Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 23, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
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 | 29,868,373 | ||
Entity Public Float | $ 1 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
ICFR Auditor Attestation Flag | true | ||
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 $0.000004 per share | ||
Security Exchange Name | NYSE | ||
Auditor Firm ID | 34 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Costa Mesa, California | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2022 . |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash, cash equivalents and restricted cash | $ 89,828 | $ 146,741 |
Accounts receivable—net | 94,711 | 98,513 |
Contract assets | 52,403 | 40,139 |
Prepaid and other current assets | 10,292 | 7,957 |
Income tax receivable | 694 | 508 |
Total current assets | 247,928 | 293,858 |
NON-CURRENT ASSETS: | ||
Property and equipment—net | 36,045 | 31,521 |
Operating lease right-of-use asset—net | 26,038 | 23,532 |
Finance lease right-of-use asset—net | 9,840 | 8,944 |
Goodwill | 323,868 | 311,944 |
Other intangible assets—net | 142,107 | 160,997 |
Other assets | 6,088 | 2,298 |
TOTAL ASSETS | 791,914 | 833,094 |
CURRENT LIABILITIES: | ||
Accounts payable and other accrued liabilities | 63,412 | 68,936 |
Accrued payroll and benefits | 20,528 | 25,971 |
Business acquisitions contingent consideration, current | 3,801 | 31,450 |
Current portion of operating lease liabilities | 7,895 | 6,888 |
Current portion of finance lease liabilities | 3,775 | 3,512 |
Current portion of long-term debt | 12,031 | 10,938 |
Total current liabilities | 111,442 | 147,695 |
NON-CURRENT LIABILITIES: | ||
Business acquisitions contingent consideration, long-term | 4,454 | 4,350 |
Other non-current liabilities | 13 | 100 |
Deferred tax liabilities—net | 5,742 | 4,006 |
Operating lease liability—net of current portion | 19,437 | 16,859 |
Finance lease liability—net of current portion | 6,486 | 5,756 |
Long-term debt—net of deferred financing fees | 152,494 | 161,818 |
Total liabilities | 325,799 | 363,665 |
COMMITMENTS AND CONTINGENCIES (Note 16) | ||
STOCKHOLDERS’ EQUITY: | ||
Additional paid-in capital | 492,676 | 464,143 |
Accumulated deficit | (179,497) | (147,678) |
Accumulated other comprehensive income | 8 | 36 |
Total stockholders’ equity | 313,187 | 316,501 |
TOTAL LIABILITIES, CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | 791,914 | 833,094 |
Conversion Option | ||
NON-CURRENT LIABILITIES: | ||
Embedded derivative | 25,731 | 23,081 |
Convertible And Redeemable Series A-2 Preferred Stock | ||
NON-CURRENT LIABILITIES: | ||
REDEEMABLE SERIES PREFERRED STOCK | $ 152,928 | $ 152,928 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Millions | Dec. 31, 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 | 29,746,793 | 29,619,921 |
Common stock, shares outstanding | 29,746,793 | 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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
REVENUES | $ 544,416 | $ 546,413 | $ 328,243 |
COST OF REVENUES (exclusive of depreciation and amortization shown below) | 351,882 | 369,028 | 215,492 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE | 176,295 | 117,658 | 85,546 |
FAIR VALUE CHANGES IN BUSINESS ACQUISITION CONTINGENCIES | (3,227) | 24,372 | 12,942 |
DEPRECIATION AND AMORTIZATION | 47,479 | 44,810 | 37,274 |
LOSS FROM OPERATIONS | (28,013) | (9,455) | (23,011) |
OTHER INCOME (EXPENSE): | |||
Other income (expense) | 3,683 | (2,546) | (20,268) |
Interest expense—net | (5,239) | (11,615) | (13,819) |
Total other expenses-net | (1,556) | (14,161) | (34,087) |
LOSS BEFORE EXPENSE FROM INCOME TAXES | (29,569) | (23,616) | (57,098) |
INCOME TAX EXPENSE | 2,250 | 1,709 | 851 |
NET LOSS | (31,819) | (25,325) | (57,949) |
EQUITY ADJUSTMENT FROM FOREIGN CURRENCY TRANSLATION | (28) | (35) | 111 |
COMPREHENSIVE LOSS | (31,847) | (25,360) | (57,838) |
ACCRETION OF REDEEMABLE SERIES A- 1 PREFERRED STOCK | (17,601) | ||
REDEEMABLE SERIES A-1 PREFERRED STOCK DEEMED DIVIDEND | (24,341) | ||
CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK DIVIDEND | (16,400) | (16,400) | (6,970) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (48,219) | $ (41,725) | $ (106,861) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 29,688 | 26,724 | 16,479 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 29,688 | 26,724 | 16,479 |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - BASIC | $ (1.62) | $ (1.56) | $ (6.48) |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS - DILUTED | $ (1.62) | $ (1.56) | $ (6.48) |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE SERIES A-1 PREFERRED STOCK, CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Redeemable Series A-1 Preferred Stock | 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, 2019 | $ 128,822 | ||||||
Beginning balance, shares at Dec. 31, 2019 | 12,000 | ||||||
Beginning balance at Dec. 31, 2019 | $ (26,291) | $ 38,153 | $ (64,404) | $ (40) | |||
Beginning balance, shares at Dec. 31, 2019 | 8,370,107 | ||||||
Net loss | (57,949) | (57,949) | |||||
Accretion of the redeemable series A-1 preferred stock to redeemable value | (17,601) | (17,601) | |||||
Accretion of the redeemable series A-1 preferred stock to redeemable value | $ 17,601 | ||||||
Series A-1 preferred stock deemed dividend | $ 24,341 | ||||||
Series A-1 preferred stock deemed dividend | $ (24,341) | (24,341) | |||||
Redemption of the series A-1, shares | (1,786,739) | 1,786,739 | |||||
Temporary equity redemption of the series A-1, shares | (12,000) | ||||||
Redemption of the series A-1 preferred stock | $ 26,801 | 26,801 | |||||
Temporary equity redemption of the series A-1 | $ (170,764) | ||||||
Issuance of the convertible andredeemable series A-2 preferred stock | $ 152,928 | ||||||
Issuance of the convertible and redeemable series A-2 preferred stock, Shares | 17,500 | ||||||
Dividend payment to the series A-2 preferred shareholders | (6,970) | $ (7,000) | (6,970) | ||||
Exercise of the series A-1 and A-2 preferred stock warrant | 56,312 | 56,312 | |||||
Exercise of the series A-1 and A-2 preferred stock warrant, shares | 2,534,239 | ||||||
Stock-based compensation | 4,849 | 4,849 | |||||
Common stock issued | 25,383 | 25,383 | |||||
Common stock issued, shares | 859,227 | ||||||
Issuance of common stock in connection with initial public offering | $ 156,841 | 156,841 | |||||
Issuance of common stock in connection with initial public offering, net of issuance costs of $15.6 million, shares | 11,500,000 | ||||||
Cancellation of shares | (117,785) | (117,785) | |||||
Accumulated other comprehensive income (loss) | $ 111 | 111 | |||||
Ending balance at Dec. 31, 2020 | $ 152,928 | ||||||
Ending balance, shares at Dec. 31, 2020 | 17,500 | ||||||
Ending balance at Dec. 31, 2020 | 137,145 | 259,427 | (122,353) | 71 | |||
Ending balance, shares at Dec. 31, 2020 | 24,932,527 | ||||||
Net loss | (25,325) | (25,325) | |||||
Dividend payment to the series A-2 preferred shareholders | (16,400) | $ (16,400) | (16,400) | ||||
Stock-based compensation | 10,321 | 10,321 | |||||
Common stock issued | 41,641 | 41,641 | |||||
Common stock issued, shares | 1,812,394 | ||||||
Issuance of common stock in connection with follow-on offering, net of issuance costs of $0.6 million | 169,154 | 169,154 | |||||
Issuance of common stock in connection with follow-on offering, net of issuance costs of0.6 million, shares | 2,875,000 | ||||||
Accumulated other comprehensive income (loss) | (35) | (35) | |||||
Ending balance at Dec. 31, 2021 | $ 152,928 | ||||||
Ending balance, shares at Dec. 31, 2021 | 17,500 | ||||||
Ending balance at Dec. 31, 2021 | 316,501 | 464,143 | (147,678) | 36 | |||
Ending balance, shares at Dec. 31, 2021 | 29,619,921 | ||||||
Net loss | (31,819) | (31,819) | |||||
Dividend payment to the series A-2 preferred shareholders | (16,400) | $ (16,400) | (16,400) | ||||
Stock-based compensation | 43,290 | 43,290 | |||||
Common stock issued | 1,643 | 1,643 | |||||
Common stock issued, shares | 126,872 | ||||||
Accumulated other comprehensive income (loss) | (28) | (28) | |||||
Ending balance at Dec. 31, 2022 | $ 152,928 | ||||||
Ending balance, shares at Dec. 31, 2022 | 17,500 | ||||||
Ending balance at Dec. 31, 2022 | $ 313,187 | $ 492,676 | $ (179,497) | $ 8 | |||
Ending balance, shares at Dec. 31, 2022 | 29,746,793 |
CONSOLIDATED STATEMENTS OF RE_2
CONSOLIDATED STATEMENTS OF REDEEMABLE SERIES A-1 PREFERRED STOCK, CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock issuance costs | $ 0.6 | $ 15.6 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
OPERATING ACTIVITIES: | ||||
Net loss | $ (31,819) | $ (25,325) | $ (57,949) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
(Recovery) provision for bad debt | (1,097) | 1,135 | 4,532 | [1] |
Depreciation and amortization | 47,479 | 44,810 | 37,274 | |
Amortization of right-of-use asset | 9,289 | 8,151 | ||
Stock-based compensation expense | 43,290 | 10,321 | 4,849 | |
Fair value changes in financial instruments | (3,396) | 2,195 | 20,319 | |
Fair value changes in business acquisition contingencies | (3,227) | 24,372 | 12,942 | |
Deferred income taxes | 2,250 | 1,709 | 851 | |
Debt extinguishment costs | 4,052 | 1,810 | ||
Other | 349 | (195) | 278 | |
Changes in operating assets and liabilities—net of acquisitions: | ||||
Accounts receivable and contract assets | 4,394 | (36,164) | (19,202) | |
Prepaid expenses and other current assets | (1,763) | (1,148) | (4,137) | |
Accounts payable and other accrued liabilities | (9,878) | 23,996 | 601 | |
Accrued payroll and benefits | (6,830) | 3,244 | 6,072 | |
Payment of contingent consideration | (19,457) | (15,628) | (6,390) | |
Change in operating leases | (8,935) | (7,944) | ||
Net cash (used in) provided by operating activities | 20,649 | 37,581 | 1,850 | |
INVESTING ACTIVITIES: | ||||
Proceeds received from corporate owned insurance | 329 | 413 | 0 | |
Purchases of property and equipment | (10,002) | (6,987) | (7,756) | |
(Payment) collection of purchase price true ups | (389) | (9,336) | 1,939 | |
Cash paid for acquisitions—net of cash acquired | (28,625) | (55,731) | (173,923) | |
Net cash used in investing activities | (38,687) | (71,641) | (179,740) | |
FINANCING ACTIVITIES: | ||||
Proceeds from line of credit | 109,000 | 104,390 | ||
Payments on line of credit | (109,000) | (201,980) | ||
Proceeds from term loans | 175,000 | 175,000 | ||
Repayment of term loans | (8,750) | (173,905) | (50,195) | |
Payment of contingent consideration and other purchase price true ups | (11,107) | (9,865) | (6,004) | |
Repayment of finance leases | (3,967) | (2,711) | (2,848) | |
Proceeds from issuance of common stock in public offerings, net of issuance costs | 169,783 | 161,288 | ||
Payments of deferred offering costs | (183) | (446) | (4,164) | |
Debt issuance cost | (2,590) | (4,866) | ||
Proceeds from issuance of common stock for exercised stock options | 1,643 | 7,237 | 408 | |
Issuance of series A-2 preferred stock and warrant, net of issuance costs | 173,664 | |||
Redemption of the series A-1 preferred stock | (131,821) | |||
Dividend payment to the series A-2 shareholders | (16,400) | (16,400) | (6,970) | |
Net cash (used in) provided by financing activities | (38,764) | 146,103 | 205,902 | |
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (56,802) | 112,043 | 28,012 | |
Foreign exchange impact on cash balance | (111) | (183) | (15) | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
Beginning of year | 146,741 | 34,881 | 6,884 | |
End of year | 89,828 | 146,741 | 34,881 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | ||||
Cash paid for interest, net | 6,514 | 5,012 | 11,947 | |
Cash paid for income tax, net | 789 | 412 | 171 | |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Preferred stock deemed dividend—net of return from holders | 24,341 | |||
Redemption of preferred stock in common shares | 26,801 | |||
Accrued purchases of property and equipment | 2,261 | 790 | 432 | |
Property and equipment purchased under finance leases | 5,061 | 1,766 | 2,113 | |
Accretion of the redeemable series A-1 preferred stock to redeemable value | 17,601 | |||
Common stock issued to acquire new businesses | 8,320 | 25,000 | ||
Acquisitions unpaid contingent consideration | $ 8,255 | 35,800 | $ 54,457 | |
Acquisitions contingent consideration paid in shares | 26,084 | |||
Offering costs included in accounts payable and other accrued liabilities | $ 183 | |||
[1] During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). |
Description of the Business and
Description of the Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 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 approximately 80 offices across the United States, Canada and Australia and approximately 2,900 employees as of December 31, 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, and implementation 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. Initial Public Offering —On July 27, 2020, the Company completed its initial public offering (“IPO”) of common stock, in which it sold 11,500,000 shares, including 1,500,000 shares issued pursuant to the underwriters full exercise on July 24, 2020 of the underwriters’ option to purchase additional shares, at a price to the public of $ 15.00 per share, resulting in net proceeds to the Company of approximately $ 161.3 million after deducting underwriting discounts of $ 11.2 million. Additionally, the Company offset $ 4.4 milli on of deferred IPO costs against IPO proceeds recorded to additional paid in capital. These deferred IPO costs were directly attributable to the IPO offering in accordance with Staff Accounting Bulletin Topic 5: Miscellaneous Accounting. The Company’s common stock began trading on the New York Stock Exchange on July 23, 2020. Follow-on Offering —On October 1, 2021, the Company completed a follow-on offering of common stock, in which it sold 2,875,000 shares, including 375,000 shares issued pursuant to the underwriters full exercise on October 5, 2021 of the underwriters’ option to purchase additional shares, at a price to the public of $ 62.00 per share, resulting in net proceeds to the Company of approximately $ 169.8 million after deducting underwriting discounts of $ 8.5 million. Additionally, the Company offset $ 0.6 million of deferred follow-on offering costs against follow-on proceeds recorded to additional paid in capital. These deferred follow-on offering costs were directly attributable to the follow-on offering in accordance with Staff Accounting Bulletin Topic 5: Miscellaneous Accounting. Basis of Presentation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Intercompany balances and transactions are eliminated. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. S IGNIFICANT ACCOUNTING POLICIES Use of Estimates —The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include, but are not limited to, management’s forecasts of future cash flows used as a basis to assess recoverability of goodwill and long-lived assets, the allocation of purchase price to tangible and intangible assets, allowances for doubtful accounts, the estimated useful lives over which property and equipment is depreciated and intangible assets are amortized, subsequent measurement of goodwill, the fair value of contingent consideration payables, the fair value of warrants, the fair value of embedded derivatives, the fair value of common stock issued, stock-based compensation expense and deferred taxes. These estimates could materially differ from actual results. Cash, Cash Equivalents and Restricted Cash —The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company considers cash deposits in banks as cash with original maturities at purchase of three months or less as cash equivalents. Cash, long-term debt and financial instruments subject the Company to concentrations of credit risk. To minimize the risk of credit loss, these financial instruments are primarily held with large, reputable financial institutions. The Company has not experienced losses in such accounts and believes it is not exposed to any significant credit risk associated with these accounts. Cash that is restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash in the Company’s consolidated statements of financial position. The Company’s restricted cash balance as of December 31, 2021 of $ 0.5 million was related to deposit funds that served as a performance guarantee for certain projects with the Australian government. During the year ended December 31, 2022, such projects were completed and the cash was released. Accounts Receivables-Net —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 Accounting Standard Update ("ASU") 2016-13, Financial Instruments—Credit Losses (Topic 326). Accounting Standards Codification ("ASC") 326 requires the Company to estimate the lifetime expected credit losses on such instruments and to record an allowance to offset the receivables. Cloud Computing Arrangements —The Company capitalizes certain implementation costs incurred related to cloud computing arrangements that are service contracts. Such costs are amortized on a straight-line basis over the term of the associated hosting arrangement. Any capitalized amounts related to such arrangements are recorded within other assets on the consolidated statements of financial position. Financial Instruments — The Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The inputs to the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. The Company considers the carrying values of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses to approximate fair value for these financial instruments due to the short maturities of these instruments. The Company’s interest rate swap, embedded derivatives, warrant options and any acquisition’s contingent consideration are/ were carried at fair value and determined according to the fair value hierarchy above. The Company’s variable rate borrowings under its Credit Facility (Note 14) is tied to market indices and, thus, approximate fair value. The estimated fair value of the long-term debt under the credit facility is based on borrowing rates currently available to the Company for loans with similar terms and remaining maturities. Impairment of Long-Lived Assets —Certain events or changes in circumstances may indicate that the recoverability of the carrying amount of long lived assets should be assessed. When such events or changes in circumstances are present, the Company estimates the future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount, the Company recognizes an impairment based on the fair value of such assets. As of December 31, 2022, management determined certain of the Company's operating lease right-of-use assets were impaired (Note 7). As of December 31, 2021 , management determined that there was no impairment of long-lived assets. Acquisitions —The Company first assesses whether the acquisition represents a purchase of assets or a business. If the transaction is a business acquisition, the Company accounts for the acquisition using business combination accounting, which requires that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. The purchase price of acquisitions is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on estimated fair values, and any excess purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. Goodwill represents the premium the Company pays over the fair value of the net tangible and intangible assets acquired. The Company may use independent valuation specialists to assist in determining the estimated fair values of assets acquired and liabilities assumed, which could require certain significant management assumptions and estimates. Transaction costs associated with acquisitions of businesses are expensed as they are incurred. Business Acquisition Contingencies — Some of the Company’s acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of future performance thresholds. For each transaction, the Company estimates the fair value of contingent consideration payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability. Subsequent changes in the fair value of contingent consideration are recognized as a gain or loss in the consolidated statements of operations. Payments of contingent consideration are reflected in financing activities in the consolidated statements of cash flows to the extent included as part of the initial purchase price, or in operating activities if the payment exceeds the amount included in the initial purchase price. Goodwill —Goodwill is not amortized but instead qualitatively or quantitively tested for impairment at least annually should an event or circumstances indicate that a reduction in fair value of the reporting unit may have occurred during the year, goodwill would also be tested at such occasion. The Company performs its goodwill test at the reporting unit level. If necessary, the goodwill quantitative impairment test is performed on October 1 every year. The Company uses a two-step process to assess the realizability of goodwill. The first step (generally referred to as a "step 0" analysis) is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative second step (generally referred to as a "step 1" analysis) where the fair value of a reporting unit is calculated based on weighted income and market-based approaches. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit. Step 1 of the quantitative test requires comparison of the fair value of each of the reporting units to the respective carrying value. If the carrying value of the reporting unit is less than the fair value, no impairment exists. Otherwise, the Company would recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. During 2022, the Company elected to perform a step 1 impairment analysis. Based on the analysis performed, management determined that no impairment of goodwill existed in any of the Company’s reporting units as of the testing date (October 1, 2022). Also, no triggering events or changes in circumstances occurred during the period October 1, 2022 through December 31, 2022 that warranted retesting goodwill for impairment. During 2021, the Company performed a qualitative goodwill impairment analysis and concluded it was not more likely than not that the fair value of any of the Company’s reporting units were less than their respective carrying amounts and thus determined that no impairment existed as of the testing date (October 1, 2021). Also, no triggering events or changes in circumstances occurred during the period October 1, 2021 through December 31, 2021 that warranted retesting goodwill for impairment. Embedded Derivatives —Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position. Changes in fair value of the embedded derivatives are recognized as a component of other expense on our consolidated statements of operations (Note 17 and 18). Foreign Currency —The Company has operations in the United States, Canada, Australia and Europe. The results of its non-U.S. dollar based functional currency operations are translated to U.S. dollars at the average exchange rates during the period. The Company’s assets and liabilities are translated using the exchange rate as of the date of the consolidated statement of financial position and equity is translated using historical rates. Adjustments resulting from the translation of the consolidated financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from the determination of net income (loss) and instead are accumulated in a separate component of stockholders’ equity (deficit). Foreign exchange transaction gains and losses are included in selling, general and administrative expense on the consolidated statements of operations. Accumulated Other Comprehensive Income (Loss) —Accumulated other comprehensive income (loss), as presented on the consolidated statements of redeemable series A-1 preferred stock, convertible and redeemable series A-2 preferred stock and stockholders’ equity (deficit), cons ists of unrealized gains and losses on foreign currency translation. Comprehensive income (loss) is not included in the computation of income tax benefit. Revenue Recognition —Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers. The following is considered by the Company in the recognition of revenue under ASC 606: The Company’s services are performed under two general types of contracts (i) fixed-price and (ii) time-and-materials. Under fixed-price contracts, customers pay an agreed-upon amount for a specified scope of work agreed to in advance of the project. Under time-and-materials contracts, customers pay for the hours worked and resources used based on agreed-upon rates. Certain of the Company’s time-and-materials contracts are subject to maximum contract amounts. The duration of the Company’s contracts ranges from less than one month to over a year, depending on the scope of services provided. The Company accounts for individual promises in contracts as separate performance obligations if the promises are distinct. The assessment requires judgment. