 | |
Operating lease right-of-use asset-net | 106 | |
Goodwill | 8,960 | |
Total assets | 25,687 | |
Current liabilities | 2,719 | |
Operating lease liability-net of current portion | 36 | |
Total liabilities | 2,755 | |
Purchase price | 22,932 | |
Other Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash | 693 | |
Accounts receivable | 4,133 | |
Other current assets | 289 | |
Current assets | 5,115 | |
Property and equipment | 1,168 | |
Operating lease right-of-use asset-net | 2,233 | |
Goodwill | 19,569 | |
Total assets | 44,442 | |
Current liabilities | 2,351 | |
Operating lease liability-net of current portion | 1,805 | |
Total liabilities | 4,156 | |
Purchase price | 40,286 | |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets | 8,521 | 31,623 |
Customer Relationships | EnvStd | ||
Business Acquisition [Line Items] | ||
Intangible assets | 5,807 | |
Customer Relationships | All Other 2022 Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | 2,714 | |
Customer Relationships | MSE Group | ||
Business Acquisition [Line Items] | ||
Intangible assets | 8,720 | |
Customer Relationships | EI | ||
Business Acquisition [Line Items] | ||
Intangible assets | 10,073 | |
Customer Relationships | Other Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | 12,830 | |
Trade Names | ||
Business Acquisition [Line Items] | ||
Intangible assets | 1,261 | 3,475 |
Trade Names | EnvStd | ||
Business Acquisition [Line Items] | ||
Intangible assets | 1,010 | |
Trade Names | All Other 2022 Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | 251 | |
Trade Names | MSE Group | ||
Business Acquisition [Line Items] | ||
Intangible assets | 521 | |
Trade Names | EI | ||
Business Acquisition [Line Items] | ||
Intangible assets | 996 | |
Trade Names | Other Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | 1,958 | |
Covenants Not to Compete | ||
Business Acquisition [Line Items] | ||
Intangible assets | 663 | 2,681 |
Covenants Not to Compete | EnvStd | ||
Business Acquisition [Line Items] | ||
Intangible assets | 269 | |
Covenants Not to Compete | All Other 2022 Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 394 | |
Covenants Not to Compete | MSE Group | ||
Business Acquisition [Line Items] | ||
Intangible assets | 922 | |
Covenants Not to Compete | EI | ||
Business Acquisition [Line Items] | ||
Intangible assets | 511 | |
Covenants Not to Compete | Other Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | 1,248 | |
Acquired Technology | ||
Business Acquisition [Line Items] | ||
Intangible assets | 321 | |
Acquired Technology | Other Acquisitions | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 321 |
Business Acquisitions - Weighte
Business Acquisitions - Weighted Average Useful Lives for Acquired Identifiable Intangible Assets (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Customer Relationships | EnvStd | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 7 years |
Customer Relationships | MSE Group | Minimum | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 2 years |
Customer Relationships | MSE Group | Maximum | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 7 years |
Customer Relationships | EI | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 10 years |
Customer Relationships | All Other 2021 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 10 years |
Customer Relationships | All Other 2022 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 7 years |
Trade Names | EnvStd | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 2 years |
Trade Names | MSE Group | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 2 years |
Trade Names | EI | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Trade Names | All Other 2021 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 3 years |
Trade Names | All Other 2022 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 2 years |
Covenants Not to Compete | EnvStd | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Covenants Not to Compete | MSE Group | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Covenants Not to Compete | EI | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Covenants Not to Compete | All Other 2021 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Covenants Not to Compete | All Other 2022 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Developed Technology | All Other 2021 Acquisitions | |
Business Acquisition [Line Items] | |
Weighted average useful lives for acquired intangible assets | 5 years |
Business Acquisitions - Summa_3
Business Acquisitions - Summary of Supplemental Unaudited Pro-Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 130,312 | $ 132,578 | $ 404,902 | $ 402,619 |
Net (loss) income | (5,720) | 2,226 | (21,007) | (23,853) |
Acquisition Proforma | ||||
Business Acquisition [Line Items] | ||||
Revenues | 1,202 | 9,457 | 6,422 | 39,819 |
Net (loss) income | 290 | 1,479 | 832 | 6,848 |
Consolidated Proforma | ||||
Business Acquisition [Line Items] | ||||
Revenues | 131,514 | 142,035 | 411,324 | 442,438 |
Net (loss) income | $ (5,430) | $ 3,705 | $ (20,175) | $ (17,005) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Amounts Related to Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 311,944 |
Goodwill acquired during the period | 7,072 |