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Certain contracts in the Company’s Measurement and Analysis have multiple performance obligations, most commonly due to the contracts providing for multiple laboratory tests which are individual performance obligations. For the Measurement and Analysis contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price of each performance obligation. The standalone selling price of each performance obligation is generally determined by the observable price of a service when sold separately. Fixed fee contracts —On the majority of fixed fee contracts, the Company recognizes revenue, over time, using either the proportion of actual costs incurred to the total costs expected to complete the contract performance obligation (“cost to cost method”), under the time-elapsed basis. The Company determined that the cost to cost method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed fee contract performance obligation. Under the time-elapsed basis, the arrangement is considered a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e. distinct days of service). The Company applies a time-based measure of progress to the total transaction price, which results in ratable recognition over the term of the contract. For a portion of the Company’s laboratory service contracts, revenue is recognized as performance obligations are satisfied over time, with recognition reflecting a series of distinct services using the output method. The Company determined that this method best represents the transfer of services as the customer obtains equal benefit from the service throughout the service period. There are inherent uncertainties in the estimation process for cost to cost contracts, as the estimation of total contract costs and estimates to complete is complex, subject to many variables, and requires judgment. It is possible that estimates of costs to complete a performance obligation will be revised in the near-term based on actual progress and costs incurred. These uncertainties primarily impact the Company’s contracts in the Remediation and Reuse segment. Time-and-materials contracts —Time-and-materials contracts contain variable consideration. However, performance obligations qualify for the “Right to Invoice” Practical Expedient. Under this practical expedient, the Company is allowed to recognize revenue, over time, in the amount to which the Company has a right to invoice. In addition, the Company is not required to estimate such variable consideration upon incep tion of the contract and reassess the estimate each reporting period. The Company determined that this method best represents the transfer of services as, upon billing, the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the customer of the Company’s performance completed to date. Segment Reporting —Operating segments are components of an enterprise for which discrete financial reporting information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company has identified its Chief Executive Officer as the CODM. The CODM views the Company’s operations and manages the businesses as three operating segments, which are also the Company’s reportable segments: (i) Assessment, Permitting and Response, (ii) Measurement and Analysis, and (iii) Remediation and Reuse. The CODM reviews the operating results of these segments on a regular basis and allocates company resources depending on the needs of each group and the availability of resources. Cost of Revenues —Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, equipment rental and other outside services, field and lab supplies, vehicle costs and travel-related expenses. Selling, General and Administrative Expense —Selling, general and administrative expenses consist of indirect costs, including management and executive compensation, corporate costs related to finance, accounting, human resources, information technology, legal, administrative, safety, professional services, rent and other general expenses. Offering Costs, Initial Public Offering Expense and Follow-On Offering Expense —The offering costs associated with the IPO and October 2021 follow-on offering mainly consisted of legal, accounting and filing fees. Total IPO and follow-on offering costs of $ 4.2 million and $ 0.6 million, respectively, were deferred through the date of the IPO and follow-on offering, and then capitalized and offset against proceeds received. IPO and follow-on offering expenses that were determined to be non-capitalizable were expensed as incurred. Stock-Based Compensation —The Company currently sponsors two stock incentive plans that allow for issuance of employee stock options, restricted stock awards, restricted stock units and stock appreciation rights awards. Under one of the plans, there are certain awards that were issued to non-employees in exchange for their services and are accounted for under ASC 505, Equity-Based Payments to Non-Employees. ASC 505 requires that the fair value of the equity instruments issued to a non-employee be measured on the earlier of: (i) the performance commitment date or (ii) the date the services required under the arrangement have been completed. Certain of the performance based restricted stock units will only meet the requirements for establishing a grant date when the final calculated financial performance metrics and the amount of awards have been approved by the Company’s Board of Directors, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. The fair value of the remaining stock-based payment awards is expensed over the vesting period of each tranche on a straight-line basis. Any modification of an award that increases its fair value will require the Company to recognize additional expense. The fair value of stock options under its employee stock incentive plan are estimated as of the grant date using the Black-Scholes option valuation model, which is affected by its estimates of the fair value of common stock, risk-free interest rate, its expected dividend yield, expected term and the expected share price volatility of its common shares over the expected term. No dividend rates are used in the calculation as these are not applicable to the Company. Forfeitures are recognized as incurred. Employee options are accounted for in accordance with the guidance set forth by ASC 718, Stock Based Compensation. The fair value of stock appreciation rights is estimated at the grant date using the geometric Brownian motion model. This process has been widely used to model stock prices and is the underpinning of the Black-Scholes option pricing model and other extensions of the Random Walk Hypothesis of stock price movements and the Efficient Market Hypothesis. The Company's current intent and ability is to settle the stock appreciation rights awards in common stock and, as such, accounts for the awards as equity classified awards. Fair Value of Common Stock —Prior to the Company’s IPO, due to the absence of an active market for the Company’s common stock, the fair value of the Company’s common stock was estimated based on current available information. This estimate required significant judgment and considered several factors, including valuations of the Company’s common stock prepared by an independent third-party valuation firm. The fair value of the Company’s common stock was estimated primarily using an income approach based on discounted estimated future cash flows. The Company also utilized the market approach as an additional reference point to evaluate the reasonableness of the fair value determined under the income approach. These estimates were highly subjective in nature and involved a large degree of uncertainty. Such estimates of the fair value of the Company’s common stock were used in the measurement of stock-based compensation expense, warrant options, and the purchase price of business acquisitions for which common stock is an element of the purchase price. Following the IPO by the Company, valuation models, including estimates and assumptions used in such models, are not necessary to estimate the fair value of the Company’s common stock, as shares of the Company’s common stock are traded in the public market and the fair value is determined based on the closing price of the Company’s common stock. Income Taxes — The Company accounts for income taxes under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enacted date. A valuation allowance is recorded when it is more-likely-than-not some of the deferred tax assets may not be realized. Significant judgment is applied when assessing the need for a valuation allowance and the Company considers all available positive and negative evidence, including future taxable income, reversals of existing deferred tax assets and liabilities and ongoing prudent and feasible tax planning strategies in making such assessment. Should a change in circumstances lead to a change in judgment regarding the utilization of deferred tax assets in future years, the Company will adjust the related valuation allowance in the period such change in circumstances occurs. For acquired business entities, if the Company identifies changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they relate to new information obtained about facts and circumstances existing as of the acquisition date, those changes are considered a measurement period adjustment and the offset is recorded to goodwill. The Company records uncertain tax positions on the basis of the two-step process in which (i) it determines whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the C ompany 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 that there are no uncertain tax positions as of December 31, 2022 and 2021. The Company classifies interest and penalties reco gnized on uncertain tax positions as a component of income tax expense. |
Summary of New Accounting Prono
Summary of New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Summary of New Accounting Pronouncements | 3. 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 FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity adopted as of January 1, 2022 and did no t 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 | 12 Months Ended |
Dec. 31, 2022 | |
Revenues And Accounts Receivable [Abstract] | |
Revenues And Accounts Receivable | 4. 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 21, Segment Information. 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 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 p resents the Company’s contract balances as of December 31: 2022 2021 Contract assets $ 52,403 $ 40,139 Contract liabilities (Note 10) 18,549 27,907 Contract assets acquired through business acquisitions amounted to $ 1.7 million and $ 0.5 million as of December 31, 2022 and 2021 , respectively. Contract liabilities acquired through business acquisitions amounted to zero and $ 0.5 as of December 31, 2022 and 2021, respectively. Revenue recognized during the year ended December 31, 2022, included in the contract liability balance at the beginning of the year was $ 25.3 million. 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 year ended December 31, 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 December 31, 2022 and 2021, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $ 100.4 million and $ 108.7 million, respectively. As of December 31, 2022, the Company expected to recognize approximately $ 82.1 million of this amount as revenue within the next year and $ 18.3 million the year after . Accounts Receivable, Net —Accounts receivable, net as of December 31, consisted of the following: 2022 2021 Accounts receivable, invoiced $ 95,055 $ 101,709 Accounts receivable, other 1,571 1,385 Allowance for doubtful accounts ( 1,915 ) ( 4,581 ) Accounts receivable—net $ 94,711 $ 98,513 The Company did no t have any customers that exceeded 10.0 % of its gross receivables as of December 31, 2022. The Company had one customer who accounted for 23.1 % of the Company's gross accounts receivable as of December 31, 2021. The Company had one customer who accounted for 14.4 % and 10.0 % of revenue for the years ended December 31, 2022 and 2021 , respectively. The Company did no t have any customers that exceeded 10.0 % of revenue during the year ended December 31, 2020. The 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. The allowance for doubtful accounts consisted of the following: Beginning Bad Debt Charged to Other (1) Ending Year ended December 31, 2022 $ 4,581 $ ( 1,097 ) $ ( 1,696 ) $ 127 $ 1,915 Year ended December 31, 2021 4,265 1,135 ( 1,548 ) 729 4,581 Year ended December 31, 2020 (2) 1,327 4,532 ( 2,633 ) 1,039 $ 4,265 (1) This amount consists of additions to the allowance due to business acquisitions. (2) During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | 5. PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets as of December 31, consisted of the following: 2022 2021 Deposits $ 1,394 $ 843 Prepaid expenses 5,266 4,675 Supplies 3,632 2,439 Prepaid and other current assets $ 10,292 $ 7,957 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. 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, as of December 31, consisted of the following: Estimated 2022 2021 Lab and test equipment 7 years $ 21,171 $ 18,581 Vehicles 5 years 5,732 5,414 Equipment 3 - 7 years 40,940 35,148 Furniture and fixtures 7 years 2,841 2,844 Leasehold improvements 7 years 8,576 7,268 Aircraft 10 years 931 931 Building 39 years 2,975 2,975 83,166 73,161 Land 725 725 Construction in progress 3,150 2,342 Less accumulated depreciation ( 50,996 ) ( 44,707 ) Total property and equipment—net $ 36,045 $ 31,521 Total depreciation expense for property and equipment, net included on the consolidated statements of operations was $ 7.2 million, $ 6.4 million and $ 8.4 million for the years ended December 31, 2022, 2021, and 2020 , respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 7. LEASES Leases are classified as either finance 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. 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 new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under ASC 840. 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. As part of this adoption, the Company elected to 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 elected to combine lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets. Total rent expense under operating leases was $ 8.7 million for the year ended December 31, 2020 and was included in selling, general and administrative expense on the consolidated statement of operations. The amortization of assets under finance leases for the years ended December 31, 2020 was $ 2.2 million and was included in depreciation and amortization on the consolidated statements of operations. The components of lease expense were as follows: Year Ended December 31, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 10,017 $ 8,760 Variable lease cost Selling, general and administrative expense 1,319 367 Impairment of ROU asset (1) Other income (expense) 725 — Total operating lease cost $ 12,061 $ 9,127 Finance lease cost Amortization of right of use assets Depreciation and amortization $ 4,179 $ 3,227 Interest on lease liabilities Interest expense—net 467 401 Total finance lease cost 4,646 3,628 Total lease cost $ 16,707 $ 12,755 _________________________________________________ (1) During the year ended December 31, 2022, the Company vacated certain of its real estate space that is no longer needed for current operations. The impairment analysis on these ROU assets resulted in an impairment loss of $ 0.7 million. Supplemental cash flows information related to leases was as follows: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in finance leases $ 467 $ 401 Operating cash flows used in operating leases 9,662 8,531 Financing cash flows used in finance leases 3,967 3,191 Lease liabilities arising from new ROU assets Operating leases $ 12,443 $ 7,037 Finance leases 4,915 4,929 Weighted average remaining lease terms and weighted average discount rates were: Year Ended December 31, 2022 2021 Operating Leases Finance Operating Leases Finance Weighted average remaining lease term (years) 4.43 3.30 5.06 3.16 Weighted average discount rate 2.64 % 5.37 % 2.60 % 4.94 % The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year: December 31, Operating Leases Finance Leases 2023 $ 8,504 $ 4,219 2024 6,785 2,984 2025 4,850 2,084 2026 3,753 1,374 2027 and thereafter 5,100 565 Total undiscounted future minimum lease payments 28,992 11,226 Less imputed interest ( 1,660 ) ( 965 ) Total discounted future minimum lease payments $ 27,332 $ 10,261 |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Acquisitions | 8. BUSINESS ACQUISITIONS In line with the Company’s strategic growth initiatives, the Company acquired several businesses during the years ended December 31, 2022, 2021 and 2020. The results of each of those acquired businesses are included in the consolidated financial statements beginning on the respective acquisition dates. 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 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, external proprietary software and developed technology, 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 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 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 $ 9.5 million in aggregate earn-out payments between the years 2023 and 2026 in connection with certain of its business acquisitions, up to $ 4.0 million of which may be paid in cash. Transaction costs related to business combinations totaled $ 1.9 million, $ 2.1 million and $ 4.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. These costs are expensed within selling, general and administrative expense in the accompanying consolidated statements of operations. 2022 Acquisitions Environmental Standards, Inc. (“Environmental Standards”) —In January 2022, the Company completed the acquisition of Environmental Standards, Inc. by acquiring 100.0 % of its common stock. Environmental Standards is a provider of environmental consulting and data validation services. Environmental Standards is based in Valley Forge, PA with satellite locations nationwide. 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. IAG is based in Atlanta, GA. IAG provides highly specialized engineering services which are additive to the Company’s water treatment and renewable energy technology implementations. 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. 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. Huco Consulting, Inc. (“Huco”) —In November 2022, the Company completed the acquisition of Huco Consulting, Inc. by acquiring 100.0 % of its common stock. Huco primarily specializes in the implementation of environment, health and safety software for industrial, commercial and government clients. Huco is based in Houston, TX. The upfront cash payment made to acquire all of these acquisitions was funded through cash on hand. The following table summarizes the elements of the purchase price of the acquisitions completed during 2022: Cash Common Other Contingent Total Environmental Standards $ 14,473 $ — $ 544 $ 1,166 $ 16,183 All other 2022 acquisitions 15,271 — 1,134 1,500 17,905 Total $ 29,744 $ — $ 1,678 $ 2,666 $ 34,088 The other purchase price components of the Environmental Standards purchase price consist of a surplus working capital amount 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 working capital amounts. The preliminary purchase price attributable to the 2022 acquisitions was allocated as follows: Environmental Standards All Other 2022 Acquisitions Total (1) Cash $ 295 $ 824 $ 1,119 Accounts receivable and contract assets 5,200 2,646 7,846 Other current assets 456 116 572 Current assets 5,951 3,586 9,537 Property and equipment 168 15 183 Operating lease right-of-use asset—net 2,895 215 3,110 Customer relationships 5,807 5,812 11,619 Trade names 1,010 639 1,649 Covenants not to compete 269 650 919 Goodwill 4,131 8,412 12,543 Total assets 20,231 19,329 39,560 Current liabilities 1,720 1,314 3,034 Operating lease liability—net of 2,328 110 2,438 Total liabilities 4,048 1,424 5,472 Purchase price $ 16,183 $ 17,905 $ 34,088 ______________________________ (1) The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. For the acquisitions completed during the year ended December 31, 2022, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s consolidated statement of operations for the year ended December 31, 2022 includes revenue and pre-tax income of $ 20.2 million and $ 2.9 million, respectively, related to these acquisitions. Environmental Standards and Huco are 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. The weighted average useful lives for the acquired companie s’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete Environmental Standards 7 2 5 All other 2022 acquisitions 7 2 5 Goodwill associated with the Environmental Standards acquisition is deductible for income tax purposes. 2021 Acquisitions 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 purchase price of the acquisitions completed during 2021: Cash Common Other Contingent Total MSE $ 9,082 $ 2,271 $ 10,701 $ 1,804 $ 23,858 EI 20,721 2,274 ( 63 ) — 22,932 All other 2021 acquisitions 29,683 3,775 1,228 5,600 40,286 Total $ 59,486 $ 8,320 $ 11,866 $ 7,404 $ 87,076 The other purchase price components of the MSE purchase price consist of a surplus working capital amount, 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. The other purchase price components of all the other acquisitions purchase price mainly consist of working capital amounts and 338(h)(10) election liabilities. The purchase price attributable to the 2021 acquisitions was allocated as follows: MSE EI All Other 2021 Acquisitions Total Cash $ 2,810 $ 250 $ 693 $ 3,753 Accounts receivable and contract 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 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 consolidated statement of operations for the year ended December 31, 2021 includes revenue and pre-tax income of $ 33.7 million and $ 0.8 million, respectively, related to these acquisitions. 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 the Company’s Assessment, Permitting and Response segment. The weighted average useful lives for the acquired companies’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants 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. 2020 Acquisitions The Center for Toxicology and Environmental Health, L.L.C. —In April 2020, the Company completed the acquisition of The Center for Toxicology and Environmental Health, L.L.C. (“CTEH”) by acquiring 100.0 % of its membership interests. CTEH is an environmental consulting company headquartered in Arkansas that specializes in environmental response and toxicology. The cash payment made to acquire CTEH was funded through the issuance of the Convertible and Redeemable Series A-2 Preferred Stock (Note 18) an d the common stock portion of the purchase price was funded through the issuance of 791,139 shares of common stock. Leed Environmental Inc. — In September 2020, the Company acquired certain testing assets, and operations from Leed Environmental Inc. (“LEED”). LEED provides environmental project management and coordination services. LEED expands the Company’s remediation capabilities in the Northeast region of the United States. The cash payment made to acquire LEED was funded via cash on hand. American Environmental Testing Co. — In September 2020, the Company acquired certain assets and operations of American Environmental Testing Co. (“AETC”), a stack testing company in Utah. AETC expands the Company’s air measurement and analysis capabilities in the West Coast region. The cash payment made to acquire AETC was funded via cash on hand. The following table summarizes the elements of purchase price of the acquisitions completed during 2020: Cash Common Other Contingent Total CTEH $ 175,000 $ 25,000 $ ( 1,939 ) $ 44,994 $ 243,055 All other 2020 acquisitions 450 — 150 210 810 Total $ 175,450 $ 25,000 $ ( 1,789 ) $ 45,204 $ 243,865 CTEH first year earnout was calculated at twelve times CTEH’s 2020 EBITDA (as defined in the purchase agreement) in excess of $ 18.3 million, with a maximum first year earn-out payment of $ 50.0 million, which was fully achieved. The second year earn-out was calculated at ten times CTEH’s 2021 EBITDA in excess of actual 2020 EBITDA (with actual 2020 EBITDA subject to a minimum of $ 18.3 million and a maximum of $ 22.5 million), with a maximum second year earn-out payment of $ 30.0 million, which was fully achieved. The 2020 earn out was initially payable 100.0 % in common stock, but as a result of the completion of the Company’s IPO (Note 1) , at the Company’s election, 50.0 % was payable in cash. In April 2021, the 2020 earn-out payment was made with 50.0 % paid in cash and the remaining 50.0 % paid in common stock of the Company (Notes 15 and 19). Th e 2021 earn-out was 100.0 % paid in cash in March 2022. The purchase price attributable to the 2020 acquisitions was allocated as follows: CTEH All Other 2020 Total Cash $ 1,527 $ — $ 1,527 Accounts receivable and contract assets 17,059 — 17,059 Other current assets 1,265 — 1,265 Current assets 19,851 — 19,851 Property and equipment 7,042 75 7,117 Customer relationships 56,000 — 56,000 Trade names 4,200 — 4,200 Covenants not to compete 4,000 109 4,109 Proprietary software 14,700 — 14,700 Goodwill 146,983 626 147,609 Total assets 252,776 810 253,586 Current liabilities 9,721 — 9,721 Total liabilities 9,721 — 9,721 Purchase price $ 243,055 $ 810 $ 243,865 For the acquisitions completed during the year ended December 31, 2020, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s consolidated statement of operations for the year ended December 31, 2020 includes revenue and pre-tax income of $ 82.4 million and $ 11.7 million, respectively, related mainly to the CTEH acquisition. CTEH, LEED and AETC are included in the Company’s Assessment, Permitting and Response, Remediation and Reuse and Measurement and Analysis segments, respectively. The weighted average useful lives for the CTEH acquired customer relationships, internal proprietary software, acquired tradenames, covenants not to compete and external proprietary software are 15 years, 3 years, 5 year, 5 years and 5 years, respectively. The weighted average useful lives for the acquired covenants not to compete for the other acquisitions is 4 years. Goodwill associated with all of these acquisitions is deductible for income tax purposes. Supplemental Unaudited Pro-Forma — The unaudited consolidated financial information summarized in the following table gives effect to the 2022, 2021, and 2020 acquisitions assuming they occurred on January 1, 2020. These unaudited consolidated pro forma operating results include results from certain acquired companies that have not been audited and whose accounting policies prior to acquisition may differ from those of the Company. As a result, these unaudited consolidated pro forma operating results may not be comparable to revenues and earnings had these consolidated pro forma results been audited and consistent accounting policies applied. 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 include the results from Discontinued Service Lines and Discontinued O&M Contracts through the applicable date of discontinuance. 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, 2020, nor does the information project results for any future period. As reported Acquisitions Consolidated 2022 Revenues $ 544,416 $ 9,912 $ 554,328 Net (loss) income ( 31,819 ) 1,899 ( 29,920 ) 2021 Revenues $ 546,413 $ 50,808 $ 597,221 Net (loss) income ( 25,325 ) 6,860 ( 18,465 ) 2020 Revenues $ 328,243 $ 114,293 $ 442,536 Net (loss) income ( 57,949 ) 23,176 ( 34,773 ) During the first quarter of 2020, the Company determined to reduce the footprint of its environmental lab in Berkeley, California, and to exit its non-specialized municipal water engineering service line and its food waste biogas engineering service line, the Discontinued Service Lines. Furthermore, during the second quarter of 2022, the Company determined to exit all legacy water treatment and biogas operations and maintenance contracts, collectively, the Discontinued O&M Contracts. Revenues from Discontinued Service Lines and Discontinued O&M Contracts included in as reported revenues in the above table were $ 3.6 million, $ 12.1 million and $ 17.1 million in the years ended December 31, 2022, December 31, 2021 and 2020 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 9. GOODWILL AND INTANGIBLE ASSETS Amounts related to goodwill as of December 31, are as follows: Assessment, Measurements Remediation Total Balance as of December 31, 2021 $ 176,541 $ 83,770 $ 51,633 $ 311,944 Goodwill acquired during the year 9,474 2,155 914 12,543 Acquisitions measurement period adjustments ( 899 ) 280 — ( 619 ) Balance as of December 31, 2022 $ 185,116 $ 86,205 $ 52,547 $ 323,868 Amounts related to finite-lived intangible assets as of December 31, are as follows: 2022 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 – 15 years $ 208,024 $ 95,768 $ 112,256 Covenants not to compete 4 – 5 years 33,542 28,280 5,262 Trade names 1 – 5 years 22,061 18,256 3,805 Proprietary software 3 – 5 years 22,698 15,810 6,888 Patent 16 years 17,479 3,583 13,896 Total other intangible assets—net $ 303,804 $ 161,697 $ 142,107 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—net $ 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 for the years ended December 31, 2022, 2021, and 2020 was $ 36.1 million, $ 35.2 million and $ 28.9 million, respectively. Future amortization expense is estimated to be as follows for each of the five following years and thereafter ending December 31: 2023 28,937 2024 24,288 2025 17,414 2026 13,827 2027 13,505 Thereafter 44,136 Total $ 142,107 |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | 10. ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES Accounts payable and other accrued liabilities consisted of the following as of December 31: 2022 2021 Accounts payable $ 25,353 $ 24,167 Accrued expenses 14,754 14,906 Other business acquisitions purchase price 1,185 502 Contract liabilities 18,549 27,907 Other current liabilities 3,571 1,454 Total accounts payable and other accrued liabilities $ 63,412 $ 68,936 |
Accrued Payroll and Benefits
Accrued Payroll and Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | |
Accrued Payroll and Benefits | 11. ACCRUED PAYROLL AND BENEFITS Accrued payroll and benefits consisted of t he following as of December 31: 2022 2021 Accrued bonuses $ 8,624 $ 13,438 Accrued paid time off 1,088 1,144 Accrued payroll 8,410 6,547 Accrued other 2,406 4,842 Total accrued payroll and benefits $ 20,528 $ 25,971 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The following is a geographical breakdown of income before the provision fo r (loss) income taxes as of December 31: 2022 2021 2020 Pre-tax loss: Federal $ ( 27,991 ) $ ( 24,574 ) $ ( 58,140 ) Foreign ( 1,578 ) 958 1,042 Total ( 29,569 ) ( 23,616 ) ( 57,098 ) Income tax expense for the years ended December 31, is comprised of the following: 2022 2021 2020 Current: Federal $ — $ ( 49 ) $ ( 38 ) State 664 271 1,152 Foreign 58 295 490 Total 722 517 1,604 Deferred: Federal 517 448 ( 1,184 ) State 1,726 744 553 Foreign ( 715 ) — ( 122 ) Total 1,528 1,192 ( 753 ) Income tax expense $ 2,250 $ 1,709 $ 851 The Company’s deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, are as follows: 2022 2021 Deferred tax assets: Net operating losses $ 15,641 $ 16,180 Allowance for bad debts 552 1,250 Employee related 5,655 1,291 Contingent consideration 9,755 9,770 ROU assets 10,526 8,285 Other 6,526 1,711 Total deferred tax asset 48,655 38,487 Deferred tax liabilities: Intangible assets ( 6,070 ) ( 2,467 ) Property and equipment ( 5,785 ) ( 4,860 ) Lease liabilities ( 10,033 ) ( 8,144 ) Interest rate swap ( 1,739 ) — Other ( 218 ) ( 64 ) Total deferred tax liability ( 23,845 ) ( 15,535 ) Valuation allowance ( 30,552 ) ( 26,958 ) Net deferred tax liability $ ( 5,742 ) $ ( 4,006 ) A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate for the years ended December 31, is as follows: 2022 2021 2020 Tax completed at federal statutory rate 21.00 % 21.00 % 21.00 % State tax net of federal benefit 2.42 15.41 1.32 Non- deductible expenses ( 0.34 ) ( 0.47 ) ( 1.05 ) Equity compensation ( 16.95 ) 31.95 ( 0.59 ) Embedded derivatives and warrant options ( 1.90 ) ( 1.97 ) ( 7.43 ) Foreign taxes 0.05 ( 0.06 ) ( 0.77 ) Federal deferred tax adjustment — 6.41 — Change in valuation allowance ( 12.13 ) ( 80.26 ) ( 14.30 ) Other 0.18 0.67 0.34 Effective income tax rate ( 7.67 ) % ( 7.32 ) % ( 1.48 ) % The Company elected to account for the global intangible low-taxed income inclusion as a period cost. The Company recorded a valuation allowance against its US, Australia and Sweden net deferred tax assets as realization of such assets is not more likely than not. The impact of indefinite lived deferred items was considered in recording such valuation allowance. The increase in the Company’s valuation allowance was $ 3.6 m illion and $ 18.7 million during the year ended December 31, 2022 and 2021, respectively. The Company’s policy is to record any penalties or interest related to any unrecognized tax benefits as a component of the income tax provision. As of December 31, 2022, 2021, and 2020 , the Company does no t have any unrecognized tax benefits. As of December 31, 2022, federal and state net operating loss carryforwards of approximately $ 60.7 million an d $ 37.3 million are available to offset future federal and state taxable income, respectively. Federal net operating loss carryforwards will begin to expire during 2035 while the Company’s state net operating loss carryforwards will begin to expire during various years, dependent on the jurisdiction. Federal net operating losses generated beginning in 2018 are carried forward indefinitely. Therefore, $ 51.9 million of Federal net operating loss carryforwards will not expire. The Company is subject to audit by federal and state tax authorities in the ordinary course of business. The Company’s federal income tax returns remain subject to examination for the 2015 through 2022 tax years. The Company files in multiple state jurisdictions which remain subject to examination for various years depending on such state jurisdiction. The Company is also subject to audit by tax authorities in Canada, Australia, Germany, and Sweden for which returns are subject to examination for various years, dependent on the jurisdiction. The Tax Cuts and Jobs Act of 2017, enacted tax provisions, that become effective during the taxable year ended December 31, 2022, requiring companies compute adjusted taxable income for IRC §163(j) purposes with the inclusion of depreciation and amortization deductions, making such limitation less taxpayer favorable. The Company adopted such provisions and recorded a corresponding deferred tax asset during the year ended December 31, 2022. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act includes several significant provisions for corporations, including those pertaining to net operating losses, interest deductions and payroll tax benefits. Under ASC 740, the effects of new legislation are recognized upon enactment. Accordingly, the effects of the CARES Act have been incorporated into the income tax provision computation for the year ended December 31, 2020. These provisions did not have a material impact on the income tax provision. The Company deferred the employer side social security payments for payroll paid for the portion of 2020 following enactment as permitted by the CARES Act. In total, we deferred approximately $ 5.0 million of 2020 payments to 2021 and 2022, of which $ 2.5 million was repaid in 2021 and the remaining amount was paid in 2022. On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (CAA 2021) which included a number of provisions including, but not limited to the extension of numerous employment tax credits, the extension of the Section 179D deduction, enhanced business meals deductions, and the deductibility of expenses paid with Paycheck Protection Program (PPP) loan funds that are forgiven. Accordingly, the effects of the CAA 2021 have been incorporated into the income tax provision for the year ended December 31, 2020. These provisions did not have a material impact on the income tax provision. |
Warrant Options
Warrant Options | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrant Options | 13. WARRANT OPTIONS In October 2018, in connection with the issuance of the Redeemable Series A-1 Preferred Stock, the Company issued a detachable warrant to acquire 534,240 shares of common stock at a price of $ 0.01 per share at any given time during a period of ten years beginning on the instrument’s issuance date. In April 2020, in connection with the issuance of the Convertible and Redeemable Series A-2 Preferred Stock, the Company issued a detachable warrant to acquire 1,351,960 shares of common stock at a price of $ 0.01 per share at any time following the occurrence of a qualifying IPO, a sale of the Company, or a redemption in full of the Series A-2 preferred stock (each, an “Adjustment Event”), with an expiration date of ten years from the instrument’s issuance date. The number of shares underlying the warrant and issuable upon exercise was subject to adjustment based upon the price per share of common stock upon the occurrence of an Adjustment Event (Note 18) to reflect an aggregate value of $ 30.0 million. As a result of the $ 15.00 per share public offering price in the IPO, the warrant issued in connection with the issuance of the Convertible and Redeemable Series A-2 Preferred Stock was adjusted pursuant to its terms and, upon closing of the IPO, represented a warrant to purchase 1,999,999 shares of common stock (an increase of 648,039 shares). On July 30, 2020 , the Redeemable Series A-1 Preferred Stock and the Convertible and Redeemable Series A-2 Preferred Stock warrants were exercised in full resulting in the issuance of an aggregate of 2,534,239 shares of common stock to the holder for an exercise price of $ 0.01 per share. Fair value loss recorded in other expense on the consolidated statements of operations was $ 9.3 million for the year ended December 31, 2020. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 14. DEBT Debt as of December 31, consisted of the following: 2022 2021 Term loan facility $ 166,250 $ 175,000 Revolving line of credit — — Less deferred debt issuance costs ( 1,725 ) ( 2,244 ) Total debt 164,525 172,756 Less current portion of long-term debt ( 12,031 ) ( 10,938 ) Long-term debt, less current portion $ 152,494 $ 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 new 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 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 quarterly installment repayments for the year ended December 31, 2022 amounted to $ 6.6 million. The December 31, 2022 installment repayment, amounting to $ 2.2 million, was billed and charged by the lenders in January 2023. The 2021 Credit Facility term loan and the revolver bear interest subject to the Company’s leverage ratio and LIBOR as f ollows: Pricing Tier Consolidated Leverage Senior Credit Senior Credit Commitment Letter of 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 which required the Company to remain below a maximum total net leverage ratio of 4.25 times until the fiscal quarter ended September 31, 2022, which stepped down to 4.00 times during the fiscal quarter ending December 31, 2022 through and including the fiscal quarter ending September 30, 2023 and then further stepping down 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 December 31, 2022 and 2021, the Company’s consolidated total leverage ratio was 1.3 time s and 0.8 times, respectivel y, 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 years ended December 31, 2022 and 2021 was 3.5 % and 2.1 %, respectively. 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 new $ 225.0 million credit facility comprised of a $ 175.0 million term loan and a $ 50.0 million revolving credit facility and used the proceeds therefrom to repay all amounts outstanding under the Prior Credit Facility (as defined below). The 2020 Credit Facility maturity date was April 2025 . Up until October 6, 2020, the term loan and the revolver bore interest at LIBOR plus 5.0 % with a 1.0 % LIBOR floor or the base rate plus 4.0 % and LIBOR plus 3.5 % or the base rate plus 2.5 %, respectively. Effective October 6, 2020, the Company amended the 2020 Credit Facility to provide for a reduction on the applicable interest rate on the term loan from LIBOR plus 5.0% with a 1.0% LIBOR floor to LIBOR plus 4.5 % with a 1.0 % LIBOR floor. The revolver interest rate remained unchanged. The revolver was also subject to an unused commitment fee of 0.35 %. The term loan had quarterly repayments that started on September 30, 2020 of $ 0.5 million, increasing to $ 1.1 million on September 30, 2021 and further increasing to $ 1.6 million on September 30, 2022, with the remaining outstanding principal amount due on the maturity date. The weighted average interest rate on the 2020 Credit Facility for the year ended December 31, 2020 was 5.8 %. The resulting loss on extinguishment upon repayment of the 2020 Credit Facility amounted to $ 4.1 million, of which $ 1.0 m illion 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 consolidated statement of operations for the year ended December 31, 2021. Prior Credit Facility —The Company’s Senior Secured Credit Facility prior to the 2020 Credit Facility (the “Prior Credit Facility”), which was paid in full in April 2020 via proceeds from the issuance of the 2020 Credit Facility, consisted of a $ 50.0 million term loan and a $ 130.0 million revolving credit facility. Borrowings under the Prior Credit Facility bore interest at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5 %, (b) Lender A’s prime rate and (c) Eurodollar Rate, which is based on LIBOR, (using a one-month period plus 1.0 %), plus the applicable margin, as the Company elects. The applicable margin means a percentage per annum determined in accordance with the following table: Pricing Consolidated Leverage Ratio Commitment Eurodollar Daily Rate 1 > 3.75 x to 1.0 0.50 % 4.00 % 4.00 % 3.00 % 2 ≤ 3.75 x to 1.0 but > 3.00 to 1.0 0.50 3.50 3.50 2.50 3 ≤ 3.00 x to 1.0 but > 2.25 to 1.0 0.40 3.00 3.00 2.00 4 ≤ 2.25 x to 1.0 0.30 2.50 2.50 1.50 The resulting loss on extinguishment upon repayment of the Prior Credit Facility amounted to $ 1.4 million, of which $ 0.4 million was related to fees paid and $ 1.0 million related to unamortized debt issuance costs. Total loss on extinguishment is recorded in interest expense-net within the consolidated statement of operations for the year ended December 31, 2020. Equipment Line of Credit —In the last quarter of 2022, the Company renewed its $ 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 March 31, 2023 . 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 7). The following is a schedule of the aggregate annual maturities of long-term debt presented on the consolidated statement of financial position, based on the terms of the 2021 Credit Facility: 2023 $ 12,031 2024 13,125 2025 14,219 2026 126,875 2027 — Total $ 166,250 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 15. FAIR VALUE OF FINANCIAL INSTRUMENTS As of December 31, the following financial liabilities are measured at fair value on a recurring basis using significant unobservable inputs (Level 3). 2022 2021 Interest rate swap (1) $ 6,046 $ — Total assets $ 6,046 $ — Business acquisitions contingent consideration, $ 3,801 $ 31,450 Business acquisitions contingent consideration, 4,454 4,350 Conversion option 25,731 23,081 Total liabilities $ 33,986 $ 58,881 _____________________________ (1) Included in other assets in the Consolidated Statement of Financial Position. 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: Level 3 Interest Total Business Business Conversion Option Contingent Warrant Total Balance—at January 1, 2020 $ — $ — $ 8,614 $ 379 $ — $ 7,100 $ 16,878 $ 32,971 Acquisitions — — 34,661 10,543 — — — 45,204 Series A-2 compound embedded option — — — — ( 9,361 ) — — ( 9,361 ) Issuance of warrant option — — — — — — 30,097 30,097 Changes in fair value included in — — 19,119 ( 6,177 ) 30,247 ( 19,240 ) 9,312 33,261 Payment of contingent consideration — — ( 12,464 ) — — — — ( 12,464 ) Reclass of long term to short term — — 180 ( 180 ) — — — — Write off of the contingent put — — — — — 12,140 — 12,140 Exercise of warrant options — — — — — — ( 56,287 ) ( 56,287 ) Foreign currency translation of — — ( 208 ) — — — — ( 208 ) Balance—at December 31, 2020 $ — $ — $ 49,902 $ 4,565 $ 20,886 $ — $ — $ 75,353 Acquisitions — — 2,801 4,603 — — — 7,404 Series A-2 compound embedded option — — — — 2,195 — — 2,195 Changes in fair value included in — — 14,111 10,261 — — — 24,372 Payment of contingent consideration — — ( 50,443 ) — — — — ( 50,443 ) Reclass of long term to short term — — 15,079 ( 15,079 ) — — — — Balance—at December 31, 2021 $ — $ — $ 31,450 $ 4,350 $ 23,081 $ — $ — $ 58,881 Acquisitions — — — 2,666 — — — 2,666 Changes in fair value included in 6,046 6,046 500 ( 196 ) 2,650 — — 2,954 Payment of contingent consideration — — ( 30,515 ) — — — — ( 30,515 ) Reclass of long term to short term — — 2,366 ( 2,366 ) — — — — Balance—at December 31, 2022 $ 6,046 $ 6,046 $ 3,801 $ 4,454 $ 25,731 $ — $ — $ 33,986 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 consolidated statement of financial position within other assets, with changes in fair value recognized as other income (expense) in each reporting period. 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 Environmental Standards 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 earnout thresholds. Conversion Option —Upon the Company’s IPO, the fair value of the conversion option associated with the issuance of the Convertible and Redeemable Series A-2 Preferred Stock (Note 18) 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. Contingent Put Option —The fair value of the contingent put option associated with the issuance of the Redeemable Series A-1 Preferred Stock 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 contingent put option. The difference between the two scenarios is the implied fair value of the embedded derivative, recorded as the contingent put option liability. In this case the Series A-1 was redeemed on the date of value so the value of the “with” scenario is known. The unobservable input is the required rate of return on the Series A-1 through to maturity in the “without” scenario. The contingent put option was redeemed in July 2020 (Note 17). Warrant Options —The warrant options were exercised on July 30, 2020 (Note 13). The fair value of the warrant options associated with the issuance of the Redeemable Se ries A-1 Preferred Stock and the Convertible and Redeemable Series A-2 Preferred Stock was calculated based on the Black-Sholes pricing model using the following assumptions: July 30, 2020 Common stock value (per share) $ 22.22 Expected volatility 44.35 % Risk-free interest rate 0.55 % Expected life (years) 10 The method used to price these liabilities is considered Level 3 due to the subjective nature of the unobservable inputs (common stock value and expected volatility) used to determine the fair value. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. 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 7). Other Commitments —The Company has commitments under the 2021 Credit Facility, its equipment line of credit and its lease obligations (Notes 7 and 14). Contingencies —The Company is subject to purchase price contingencies related to earn-outs associated with certain acquisitions (Note 8 and 15). 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 consolidated results of operations, financial position or cash flows of the Company. |
Redeemable Series A-1 Preferred
Redeemable Series A-1 Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Series A-1 Preferred Stock | 17. REDEEMABLE SERIES A-1 PREFERRED STOCK On October 19, 2018, the Company issued 12,000 shares of Redeemable Series A-1 Preferred Stock with a par value of $ 0.0001 per share and a detachable warrant to purchase 534,240 shares of the Company’s common stock. On April 13, 2020, the Company amended and restated the certificate of designation of the Company’s Redeemable Series A-1 Preferred Stock. Some of the most significant changes in the amendment included (i) the Redeemable Series A-1 Preferred Stock became pari passu with the Convertible and Redeemable Series A-2 Preferred Stock (Note 18), (ii) the Company could use up to $ 50.0 million of indebtedness or cash on hand to redeem the Redeemable Series A-1 Preferred Stock, and (iii) upon an IPO, up to 50.0 % of accumulated dividends could be paid in shares of common stock and (iv) the Company could elect to reduce the three year make whole penalty to a two year make whole penalty if the warrant issued in connection with the issuance of the Redeemable Series A-1 Preferred Stock was redeemed in full at a share price of no less than $ 31.60 . Before redemption, the Redeemable Series A-1 Preferred Stock accrued dividends quarterly at an annual rate of 15.0 % with respect to dividends that were paid in cash and at an annual rate of 14.2 % with respect to dividends that were accrued. On July 27, 2020, the Company redeemed in full the Redeemable Series A-1 Preferred Stock, including the guaranteed minimum two-year dividend. At issuance the Company determined that the detachable warrant (Note 13) and the contingent put option were required to be accounted for separately. The contingent put option change in value as of December 31, 2020 of $ 19.2 million wa s recorded to other income (expense). |
Convertible and Redeemable Seri