Acquisitions measurement period adjustments | (603) |
Ending balance | 318,413 |
Assessment, Permitting and Response | |
Goodwill [Line Items] | |
Beginning balance | 176,541 |
Goodwill acquired during the period | 4,764 |
Acquisitions measurement period adjustments | (899) |
Ending balance | 180,406 |
Measurement and Analysis | |
Goodwill [Line Items] | |
Beginning balance | 83,770 |
Goodwill acquired during the period | 2,158 |
Acquisitions measurement period adjustments | 296 |
Ending balance | 86,224 |
Remediation and Reuse Segment | |
Goodwill [Line Items] | |
Beginning balance | 51,633 |
Goodwill acquired during the period | 150 |
Ending balance | $ 51,783 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Amounts Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 299,833 | $ 288,904 |
Accumulated Amortization | 153,565 | 127,907 |
Total Intangible Assets—Net | 146,268 | 160,997 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | 204,926 | 196,323 |
Accumulated Amortization | 90,572 | 74,010 |
Total Intangible Assets—Net | $ 114,354 | $ 122,313 |
Customer Relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 2 years | 2 years |
Customer Relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Covenants Not to Compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 33,286 | $ 32,622 |
Accumulated Amortization | 27,523 | 25,113 |
Total Intangible Assets—Net | $ 5,763 | $ 7,509 |
Covenants Not to Compete | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 4 years | 4 years |
Covenants Not to Compete | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 21,673 | $ 20,403 |
Accumulated Amortization | 17,442 | 15,139 |
Total Intangible Assets—Net | $ 4,231 | $ 5,264 |
Trade Names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 1 year | 1 year |
Trade Names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Proprietary Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 22,469 | $ 22,077 |
Accumulated Amortization | 14,719 | 11,155 |
Total Intangible Assets—Net | $ 7,750 | $ 10,922 |
Proprietary Software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | 3 years |
Proprietary Software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Patent | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 16 years | 16 years |
Gross Balance | $ 17,479 | $ 17,479 |
Accumulated Amortization | 3,309 | 2,490 |
Total Intangible Assets—Net | $ 14,170 | $ 14,989 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 8.7 | $ 8.9 | $ 27.6 | $ 25.9 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (remaining) | $ 8,135 | |
2023 | 28,163 | |
2024 | 23,588 | |
2025 | 16,897 | |
2026 and thereafter | 69,485 | |
Total Intangible Assets—Net | $ 146,268 | $ 160,997 |
Accounts Payable and Other Ac_3
Accounts Payable and Other Accrued Liabilities - Summary of Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 19,023 | $ 24,167 |
Accrued expenses | 12,312 | 14,906 |
Other business acquisitions purchase price obligations | 505 | 502 |
Contract liabilities | 23,270 | 27,907 |
Other current liabilities | 3,206 | 1,454 |
Total accounts payable and other accrued liabilities | $ 58,316 | $ 68,936 |
Accrued Payroll and Benefits -
Accrued Payroll and Benefits - Schedule of Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accrued bonuses | $ 7,036 | $ 13,438 |
Accrued paid time off | 1,309 | 1,144 |
Accrued payroll | 7,749 | 6,547 |
Accrued other | 4,383 | 4,842 |
Total accrued payroll and benefits | $ 20,477 | $ 25,971 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Annual effective tax rate ("ETR") from continuing operations | 3.50% | 28.80% | (9.90%) | (2.80%) |
Federal statutory rate | 21% | |||
Uncertain tax positions | $ 0 | $ 0 | ||
Income tax (benefit) expense | $ (208,000) | $ 902,000 | $ 1,892,000 | $ 648,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Line Of Credit Facility [Line Items] | ||
Less deferred debt issuance costs | $ (1,855) | $ (2,244) |
Total debt | 164,395 | 172,756 |
Less current portion of long-term debt | (8,750) | (10,938) |
Long-term debt, less current portion | 155,645 | 161,818 |
Term Loan Facility | ||
Line Of Credit Facility [Line Items] | ||
Total debt | $ 166,250 | $ 175,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||||
Jan. 27, 2022 | Jan. 26, 2022 | Apr. 30, 2021 | Apr. 27, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Apr. 13, 2020 | |
Line Of Credit Facility [Line Items] | ||||||||||
Loss on extinguishment | $ (4,052,000) | |||||||||
Floating Component | Interest Rate Swap | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||||
Credit facility maturity date | Jan. 27, 2025 | |||||||||
Interest rate | 1.39% | |||||||||
2021 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | |||||||||
Credit facility maturity date | Apr. 27, 2026 | |||||||||
Percentage of interest rate reduction | 0.05% | |||||||||
Maximum net leverage ratio | 425% | |||||||||
Maximum net leverage ratio year two | 400% | |||||||||
Maximum net leverage ratio year three | 375% | |||||||||
Minimum fixed charge coverage ratio | 125% | |||||||||
Consolidated total leverage ratio | 120% | |||||||||
Percentage of proceeds of debt, subject to customary exceptions | 100% | |||||||||
Percentage of proceeds of certain dispositions, subject to customary reinvestment rights | 100% | |||||||||
Percentage of proceeds of insurance or condemnation, subject to customary reinvestment rights | 100% | |||||||||
Weighted average interest rate | 2.90% | 2.90% | ||||||||
Incremental Term Loans | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | |||||||||
2020 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit | $ 225,000,000 | |||||||||
Loss on extinguishment | $ 4,100,000 | |||||||||
Debt fee paid | 1,000,000 | |||||||||
Unamortized debt issuance costs | $ 3,100,000 | |||||||||
Equipment Line Of Credit | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | |||||||||
Credit facility maturity date | Dec. 30, 2022 | |||||||||
Term Loan Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit | $ 166,250,000 | $ 166,250,000 | $ 175,000,000 | |||||||
Term Loan Facility | 2021 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 175,000,000 | |||||||||
Installment repayment amount | $ 2,200,000 | $ 6,600,000 | ||||||||
Term Loan Facility | 2020 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit | 175,000,000 | |||||||||
Revolving Line of Credit | 2021 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 125,000,000 | |||||||||
Revolving Line of Credit | 2020 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit | $ 50,000,000 | |||||||||
Revolving Line of Credit | Letter of Credit | 2021 Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 |
Debt - Summary of Term Loan Amo
Debt - Summary of Term Loan Amortization (Details) - 2021 Credit Facility - Term Loan Facility | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Event [Line Items] | |
Debt instrument, quarterly installment rate, December 31, 2022 | 1.25% |
Debt instrument, quarterly installment rate, March 31, 2023 | 1.25% |
Debt instrument, quarterly installment rate, June 30, 2023 | 1.25% |
Debt instrument, quarterly installment rate, September 30, 2023 | 1.25% |
Debt instrument, quarterly installment rate, December 31, 2023 | 1.88% |
Debt instrument, quarterly installment rate, March 31, 2024 | 1.88% |
Debt instrument, quarterly installment rate, June 30, 2024 | 1.88% |
Debt instrument, quarterly installment rate, September 30, 2024 | 1.88% |
Debt instrument, quarterly installment rate, December 31, 2024 | 1.88% |
Debt instrument, quarterly installment rate, March 31, 2025 | 1.88% |
Debt instrument, quarterly installment rate, June 30, 2025 | 1.88% |
Debt instrument, quarterly installment rate, September 30, 2025 | 1.88% |
Debt instrument, quarterly installment rate, December 31, 2025 | 2.50% |
Debt instrument, quarterly installment rate, March 31, 2026 | 2.50% |
Debt instrument, quarterly installment rate, April 27, 2026 | Remaining balance |
Debt - Summary of 2021 Credit F
Debt - Summary of 2021 Credit Facility Interest Rate Subject to Leverage Ratio and LIBOR (Details) - 2021 Credit Facility | Apr. 27, 2021 |
Pricing Tier1 | |
Subsequent Event [Line Items] | |
Commitment Fee | 0.25% |
Letter of Credit Fee | 2.50% |
Pricing Tier1 | Minimum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 375% |
Pricing Tier1 | LIBOR Plus | |
Subsequent Event [Line Items] | |
Interest rate | 2.50% |
Pricing Tier1 | Base Rate Plus | |
Subsequent Event [Line Items] | |
Interest rate | 1.50% |
Pricing Tier2 | |
Subsequent Event [Line Items] | |
Commitment Fee | 0.23% |
Letter of Credit Fee | 2.25% |
Pricing Tier2 | Maximum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 375% |
Pricing Tier2 | Minimum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 325% |
Pricing Tier2 | LIBOR Plus | |
Subsequent Event [Line Items] | |
Interest rate | 2.25% |
Pricing Tier2 | Base Rate Plus | |
Subsequent Event [Line Items] | |
Interest rate | 1.25% |
Pricing Tier3 | |
Subsequent Event [Line Items] | |
Commitment Fee | 0.20% |
Letter of Credit Fee | 2% |
Pricing Tier3 | Maximum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 325% |
Pricing Tier3 | Minimum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 250% |
Pricing Tier3 | LIBOR Plus | |
Subsequent Event [Line Items] | |
Interest rate | 2% |
Pricing Tier3 | Base Rate Plus | |
Subsequent Event [Line Items] | |
Interest rate | 1% |
Pricing Tier4 | |
Subsequent Event [Line Items] | |
Commitment Fee | 0.15% |
Letter of Credit Fee | 1.75% |
Pricing Tier4 | Maximum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 250% |
Pricing Tier4 | Minimum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 175% |
Pricing Tier4 | LIBOR Plus | |
Subsequent Event [Line Items] | |
Interest rate | 1.75% |
Pricing Tier4 | Base Rate Plus | |
Subsequent Event [Line Items] | |
Interest rate | 0.75% |
Pricing Tier5 | |
Subsequent Event [Line Items] | |
Commitment Fee | 0.15% |
Letter of Credit Fee | 1.50% |
Pricing Tier5 | Maximum | |
Subsequent Event [Line Items] | |
Net Leverage Ratio | 175% |
Pricing Tier5 | LIBOR Plus | |
Subsequent Event [Line Items] | |
Interest rate | 1.50% |
Pricing Tier5 | Base Rate Plus | |
Subsequent Event [Line Items] | |
Interest rate | 0.50% |
Debt - Schedule of Aggregate An
Debt - Schedule of Aggregate Annual Maturities of Long-Term Debt (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 8,750 |
2024 | 13,125 |
2025 | 13,125 |
2026 | 131,250 |