Convertible and Redeemable Series A-2 Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Convertible and Redeemable Series A-2 Preferred Stock | 18. 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 $ 16.4 million, $ 16.4 million and $ 7.0 million during the years ended December 31, 2022, 2021 and 2020, respectively. At issuance, the Company determined that the Convertible and Redeemable Series A-2 Preferred Stock and the detachable warrant (Note 13), were required to be accounted for separately. Upon the Company’s IPO, following which the Redeemable Series A-1 Preferred Stock was fully redeemed, 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 December 31, 2022, the Company has determined that a change of control is not probable. Additionally, as of December 31, 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 December 31, 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 C onvertible 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. The change in net fair value of $ 2.7 million, $ 2.2 million and $ 30.2 million for the years ended December 31, 2022, 2021 and 2020 , respectively, was recorded to other income (expense). |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 1 9. 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 December 31, 2022 and 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, Cancellations and Repurchases — During the years ended December 31, the Company issued, cancelled and repurchased the following shares of common stock: 2022 2021 2020 Shares Average Total Shares Average Total Shares Average Total Common stock issued — $ — $ — — $ — — 11,500,000 $ 15.00 $ 172,500 Common stock issued — — — 2,875,000 59.05 169,783 — — — Acquisitions — — — 178,721 46.55 8,320 791,139 31.60 25,000 Redemption of series — — — — — — 1,786,739 15.00 26,801 Exercise of warrants (1) — — — 67,713 17.19 — 2,534,239 0.01 25.00 Exercise of options 101,340 16.21 1,643 959,890 7.54 7,237 47,600 8.05 383.00 Restricted shares, net (1) 25,532 66.30 — 42,263 30.69 — 20,488 24.00 — Payment of earn-out — — — 563,807 46.26 26,084 — — — Cancellation of shares — — — — — — ( 117,785 ) 17.15 — Total 126,872 $ 26.29 $ 1,643 4,687,394 $ 45.63 $ 211,424 16,562,420 $ 13.64 $ 224,709 ___________________________ (1) Represents the non-cash release of shares of common stock 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 2017 Stock Incentive Plan (“2017 Plan”) and (ii) the Montrose Amended & Restated 2013 Stock Option Plan (“2013 Plan”) (collectively the “Plans”). As of December 31, 2022, there was $ 141.8 million 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 as of December 31: 2017 Plan 2022 2021 2020 Shares authorized to be issued 5,140,112 3,944,750 2,945,443 Shares available for grant (1) 367,243 23,153 848,241 2013 Plan 2022 2021 2020 Shares authorized to be issued 2,037,019 2,047,269 2,047,269 Shares available for grant — — — _______________________ (1) In January 2023 the Board of Directors ratified the addition of 1,189,801 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 Total stock compensation expense for the Plans was as follows: 2022 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,507 $ — $ — $ — $ 1,507 Selling, general and administrative expense 8,531 23,972 9,280 — 41,783 Total $ 10,038 $ 23,972 $ 9,280 $ — $ 43,290 2021 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,482 $ — $ — $ 10 $ 1,492 Selling, general and administrative expense 6,552 1,959 307 11 8,829 Total $ 8,034 $ 1,959 $ 307 $ 21 $ 10,321 2020 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,441 $ — $ — $ 136 $ 1,577 Selling, general and administrative expense 1,793 1,279 — 200 3,272 Total $ 3,234 $ 1,279 $ — $ 336 $ 4,849 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 10,920 , 19,309 and 33,229 RSAs granted during the years ended December 31, 2022 and 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 upon retirement. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. During 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 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 years ended December 31, 2022. No RSUs were granted under these SI Plans during the years ended December 31, 2021. During the year ended December 31, 2022, certain of these SI Plan’s 2022 financial performance targets were met. Given that these awards are pending the final approval of the Board of Directors, they are not deemed granted and thus have not been accrued for as of December 31, 2022. These RSUs will begin to amortize on the date the awards are approved and will vest 1/3 on the date of grant, 1/3 on the one-year anniversary of the grant, and 1/3 on the two-year anniversary of the grant, subject to continued service through such date. During 2021, the Board of Directors 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 For the year ended December 31, 2022, 2021 and 2020, RSA and RSU activity was as follows: 2022 Shares Average Price per Share Total Awards granted 106,324 $ 46.82 $ 4,978 2021 Shares Average Price per Share Total Awards granted 1,690,700 $ 66.45 $ 112,347 2020 Shares Average Price per Share Total Awards granted 33,229 $ 31.60 $ 1,050 There were 25,532 , 42,263 and 22,155 shares underlying RSAs that became fully vested and were released as unrestricted shares of common stock during the years ended December 31, 2022, 2021 and 2020, respectively. There were no forfeitures of RSAs or RSUs during the years ended December 31, 2022 and 2021 . There were forfeitures of 1,667 RSAs during the year ended December 31, 2020. There were an aggregate of 2,064,197 , 1,957,873 , and 267,173 , shares underlying outstanding RSA and RSU awards as of December 31, 2022, 2021, and 2020, respectively. 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 t o 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 December 31, 2022 was 8.96 years. Options —Options 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 for the years ended December 31, 2022, 2021 and 2020: Options to Purchase Common Stock Weighted-Average Exercise Price per Share Weighted Average Grant Date Fair Value per Share Weighted Average Remaining Contract Life (in Years) Aggregate Intrinsic Value of In-The-Money Options (in Thousands) Outstanding at January 1, 2020 617,852 $ 24 $ 12 7.82 $ 4,696 Granted 1,243,027 22 12 — — Forfeited/cancelled ( 17,225 ) 22 — — — Expired ( 2,500 ) 18 — — — Exercised ( 925 ) 14 — — 8 Outstanding at December 31, 2020 1,840,229 $ 23 $ 12 9.09 $ 15,598 Granted 300,620 44 23 — — Forfeited/cancelled ( 33,875 ) 28 — — — Expired ( 1,550 ) 19 — — — Exercised ( 68,695 ) 22 — — 2,169 Outstanding at December 31, 2021 2,036,729 $ 26 $ 14 8.30 $ 91,030 Granted 698,534 44 16 — — Forfeited/cancelled ( 96,211 ) 32 — — — Exercised ( 59,486 ) 23 — — 1,398 Outstanding at December 31, 2022 2,579,566 $ 31 $ 15 7.76 $ 37,295 Exercisable at December 31, 2022 1,183,574 27 — 7.15 21,181 The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation for the years ended December 31: 2022 2021 2020 Common stock value (per share) $ 43.74 $ 44.28 $ 21.81 Expected volatility 33.44 % 55.34 % 46.59 % Risk- free interest rate 2.03 % 0.82 % 0.65 % Expected life (years) 6.98 6.40 7.00 Forfeiture rate None None None Dividend rate None None None Montrose Amended & Restated 2013 Stock Option Plan — The following summarizes the activity of the 2013 Plan for the years ended December 31, 2022, 2021 and 2020: Aggregate Weighted- Weighted Weighted Intrinsic Value Options to Average Average Average of In-The- Common Price per Fair Value Contract Life Options Stock Share per Share (in Years) (in Thousands) Outstanding at January 1, 2020 1,855,469 $ 6 $ 1 6.40 $ 46,617 Forfeited/cancelled ( 7,500 ) 10 — — — Expired ( 11,300 ) 6 — — — Exercised ( 48,800 ) 8 — — 908 Outstanding at December 31, 2020 1,787,869 $ 6 $ 1 5.40 $ 43,867 Expired ( 625 ) 6 — — — Exercised ( 889,570 ) 6 — — 45,161 Outstanding at December 31, 2021 897,674 $ 6 $ 2 4.37 $ 57,529 Expired ( 125 ) 6 — — — Exercised ( 41,854 ) 6 — — 1,626 Outstanding at December 31, 2022 855,695 $ 6 $ 2 3.31 $ 32,478 Exercisable at December 31, 2022 855,695 6 — 3.31 32,478 Total shares outstanding from exercised options were 1,310,430 shares, 1,209,090 shares and 249,200 shares as of December 31, 2022, 2021 and 2020. Common Stock Reserved for Future Issuances —At December 31, the Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: 2022 2021 2020 Warrants — — 116,350 Montrose 2013 Stock Incentive Plan 855,695 2,047,269 2,047,269 Montrose 2017 Stock Incentive Plan (1) 7,724,524 6,921,597 2,945,443 Total 8,580,219 8,968,866 5,109,062 (1) In January 2023, the Board of Directors ratified the addition of 1,189,801 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 | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 20. 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 Redeemable Series A-1 Preferred Stock, which was outstanding prior to its redemption on July 27, 2020, and the Convertible and Redeemable Series A-2 Preferred Stock are considered a participating security. Net losses are not allocated to the Redeemable Series A-1 Preferred stockholders nor 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 and warrants (other than warrant options) to purchase common stock. During the years ended December 31, 2022, 2021, and 2020, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss 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: In thousands, except for net loss per share 2022 2021 2020 Net loss $ ( 31,819 ) $ ( 25,325 ) $ ( 57,949 ) Accretion of redeemable series A-1 — — ( 17,601 ) Redeemable series A-1 preferred stock — — ( 24,341 ) Convertible and redeemable series A-2 ( 16,400 ) ( 16,400 ) ( 6,970 ) Net loss attributable to common ( 48,219 ) ( 41,725 ) ( 106,861 ) Weighted-average common shares 29,688 26,724 16,479 Net loss per share attributable to common $ ( 1.62 ) $ ( 1.56 ) $ ( 6.48 ) The following common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the years ended December 31: 2022 (1) 2021 (1) 2020 (1) Stock options 3,435,261 1,687,413 2,237,910 Restricted stock 1,777,715 1,693,923 187,989 Series A-2 4,983,282 4,085,083 5,533,150 SARs 3,000,000 3,000,000 — Warrants — — 116,350 Total 13,196,258 10,466,419 8,075,399 ____________________________________________ (1) Includes 6,886,942 , 4,051,206 and 728,143 equity shares that are out of the money as of December 31, 2022, 2021 and 2020, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 21. 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 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 Segment Adjusted EBITDA for the years ended December 31, consisted of the following: 2022 2021 2020 Segment Segment Segment Segment Segment Segment Assessment, Permitting and Response $ 187,234 $ 37,458 $ 261,865 $ 57,128 $ 98,521 $ 24,208 Measurement and Analysis 172,432 31,588 153,208 31,270 151,557 39,386 Remediation and Reuse 184,750 30,616 131,340 19,326 78,165 8,938 Total Operating Segments 544,416 99,662 546,413 107,724 328,243 72,532 Corporate and Other — ( 31,212 ) — ( 30,082 ) — ( 18,056 ) Total $ 544,416 $ 68,450 $ 546,413 $ 77,642 $ 328,243 $ 54,476 Presented below is a reconciliation of the Company’s segment measure to net loss for the years ended December 31: 2022 2021 2020 Total $ 68,450 $ 77,642 $ 54,476 Interest expense, net ( 5,239 ) ( 11,615 ) ( 13,819 ) Income tax expense ( 2,250 ) ( 1,709 ) ( 851 ) Depreciation and amortization ( 47,479 ) ( 44,810 ) ( 37,274 ) Stock-based compensation ( 43,290 ) ( 10,321 ) ( 4,849 ) Start-up losses and investment in new services ( 2,277 ) ( 4,407 ) ( 2,182 ) Acquisition costs ( 1,891 ) ( 2,088 ) ( 4,344 ) Fair value changes in financial instruments 3,396 ( 2,195 ) ( 20,319 ) Fair value changes in business acquisition 3,227 ( 24,372 ) ( 12,942 ) Short term purchase accounting fair value — — ( 243 ) Public offering expense — — ( 7,657 ) Expenses related to financing transactions ( 7 ) ( 50 ) ( 378 ) Other losses or expenses ( 4,459 ) (1) ( 1,400 ) (2) ( 7,567 ) (3) Net loss $ ( 31,819 ) $ ( 25,325 ) $ ( 57,949 ) (1) Amounts include costs associated with the exiting of the legacy water treatment and biogas operations and maintenance contracts and the Company's start-up lab in Berkley, California, as well as an impairment charge for certain operating lease right-of-use assets (Note 7) and severance costs related to the restructuring within our soil remediation business. (2) 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. (3) During the first quarter of 2020, the Company determined to reduce the footprint of its environmental lab in Berkeley, California, and to exit its non-specialized municipal water engineering service line and its food waste biogas engineering service line. As a part of discontinuing these service lines, the Company made the decision to book an additional bad debt reserve related to the uncertainty around the ability to collect on receivables related to these service lines (Note 4). It was determined that the discontinuation of these service lines did not represent a strategic shift that had (or will have) a major effect on the Company’s operations and financial results therefore did not meet the requirements to be classified as discontinued operations. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 22. RELATED-PARTY TRANSACTIONS The Company did no t have any related party transactions during the years ended December 31, 2022 and 2021. The Company previously engaged a related party to provide Quality of Earnings reports on acquisition targets. The Company paid this related party approximately $ 0.1 million during the year ended December 31, 2020, for its services. This expense is included within selling, general and administrative expen se on the consolidated statements of operations. The related party used by the Company is partially owned through investment vehicles controlled by certain members of the Company’s Board of Directors. The Company ceased using the services of this related party during 2020. During the year ended December 31, 2020, the holder of the Redeemable Series A-1 Preferred Stock and Convertible and Redeemable A-2 Preferred Stock became a common stockholder in the Company. On the redemption date of the Redeemable Series A-1 Preferred Stock (Note 17), the Company issued 1,786,739 shares of common stock as dividend payment. Additionally, this related party exercised its warrant options (Note 13), becoming the holder of 2,534,239 additional common shares. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 23. 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 December 31, 2022, 2021, and 2020 , 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 for years ended December 31, 2022, 2021, and 2020 were $ 5.7 million, $ 2.6 million and $ 1.2 million, respectively, and are included within selling, general, and administrative expense on the consolidated statements of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 24. SUBSEQUENT EVENTS Business Acquisitions —On January 3, 2023, the Company completed the business acquisition of Frontier Analytical Laboratories (“Frontier”) by acquiring certain of its assets and operations. Frontier is a specialized environmental laboratory based in El Dorado Hills, CA. On February 1, 2023, the Company completed the business acquisition of Environmental Alliance, Inc. (“EAI”) by acquiring 100.0 % of its common stock. EIA provides environmental remediation and consulting services, and is based in Wilmington, DE. These transactions qualified as business acquisitions and will be accounted for as business combinations. The following table summarizes the elements of the purchase price of these acquisitions: Cash (1) Other (2) Total Frontier $ 1,146 $ — $ 1,146 EAI 3,750 1,412 5,162 (1) The cash portion of this acquisition’s purchase price was funded through cash on hand. (2) The other purchase price component consists of liabilities assumed. The Company has not yet completed the initial purchase price allocation for these acquisitions, including obtaining all of the information required for the valuation of the acquired intangible assets, goodwill, assets and liabilities assumed, due to the timing of the close of the transactions. |
Description of the Business a_2
Description of the Business and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Intercompany balances and transactions are eliminated. |
Use of Estimates | Use of Estimates —The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include, but are not limited to, management’s forecasts of future cash flows used as a basis to assess recoverability of goodwill and long-lived assets, the allocation of purchase price to tangible and intangible assets, allowances for doubtful accounts, the estimated useful lives over which property and equipment is depreciated and intangible assets are amortized, subsequent measurement of goodwill, the fair value of contingent consideration payables, the fair value of warrants, the fair value of embedded derivatives, the fair value of common stock issued, stock-based compensation expense and deferred taxes. These estimates could materially differ from actual results. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash —The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company considers cash deposits in banks as cash with original maturities at purchase of three months or less as cash equivalents. Cash, long-term debt and financial instruments subject the Company to concentrations of credit risk. To minimize the risk of credit loss, these financial instruments are primarily held with large, reputable financial institutions. The Company has not experienced losses in such accounts and believes it is not exposed to any significant credit risk associated with these accounts. Cash that is restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash in the Company’s consolidated statements of financial position. The Company’s restricted cash balance as of December 31, 2021 of $ 0.5 million was related to deposit funds that served as a performance guarantee for certain projects with the Australian government. During the year ended December 31, 2022, such projects were completed and the cash was released. |
Accounts Receivables-Net | Accounts Receivables-Net —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 Accounting Standard Update ("ASU") 2016-13, Financial Instruments—Credit Losses (Topic 326). Accounting Standards Codification ("ASC") 326 requires the Company to estimate the lifetime expected credit losses on such instruments and to record an allowance to offset the receivables. |
Cloud Computing Arrangements | Cloud Computing Arrangements —The Company capitalizes certain implementation costs incurred related to cloud computing arrangements that are service contracts. Such costs are amortized on a straight-line basis over the term of the associated hosting arrangement. Any capitalized amounts related to such arrangements are recorded within other assets on the consolidated statements of financial position. |
Financial Instruments | Financial Instruments — The Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The inputs to the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. The Company considers the carrying values of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses to approximate fair value for these financial instruments due to the short maturities of these instruments. The Company’s interest rate swap, embedded derivatives, warrant options and any acquisition’s contingent consideration are/ were carried at fair value and determined according to the fair value hierarchy above. The Company’s variable rate borrowings under its Credit Facility (Note 14) is tied to market indices and, thus, approximate fair value. The estimated fair value of the long-term debt under the credit facility is based on borrowing rates currently available to the Company for loans with similar terms and remaining maturities. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —Certain events or changes in circumstances may indicate that the recoverability of the carrying amount of long lived assets should be assessed. When such events or changes in circumstances are present, the Company estimates the future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount, the Company recognizes an impairment based on the fair value of such assets. As of December 31, 2022, management determined certain of the Company's operating lease right-of-use assets were impaired (Note 7). As of December 31, 2021 , management determined that there was no impairment of long-lived assets. |
Acquisitions | Acquisitions —The Company first assesses whether the acquisition represents a purchase of assets or a business. If the transaction is a business acquisition, the Company accounts for the acquisition using business combination accounting, which requires that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. The purchase price of acquisitions is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on estimated fair values, and any excess purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. Goodwill represents the premium the Company pays over the fair value of the net tangible and intangible assets acquired. The Company may use independent valuation specialists to assist in determining the estimated fair values of assets acquired and liabilities assumed, which could require certain significant management assumptions and estimates. Transaction costs associated with acquisitions of businesses are expensed as they are incurred. |
Business Acquisition Contingencies | Business Acquisition Contingencies — Some of the Company’s acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of future performance thresholds. For each transaction, the Company estimates the fair value of contingent consideration payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability. Subsequent changes in the fair value of contingent consideration are recognized as a gain or loss in the consolidated statements of operations. Payments of contingent consideration are reflected in financing activities in the consolidated statements of cash flows to the extent included as part of the initial purchase price, or in operating activities if the payment exceeds the amount included in the initial purchase price. |
Goodwill | Goodwill —Goodwill is not amortized but instead qualitatively or quantitively tested for impairment at least annually should an event or circumstances indicate that a reduction in fair value of the reporting unit may have occurred during the year, goodwill would also be tested at such occasion. The Company performs its goodwill test at the reporting unit level. If necessary, the goodwill quantitative impairment test is performed on October 1 every year. The Company uses a two-step process to assess the realizability of goodwill. The first step (generally referred to as a "step 0" analysis) is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative second step (generally referred to as a "step 1" analysis) where the fair value of a reporting unit is calculated based on weighted income and market-based approaches. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit. Step 1 of the quantitative test requires comparison of the fair value of each of the reporting units to the respective carrying value. If the carrying value of the reporting unit is less than the fair value, no impairment exists. Otherwise, the Company would recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. During 2022, the Company elected to perform a step 1 impairment analysis. Based on the analysis performed, management determined that no impairment of goodwill existed in any of the Company’s reporting units as of the testing date (October 1, 2022). Also, no triggering events or changes in circumstances occurred during the period October 1, 2022 through December 31, 2022 that warranted retesting goodwill for impairment. During 2021, the Company performed a qualitative goodwill impairment analysis and concluded it was not more likely than not that the fair value of any of the Company’s reporting units were less than their respective carrying amounts and thus determined that no impairment existed as of the testing date (October 1, 2021). Also, no triggering events or changes in circumstances occurred during the period October 1, 2021 through December 31, 2021 that warranted retesting goodwill for impairment. |
Embedded Derivatives | Embedded Derivatives —Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position. Changes in fair value of the embedded derivatives are recognized as a component of other expense on our consolidated statements of operations (Note 17 and 18). |
Foreign Currency | Foreign Currency —The Company has operations in the United States, Canada, Australia and Europe. The results of its non-U.S. dollar based functional currency operations are translated to U.S. dollars at the average exchange rates during the period. The Company’s assets and liabilities are translated using the exchange rate as of the date of the consolidated statement of financial position and equity is translated using historical rates. Adjustments resulting from the translation of the consolidated financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from the determination of net income (loss) and instead are accumulated in a separate component of stockholders’ equity (deficit). Foreign exchange transaction gains and losses are included in selling, general and administrative expense on the consolidated statements of operations. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) —Accumulated other comprehensive income (loss), as presented on the consolidated statements of redeemable series A-1 preferred stock, convertible and redeemable series A-2 preferred stock and stockholders’ equity (deficit), cons ists of unrealized gains and losses on foreign currency translation. Comprehensive income (loss) is not included in the computation of income tax benefit. |
Revenue Recognition | Revenue Recognition —Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers. The following is considered by the Company in the recognition of revenue under ASC 606: The Company’s services are performed under two general types of contracts (i) fixed-price and (ii) time-and-materials. Under fixed-price contracts, customers pay an agreed-upon amount for a specified scope of work agreed to in advance of the project. Under time-and-materials contracts, customers pay for the hours worked and resources used based on agreed-upon rates. Certain of the Company’s time-and-materials contracts are subject to maximum contract amounts. The duration of the Company’s contracts ranges from less than one month to over a year, depending on the scope of services provided. The Company accounts for individual promises in contracts as separate performance obligations if the promises are distinct. The assessment requires judgment. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Certain contracts in the Company’s Measurement and Analysis have multiple performance obligations, most commonly due to the contracts providing for multiple laboratory tests which are individual performance obligations. For the Measurement and Analysis contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price of each performance obligation. The standalone selling price of each performance obligation is generally determined by the observable price of a service when sold separately. Fixed fee contracts —On the majority of fixed fee contracts, the Company recognizes revenue, over time, using either the proportion of actual costs incurred to the total costs expected to complete the contract performance obligation (“cost to cost method”), under the time-elapsed basis. The Company determined that the cost to cost method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed fee contract performance obligation. Under the time-elapsed basis, the arrangement is considered a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e. distinct days of service). The Company applies a time-based measure of progress to the total transaction price, which results in ratable recognition over the term of the contract. For a portion of the Company’s laboratory service contracts, revenue is recognized as performance obligations are satisfied over time, with recognition reflecting a series of distinct services using the output method. The Company determined that this method best represents the transfer of services as the customer obtains equal benefit from the service throughout the service period. There are inherent uncertainties in the estimation process for cost to cost contracts, as the estimation of total contract costs and estimates to complete is complex, subject to many variables, and requires judgment. It is possible that estimates of costs to complete a performance obligation will be revised in the near-term based on actual progress and costs incurred. These uncertainties primarily impact the Company’s contracts in the Remediation and Reuse segment. Time-and-materials contracts —Time-and-materials contracts contain variable consideration. However, performance obligations qualify for the “Right to Invoice” Practical Expedient. Under this practical expedient, the Company is allowed to recognize revenue, over time, in the amount to which the Company has a right to invoice. In addition, the Company is not required to estimate such variable consideration upon incep tion of the contract and reassess the estimate each reporting period. The Company determined that this method best represents the transfer of services as, upon billing, the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the customer of the Company’s performance completed to date. |
Segment Reporting | Segment Reporting —Operating segments are components of an enterprise for which discrete financial reporting information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company has identified its Chief Executive Officer as the CODM. The CODM views the Company’s operations and manages the businesses as three operating segments, which are also the Company’s reportable segments: (i) Assessment, Permitting and Response, (ii) Measurement and Analysis, and (iii) Remediation and Reuse. The CODM reviews the operating results of these segments on a regular basis and allocates company resources depending on the needs of each group and the availability of resources. |
Cost of Revenues | Cost of Revenues —Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, equipment rental and other outside services, field and lab supplies, vehicle costs and travel-related expenses. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expense —Selling, general and administrative expenses consist of indirect costs, including management and executive compensation, corporate costs related to finance, accounting, human resources, information technology, legal, administrative, safety, professional services, rent and other general expenses. |
Offering Costs, Initial Public Offering Expense and Follow-On Offering Expense | Offering Costs, Initial Public Offering Expense and Follow-On Offering Expense —The offering costs associated with the IPO and October 2021 follow-on offering mainly consisted of legal, accounting and filing fees. Total IPO and follow-on offering costs of $ 4.2 million and $ 0.6 million, respectively, were deferred through the date of the IPO and follow-on offering, and then capitalized and offset against proceeds received. IPO and follow-on offering expenses that were determined to be non-capitalizable were expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation —The Company currently sponsors two stock incentive plans that allow for issuance of employee stock options, restricted stock awards, restricted stock units and stock appreciation rights awards. Under one of the plans, there are certain awards that were issued to non-employees in exchange for their services and are accounted for under ASC 505, Equity-Based Payments to Non-Employees. ASC 505 requires that the fair value of the equity instruments issued to a non-employee be measured on the earlier of: (i) the performance commitment date or (ii) the date the services required under the arrangement have been completed. Certain of the performance based restricted stock units will only meet the requirements for establishing a grant date when the final calculated financial performance metrics and the amount of awards have been approved by the Company’s Board of Directors, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. The fair value of the remaining stock-based payment awards is expensed over the vesting period of each tranche on a straight-line basis. Any modification of an award that increases its fair value will require the Company to recognize additional expense. The fair value of stock options under its employee stock incentive plan are estimated as of the grant date using the Black-Scholes option valuation model, which is affected by its estimates of the fair value of common stock, risk-free interest rate, its expected dividend yield, expected term and the expected share price volatility of its common shares over the expected term. No dividend rates are used in the calculation as these are not applicable to the Company. Forfeitures are recognized as incurred. Employee options are accounted for in accordance with the guidance set forth by ASC 718, Stock Based Compensation. The fair value of stock appreciation rights is estimated at the grant date using the geometric Brownian motion model. This process has been widely used to model stock prices and is the underpinning of the Black-Scholes option pricing model and other extensions of the Random Walk Hypothesis of stock price movements and the Efficient Market Hypothesis. The Company's current intent and ability is to settle the stock appreciation rights awards in common stock and, as such, accounts for the awards as equity classified awards. |
Fair Value of Common Stock | Fair Value of Common Stock —Prior to the Company’s IPO, due to the absence of an active market for the Company’s common stock, the fair value of the Company’s common stock was estimated based on current available information. This estimate required significant judgment and considered several factors, including valuations of the Company’s common stock prepared by an independent third-party valuation firm. The fair value of the Company’s common stock was estimated primarily using an income approach based on discounted estimated future cash flows. The Company also utilized the market approach as an additional reference point to evaluate the reasonableness of the fair value determined under the income approach. These estimates were highly subjective in nature and involved a large degree of uncertainty. Such estimates of the fair value of the Company’s common stock were used in the measurement of stock-based compensation expense, warrant options, and the purchase price of business acquisitions for which common stock is an element of the purchase price. Following the IPO by the Company, valuation models, including estimates and assumptions used in such models, are not necessary to estimate the fair value of the Company’s common stock, as shares of the Company’s common stock are traded in the public market and the fair value is determined based on the closing price of the Company’s common stock. |
Income Taxes | Income Taxes — The Company accounts for income taxes under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enacted date. A valuation allowance is recorded when it is more-likely-than-not some of the deferred tax assets may not be realized. Significant judgment is applied when assessing the need for a valuation allowance and the Company considers all available positive and negative evidence, including future taxable income, reversals of existing deferred tax assets and liabilities and ongoing prudent and feasible tax planning strategies in making such assessment. Should a change in circumstances lead to a change in judgment regarding the utilization of deferred tax assets in future years, the Company will adjust the related valuation allowance in the period such change in circumstances occurs. For acquired business entities, if the Company identifies changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they relate to new information obtained about facts and circumstances existing as of the acquisition date, those changes are considered a measurement period adjustment and the offset is recorded to goodwill. The Company records uncertain tax positions on the basis of the two-step process in which (i) it determines whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the C ompany 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 that there are no uncertain tax positions as of December 31, 2022 and 2021. The Company classifies interest and penalties reco gnized on uncertain tax positions as a component of income tax expense. |
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 FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity adopted as of January 1, 2022 and did no t 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) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues And Accounts Receivable [Abstract] | |
Schedule of Contract Balances | The following table p resents the Company’s contract balances as of December 31: 2022 2021 Contract assets $ 52,403 $ 40,139 Contract liabilities (Note 10) 18,549 27,907 |
Schedule of Accounts Receivable, Net | Accounts Receivable, Net —Accounts receivable, net as of December 31, consisted of the following: 2022 2021 Accounts receivable, invoiced $ 95,055 $ 101,709 Accounts receivable, other 1,571 1,385 Allowance for doubtful accounts ( 1,915 ) ( 4,581 ) Accounts receivable—net $ 94,711 $ 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 Year ended December 31, 2022 $ 4,581 $ ( 1,097 ) $ ( 1,696 ) $ 127 $ 1,915 Year ended December 31, 2021 4,265 1,135 ( 1,548 ) 729 4,581 Year ended December 31, 2020 (2) 1,327 4,532 ( 2,633 ) 1,039 $ 4,265 (1) This amount consists of additions to the allowance due to business acquisitions. (2) During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets as of December 31, consisted of the following: 2022 2021 Deposits $ 1,394 $ 843 Prepaid expenses 5,266 4,675 Supplies 3,632 2,439 Prepaid and other current assets $ 10,292 $ 7,957 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net, as of December 31, consisted of the following: Estimated 2022 2021 Lab and test equipment 7 years $ 21,171 $ 18,581 Vehicles 5 years 5,732 5,414 Equipment 3 - 7 years 40,940 35,148 Furniture and fixtures 7 years 2,841 2,844 Leasehold improvements 7 years 8,576 7,268 Aircraft 10 years 931 931 Building 39 years 2,975 2,975 83,166 73,161 Land 725 725 Construction in progress 3,150 2,342 Less accumulated depreciation ( 50,996 ) ( 44,707 ) Total property and equipment—net $ 36,045 $ 31,521 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows: Year Ended December 31, Statement of Operations Location 2022 2021 Operating lease cost Lease cost Selling, general and administrative expense $ 10,017 $ 8,760 Variable lease cost Selling, general and administrative expense 1,319 367 Impairment of ROU asset (1) Other income (expense) 725 — Total operating lease cost $ 12,061 $ 9,127 Finance lease cost Amortization of right of use assets Depreciation and amortization $ 4,179 $ 3,227 Interest on lease liabilities Interest expense—net 467 401 Total finance lease cost 4,646 3,628 Total lease cost $ 16,707 $ 12,755 _________________________________________________ (1) During the year ended December 31, 2022, the Company vacated certain of its real estate space that is no longer needed for current operations. The impairment analysis on these ROU assets resulted in an impairment loss of $ 0.7 million. |
Summary of Supplemental Cash Flow Information Related To Leases | Supplemental cash flows information related to leases was as follows: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in finance leases $ 467 $ 401 Operating cash flows used in operating leases 9,662 8,531 Financing cash flows used in finance leases 3,967 3,191 Lease liabilities arising from new ROU assets Operating leases $ 12,443 $ 7,037 Finance leases 4,915 4,929 |
Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates | Weighted average remaining lease terms and weighted average discount rates were: Year Ended December 31, 2022 2021 Operating Leases Finance Operating Leases Finance Weighted average remaining lease term (years) 4.43 3.30 5.06 3.16 Weighted average discount rate 2.64 % 5.37 % 2.60 % 4.94 % |
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: December 31, Operating Leases Finance Leases 2023 $ 8,504 $ 4,219 2024 6,785 2,984 2025 4,850 2,084 2026 3,753 1,374 2027 and thereafter 5,100 565 Total undiscounted future minimum lease payments 28,992 11,226 Less imputed interest ( 1,660 ) ( 965 ) Total discounted future minimum lease payments $ 27,332 $ 10,261 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 2022: Cash Common Other Contingent Total Environmental Standards $ 14,473 $ — $ 544 $ 1,166 $ 16,183 All other 2022 acquisitions 15,271 — 1,134 1,500 17,905 Total $ 29,744 $ — $ 1,678 $ 2,666 $ 34,088 |
Summary of Purchase Price Attributable to Acquisitions | The preliminary purchase price attributable to the 2022 acquisitions was allocated as follows: Environmental Standards All Other 2022 Acquisitions Total (1) Cash $ 295 $ 824 $ 1,119 Accounts receivable and contract assets 5,200 2,646 7,846 Other current assets 456 116 572 Current assets 5,951 3,586 9,537 Property and equipment 168 15 183 Operating lease right-of-use asset—net 2,895 215 3,110 Customer relationships 5,807 5,812 11,619 Trade names 1,010 639 1,649 Covenants not to compete 269 650 919 Goodwill 4,131 8,412 12,543 Total assets 20,231 19,329 39,560 Current liabilities 1,720 1,314 3,034 Operating lease liability—net of 2,328 110 2,438 Total liabilities 4,048 1,424 5,472 Purchase price $ 16,183 $ 17,905 $ 34,088 ______________________________ (1) The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. |
Weighted Average Useful Lives for Acquired Identifiable Intangible Assets | The weighted average useful lives for the acquired companie s’ identifiable intangible assets are as follows: Customer Relationships Tradenames Covenants Not to Compete Environmental Standards 7 2 5 All other 2022 acquisitions 7 2 5 |
Summary of Supplemental Unaudited Pro-Forma Information | The unaudited consolidated financial information summarized in the following table gives effect to the 2022, 2021, and 2020 acquisitions assuming they occurred on January 1, 2020. These unaudited consolidated pro forma operating results include results from certain acquired companies that have not been audited and whose accounting policies prior to acquisition may differ from those of the Company. As a result, these unaudited consolidated pro forma operating results may not be comparable to revenues and earnings had these consolidated pro forma results been audited and consistent accounting policies applied. 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 include the results from Discontinued Service Lines and Discontinued O&M Contracts through the applicable date of discontinuance. 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, 2020, nor does the information project results for any future period. As reported Acquisitions Consolidated 2022 Revenues $ 544,416 $ 9,912 $ 554,328 Net (loss) income ( 31,819 ) 1,899 ( 29,920 ) 2021 Revenues $ 546,413 $ 50,808 $ 597,221 Net (loss) income ( 25,325 ) 6,860 ( 18,465 ) 2020 Revenues $ 328,243 $ 114,293 $ 442,536 Net (loss) income ( 57,949 ) 23,176 ( 34,773 ) |
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 purchase price of the acquisitions completed during 2021: Cash Common Other Contingent Total MSE $ 9,082 $ 2,271 $ 10,701 $ 1,804 $ 23,858 EI 20,721 2,274 ( 63 ) — 22,932 All other 2021 acquisitions 29,683 3,775 1,228 5,600 40,286 Total $ 59,486 $ 8,320 $ 11,866 $ 7,404 $ 87,076 |
Summary of Purchase Price Attributable to Acquisitions | The purchase price attributable to the 2021 acquisitions was allocated as follows: MSE EI All Other 2021 Acquisitions Total Cash $ 2,810 $ 250 $ 693 $ 3,753 Accounts receivable and contract 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 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 |
CTEH | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Attributable to Acquisitions | The purchase price attributable to the 2020 acquisitions was allocated as follows: CTEH All Other 2020 Total Cash $ 1,527 $ — $ 1,527 Accounts receivable and contract assets 17,059 — 17,059 Other current assets 1,265 — 1,265 Current assets 19,851 — 19,851 Property and equipment 7,042 75 7,117 Customer relationships 56,000 — 56,000 Trade names 4,200 — 4,200 Covenants not to compete 4,000 109 4,109 Proprietary software 14,700 — 14,700 Goodwill 146,983 626 147,609 Total assets 252,776 810 253,586 Current liabilities 9,721 — 9,721 Total liabilities 9,721 — 9,721 Purchase price $ 243,055 $ 810 $ 243,865 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amounts Related to Goodwill | Amounts related to goodwill as of December 31, are as follows: Assessment, Measurements Remediation Total Balance as of December 31, 2021 $ 176,541 $ 83,770 $ 51,633 $ 311,944 Goodwill acquired during the year 9,474 2,155 914 12,543 Acquisitions measurement period adjustments ( 899 ) 280 — ( 619 ) Balance as of December 31, 2022 $ 185,116 $ 86,205 $ 52,547 $ 323,868 |
Schedule of Amounts Related to Finite-Lived Intangible Assets | Amounts related to finite-lived intangible assets as of December 31, are as follows: 2022 Estimated Gross Accumulated Total Finite lived intangible assets Customer relationships 2 – 15 years $ 208,024 $ 95,768 $ 112,256 Covenants not to compete 4 – 5 years 33,542 28,280 5,262 Trade names 1 – 5 years 22,061 18,256 3,805 Proprietary software 3 – 5 years 22,698 15,810 6,888 Patent 16 years 17,479 3,583 13,896 Total other intangible assets—net $ 303,804 $ 161,697 $ 142,107 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—net $ 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 ending December 31: 2023 28,937 2024 24,288 2025 17,414 2026 13,827 2027 13,505 Thereafter 44,136 Total $ 142,107 |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following as of December 31: 2022 2021 Accounts payable $ 25,353 $ 24,167 Accrued expenses 14,754 14,906 Other business acquisitions purchase price 1,185 502 Contract liabilities 18,549 27,907 Other current liabilities 3,571 1,454 Total accounts payable and other accrued liabilities $ 63,412 $ 68,936 |
Accrued Payroll and Benefits (T
Accrued Payroll and Benefits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | |
Schedule of Accrued Payroll and Benefits | Accrued payroll and benefits consisted of t he following as of December 31: 2022 2021 Accrued bonuses $ 8,624 $ 13,438 Accrued paid time off 1,088 1,144 Accrued payroll 8,410 6,547 Accrued other 2,406 4,842 Total accrued payroll and benefits $ 20,528 $ 25,971 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Geographical Breakdown of Income Before Provision for (Loss) Income Taxes | The following is a geographical breakdown of income before the provision fo r (loss) income taxes as of December 31: 2022 2021 2020 Pre-tax loss: Federal $ ( 27,991 ) $ ( 24,574 ) $ ( 58,140 ) Foreign ( 1,578 ) 958 1,042 Total ( 29,569 ) ( 23,616 ) ( 57,098 ) |
Summary of Income Tax Expense | Income tax expense for the years ended December 31, is comprised of the following: 2022 2021 2020 Current: Federal $ — $ ( 49 ) $ ( 38 ) State 664 271 1,152 Foreign 58 295 490 Total 722 517 1,604 Deferred: Federal 517 448 ( 1,184 ) State 1,726 744 553 Foreign ( 715 ) — ( 122 ) Total 1,528 1,192 ( 753 ) Income tax expense $ 2,250 $ 1,709 $ 851 |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, are as follows: 2022 2021 Deferred tax assets: Net operating losses $ 15,641 $ 16,180 Allowance for bad debts 552 1,250 Employee related 5,655 1,291 Contingent consideration 9,755 9,770 ROU assets 10,526 8,285 Other 6,526 1,711 Total deferred tax asset 48,655 38,487 Deferred tax liabilities: Intangible assets ( 6,070 ) ( 2,467 ) Property and equipment ( 5,785 ) ( 4,860 ) Lease liabilities ( 10,033 ) ( 8,144 ) Interest rate swap ( 1,739 ) — Other ( 218 ) ( 64 ) Total deferred tax liability ( 23,845 ) ( 15,535 ) Valuation allowance ( 30,552 ) ( 26,958 ) Net deferred tax liability $ ( 5,742 ) $ ( 4,006 ) |
Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate for the years ended December 31, is as follows: 2022 2021 2020 Tax completed at federal statutory rate 21.00 % 21.00 % 21.00 % State tax net of federal benefit 2.42 15.41 1.32 Non- deductible expenses ( 0.34 ) ( 0.47 ) ( 1.05 ) Equity compensation ( 16.95 ) 31.95 ( 0.59 ) Embedded derivatives and warrant options ( 1.90 ) ( 1.97 ) ( 7.43 ) Foreign taxes 0.05 ( 0.06 ) ( 0.77 ) Federal deferred tax adjustment — 6.41 — Change in valuation allowance ( 12.13 ) ( 80.26 ) ( 14.30 ) Other 0.18 0.67 0.34 Effective income tax rate ( 7.67 ) % ( 7.32 ) % ( 1.48 ) % |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt as of December 31, consisted of the following: 2022 2021 Term loan facility $ 166,250 $ 175,000 Revolving line of credit — — Less deferred debt issuance costs ( 1,725 ) ( 2,244 ) Total debt 164,525 172,756 Less current portion of long-term debt ( 12,031 ) ( 10,938 ) Long-term debt, less current portion $ 152,494 $ 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 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 f ollows: Pricing Tier Consolidated Leverage Senior Credit Senior Credit Commitment Letter of 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 Applicable Percentages | The applicable margin means a percentage per annum determined in accordance with the following table: Pricing Consolidated Leverage Ratio Commitment Eurodollar Daily Rate 1 > 3.75 x to 1.0 0.50 % 4.00 % 4.00 % 3.00 % 2 ≤ 3.75 x to 1.0 but > 3.00 to 1.0 0.50 3.50 3.50 2.50 3 ≤ 3.00 x to 1.0 but > 2.25 to 1.0 0.40 3.00 3.00 2.00 4 ≤ 2.25 x to 1.0 0.30 2.50 2.50 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 consolidated statement of financial position, based on the terms of the 2021 Credit Facility: 2023 $ 12,031 2024 13,125 2025 14,219 2026 126,875 2027 — Total $ 166,250 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Liabilities Measured at Fair Value on Recurring Basis | As of December 31, the following financial liabilities are measured at fair value on a recurring basis using significant unobservable inputs (Level 3). 2022 2021 Interest rate swap (1) $ 6,046 $ — Total assets $ 6,046 $ — Business acquisitions contingent consideration, $ 3,801 $ 31,450 Business acquisitions contingent consideration, 4,454 4,350 Conversion option 25,731 23,081 Total liabilities $ 33,986 $ 58,881 _____________________________ (1) Included in other assets in the Consolidated Statement of Financial Position. |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis: Level 3 Interest Total Business Business Conversion Option Contingent Warrant Total Balance—at January 1, 2020 $ — $ — $ 8,614 $ 379 $ — $ 7,100 $ 16,878 $ 32,971 Acquisitions — — 34,661 10,543 — — — 45,204 Series A-2 compound embedded option — — — — ( 9,361 ) — — ( 9,361 ) Issuance of warrant option — — — — — — 30,097 30,097 Changes in fair value included in — — 19,119 ( 6,177 ) 30,247 ( 19,240 ) 9,312 33,261 Payment of contingent consideration — — ( 12,464 ) — — — — ( 12,464 ) Reclass of long term to short term — — 180 ( 180 ) — — — — Write off of the contingent put — — — — — 12,140 — 12,140 Exercise of warrant options — — — — — — ( 56,287 ) ( 56,287 ) Foreign currency translation of — — ( 208 ) — — — — ( 208 ) Balance—at December 31, 2020 $ — $ — $ 49,902 $ 4,565 $ 20,886 $ — $ — $ 75,353 Acquisitions — — 2,801 4,603 — — — 7,404 Series A-2 compound embedded option — — — — 2,195 — — 2,195 Changes in fair value included in — — 14,111 10,261 — — — 24,372 Payment of contingent consideration — — ( 50,443 ) — — — — ( 50,443 ) Reclass of long term to short term — — 15,079 ( 15,079 ) — — — — Balance—at December 31, 2021 $ — $ — $ 31,450 $ 4,350 $ 23,081 $ — $ — $ 58,881 Acquisitions — — — 2,666 — — — 2,666 Changes in fair value included in 6,046 6,046 500 ( 196 ) 2,650 — — 2,954 Payment of contingent consideration — — ( 30,515 ) — — — — ( 30,515 ) Reclass of long term to short term — — 2,366 ( 2,366 ) — — — — Balance—at December 31, 2022 $ 6,046 $ 6,046 $ 3,801 $ 4,454 $ 25,731 $ — $ — $ 33,986 |