Total | $ 166,250 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Fair Value, Recurring - Level 3 - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Level 3 Liabilities | $ 31,507 | $ 58,881 | $ 57,889 | $ 75,353 |
Level 3 Assets | 6,313 | |||
Business Acquisitions Contingent Consideration, Current | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Level 3 Liabilities | 3,967 | 31,450 | 31,152 | 49,902 |
Business Acquisitions Contingent Consideration, Long-Term | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Level 3 Liabilities | 2,810 | 4,350 | 4,200 | 4,565 |
Conversion Option | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Level 3 Liabilities | 24,730 | $ 23,081 | $ 22,537 | $ 20,886 |
Interest Rate Swap | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Level 3 Assets | $ 6,313 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Level 3 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | $ 58,881 | $ 75,353 | |
Acquisitions | 1,216 | 7,004 | |
Changes in fair value included in earnings | 1,589 | 25,686 | |
Asset value, Changes in fair value included in earnings | 6,313 | ||
Payment of contingent consideration payable | (30,179) | (50,154) | |
Ending balance | $ 31,507 | 31,507 | 57,889 |
Total Assets, Ending balance | 6,313 | 6,313 | |
Level 3 | Business Acquisitions Contingent Consideration, Current | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 31,450 | 49,902 | |
Acquisitions | 1,000 | ||
Changes in fair value included in earnings | 330 | 13,774 | |
Payment of contingent consideration payable | (30,179) | (50,154) | |
Reclass of long term to short term contingent liabilities | 2,366 | 16,630 | |
Ending balance | 3,967 | 3,967 | 31,152 |
Level 3 | Business Acquisitions Contingent Consideration, Long-Term | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 4,350 | 4,565 | |
Acquisitions | 1,216 | 6,004 | |
Changes in fair value included in earnings | (390) | 10,261 | |
Reclass of long term to short term contingent liabilities | (2,366) | (16,630) | |
Ending balance | 2,810 | 2,810 | 4,200 |
Level 3 | Conversion Option | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 23,081 | 20,886 | |
Changes in fair value included in earnings | 1,649 | 1,651 | |
Ending balance | 24,730 | 24,730 | $ 22,537 |
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Asset value, Changes in fair value included in earnings | 2,300 | 6,300 | |
Interest Rate Swap | Level 3 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Asset value, Changes in fair value included in earnings | 6,313 | ||
Total Assets, Ending balance | $ 6,313 | $ 6,313 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Additional Information (Details) - Fair Value, Recurring - Interest Rate Swap - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||
Change in fair value recognized | $ 2.3 | $ 6.3 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Convertible and Redeemable Se_2
Convertible and Redeemable Series A-2 Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Apr. 13, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Temporary Equity [Line Items] | ||||||||||
Period between issuance and expiration of outstanding warrant | 10 years | |||||||||
Proceeds from the Series A-2 and Warrant | $ 175,000 | |||||||||
Percentage of dividends paid in cash | 14.20% | |||||||||
Preferred stock, dividends paid | $ 4,100 | $ 4,100 | $ 4,100 | $ 4,100 | $ 4,100 | $ 4,100 | ||||
Compound embedded derivative, change in value | $ 4,664 | $ (1,651) | ||||||||
Convertible And Redeemable Series A-2 Preferred Stock | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Number of shares issued | 17,500 | 17,500 | 17,500 | 17,500 | ||||||
Par value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Debt issuance costs, net | $ 1,300 | |||||||||
Percentage of dividends paid in cash | 15% | |||||||||
Preferred stock, dividends paid | $ 4,100 | $ 4,100 | $ 12,300 | $ 12,300 | ||||||
Percentage of discount on common stock market price | 15% | |||||||||
Percentage of dividend rate steps downs per year | 9% | |||||||||
Percentage of dividend rate increase per annum in the event of noncompliance | 12% | |||||||||
Number of days dividend increase rate applicable noncompliance event occurred | 90 days | |||||||||
Percentage of dividend rate increase per annum upon noncompliance occurred and thereafter | 14% | |||||||||
Number of times increase in debt incurrence test ratio | 4.5 | |||||||||
Minimum repayment amount | $ 50,000 | |||||||||
Minimum repayment amount drop down | $ 25,000 | |||||||||
Temporary equity description | The Company may, at its option on any one or more dates, redeem all or a minimum portion (the lesser of (i) $25.0 million in aggregate stated value of the Convertible and Redeemable Series A-2 Preferred Stock and (ii) all of the Convertible and Redeemable Series A-2 Preferred Stock then outstanding) of the outstanding Convertible and Redeemable Series A-2 Preferred Stock in cash.With respect to any redemption of any share of the Convertible and Redeemable Series A-2 Preferred Stock prior to the third-year anniversary, the Company is subject to a make whole penalty in which the holders of the Convertible and Redeemable Series A-2 Preferred Stock are guaranteed a minimum repayment equal to outstanding redeemed stated value plus three years of dividends accrued or accruable thereon. | |||||||||