Summary of Fair Value of Warrant Options Associated with Issuance of Redeemable Preferred Stock | The fair value of the warrant options associated with the issuance of the Redeemable Se ries A-1 Preferred Stock and the Convertible and Redeemable Series A-2 Preferred Stock was calculated based on the Black-Sholes pricing model using the following assumptions: July 30, 2020 Common stock value (per share) $ 22.22 Expected volatility 44.35 % Risk-free interest rate 0.55 % Expected life (years) 10 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Issued, Cancelled and Repurchased Shares of Common Stock | During the years ended December 31, the Company issued, cancelled and repurchased the following shares of common stock: 2022 2021 2020 Shares Average Total Shares Average Total Shares Average Total Common stock issued — $ — $ — — $ — — 11,500,000 $ 15.00 $ 172,500 Common stock issued — — — 2,875,000 59.05 169,783 — — — Acquisitions — — — 178,721 46.55 8,320 791,139 31.60 25,000 Redemption of series — — — — — — 1,786,739 15.00 26,801 Exercise of warrants (1) — — — 67,713 17.19 — 2,534,239 0.01 25.00 Exercise of options 101,340 16.21 1,643 959,890 7.54 7,237 47,600 8.05 383.00 Restricted shares, net (1) 25,532 66.30 — 42,263 30.69 — 20,488 24.00 — Payment of earn-out — — — 563,807 46.26 26,084 — — — Cancellation of shares — — — — — — ( 117,785 ) 17.15 — Total 126,872 $ 26.29 $ 1,643 4,687,394 $ 45.63 $ 211,424 16,562,420 $ 13.64 $ 224,709 ___________________________ (1) Represents the non-cash release of shares of common stock 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 as of December 31: 2017 Plan 2022 2021 2020 Shares authorized to be issued 5,140,112 3,944,750 2,945,443 Shares available for grant (1) 367,243 23,153 848,241 2013 Plan 2022 2021 2020 Shares authorized to be issued 2,037,019 2,047,269 2,047,269 Shares available for grant — — — _______________________ (1) In January 2023 the Board of Directors ratified the addition of 1,189,801 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 |
Schedule of Stock Compensation Expense | Total stock compensation expense for the Plans was as follows: 2022 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,507 $ — $ — $ — $ 1,507 Selling, general and administrative expense 8,531 23,972 9,280 — 41,783 Total $ 10,038 $ 23,972 $ 9,280 $ — $ 43,290 2021 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,482 $ — $ — $ 10 $ 1,492 Selling, general and administrative expense 6,552 1,959 307 11 8,829 Total $ 8,034 $ 1,959 $ 307 $ 21 $ 10,321 2020 2017 plan 2013 plan Options Restricted Stock SARs Options Total Cost of revenue $ 1,441 $ — $ — $ 136 $ 1,577 Selling, general and administrative expense 1,793 1,279 — 200 3,272 Total $ 3,234 $ 1,279 $ — $ 336 $ 4,849 |
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 for the years ended December 31: 2022 2021 2020 Common stock value (per share) $ 43.74 $ 44.28 $ 21.81 Expected volatility 33.44 % 55.34 % 46.59 % Risk- free interest rate 2.03 % 0.82 % 0.65 % Expected life (years) 6.98 6.40 7.00 Forfeiture rate None None None Dividend rate None None None |
Schedule of Common Stock Reserved for Future Issuance | Common Stock Reserved for Future Issuances —At December 31, the Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: 2022 2021 2020 Warrants — — 116,350 Montrose 2013 Stock Incentive Plan 855,695 2,047,269 2,047,269 Montrose 2017 Stock Incentive Plan (1) 7,724,524 6,921,597 2,945,443 Total 8,580,219 8,968,866 5,109,062 |
Montrose Amended & Restated 2017 Stock Incentive Plan | |
Schedule of Restricted Stock Activity | 2022 Shares Average Price per Share Total Awards granted 106,324 $ 46.82 $ 4,978 2021 Shares Average Price per Share Total Awards granted 1,690,700 $ 66.45 $ 112,347 2020 Shares Average Price per Share Total Awards granted 33,229 $ 31.60 $ 1,050 |
Summary of Stock Option Activity | The following summarizes the options activity of the 2017 Plan for the years ended December 31, 2022, 2021 and 2020: Options to Purchase Common Stock Weighted-Average Exercise Price per Share Weighted Average Grant Date Fair Value per Share Weighted Average Remaining Contract Life (in Years) Aggregate Intrinsic Value of In-The-Money Options (in Thousands) Outstanding at January 1, 2020 617,852 $ 24 $ 12 7.82 $ 4,696 Granted 1,243,027 22 12 — — Forfeited/cancelled ( 17,225 ) 22 — — — Expired ( 2,500 ) 18 — — — Exercised ( 925 ) 14 — — 8 Outstanding at December 31, 2020 1,840,229 $ 23 $ 12 9.09 $ 15,598 Granted 300,620 44 23 — — Forfeited/cancelled ( 33,875 ) 28 — — — Expired ( 1,550 ) 19 — — — Exercised ( 68,695 ) 22 — — 2,169 Outstanding at December 31, 2021 2,036,729 $ 26 $ 14 8.30 $ 91,030 Granted 698,534 44 16 — — Forfeited/cancelled ( 96,211 ) 32 — — — Exercised ( 59,486 ) 23 — — 1,398 Outstanding at December 31, 2022 2,579,566 $ 31 $ 15 7.76 $ 37,295 Exercisable at December 31, 2022 1,183,574 27 — 7.15 21,181 |
Montrose Amended and Restated 2013 Stock Option Plan | |
Summary of Stock Option Activity | The following summarizes the activity of the 2013 Plan for the years ended December 31, 2022, 2021 and 2020: Aggregate Weighted- Weighted Weighted Intrinsic Value Options to Average Average Average of In-The- Common Price per Fair Value Contract Life Options Stock Share per Share (in Years) (in Thousands) Outstanding at January 1, 2020 1,855,469 $ 6 $ 1 6.40 $ 46,617 Forfeited/cancelled ( 7,500 ) 10 — — — Expired ( 11,300 ) 6 — — — Exercised ( 48,800 ) 8 — — 908 Outstanding at December 31, 2020 1,787,869 $ 6 $ 1 5.40 $ 43,867 Expired ( 625 ) 6 — — — Exercised ( 889,570 ) 6 — — 45,161 Outstanding at December 31, 2021 897,674 $ 6 $ 2 4.37 $ 57,529 Expired ( 125 ) 6 — — — Exercised ( 41,854 ) 6 — — 1,626 Outstanding at December 31, 2022 855,695 $ 6 $ 2 3.31 $ 32,478 Exercisable at December 31, 2022 855,695 6 — 3.31 32,478 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net (Loss) Income 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: In thousands, except for net loss per share 2022 2021 2020 Net loss $ ( 31,819 ) $ ( 25,325 ) $ ( 57,949 ) Accretion of redeemable series A-1 — — ( 17,601 ) Redeemable series A-1 preferred stock — — ( 24,341 ) Convertible and redeemable series A-2 ( 16,400 ) ( 16,400 ) ( 6,970 ) Net loss attributable to common ( 48,219 ) ( 41,725 ) ( 106,861 ) Weighted-average common shares 29,688 26,724 16,479 Net loss per share attributable to common $ ( 1.62 ) $ ( 1.56 ) $ ( 6.48 ) |
Equity Shares Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders | The following common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the years ended December 31: 2022 (1) 2021 (1) 2020 (1) Stock options 3,435,261 1,687,413 2,237,910 Restricted stock 1,777,715 1,693,923 187,989 Series A-2 4,983,282 4,085,083 5,533,150 SARs 3,000,000 3,000,000 — Warrants — — 116,350 Total 13,196,258 10,466,419 8,075,399 ____________________________________________ (1) Includes 6,886,942 , 4,051,206 and 728,143 equity shares that are out of the money as of December 31, 2022, 2021 and 2020, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Components of Segment Revenues and Segment Adjusted EBITDA | Segment revenues and Segment Adjusted EBITDA for the years ended December 31, consisted of the following: 2022 2021 2020 Segment Segment Segment Segment Segment Segment Assessment, Permitting and Response $ 187,234 $ 37,458 $ 261,865 $ 57,128 $ 98,521 $ 24,208 Measurement and Analysis 172,432 31,588 153,208 31,270 151,557 39,386 Remediation and Reuse 184,750 30,616 131,340 19,326 78,165 8,938 Total Operating Segments 544,416 99,662 546,413 107,724 328,243 72,532 Corporate and Other — ( 31,212 ) — ( 30,082 ) — ( 18,056 ) Total $ 544,416 $ 68,450 $ 546,413 $ 77,642 $ 328,243 $ 54,476 |
Reconciliation of Segment Measure to Loss Before Benefit from Income Taxes | Presented below is a reconciliation of the Company’s segment measure to net loss for the years ended December 31: 2022 2021 2020 Total $ 68,450 $ 77,642 $ 54,476 Interest expense, net ( 5,239 ) ( 11,615 ) ( 13,819 ) Income tax expense ( 2,250 ) ( 1,709 ) ( 851 ) Depreciation and amortization ( 47,479 ) ( 44,810 ) ( 37,274 ) Stock-based compensation ( 43,290 ) ( 10,321 ) ( 4,849 ) Start-up losses and investment in new services ( 2,277 ) ( 4,407 ) ( 2,182 ) Acquisition costs ( 1,891 ) ( 2,088 ) ( 4,344 ) Fair value changes in financial instruments 3,396 ( 2,195 ) ( 20,319 ) Fair value changes in business acquisition 3,227 ( 24,372 ) ( 12,942 ) Short term purchase accounting fair value — — ( 243 ) Public offering expense — — ( 7,657 ) Expenses related to financing transactions ( 7 ) ( 50 ) ( 378 ) Other losses or expenses ( 4,459 ) (1) ( 1,400 ) (2) ( 7,567 ) (3) Net loss $ ( 31,819 ) $ ( 25,325 ) $ ( 57,949 ) (1) Amounts include costs associated with the exiting of the legacy water treatment and biogas operations and maintenance contracts and the Company's start-up lab in Berkley, California, as well as an impairment charge for certain operating lease right-of-use assets (Note 7) and severance costs related to the restructuring within our soil remediation business. (2) 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. (3) During the first quarter of 2020, the Company determined to reduce the footprint of its environmental lab in Berkeley, California, and to exit its non-specialized municipal water engineering service line and its food waste biogas engineering service line. As a part of discontinuing these service lines, the Company made the decision to book an additional bad debt reserve related to the uncertainty around the ability to collect on receivables related to these service lines (Note 4). It was determined that the discontinuation of these service lines did not represent a strategic shift that had (or will have) a major effect on the Company’s operations and financial results therefore did not meet the requirements to be classified as discontinued operations. |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Event [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 2022: Cash Common Other Contingent Total Environmental Standards $ 14,473 $ — $ 544 $ 1,166 $ 16,183 All other 2022 acquisitions 15,271 — 1,134 1,500 17,905 Total $ 29,744 $ — $ 1,678 $ 2,666 $ 34,088 |
Frontier | |
Subsequent Event [Line Items] | |
Summary of Elements of Purchase Price of Acquisitions | The following table summarizes the elements of the purchase price of these acquisitions: Cash (1) Other (2) Total Frontier $ 1,146 $ — $ 1,146 EAI 3,750 1,412 5,162 (1) The cash portion of this acquisition’s purchase price was funded through cash on hand. (2) The other purchase price component consists of liabilities assumed. |
Description of the Business a_3
Description of the Business and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Oct. 01, 2021 USD ($) $ / shares shares | Jul. 27, 2020 USD ($) $ / shares shares | Dec. 31, 2022 Employee Segment Office $ / shares | Dec. 31, 2020 $ / shares shares | Dec. 31, 2021 $ / shares | |
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 | 2,900 | ||||
Number of operating segments | Segment | 3 | ||||
Share price | $ / shares | $ 43.74 | $ 21.81 | $ 44.28 | ||
IPO | |||||
Description Of Business And Basis Of Presentation [Line Items] | |||||
Common stock issued, shares | shares | 11,500,000 | 11,500,000 | |||
Share price | $ / shares | $ 15 | ||||
Net proceeds from sale of common stock | $ 161.3 | ||||
Underwriting discounts | 11.2 | ||||
Deferred offset | $ 4.4 | ||||
Underwriters | |||||
Description Of Business And Basis Of Presentation [Line Items] | |||||
Common stock issued, shares | shares | 375,000 | 1,500,000 | |||
Follow-on Offering | |||||
Description Of Business And Basis Of Presentation [Line Items] | |||||
Common stock issued, shares | shares | 2,875,000 | ||||
Share price | $ / shares | $ 62 | ||||
Net proceeds from sale of common stock | $ 169.8 | ||||
Underwriting discounts | 8.5 | ||||
Deferred offset | $ 0.6 |
Significant Accounting Polici_2
Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 500,000 | ||
Impairment of long-lived assets | 0 | ||
Number of operating segments | Segment | 3 | ||
Number of reportable segments | Segment | 3 | ||
Uncertain tax positions | $ 0 | $ 0 | $ 0 |
IPO | |||
Significant Accounting Policies [Line Items] | |||
Deferred capitalized offering costs | 4,200,000 | ||
Follow-on Offering | |||
Significant Accounting Policies [Line Items] | |||
Deferred capitalized offering costs | $ 600,000 |
Summary of New Accounting Pro_2
Summary of New Accounting Pronouncements - Additional Information (Details) - ASU 2020-06 | Dec. 31, 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 | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues And Accounts Receivable [Abstract] | ||
Contract assets | $ 52,403 | $ 40,139 |
Contract liabilities | $ 18,549 | $ 27,907 |
Revenues and Accounts Receiva_4
Revenues and Accounts Receivable - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 USD ($) Customer | Dec. 31, 2020 Customer | |
Accounts Notes And Loans Receivable [Line Items] | |||
Contracts assets acquired through business acquisitions | $ 1.7 | $ 0.5 | |
Contract liabilities acquired through business acquisitions | 0 | 0.5 | |
Contract with customer liabilities, revenue recognized | 25.3 | ||
Revenue remaining performance obligations | $ 100.4 | $ 108.7 | |
Customer Concentration Risk | Revenue | Significant Customer | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of customers | Customer | 1 | 1 | 0 |
Concentration risk percentage | 14.40% | 10% | |
Customer Concentration Risk | Revenue | Customer One | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Concentration risk percentage | 10% | ||
Customer Concentration Risk | Accounts Receivable | Significant Customer | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of customers | Customer | 0 | ||
Concentration risk percentage | 10% | ||
Customer Concentration Risk | Accounts Receivable | Customer One | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of customers | Customer | 1 | ||
Concentration risk percentage | 23.10% |
Revenues and Accounts Receiva_5
Revenues and Accounts Receivable - Additional Information (Details1) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 100.4 | $ 108.7 |
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 | $ 82.1 | |
Revenue remaining performance obligations, satisfaction period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 18.3 | |
Revenue remaining performance obligations, satisfaction period |
Revenues and Accounts Receiva_6
Revenues and Accounts Receivable - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | [1] | Dec. 31, 2019 | [1] |
Revenues And Accounts Receivable [Abstract] | ||||||
Accounts receivable, invoiced | $ 95,055 | $ 101,709 | ||||
Accounts receivable, other | 1,571 | 1,385 | ||||
Allowance for doubtful accounts | (1,915) | (4,581) | $ (4,265) | $ (1,327) | ||
Accounts receivable—net | $ 94,711 | $ 98,513 | ||||
[1] During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). |
Revenues and Accounts Receiva_7
Revenues and Accounts Receivable - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | [1] | ||||
Revenues And Accounts Receivable [Abstract] | ||||||||
Beginning Balance | $ 1,327 | [1] | $ 4,581 | $ 4,265 | [1] | $ 1,327 | ||
Bad Debt (Recovery) Expense | $ 6,300 | (1,097) | 1,135 | 4,532 | ||||
Charged to Allowance | (1,696) | (1,548) | (2,633) | |||||
Other | [2] | 127 | 729 | 1,039 | ||||
Ending Balance | $ 1,915 | $ 4,581 | $ 4,265 | |||||
[1] During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). This amount consists of additions to the allowance due to business acquisitions. |
Revenues and Accounts Receiva_8
Revenues and Accounts Receivable - Schedule of Allowance for Doubtful Accounts (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | [1] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Bad Debt (Recovery) Expense | $ 6,300 | $ (1,097) | $ 1,135 | $ 4,532 | ||
Remediation and Reuse Segment | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Bad Debt (Recovery) Expense | $ 5,500 | |||||
[1] During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The COVID-19 pandemic added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded $ 6.3 million of bad debt reserve during the first quarter of 2020. The bad debt adjustment included a $ 5.5 million reserve for one customer in the Company’s Remediation and Reuse segment in which management concluded to discontinue select service lines as of June 30, 2020 (Note 21). |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits | $ 1,394 | $ 843 |
Prepaid expenses | 5,266 | 4,675 |
Supplies | 3,632 | 2,439 |
Prepaid and other current assets | $ 10,292 | $ 7,957 |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 83,166 | $ 73,161 |
Less accumulated depreciation | (50,996) | (44,707) |
Total property and equipment—net | $ 36,045 | 31,521 |
Lab and test equipment | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 21,171 | 18,581 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Property and equipment, gross | $ 5,732 | 5,414 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 40,940 | 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 | $ 2,841 | 2,844 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 8,576 | 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 | $ 3,150 | $ 2,342 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 7.2 | $ 6.4 | $ 8.4 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selling, General and Administrative Expenses | |||
Lessee Lease Description [Line Items] | |||
Rent expense | $ 10,017 | $ 8,760 | $ 8,700 |
Depreciation And Amortization | |||
Lessee Lease Description [Line Items] | |||
Amortization of assets under finance lease | $ 4,179 | $ 3,227 | $ 2,200 |
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 | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Lessee Lease Description [Line Items] | ||||
Impairment of ROU asset | $ 700 | |||
Total operating lease cost | 12,061 | $ 9,127 | ||
Total finance lease cost | 4,646 | 3,628 | ||
Total lease cost | 16,707 | 12,755 | ||
Selling, General and Administrative Expenses | ||||
Lessee Lease Description [Line Items] | ||||
Lease cost | 10,017 | 8,760 | $ 8,700 | |
Variable lease cost | 1,319 | 367 | ||
Depreciation And Amortization | ||||
Lessee Lease Description [Line Items] | ||||
Amortization of assets under finance lease | 4,179 | 3,227 | $ 2,200 | |
Interest Expense, Net | ||||
Lessee Lease Description [Line Items] | ||||
Interest on lease liabilities | 467 | $ 401 | ||
Other Income (Expense) | ||||
Lessee Lease Description [Line Items] | ||||
Impairment of ROU asset | [1] | $ 725 | ||
[1] During the year ended December 31, 2022, the Company vacated certain of its real estate space that is no longer needed for current operations. The impairment analysis on these ROU assets resulted in an impairment loss of $ 0.7 million. |
Leases - Summary of Component_2
Leases - Summary of Components of Lease Expense (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lease impairment loss | $ 0.7 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related To Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows used in finance leases | $ 467 | $ 401 |
Operating cash flows used in operating leases | 9,662 | 8,531 |
Financing cash flows used in finance leases | 3,967 | 3,191 |
Operating leases | 12,443 | 7,037 |
Finance leases | $ 4,915 | $ 4,929 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term, Operating Leases | 4 years 5 months 4 days | 5 years 21 days |
Weighted average remaining lease term, Finance Leases | 3 years 3 months 18 days | 3 years 1 month 28 days |
Weighted average discount rate, Operating Leases | 2.64% | 2.60% |
Weighted average discount rate, Finance Leases | 5.37% | 4.94% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
Operating Leases, 2023 | $ 8,504 |
Operating Leases, 2024 | 3,753 |
Operating Leases, 2025 | 6,785 |
Operating Leases, 2026 | 4,850 |
Operating Leases, 2027 and thereafter | 5,100 |
Operating Leases, Total undiscounted future minimum lease payments | 28,992 |
Operating Leases, Less imputed interest | (1,660) |
Operating Leases, Total discounted future minimum lease payments | 27,332 |
Finance Leases, 2023 | 4,219 |
Finance Leases, 2024 | 1,374 |
Finance Leases, 2025 | 2,984 |
Finance Leases, 2026 | 2,084 |
Finance Leases, 2027 and thereafter | 565 |
Finance Leases, Total undiscounted future minimum lease payments | 11,226 |
Finance Leases, Less imputed interest | (965) |
Finance Leases, Total discounted future minimum lease payments | $ 10,261 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Mar. 31, 2022 | Nov. 30, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Jun. 30, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Apr. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2022 | Sep. 30, 2022 | Aug. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||||||||||
Transaction costs related to business combinations | $ 1,891,000 | $ 2,088,000 | $ 4,344,000 | |||||||||||||
Number of common stock shares issued in connection with business acquisition | 178,721 | 791,139 | ||||||||||||||
Business combination, paid in cash | 29,744,000 | $ 59,486,000 | $ 175,450,000 | |||||||||||||
Revenues from discontinued service lines and discontinued O&M contracts | 3,600,000 | 12,100,000 | 17,100,000 | |||||||||||||
Environmental Standards and IAG | 2026 Earn Out | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, earn-out payment, maximum | 9,500,000 | |||||||||||||||
Business combination, paid in cash | 4,000,000 | |||||||||||||||
Environmental Standards | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of interests acquired | 100% | |||||||||||||||
Business combination, paid in cash | $ 14,473,000 | |||||||||||||||
Environmental Standards | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 7 years | |||||||||||||||
Environmental Standards | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 2 years | |||||||||||||||
Environmental Standards | Covenants Not to Compete | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
TriAD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of interests acquired | 100% | |||||||||||||||
AirKinetics | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of interests acquired | 100% | |||||||||||||||
Huco | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of interests acquired | 100% | |||||||||||||||
MSE Group, LLC | ||||||||||||||||
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 | |||||||||||||||
EI | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 10 years | |||||||||||||||
EI | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
EI | Covenants Not to Compete | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
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, Vista, Sensible and ECI | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Revenue | $ 33,700,000 | |||||||||||||||
Pre-tax income (loss) | $ 800,000 | |||||||||||||||
CTEH | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of interests acquired | 100% | |||||||||||||||
Number of common stock shares issued in connection with business acquisition | 791,139 | |||||||||||||||
Business combination, paid in cash | 175,000,000 | |||||||||||||||
Revenue | 82,400,000 | |||||||||||||||
Pre-tax income (loss) | 11,700,000 | |||||||||||||||
CTEH | External Proprietary Software | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
CTEH | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 15 years | |||||||||||||||
CTEH | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
CTEH | Covenants Not to Compete | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 5 years | |||||||||||||||
CTEH | Proprietary Software | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 3 years | |||||||||||||||
CTEH | Covenants Not to Compete Other Acquisitions | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Weighted average useful lives for acquired intangible assets | 4 years | |||||||||||||||
CTEH | 2020 Earn Out | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, earn-out payment, maximum | 50,000,000 | |||||||||||||||
Business combination, contingent consideration arrangements, basis for amount | CTEH first year earnout was calculated at twelve times CTEH’s 2020 EBITDA (as defined in the purchase agreement) in excess of $18.3 million, with a maximum first year earn-out payment of $50.0 million, which was fully achieved. | |||||||||||||||
Business combination, contingent consideration arrangements, description | The 2020 earn out was initially payable 100.0% in common stock, but as a result of the completion of the Company’s IPO (Note 1), at the Company’s election, 50.0% was payable in cash. | |||||||||||||||
Business combination, minimum EBITDA for contingent consideration arrangements | $ 18,300,000 | |||||||||||||||
Percentage of earn out payable in common stock | 100% | |||||||||||||||
Percentage of earn out payable in cash, as result of completing of IPO | 50% | |||||||||||||||
Percentage of earn out paid in cash, as result of completing of IPO | 50% | |||||||||||||||
Percentage of earn out paid in common stock, as a result of completion of IPO | 50% | |||||||||||||||
CTEH | 2020 Earn Out | Minimum | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, actual EBITDA | $ 18,300,000 | |||||||||||||||
CTEH | 2020 Earn Out | Maximum | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, actual EBITDA | 22,500,000 | |||||||||||||||
CTEH | 2021 Earn Out | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, earn-out payment, maximum | $ 30,000,000 | |||||||||||||||
Business combination, contingent consideration arrangements, basis for amount | The second year earn-out was calculated at ten times CTEH’s 2021 EBITDA in excess of actual 2020 EBITDA (with actual 2020 EBITDA subject to a minimum of $18.3 million and a maximum of $22.5 million), with a maximum second year earn-out payment of $30.0 million, which was fully achieved. | |||||||||||||||