Aggregate stated value of stock redeemed | 25,000 | $ 25,000 | ||||||||
Aggregate liquidation preference | 182,200 | 182,200 | $ 182,200 | |||||||
Compound embedded derivative, fair value net | 24,700 | 24,700 | $ 23,100 | |||||||
Convertible And Redeemable Series A-2 Preferred Stock | Other Expense | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Compound embedded derivative, change in value | 500 | 1,600 | ||||||||
Convertible And Redeemable Series A-2 Preferred Stock | 60-Day Period Prior to Seventh Anniversary | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Temporary equity convertible into common stock | 60,000 | 60,000 | ||||||||
Convertible And Redeemable Series A-2 Preferred Stock | Year 5 | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Temporary equity convertible into common stock | 60,000 | 60,000 | ||||||||
Convertible And Redeemable Series A-2 Preferred Stock | Year 6 | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Temporary equity convertible into common stock | $ 120,000 | $ 120,000 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jan. 31, 2021 | May 31, 2015 | |||
Class Of Stock [Line Items] | |||||||||
Common stock, shares authorized | 190,000,000 | 190,000,000 | 190,000,000 | ||||||
Common stock, par value | $ 0.000004 | $ 0.000004 | $ 0.000004 | ||||||
Stock issued on exercise of warrants | 67,713 | 67,713 | [1] | ||||||
Total unrecognized stock compensation expense related to unvested options and restricted stock granted under the Plans | $ 152,500 | $ 15,000 | $ 152,500 | $ 15,000 | |||||
Unrecognized expense expected to be recognized period | 4 years | ||||||||
Restricted shares became fully vested and released as common stock | 0 | 0 | 25,289 | 38,929 | |||||
Shares, granted | [1] | 25,289 | 38,929 | ||||||
Stock compensation expense | $ 11,018 | $ 2,365 | $ 32,375 | $ 6,587 | |||||
Shares reserved for future issuance | 8,619,509 | 5,992,019 | 8,619,509 | 5,992,019 | |||||
Restricted shares outstanding | 2,064,197 | 286,239 | 2,064,197 | 286,239 | |||||
Shares of vested over period | 1 year | 1 year | 1 year | 1 year | |||||
Shares RSAs granted | 0 | 0 | |||||||
Supplemental Incentive Plans | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, granted | 95,404 | 0 | |||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, granted | 1,671,391 | ||||||||
Share based, description | These RSUs represent the right to receive one share of the Company’s common stock upon vesting. These incentives were designed by the Board, in coordination with the Company’s compensation advisors, to (i) retain selected employees of the Company for a minimum of 5 years, (ii) reward selected employees for the Company’s significant outperformance and stockholder value creation in 2021, and (iii) provide incentives to selected employees of the Company to accelerate value creation for stockholders and other stakeholders over the next five-year period | ||||||||
Stock compensation expense | $ 90,000 | ||||||||
Shares reserved for future issuance | 7,757,995 | 3,944,750 | 7,757,995 | 3,944,750 | 135,517 | 1,185,112 | |||
Restricted shares forfeited | 0 | 0 | 0 | 0 | |||||
Shares of vested over period | 5 years | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Restricted Stock | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares RSAs granted | 0 | 0 | 10,920 | 19,066 | |||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Stock Options | Board of Directors | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares of vested over period | 4 years | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Stock Options | Executive Officers | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares of vested over period | 3 years | ||||||||
Vesting frequency of period | 1 year | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Stock Options | Second Anniversary | Board of Directors | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, vesting rights, percentage | 50% | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Stock Options | Fourth Anniversary | Board of Directors | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, vesting rights, percentage | 50% | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | Performance-Vested RSUs | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, granted | 316,209 | ||||||||
Shares, vesting rights, percentage | 50% | ||||||||
Montrose Amended & Restated 2017 Stock Incentive Plan | RSUs | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, granted | 1,355,182 | ||||||||
Shares, vesting rights, percentage | 50% | ||||||||
Montrose Amended and Restated 2013 Stock Option Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares outstanding from exercised options | 1,271,383 | 1,028,268 | 1,271,383 | 1,028,268 | |||||
Two Thousand Seventeen Plan | Restricted Stock | |||||||||
Class Of Stock [Line Items] | |||||||||
Stock compensation expense | $ 237 | $ 17,892 | $ 749 | ||||||
Two Thousand Seventeen Plan | Stock Options | |||||||||
Class Of Stock [Line Items] | |||||||||
Stock compensation expense | $ 2,620 | $ 2,126 | 7,518 | $ 5,816 | |||||
Two Thousand Seventeen Plan | Stock Appreciation Rights (SARs) | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares, granted | 3,000,000 | ||||||||
Stock compensation expense | $ 2,315 | $ 6,965 | |||||||
Exercise price | $ 66.79 | ||||||||
Shares of vested over period | 5 years | ||||||||
Remaining contractual terms | 10 years | ||||||||
Weighted average remaining contract life | 9 years 2 months 15 days | ||||||||
Fair value vested in period | $ 46,000 | ||||||||
Private Offering | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to purchase common stock | 116,350 | ||||||||
Warrant exercise price per share | $ 17.19 | ||||||||
[1] Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock. |
Stockholder's Equity - Summary
Stockholder's Equity - Summary of Issued Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |||
Equity [Abstract] | ||||||
Acquisitions, Shares | 62,738 | 143,800 | ||||
Exercise of warrants options, Shares | 67,713 | 67,713 | [1] | |||
Exercise of options, Shares | 28,111 | 354,918 | 62,293 | 779,068 | ||
Restricted shares, net, Shares | [1] | 25,289 | 38,929 | |||
Payment of earn-out liability, Shares | 539,607 | |||||
Payment of purchase price true up, Shares | 24,200 | |||||
Total, Shares | 28,111 | 417,656 | 87,582 | 1,593,317 | ||
Acquisitions, Average Price per Share | $ 52.18 | $ 41.86 | ||||
Exercise of warrants options, Average Price per Share | [1] | 17.19 | ||||
Exercise of options, Average Price per Share | $ 11.70 | 8.30 | $ 13.04 | 7.74 | ||
Restricted shares, net, Average Price per Share | [1] | 66.58 | 31.31 | |||
Payment of earn-out liability, Average Price per share | 46.33 | |||||
Payment of purchase price true up, Average Price per share | 44.81 | |||||
Total, Average Price per Share | $ 11.70 | $ 14.89 | $ 28.50 | $ 25.43 | ||
Acquisitions, Total | $ 3,274 | $ 6,020 | ||||
Exercise of options, Total | $ 329 | 2,946 | $ 812 | 6,032 | ||
Payment of earn-out liability, Total | 25,000 | |||||
Payment of purchase price true up, Total | 1,084 | |||||
Total | $ 329 | $ 6,220 | $ 812 | $ 38,136 | ||
[1] Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock. |
Stockholder's Equity - Summar_2
Stockholder's Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Details) - shares | Sep. 30, 2022 | Jan. 31, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized to be issued | 7,177,131 | 5,992,019 | ||
Shares available for grant | 364,949 | [1] | 1,593,287 | |
2017 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized to be issued | 5,140,112 | 3,944,750 | ||
Shares available for grant | 364,949 | [1] | 1,185,112 | 1,593,287 |
2013 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized to be issued | 2,037,019 | 2,047,269 | ||
[1] In January 2022 the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information regarding the December 2021 grant. |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Parenthetical) (Details) - shares | Sep. 30, 2022 | [1] | Jan. 31, 2022 | Sep. 30, 2021 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares available for grant | 364,949 | 1,593,287 | ||
Two Thousand Seventeen Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares available for grant | 364,949 | 1,185,112 | 1,593,287 | |
[1] In January 2022 the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information regarding the December 2021 grant. |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 11,018 | $ 2,365 | $ 32,375 | $ 6,587 |
2017 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 2,620 | 2,126 | 7,518 | 5,816 |
2017 Plan | Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 237 | 17,892 | 749 | |
2017 Plan | Stock Appreciation Rights (SARs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 2,315 | 6,965 | ||
2013 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 2 | 21 | ||
Cost of Revenue | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 404 | 282 | 1,069 | 1,188 |
Cost of Revenue | 2017 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 404 | 282 | 1,069 | 1,178 |
Cost of Revenue | 2013 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 10 | |||
Selling, General and Administrative Expenses | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 10,614 | 2,083 | 31,306 | 5,399 |
Selling, General and Administrative Expenses | 2017 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 2,216 | 1,844 | 6,449 | 4,638 |
Selling, General and Administrative Expenses | 2017 Plan | Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | 6,083 | 237 | 17,892 | 749 |
Selling, General and Administrative Expenses | 2017 Plan | Stock Appreciation Rights (SARs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 2,315 | $ 6,965 | ||
Selling, General and Administrative Expenses | 2013 Plan | Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 2 | $ 11 |
Stockholder's Equity - Schedu_2
Stockholder's Equity - Schedule of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares | 0 | 0 | |||
Average Price per Share | [1] | $ 66.58 | $ 31.31 | ||
Montrose Amended & Restated 2017 Stock Incentive Plan | Restricted stock units awards | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares | 106,324 | 19,066 | |||
Average Price per Share | $ 46.82 | $ 36.99 | |||
Fair Value | $ 4,978 | $ 705 | |||
[1] Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock. |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Performance Hurdles (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares | |
SAR Stock Price Performance Hurdle One | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 133.58 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
SAR Stock Price Performance Hurdle Two | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 166.98 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
SAR Stock Price Performance Hurdle Three | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 200.37 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
Stockholder's Equity - Summar_3
Stockholder's Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Exercise of options, Shares | (28,111) | (354,918) | (62,293) | (779,068) | ||
Montrose Amended & Restated 2017 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Options to Purchase Common Stock Outstanding Beginning Balance | 2,036,729 | 1,840,229 | 1,840,229 | |||
Options to Purchase Common Stock Granted | 664,784 | 264,470 | ||||
Options to Purchase Common Stock Forfeited/cancelled | (60,167) | (29,025) | ||||
Options to Purchase Common Stock Expired | (1,250) | |||||
Exercise of options, Shares | (26,258) | (66,875) | ||||
Options to Purchase Common Stock Outstanding Ending Balance | 2,615,088 | 2,007,549 | 2,615,088 | 2,007,549 | 2,036,729 | 1,840,229 |
Options to Purchase Common Stock Exercisable | 1,010,302 | 1,010,302 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||||
Weighted-Average Exercise Price per Share Outstanding Beginning Balance | $ 26 | $ 23 | $ 23 | |||
Weighted-Average Exercise Price per Share Granted | 44 | 40 | ||||
Weighted-Average Exercise Price per Share Forfeited/cancelled | 36 | 28 | ||||
Weighted-Average Exercise Price per Share Expired | 18 | |||||
Weighted-Average Exercise Price per Share Exercised | 22 | 22 | ||||
Weighted-Average Exercise Price per Share Outstanding Ending Balance | $ 30 | $ 25 | 30 | 25 | 26 | $ 23 |
Weighted-Average Exercise Price per Share Exercisable | 26 | 26 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Weighted Average Grant Date Fair Value per Share Outstanding Beginning Balance | 14 | 12 | 12 | |||
Weighted Average Grant Date Fair Value per Share Granted | 16 | 22 | ||||
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 15 | $ 14 | $ 15 | $ 14 | $ 14 | $ 12 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 8 years 14 days | 8 years 6 months 10 days | 8 years 3 months 18 days | 9 years 1 month 2 days | ||
Weighted Average Remaining Contract Life (in Years) Exercisable | 7 years 5 months 23 days | |||||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 18,784 | $ 73,724 | $ 18,784 | $ 73,724 | $ 91,030 | $ 15,598 |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 671 | $ 2,078 | ||||
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 9,966 | $ 9,966 | ||||
Montrose Amended and Restated 2013 Stock Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Options to Purchase Common Stock Outstanding Beginning Balance | 897,674 | 1,787,869 | 1,787,869 | |||
Options to Purchase Common Stock Expired | (125) | (625) | ||||
Exercise of options, Shares | (36,035) | (710,568) | ||||
Options to Purchase Common Stock Outstanding Ending Balance | 861,514 | 1,076,676 | 861,514 | 1,076,676 | 897,674 | 1,787,869 |
Options to Purchase Common Stock Exercisable | 861,514 | 861,514 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||||
Weighted-Average Exercise Price per Share Outstanding Beginning Balance | $ 6 | $ 6 | $ 6 | |||
Weighted-Average Exercise Price per Share Expired | 6 | 6 | ||||
Weighted-Average Exercise Price per Share Exercised | 6 | 6 | ||||
Weighted-Average Exercise Price per Share Outstanding Ending Balance | $ 6 | $ 6 | 6 | 6 | 6 | $ 6 |
Weighted-Average Exercise Price per Share Exercisable | 6 | 6 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Weighted Average Grant Date Fair Value per Share Outstanding Beginning Balance | 2 | 1 | 1 | |||
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 3 years 7 months 9 days | 4 years 7 months 24 days | 4 years 4 months 13 days | 5 years 4 months 24 days | ||
Weighted Average Remaining Contract Life (in Years) Exercisable | 3 years 7 months 9 days | |||||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 23,448 | $ 59,532 | $ 23,448 | $ 59,532 | $ 57,529 | $ 43,867 |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 1,425 | $ 33,480 | ||||
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 23,448 | $ 23,448 |
Stockholder's Equity - Summar_4
Stockholder's Equity - Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common stock value (per share) | $ 43.72 | $ 39.83 |
Expected volatility | 33.45% | 58.34% |
Risk-free interest rate | 1.94% | 0.77% |
Expected life (years) | 6 years 5 months 12 days | 6 years 3 months 25 days |
Forfeiture rate | 0% | 0% |
Dividend rate | 0% | 0% |
Stockholder's Equity - Schedu_3
Stockholder's Equity - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jan. 31, 2021 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 8,619,509 | 5,992,019 | ||
Montrose 2013 Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 861,514 | 2,047,269 | ||
Montrose 2017 Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 7,757,995 | 135,517 | 3,944,750 | 1,185,112 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Parenthetical) (Details) - shares | 1 Months Ended | |||