Percentage of earn out paid in cash | 100% | |||||||||||||||
EnvStd, Huco, IAG, TriAD and AirKinetics | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Revenue | $ 20,200,000 | |||||||||||||||
Pre-tax income (loss) | $ 2,900,000 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Elements of Purchase Price of Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Cash | $ 29,744 | $ 59,486 | $ 175,450 |
Common Stock | 8,320 | 25,000 | |
Other Purchase Price Components | 1,678 | 11,866 | (1,789) |
Contingent Consideration | 2,666 | 7,404 | 45,204 |
Total Purchase Price | 34,088 | 87,076 | 243,865 |
Environmental Standards | |||
Business Acquisition [Line Items] | |||
Cash | 14,473 | ||
Other Purchase Price Components | 544 | ||
Contingent Consideration | 1,166 | ||
Total Purchase Price | 16,183 | ||
All Other 2022 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash | 15,271 | ||
Other Purchase Price Components | 1,134 | ||
Contingent Consideration | 1,500 | ||
Total Purchase Price | $ 17,905 | ||
MSE Group | |||
Business Acquisition [Line Items] | |||
Cash | 9,082 | ||
Common Stock | 2,271 | ||
Other Purchase Price Components | 10,701 | ||
Contingent Consideration | 1,804 | ||
Total Purchase Price | 23,858 | ||
EI | |||
Business Acquisition [Line Items] | |||
Cash | 20,721 | ||
Common Stock | 2,274 | ||
Other Purchase Price Components | (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 | 1,228 | ||
Contingent Consideration | 5,600 | ||
Total Purchase Price | $ 40,286 | ||
CTEH | |||
Business Acquisition [Line Items] | |||
Cash | 175,000 | ||
Common Stock | 25,000 | ||
Other Purchase Price Components | (1,939) | ||
Contingent Consideration | 44,994 | ||
Total Purchase Price | 243,055 | ||
All Other 2020 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash | 450 | ||
Other Purchase Price Components | 150 | ||
Contingent Consideration | 210 | ||
Total Purchase Price | $ 810 |
Business Acquisitions - Summa_2
Business Acquisitions - Summary of Purchase Price Attributable to Acquisitions (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Cash | $ 1,119 | [1] | $ 3,753 | $ 1,527 |
Accounts receivable and contract assets | 7,846 | [1] | 11,788 | 17,059 |
Other current assets | 572 | [1] | 404 | 1,265 |
Current assets | 9,537 | [1] | 15,945 | 19,851 |
Property and equipment | 183 | [1] | 1,713 | 7,117 |
Operating lease right-of-use asset—net | 3,110 | [1] | 3,079 | |
Goodwill | 12,543 | [1] | 36,705 | 147,609 |
Total assets | 39,560 | [1] | 95,542 | 253,586 |
Current liabilities | 3,034 | [1] | 6,077 | 9,721 |
Operating lease liability—net of current portion | 2,438 | [1] | 2,389 | |
Total liabilities | 5,472 | [1] | 8,466 | 9,721 |
Purchase price | 34,088 | [1] | 87,076 | 243,865 |
Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 11,619 | [1] | 31,623 | 56,000 |
Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,649 | [1] | 3,475 | 4,200 |
Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 919 | [1] | 2,681 | 4,109 |
Acquired Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 321 | |||
Proprietary Software | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 14,700 | |||
Environmental Standards | ||||
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 | 4,131 | |||
Total assets | 20,231 | |||
Current liabilities | 1,720 | |||
Operating lease liability—net of current portion | 2,328 | |||
Total liabilities | 4,048 | |||
Purchase price | 16,183 | |||
Environmental Standards | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 5,807 | |||
Environmental Standards | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,010 | |||
Environmental Standards | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 269 | |||
All Other 2022 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Cash | 824 | |||
Accounts receivable and contract assets | 2,646 | |||
Other current assets | 116 | |||
Current assets | 3,586 | |||
Property and equipment | 15 | |||
Operating lease right-of-use asset—net | 215 | |||
Goodwill | 8,412 | |||
Total assets | 19,329 | |||
Current liabilities | 1,314 | |||
Operating lease liability—net of current portion | 110 | |||
Total liabilities | 1,424 | |||
Purchase price | 17,905 | |||
All Other 2022 Acquisitions | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 5,812 | |||
All Other 2022 Acquisitions | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 639 | |||
All Other 2022 Acquisitions | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 650 | |||
MSE Group | ||||
Business Acquisition [Line Items] | ||||
Cash | 2,810 | |||
Accounts receivable and contract assets | 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 | |||
MSE Group | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 8,720 | |||
MSE Group | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 521 | |||
MSE Group | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 922 | |||
EI | ||||
Business Acquisition [Line Items] | ||||
Cash | 250 | |||
Accounts receivable and contract assets | 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 | |||
EI | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 10,073 | |||
EI | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 996 | |||
EI | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 511 | |||
All Other 2021 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Cash | 693 | |||
Accounts receivable and contract assets | 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 | |||
All Other 2021 Acquisitions | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 12,830 | |||
All Other 2021 Acquisitions | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,958 | |||
All Other 2021 Acquisitions | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,248 | |||
All Other 2021 Acquisitions | Acquired Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 321 | |||
CTEH | ||||
Business Acquisition [Line Items] | ||||
Cash | 1,527 | |||
Accounts receivable and contract assets | 17,059 | |||
Other current assets | 1,265 | |||
Current assets | 19,851 | |||
Property and equipment | 7,042 | |||
Goodwill | 146,983 | |||
Total assets | 252,776 | |||
Current liabilities | 9,721 | |||
Total liabilities | 9,721 | |||
Purchase price | 243,055 | |||
CTEH | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 56,000 | |||
CTEH | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 4,200 | |||
CTEH | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 4,000 | |||
CTEH | Proprietary Software | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 14,700 | |||
All Other 2020 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Property and equipment | 75 | |||
Goodwill | 626 | |||
Total assets | 810 | |||
Purchase price | 810 | |||
All Other 2020 Acquisitions | Covenants Not to Compete | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 109 | |||
[1] The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. |
Business Acquisitions - Weighte
Business Acquisitions - Weighted Average Useful Lives for Acquired Identifiable Intangible Assets (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer Relationships | Environmental Standards | ||
Business Acquisition [Line Items] | ||
Weighted average useful lives for acquired intangible assets | 7 years | |
Customer Relationships | All Other 2022 Acquisitions | ||
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 | |
Trade Names | Environmental Standards | ||
Business Acquisition [Line Items] | ||
Weighted average useful lives for acquired intangible assets | 2 years | |
Trade Names | All Other 2022 Acquisitions | ||
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 | |
Covenants Not to Compete | Environmental Standards | ||
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 | |
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 | |
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 544,416 | $ 546,413 | $ 328,243 |
Net (loss) income | (31,819) | (25,325) | (57,949) |
Acquisition Proforma | |||
Revenues | 9,912 | 50,808 | 114,293 |
Net (loss) income | 1,899 | 6,860 | 23,176 |
Consolidated Proforma | |||
Revenues | 554,328 | 597,221 | 442,536 |
Net (loss) income | $ (29,920) | $ (18,465) | $ (34,773) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Amounts Related to Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 311,944 |
Goodwill acquired during the year | 12,543 |
Acquisitions measurement period adjustments | (619) |
Ending balance | 323,868 |
Assessment, Permitting and Response | |
Goodwill [Line Items] | |
Beginning balance | 176,541 |
Goodwill acquired during the year | 9,474 |
Acquisitions measurement period adjustments | (899) |
Ending balance | 185,116 |
Measurements and Analysis | |
Goodwill [Line Items] | |
Beginning balance | 83,770 |
Goodwill acquired during the year | 2,155 |
Acquisitions measurement period adjustments | 280 |
Ending balance | 86,205 |
Remediation and Reuse Segment | |
Goodwill [Line Items] | |
Beginning balance | 51,633 |
Goodwill acquired during the year | 914 |
Ending balance | $ 52,547 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Amounts Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 303,804 | $ 288,904 |
Accumulated Amortization | 161,697 | 127,907 |
Total Intangible Assets—Net | 142,107 | 160,997 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | 208,024 | 196,323 |
Accumulated Amortization | 95,768 | 74,010 |
Total Intangible Assets—Net | $ 112,256 | $ 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 | $ 33,542 | $ 32,622 |
Accumulated Amortization | 28,280 | 25,113 |
Total Intangible Assets—Net | $ 5,262 | $ 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 | $ 22,061 | $ 20,403 |
Accumulated Amortization | 18,256 | 15,139 |
Total Intangible Assets—Net | $ 3,805 | $ 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 | $ 22,698 | $ 22,077 |
Accumulated Amortization | 15,810 | 11,155 |
Total Intangible Assets—Net | $ 6,888 | $ 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 | 3,583 | 2,490 |
Total Intangible Assets—Net | $ 13,896 | $ 14,989 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 36.1 | $ 35.2 | $ 28.9 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 28,937 | |
2024 | 24,288 | |
2025 | 17,414 | |
2026 | 13,827 | |
2027 | 13,505 | |
Thereafter | 44,136 | |
Total Intangible Assets—Net | $ 142,107 | $ 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 | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 25,353 | $ 24,167 |
Accrued expenses | 14,754 | 14,906 |
Other business acquisitions purchase price obligations | 1,185 | 502 |
Contract liabilities | 18,549 | 27,907 |
Other current liabilities | 3,571 | 1,454 |
Total accounts payable and other accrued liabilities | $ 63,412 | $ 68,936 |
Accrued Payroll and Benefits -
Accrued Payroll and Benefits - Schedule of Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accrued bonuses | $ 8,624 | $ 13,438 |
Accrued paid time off | 1,088 | 1,144 |
Accrued payroll | 8,410 | 6,547 |
Accrued other | 2,406 | 4,842 |
Total accrued payroll and benefits | $ 20,528 | $ 25,971 |
Income Taxes - Summary of Geogr
Income Taxes - Summary of Geographical Breakdown of Income Before Provision for (Loss) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ (27,991) | $ (24,574) | $ (58,140) |
Foreign | (1,578) | 958 | 1,042 |
LOSS BEFORE EXPENSE FROM INCOME TAXES | $ (29,569) | $ (23,616) | $ (57,098) |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ (49) | $ (38) | |
State | $ 664 | 271 | 1,152 |
Foreign | 58 | 295 | 490 |
Total | 722 | 517 | 1,604 |
Deferred: | |||
Federal | 517 | 448 | (1,184) |
State | 1,726 | 744 | 553 |
Foreign | (715) | (122) | |
Total | 1,528 | 1,192 | (753) |
Income tax expense | $ 2,250 | $ 1,709 | $ 851 |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 15,641 | $ 16,180 |
Allowance for bad debts | 552 | 1,250 |
Employee related | 5,655 | 1,291 |
Contingent consideration | 9,755 | 9,770 |
ROU assets | 10,526 | 8,285 |
Other | 6,526 | 1,711 |
Total deferred tax asset | 48,655 | 38,487 |
Deferred tax liabilities: | ||
Intangible assets | (6,070) | (2,467) |
Property and equipment | (5,785) | (4,860) |
Lease liabilities | (10,033) | (8,144) |
Interest rate swap | (1,739) | |
Other | (218) | (64) |
Total deferred tax liability | (23,845) | (15,535) |
Valuation allowance | (30,552) | (26,958) |
Net deferred tax liability | $ (5,742) | $ (4,006) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Tax completed at federal statutory rate | 21% | 21% | 21% |
State tax net of federal benefit | 2.42% | 15.41% | 1.32% |
Non- deductible expenses | (0.34%) | (0.47%) | (1.05%) |
Equity compensation | (16.95%) | 31.95% | (0.59%) |
Embedded derivatives and warrant options | (1.90%) | (1.97%) | (7.43%) |
Foreign taxes | 0.05% | (0.06%) | (0.77%) |
Federal deferred tax adjustment | 6.41% | ||
Change in valuation allowance | (12.13%) | (80.26%) | (14.30%) |
Other | 0.18% | 0.67% | 0.34% |
Effective income tax rate | (7.67%) | (7.32%) | (1.48%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | |||
Uncertain tax positions | $ 0 | $ 0 | $ 0 |
Increase in valuation allowance | $ 3,600,000 | 18,700,000 | |
Income Tax Examination, Description | The Company is subject to audit by federal and state tax authorities in the ordinary course of business. The Company’s federal income tax returns remain subject to examination for the 2015 through 2022 tax years. The Company files in multiple state jurisdictions which remain subject to examination for various years depending on such state jurisdiction. The Company is also subject to audit by tax authorities in Canada, Australia, Germany, and Sweden for which returns are subject to examination for various years, dependent on the jurisdiction. | ||
Deferred payments | $ 2,250,000 | 1,709,000 | 851,000 |
CARES Act [Member] | |||
Income Tax Disclosure [Line Items] | |||
Deferred payments | 5,000,000 | 5,000,000 | $ 5,000,000 |
Deferred payments, repaid | 2,500,000 | $ 2,500,000 | |
Domestic Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating Loss Carryforwards | $ 60,700,000 | ||
Operating loss carryforwards begin to expire year | 2035 | ||
Operating losses generated beginning year | 2018 | ||
Loss carryforwards not subject to expiration | $ 51,900,000 | ||
Domestic Tax Authority [Member] | Earliest Tax Year [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax years remain subject to examination | 2015 | ||
Domestic Tax Authority [Member] | Latest Tax Year [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax years remain subject to examination | 2022 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating Loss Carryforwards | $ 37,300,000 |
Warrant Options - Additional In
Warrant Options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||||
Jul. 30, 2020 | Jul. 27, 2020 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | Apr. 30, 2020 | Apr. 13, 2020 | Oct. 19, 2018 | |
Class Of Warrant Or Right [Line Items] | ||||||||
Period between issuance and expiration of outstanding warrant | 10 years | |||||||
Share price | $ 43.74 | $ 21.81 | $ 44.28 | |||||
Redeemable Series A-1 Preferred Stock | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants to purchase common stock | 534,240 | |||||||
Warrant exercise price per share | $ 0.01 | |||||||
Period between issuance and expiration of outstanding warrant | 10 years | |||||||
Warrants exercised in full for cash, date | Jul. 30, 2020 | |||||||
Redeemable Series A-2 Preferred Stock | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants to purchase common stock | 1,351,960 | |||||||
Warrant exercise price per share | $ 0.01 | |||||||
Period between issuance and expiration of outstanding warrant | 10 years | |||||||
Aggregate value to determine number of shares underlying the warrant and issuable upon exercise of warrants | $ 30 | |||||||
Convertible And Redeemable Series A-2 Preferred Stock | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants to purchase common stock | 1,999,999 | |||||||
Share price | $ 15 | |||||||
Increase of shares | 648,039 | |||||||
Redeemable Series A-1 Preferred Stock and Convertible and Redeemable Series A-2 Preferred Stock | Other Expense | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Fair value loss of warrants | $ 9.3 | |||||||
Redeemable Series A-1 Preferred Stock and Convertible and Redeemable Series A-2 Preferred Stock | Common Stock | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrant exercise price per share | $ 0.01 | |||||||
Exercise of the series A-1 preferred stock warrant, shares | 2,534,239 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Line Of Credit Facility [Line Items] | ||
Less deferred debt issuance costs | $ (1,725) | $ (2,244) |
Total debt | 164,525 | 172,756 |
Less current portion of long-term debt | (12,031) | (10,938) |
Long-term debt, less current portion | 152,494 | 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 | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2022 | Jan. 27, 2022 | Jan. 26, 2022 | Sep. 30, 2021 | Apr. 27, 2021 | Oct. 06, 2020 | Sep. 30, 2020 | Apr. 13, 2020 | Jan. 31, 2023 | Dec. 31, 2022 | Oct. 06, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Line Of Credit Facility [Line Items] | ||||||||||||||
Weighted average interest rate | 5.80% | |||||||||||||
Loss on extinguishment | $ (4,052,000) | $ (1,810,000) | ||||||||||||
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 | 130% | 80% | ||||||||||||
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 | 3.50% | 3.50% | 2.10% | |||||||||||
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 | |||||||||||||
Credit facility maturity | 2025-04 | |||||||||||||
Debt instrument, repayments term | quarterly | |||||||||||||
Debt instrument, repayments | $ 1,600,000 | $ 1,100,000 | $ 500,000 | |||||||||||
Loss on extinguishment | $ 4,100,000 | |||||||||||||
Debt fee paid | 1,000,000 | |||||||||||||
Unamortized debt issuance costs | 3,100,000 | |||||||||||||
Prior Credit Facility | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Loss on extinguishment | 1,400,000 | |||||||||||||
Debt fee paid | 400,000 | |||||||||||||
Unamortized debt issuance costs | 1,000,000 | |||||||||||||
Prior Credit Facility | LIBOR Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 1% | |||||||||||||
Prior Credit Facility | Federal Funds Rate Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 0.50% | |||||||||||||
Equipment Line Of Credit | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Credit facility maturity date | Mar. 31, 2023 | |||||||||||||
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 | 2021 Credit Facility | Subsequent Event | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Installment repayment amount | $ 2,200,000 | |||||||||||||
Term Loan Facility | 2020 Credit Facility | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Line of credit | 175,000,000 | |||||||||||||
Term Loan Facility | 2020 Credit Facility | LIBOR Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 4.50% | 5% | ||||||||||||
Term Loan Facility | 2020 Credit Facility | LIBOR Floor | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 1% | 1% | ||||||||||||
Term Loan Facility | 2020 Credit Facility | Base Rate Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 4% | |||||||||||||
Term Loan Facility | Prior Credit Facility | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Line of credit | 50,000,000 | 50,000,000 | ||||||||||||
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 | |||||||||||||
Commitment Fee | 0.35% | |||||||||||||
Revolving Line of Credit | 2020 Credit Facility | LIBOR Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 3.50% | |||||||||||||
Revolving Line of Credit | 2020 Credit Facility | Base Rate Plus | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Interest rate | 2.50% | |||||||||||||
Revolving Line of Credit | Prior Credit Facility | ||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||
Line of credit | $ 130,000,000 | $ 130,000,000 | ||||||||||||
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 | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Event [Line Items] | |
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 Applicable P
Debt - Schedule of Applicable Percentages (Details) - Prior Credit Facility | 12 Months Ended |
Dec. 31, 2022 | |
Pricing Tier1 | |
Line Of Credit Facility [Line Items] | |
Commitment Fee | 0.50% |
Pricing Tier1 | Minimum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 375% |
Pricing Tier1 | Eurodollar Rate Loans and LIBOR Letter of Credit Fee | |
Line Of Credit Facility [Line Items] | |
Interest rate | 4% |
Pricing Tier1 | Daily Floating Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 4% |
Pricing Tier1 | Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 3% |
Pricing Tier2 | |
Line Of Credit Facility [Line Items] | |
Commitment Fee | 0.50% |
Pricing Tier2 | Maximum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 375% |
Pricing Tier2 | Minimum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 300% |
Pricing Tier2 | Eurodollar Rate Loans and LIBOR Letter of Credit Fee | |
Line Of Credit Facility [Line Items] | |
Interest rate | 3.50% |
Pricing Tier2 | Daily Floating Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 3.50% |
Pricing Tier2 | Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 2.50% |
Pricing Tier3 | |
Line Of Credit Facility [Line Items] | |
Commitment Fee | 0.40% |
Pricing Tier3 | Maximum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 300% |
Pricing Tier3 | Minimum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 225% |
Pricing Tier3 | Eurodollar Rate Loans and LIBOR Letter of Credit Fee | |
Line Of Credit Facility [Line Items] | |
Interest rate | 3% |
Pricing Tier3 | Daily Floating Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 3% |
Pricing Tier3 | Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 2% |
Pricing Tier4 | |
Line Of Credit Facility [Line Items] | |
Commitment Fee | 0.30% |
Pricing Tier4 | Maximum | |
Line Of Credit Facility [Line Items] | |
Consolidated total leverage ratio | 225% |
Pricing Tier4 | Eurodollar Rate Loans and LIBOR Letter of Credit Fee | |
Line Of Credit Facility [Line Items] | |
Interest rate | 2.50% |
Pricing Tier4 | Daily Floating Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 2.50% |
Pricing Tier4 | Rate Loans | |
Line Of Credit Facility [Line Items] | |
Interest rate | 1.50% |
Debt - Schedule of Aggregate An
Debt - Schedule of Aggregate Annual Maturities of Long-Term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 12,031 |
2024 | 13,125 |
2025 | 14,219 |
2026 | 126,875 |
Total | $ 166,250 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring - Level 3 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Level 3 Assets | $ 6,046 | ||||
Level 3 Liabilities | 33,986 | $ 58,881 | $ 75,353 | $ 32,971 | |
Interest Rate Swap | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Level 3 Assets | [1] | 6,046 | |||
Business Acquisitions Contingent Consideration, Current | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Level 3 Liabilities | 3,801 | 31,450 | 49,902 | 8,614 | |
Business Acquisitions Contingent Consideration, Long-Term | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Level 3 Liabilities | 4,454 | 4,350 | 4,565 | $ 379 | |
Conversion Option | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Level 3 Liabilities | $ 25,731 | $ 23,081 | $ 20,886 | ||
[1] Included in other assets in the Consolidated Statement of Financial Position. |
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 - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Beginning balance | $ 58,881 | $ 75,353 | $ 32,971 | |
Acquisitions | 2,666 | 7,404 | 45,204 | |
Series A-2 compound embedded option | 2,195 | (9,361) | ||
Asset value, Changes in fair value included in earnings | $ 6,046 | |||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Changes in fair value included in earnings | $ 2,954 | $ 24,372 | 33,261 | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | ||
Payment of contingent consideration payable | $ (30,515) | $ (50,443) | (12,464) | |
Issuance of warrant option | 30,097 | |||
Write off of the contingent put option | 12,140 | |||
Exercise of warrant options | (56,287) | |||
Foreign currency translation of contingent consideration payment | (208) | |||
Total Assets, Ending balance | 6,046 | |||
Ending balance | 33,986 | 58,881 | 75,353 | |
Contingent Put Option | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Beginning balance | 7,100 | |||
Changes in fair value included in earnings | (19,240) | |||
Write off of the contingent put option | 12,140 | |||
Business Acquisitions Contingent Consideration, Current | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Beginning balance | 31,450 | 49,902 | 8,614 | |
Acquisitions | 2,801 | 34,661 | ||
Changes in fair value included in earnings | 500 | 14,111 | 19,119 | |
Payment of contingent consideration payable | (30,515) | (50,443) | (12,464) | |
Reclass of long term to short term contingent liabilities | 2,366 | 15,079 | 180 | |
Foreign currency translation of contingent consideration payment | (208) | |||
Ending balance | 3,801 | 31,450 | 49,902 | |
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 | 379 | |
Acquisitions | 2,666 | 4,603 | 10,543 | |
Changes in fair value included in earnings | (196) | 10,261 | (6,177) | |
Reclass of long term to short term contingent liabilities | (2,366) | (15,079) | (180) | |
Ending balance | 4,454 | 4,350 | 4,565 | |
Conversion Option | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Beginning balance | 23,081 | 20,886 | ||
Series A-2 compound embedded option | 2,195 | (9,361) | ||