Jan. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 8,619,509 | 5,992,019 | ||
Montrose 2017 Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 1,185,112 | 7,757,995 | 135,517 | 3,944,750 |
Stock Appreciation Rights Units Grant | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 3,000,000 | 3,000,000 | ||
Common stock issued upon vesting of performance SARs | 2,000,000 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (5,720) | $ (7,751) | $ (7,536) | $ 2,226 | $ (13,148) | $ (12,931) | $ (21,007) | $ (23,853) |
Convertible and redeemable series A-2 preferred stock dividend | (4,100) | (4,100) | (12,300) | (12,300) | ||||
Net loss attributable to common stockholders -basic and diluted | $ (9,820) | $ (1,874) | $ (33,307) | $ (36,153) | ||||
Weighted-average common shares outstanding basic | 29,691 | 26,220 | 29,677 | 25,798 | ||||
Weighted Average Number of Shares Outstanding, Diluted | 29,691 | 26,220 | 29,677 | 25,798 | ||||
Net loss per share attributable to common stockholders basic | $ (0.33) | $ (0.07) | $ (1.12) | $ (1.40) | ||||
Net loss per share attributable to common stockholder diluted | $ (0.33) | $ (0.07) | $ (1.12) | $ (1.40) |
Net Loss Per Share - Equity Sha
Net Loss Per Share - Equity Shares Excluded from Calculation of Diluted Loss Per Share Attributable to Common Stockholders (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share amount | 3,476,602 | 1,686,688 |
Restricted Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share amount | 1,777,958 | 28,623 |
Stock Appreciation Rights (SARs) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share amount | 3,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Segment Information - Component
Segment Information - Components of Segment Revenues and Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Segment Revenues | $ 130,312 | $ 132,578 | $ 404,902 | $ 402,619 |
Segment Adjusted EBITDA | 18,373 | 21,487 | 51,337 | 59,249 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 130,312 | 132,578 | 404,902 | 402,619 |
Segment Adjusted EBITDA | 25,313 | 29,474 | 74,163 | 81,275 |
Assessment, Permitting and Response | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 46,414 | 63,412 | 142,051 | 209,379 |
Segment Adjusted EBITDA | 9,820 | 15,719 | 30,252 | 46,379 |
Measurement and Analysis | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 43,754 | 38,752 | 125,739 | 111,309 |
Segment Adjusted EBITDA | 8,483 | 8,283 | 21,852 | 22,634 |
Remediation and Reuse | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 40,144 | 30,414 | 137,112 | 81,931 |
Segment Adjusted EBITDA | 7,010 | 5,472 | 22,059 | 12,262 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Segment Adjusted EBITDA | $ (6,940) | $ (7,987) | $ (22,826) | $ (22,026) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Measure to Net Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting [Abstract] | |||||
Total | $ 18,373 | $ 21,487 | $ 51,337 | $ 59,249 | |
Interest expense, net | (1,400) | (1,722) | (4,010) | (11,208) | |
Income tax benefit (expense) | 208 | (902) | (1,892) | (648) | |
Depreciation and amortization | (11,504) | (11,471) | (35,928) | (33,145) | |
Stock-based compensation | (11,018) | (2,365) | (32,375) | (6,587) | |
Start-up losses and investment in new services | (1,278) | (1,186) | (2,949) | (3,276) | |
Acquisition costs | (368) | (913) | (1,354) | (1,656) | |
Fair value changes in financial instruments | 1,808 | (531) | 4,664 | (1,651) | |
Fair value changes in business acquisitions contingencies | (59) | 3,472 | (24,035) | ||
Expenses related to financing transactions | (7) | (50) | |||
Other losses or expenses | [1] | (482) | (171) | (1,965) | (846) |
Net loss | $ (5,720) | $ 2,226 | $ (21,007) | $ (23,853) | |
[1] In 2022, amounts include costs associated with the closing of a lab and severance costs related to a restructuring within our soil remediation business. In 2021, amounts include non-operational charges incurred due to the remeasurement of finance leases as a result of the adoption of ASC 842 and costs related to the implementation of a new ERP. |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transactions [Abstract] | ||||
Related party transaction amount | $ 0 | $ 0 | $ 0 | $ 0 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | May 22, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | ||||||
Defined contribution plan, description | 401(k) Savings Plan | |||||
Defined contribution plan, maximum annual contributions per employee, percent | 85% | 85% | ||||
Defined contribution plan, employer matching contribution, percent of match | 100% | |||||
Defined contribution plan participant's compensation percent | 3% | |||||
Defined contribution plan percentage of participant's elective deferrals | 50% | |||||
Selling, General and Administrative Expenses | ||||||
Defined Contribution Plan Disclosure [Line Items] | ||||||
Defined contribution plan, employer discretionary contribution amount | $ 1.2 | $ 0.8 | $ 4.6 | $ 1.6 | ||
Minimum | ||||||
Defined Contribution Plan Disclosure [Line Items] | ||||||
Defined contribution plan participant's compensation percent | 3% | |||||
Maximum | ||||||
Defined Contribution Plan Disclosure [Line Items] | ||||||
Defined contribution plan participant's compensation percent | 4% |