Changes in fair value included in earnings | 2,650 | 30,247 | ||
Ending balance | 25,731 | $ 23,081 | 20,886 | |
Warrant Option | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Beginning balance | 16,878 | |||
Changes in fair value included in earnings | 9,312 | |||
Issuance of warrant option | 30,097 | |||
Exercise of warrant options | $ (56,287) | |||
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 | 6,046 | |||
Total Assets, Ending balance | [1] | $ 6,046 | ||
[1] Included in other assets in the Consolidated Statement of Financial Position. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Summary of Fair Value of Warrant Options Associated with Issuance of Redeemable Preferred Stock (Details) | Jul. 30, 2020 | Apr. 13, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assumptions used in calculating fair value of the warrant option | 10 years | |
Measurement Input, Share Price | Convertible And Redeemable Series A-1 and Series A-2 Preferred Stock | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assumptions used in calculating fair value of the warrant option | 22.22 | |
Measurement Input, Option Volatility | Convertible And Redeemable Series A-1 and Series A-2 Preferred Stock | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assumptions used in calculating fair value of the warrant option | 0.4435 | |
Measurement Input, Risk Free Interest Rate | Convertible And Redeemable Series A-1 and Series A-2 Preferred Stock | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assumptions used in calculating fair value of the warrant option | 0.0055 | |
Measurement Input, Expected Term | Convertible And Redeemable Series A-1 and Series A-2 Preferred Stock | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assumptions used in calculating fair value of the warrant option | 10 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies [Line Items] | |
Lessee operating lease, expiration year | 2031 |
Office Equipment | |
Commitments And Contingencies [Line Items] | |
Lessee operating lease, expiration year | 2027 |
Redeemable Series A-1 Preferr_2
Redeemable Series A-1 Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Apr. 13, 2020 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | Oct. 19, 2018 | |
Temporary Equity [Line Items] | |||||
Share price | $ 43.74 | $ 21.81 | $ 44.28 | ||
Percentage of dividends paid in cash | 14.20% | ||||
Redeemable Series A-1 Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Temporary equity, shares issued | 12,000 | ||||
Temporary equity, par value per share | $ 0.0001 | ||||
Warrants to purchase common stock | 534,240 | ||||
Temporary equity, penalty term | 3 years | ||||
Temporary equity, penalty term upon full exercise of warrant | 2 years | ||||
Percentage of dividends paid in cash | 15% | ||||
Percentage of dividends accrued | 14.20% | ||||
Fair value changes in the contingent put option | $ 19.2 | ||||
Redeemable Series A-1 Preferred Stock | Maximum | |||||
Temporary Equity [Line Items] | |||||
Temporary equity, aggregate amount of redemption requirement | $ 50 | ||||
Percentage of accumulated dividends payable in common stock upon IPO | 50% | ||||
Share price | $ 31.60 |
Convertible and Redeemable Se_2
Convertible and Redeemable Series A-2 Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Apr. 13, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | $ 16,400 | $ 16,400 | $ 6,970 | |
Compound embedded derivative, change in net fair value | $ 3,396 | $ (2,195) | (20,319) | |
Convertible And Redeemable Series A-2 Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Number of shares issued | 17,500 | 17,500 | 17,500 | |
Par value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Debt issuance costs, net | $ 1,300 | |||
Percentage of dividends paid in cash | 15% | |||
Preferred stock, dividends paid | $ 16,400 | $ 16,400 | 7,000 | |
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% | |||
Percentage of dividend rate increase per annum upon noncompliance occurred and thereafter | 14% | |||
Number of days dividend increase rate applicable noncompliance event occurred | 90 days | |||
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 | |||
Convertible And Redeemable Series A-2 Preferred Stock | Other Income (Expense) | ||||
Temporary Equity [Line Items] | ||||
Compound embedded derivative, change in net fair value | 2,700 | $ 2,200 | $ 30,200 | |
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 | |||
Convertible And Redeemable Series A-2 Preferred Stock | Year 5 | ||||
Temporary Equity [Line Items] | ||||
Temporary equity convertible into common stock | 60,000 | |||
Convertible And Redeemable Series A-2 Preferred Stock | Year 6 | ||||
Temporary Equity [Line Items] | ||||
Temporary equity convertible into common stock | $ 120,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2015 | ||||
Class Of Stock [Line Items] | |||||||
Common stock, shares authorized | 190,000,000 | 190,000,000 | |||||
Common stock, par value | $ 0.000004 | $ 0.000004 | |||||
Stock issued on exercise of warrants | 67,713 | 67,713 | [1] | 2,534,239 | [1] | ||
Total unrecognized stock compensation expense related to unvested options, restricted stock and stock appreciation rights granted under the Plans | $ 141,800 | ||||||
Unrecognized expense expected to be recognized period | 4 years | ||||||
Shares, granted | [1] | 25,532 | 42,263 | 20,488 | |||
Share based compensation expense | $ 43,290 | $ 10,321 | $ 4,849 | ||||
Shares reserved for future issuance | 8,580,219 | 8,968,866 | 5,109,062 | ||||
Restricted shares became fully vested and released as common stock | 25,532 | 42,263 | 22,155 | ||||
Restricted shares outstanding | 2,064,197 | 1,957,873 | 267,173 | ||||
Supplemental Incentive Plans | |||||||
Class Of Stock [Line Items] | |||||||
Shares, granted | 95,404 | 0 | |||||
Montrose 2017 Stock Incentive Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares of vested over period | 5 years | ||||||
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 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. | ||||||
Share based compensation expense | $ 90,000 | ||||||
Shares reserved for future issuance | [2] | 7,724,524 | 6,921,597 | 2,945,443 | |||
Restricted shares forfeited | 0 | 0 | 1,667,000 | ||||
Montrose Amended and Restated 2013 Stock Option Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares outstanding from exercised options | 1,310,430 | 1,209,090 | 249,200 | ||||
RSUs | Montrose 2017 Stock Incentive Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares, granted | 1,355,182 | ||||||
Shares, vesting rights, percentage | 50% | ||||||
Shares reserved for future issuance | 135,517 | ||||||
Performance-Vested RSUs | Montrose 2017 Stock Incentive Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares, granted | 316,209 | ||||||
Shares, vesting rights, percentage | 50% | ||||||
Stock Appreciation Rights (SARs) | Two Thousand Seventeen Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares of vested over period | 5 years | ||||||
Shares, granted | 3,000,000 | ||||||
Share based compensation expense | $ 9,280 | $ 307 | |||||
Exercise price | $ 66.79 | ||||||
Remaining contractual terms | 10 years | ||||||
Fair value vested in period | $ 46,000 | ||||||
Weighted average remaining contract life | 8 years 11 months 15 days | ||||||
Stock Options | Montrose 2017 Stock Incentive Plan | Board of Directors | |||||||
Class Of Stock [Line Items] | |||||||
Shares of vested over period | 4 years | ||||||
Stock Options | Montrose 2017 Stock Incentive Plan | Executive Officers | |||||||
Class Of Stock [Line Items] | |||||||
Shares of vested over period | 3 years | ||||||
Vesting frequency of period | 1 year | ||||||
Stock Options | Montrose 2017 Stock Incentive Plan | On the two-year anniversary of the grant | Board of Directors | |||||||
Class Of Stock [Line Items] | |||||||
Shares, vesting rights, percentage | 50% | ||||||
Stock Options | Montrose 2017 Stock Incentive Plan | Fourth Anniversary | Board of Directors | |||||||
Class Of Stock [Line Items] | |||||||
Shares, vesting rights, percentage | 50% | ||||||
Stock Options | Two Thousand Seventeen Plan | |||||||
Class Of Stock [Line Items] | |||||||
Share based compensation expense | $ 10,038 | $ 8,034 | $ 3,234 | ||||
Restricted Stock | Montrose 2017 Stock Incentive Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares RSAs granted | 10,920 | 19,309 | 33,229 | ||||
Restricted Stock | Two Thousand Seventeen Plan | |||||||
Class Of Stock [Line Items] | |||||||
Share based compensation expense | $ 23,972 | $ 1,959 | $ 1,279 | ||||
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 shares of common stock due to the exercise of warrants and the vesting of restricted stock In January 2023, the Board of Directors ratified the addition of 1,189,801 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. |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Issued, Cancelled and Repurchased Shares of Common Stock (Details) - USD ($) | 12 Months Ended | ||||||
Jul. 27, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of common stock shares issued in connection with business acquisition | 178,721 | 791,139 | |||||
Acquisitions, Average Price per Share | $ 46.55 | $ 31.60 | |||||
Acquisitions, Total | $ 8,320,000 | $ 25,000,000 | |||||
Redemption of Series A-1, Shares | 1,786,739 | ||||||
Redemption of Series A-1, Average Price per Share | $ 15 | ||||||
Redemption of Series A-1, Total | $ (26,801,000) | ||||||
Redemption of the series A-1 preferred stock | $ 26,801,000 | ||||||
Exercise of warrants, Shares | 67,713 | 67,713 | [1] | 2,534,239 | [1] | ||
Exercise of warrants, Average Price per Share | [1] | $ 17.19 | $ 0.01 | ||||
Exercise of warrants, Total | [1] | $ 25,000 | |||||
Exercise of options, Shares | 101,340 | 959,890 | 47,600 | ||||
Exercise of options, Average Price per Share | $ 16.21 | $ 7.54 | $ 8.05 | ||||
Exercise of options, Total | $ 1,643,000 | $ 7,237,000 | $ 383,000 | ||||
Restricted shares, net | [1] | 25,532 | 42,263 | 20,488 | |||
Restricted shares net, Average Price per Share | [1] | $ 66.30 | $ 30.69 | $ 24 | |||
Payment of earn-out liability and purchase price true up, Shares | 563,807 | ||||||
Payment of earn-out liability and purchase price true up, Average Price per share | $ 46.26 | ||||||
Payment of earn-out liability and purchase price true up, Total | $ 26,084,000 | ||||||
Cancellation of shares | (117,785) | ||||||
Cancellation of shares, Average Price per Share | $ 17.15 | ||||||
Common Stock Issued and Cancelled, Shares | 126,872 | 4,687,394 | 16,562,420 | ||||
Common Stock Issued and Cancelled, Average Price per share | $ 26.29 | $ 45.63 | $ 13.64 | ||||
Common Stock Issued and Cancelled, Total | $ 1,643,000 | $ 211,424,000 | $ 224,709,000 | ||||
IPO | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock issued, shares | 11,500,000 | 11,500,000 | |||||
Common stock issued, Average Price per Shares | $ 15 | ||||||
Common stock issued, Total | $ 172,500,000 | ||||||
Follow-on offering | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock issued, shares | 2,875,000 | ||||||
Common stock issued, Average Price per Shares | $ 59.05 | ||||||
Common stock issued, Total | $ 169,783,000 | ||||||
[1] Represents the non-cash release of shares of common stock due to the exercise of warrants and the vesting of restricted stock |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2017 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized to be issued | 5,140,112,000 | 3,944,750,000 | 2,945,443,000 | |
Shares available for grant | [1] | 367,243,000 | 23,153,000 | 848,241,000 |
2013 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized to be issued | 2,037,019,000 | 2,047,269,000 | 2,047,269,000 | |
[1] In January 2023 the Board of Directors ratified the addition of 1,189,801 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 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Parenthetical) (Details) - Two Thousand Seventeen Plan - shares | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares available for grant | [1] | 367,243,000 | 23,153,000 | 848,241,000 | |
Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares available for grant | 1,189,801 | ||||
[1] In January 2023 the Board of Directors ratified the addition of 1,189,801 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 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | $ 43,290 | $ 10,321 | $ 4,849 |
Cost of Revenue | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 1,507 | 1,492 | 1,577 |
Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 41,783 | 8,829 | 3,272 |
2017 Plan | Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 10,038 | 8,034 | 3,234 |
2017 Plan | Stock Options | Cost of Revenue | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 1,507 | 1,482 | 1,441 |
2017 Plan | Stock Options | Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 8,531 | 6,552 | 1,793 |
2017 Plan | Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 23,972 | 1,959 | 1,279 |
2017 Plan | Restricted Stock | Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 23,972 | 1,959 | 1,279 |
2017 Plan | Stock Appreciation Rights (SARs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 9,280 | 307 | |
2017 Plan | Stock Appreciation Rights (SARs) | Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | $ 9,280 | 307 | |
2013 Plan | Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 21 | 336 | |
2013 Plan | Stock Options | Cost of Revenue | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | 10 | 136 | |
2013 Plan | Stock Options | Selling, General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock compensation expense | $ 11 | $ 200 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Restricted Stock Activity (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Average Price per Share | [1] | $ 66.30 | $ 30.69 | $ 24 |
Montrose 2017 Stock Incentive Plan | Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares | 10,920 | 19,309 | 33,229 | |
Montrose 2017 Stock Incentive Plan | Restricted stock units awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares | 106,324 | 1,690,700 | 33,229 | |
Average Price per Share | $ 46.82 | $ 66.45 | $ 31.60 | |
Total (in thousands) | 4,978,000 | 112,347,000 | 1,050,000 | |
[1] Represents the non-cash release of shares of common stock due to the exercise of warrants and the vesting of restricted stock |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Performance Hurdles (Details) | 12 Months Ended |
Dec. 31, 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 | 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 | 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 | 33% |
Stockholders' Equity - Summar_5
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Options to Purchase Common Stock Exercised | (101,340) | (959,890) | (47,600) | |
Montrose 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 | 617,852 | |
Options to Purchase Common Stock Granted | 698,534 | 300,620 | 1,243,027 | |
Options to Purchase Common Stock Forfeited/cancelled | (96,211) | (33,875) | (17,225) | |
Options to Purchase Common Stock Expired | (1,550) | (2,500) | ||
Options to Purchase Common Stock Exercised | (59,486) | (68,695) | (925) | |
Options to Purchase Common Stock Outstanding Ending Balance | 2,579,566 | 2,036,729 | 1,840,229 | 617,852 |
Options to Purchase Common Stock Exercisable | 1,183,574 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-Average Exercise Price per Share Beginning Balance | $ 26 | $ 23 | $ 24 | |
Weighted-Average Exercise Price per Share Granted | 44 | 44 | 22 | |
Weighted-Average Exercise Price per Share Forfeited/cancelled | 32 | 28 | 22 | |
Weighted-Average Exercise Price per Share Expired | 19 | 18 | ||
Weighted-Average Exercise Price per Share Exercised | 23 | 22 | 14 | |
Weighted-Average Exercise Price per Share Ending Balance | 31 | 26 | 23 | $ 24 |
Weighted-Average Exercise Price per Share, Exercisable | 27 | |||
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 Beginning Balance | 14 | 12 | 12 | |
Weighted Average Grant Date Fair Value per Share Granted | 16 | 23 | 12 | |
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 15 | $ 14 | $ 12 | $ 12 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 7 years 9 months 3 days | 8 years 3 months 18 days | 9 years 1 month 2 days | 7 years 9 months 25 days |
Weighted Average Remaining Contract Life, Exercisable | 7 years 1 month 24 days | |||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 91,030 | $ 15,598 | $ 4,696 | |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 1,398 | 2,169 | $ 8 | |
Aggregate Intrinsic Value of In-The-Money Options Outstanding | 37,295 | $ 91,030 | $ 15,598 | $ 4,696 |
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 21,181 | |||
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 | 1,855,469 | |
Options to Purchase Common Stock Forfeited/cancelled | (7,500) | |||
Options to Purchase Common Stock Expired | (125) | (625) | (11,300) | |
Options to Purchase Common Stock Exercised | (41,854) | (889,570) | (48,800) | |
Options to Purchase Common Stock Outstanding Ending Balance | 855,695 | 897,674 | 1,787,869 | 1,855,469 |
Options to Purchase Common Stock Exercisable | 855,695 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-Average Exercise Price per Share Beginning Balance | $ 6 | $ 6 | $ 6 | |
Weighted-Average Exercise Price per Share Forfeited/cancelled | 10 | |||
Weighted-Average Exercise Price per Share Expired | 6 | 6 | 6 | |
Weighted-Average Exercise Price per Share Exercised | 6 | 6 | 8 | |
Weighted-Average Exercise Price per Share Ending Balance | 6 | 6 | 6 | $ 6 |
Weighted-Average Exercise Price per Share, Exercisable | 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 Beginning Balance | 2 | 1 | 1 | |
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 2 | $ 2 | $ 1 | $ 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 3 years 3 months 21 days | 4 years 4 months 13 days | 5 years 4 months 24 days | 6 years 4 months 24 days |
Weighted Average Remaining Contract Life, Exercisable | 3 years 3 months 21 days | |||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 57,529 | $ 43,867 | $ 46,617 | |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 1,626 | 45,161 | 908 | |
Aggregate Intrinsic Value of In-The-Money Options Outstanding | 32,478 | $ 57,529 | $ 43,867 | $ 46,617 |
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 32,478 |
Stockholders' Equity - Summar_6
Stockholders' Equity - Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Common stock value (per share) | $ 43.74 | $ 44.28 | $ 21.81 |
Expected volatility | 33.44% | 55.34% | 46.59% |
Risk- free interest rate | 2.03% | 0.82% | 0.65% |
Expected life (years) | 6 years 11 months 23 days | 6 years 4 months 24 days | 7 years |
Forfeiture rate | 0% | 0% | 0% |
Dividend rate | 0% | 0% | 0% |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 8,580,219 | 8,968,866 | 5,109,062 | |
Warrant Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 116,350 | |||
Montrose 2013 Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 855,695 | 2,047,269 | 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 | [1] | 7,724,524 | 6,921,597 | 2,945,443 |
[1] In January 2023, the Board of Directors ratified the addition of 1,189,801 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. |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Parenthetical) (Details) - shares | 1 Months Ended | ||||||
Jan. 31, 2021 | Jan. 31, 2023 | Dec. 31, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | 8,580,219 | 8,968,866 | 5,109,062 | ||||
Montrose 2017 Stock Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | [1] | 7,724,524 | 6,921,597 | 2,945,443 | |||
Montrose 2017 Stock Incentive Plan | Subsequent Event | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | 1,189,801 | ||||||
Montrose 2013 Stock Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | 855,695 | 2,047,269 | 2,047,269 | ||||
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 | ||||||
Common stock issued upon vesting of performance SARs | 2,000,000 | ||||||
[1] In January 2023, the Board of Directors ratified the addition of 1,189,801 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 - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net (Loss) Income Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (31,819) | $ (25,325) | $ (57,949) |
Accretion of redeemable series A-1 preferred stock | (17,601) | ||
Redeemable series A-1 preferred stock deemed dividend | (24,341) | ||
Convertible and redeemable series A-2 preferred stock dividend | (16,400) | (16,400) | (6,970) |
Net loss attributable to common stockholders – basic and diluted | $ (48,219) | $ (41,725) | $ (106,861) |
Weighted-average common shares outstanding - basic | 29,688 | 26,724 | 16,479 |
Weighted-average common shares outstanding - diluted | 29,688 | 26,724 | 16,479 |
Net loss per share attributable to common stockholders - basic | $ (1.62) | $ (1.56) | $ (6.48) |
Net loss per share attributable to common stockholders - diluted | $ (1.62) | $ (1.56) | $ (6.48) |
Net Loss Per Share - Equity Sha
Net Loss Per Share - Equity Shares Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount share equivalents | 13,196,258 | 10,466,419 | 8,075,399 |
Stock Options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount share equivalents | 3,435,261 | 1,687,413 | 2,237,910 |
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount share equivalents | 1,777,715 | 1,693,923 | 187,989 |
Series A-2 | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of loss per share amount | 4,983,282 | 4,085,083 | 5,533,150 |
Stock Appreciation Rights (SARs) | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount share equivalents | 3,000,000 | 3,000,000 | |
Warrants | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount share equivalents | 116,350 |
Net Loss Per Share - Equity S_2
Net Loss Per Share - Equity Shares Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders (Parenthetical) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Number of Shares Out of Money | 6,886,942 | 4,051,206 | 728,143 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 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 Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Segment Revenues | $ 544,416 | $ 546,413 | $ 328,243 |
Segment Adjusted EBITDA | 68,450 | 77,642 | 54,476 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment Revenues | 544,416 | 546,413 | 328,243 |
Segment Adjusted EBITDA | 99,662 | 107,724 | 72,532 |
Assessment, Permitting and Response | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment Revenues | 187,234 | 261,865 | 98,521 |
Segment Adjusted EBITDA | 37,458 | 57,128 | 24,208 |
Measurements and Analysis | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment Revenues | 172,432 | 153,208 | 151,557 |
Segment Adjusted EBITDA | 31,588 | 31,270 | 39,386 |
Remediation and Reuse | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment Revenues | 184,750 | 131,340 | 78,165 |
Segment Adjusted EBITDA | 30,616 | 19,326 | 8,938 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Segment Adjusted EBITDA | $ (31,212) | $ (30,082) | $ (18,056) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Measure to Loss Before Benefit from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Segment Reporting [Abstract] | ||||||
Total | $ 68,450 | $ 77,642 | $ 54,476 | |||
Interest expense, net | (5,239) | (11,615) | (13,819) | |||
Income tax expense | (2,250) | (1,709) | (851) | |||
Depreciation and amortization | (47,479) | (44,810) | (37,274) | |||
Stock-based compensation | (43,290) | (10,321) | (4,849) | |||
Start-up losses and investment in new services | (2,277) | (4,407) | (2,182) | |||
Acquisition costs | (1,891) | (2,088) | (4,344) | |||
Fair value changes in financial instruments | 3,396 | (2,195) | (20,319) | |||
Fair value changes in business acquisitions contingent consideration | 3,227 | (24,372) | (12,942) | |||
Short term purchase accounting fair value adjustment to deferred revenue | (243) | |||||
Public offering expense | (7,657) | |||||
Expenses related to financing transactions | (7) | (50) | (378) | |||
Other losses or expenses | (4,459) | [1] | (1,400) | [2] | (7,567) | [3] |
Net loss | $ (31,819) | $ (25,325) | $ (57,949) | |||
[1] Amounts include costs associated with the exiting of the legacy water treatment and biogas operations and maintenance contracts and the Company's start-up lab in Berkley, California, as well as an impairment charge for certain operating lease right-of-use assets (Note 7) and severance costs related to the restructuring within our soil remediation business. 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. During the first quarter of 2020, the Company determined to reduce the footprint of its environmental lab in Berkeley, California, and to exit its non-specialized municipal water engineering service line and its food waste biogas engineering service line. As a part of discontinuing these service lines, the Company made the decision to book an additional bad debt reserve related to the uncertainty around the ability to collect on receivables related to these service lines (Note 4). It was determined that the discontinuation of these service lines did not represent a strategic shift that had (or will have) a major effect on the Company’s operations and financial results therefore did not meet the requirements to be classified as discontinued operations. |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Related party transaction amount | $ 0 | $ 0 | |
Number of shares issued as dividend payment | 1,786,739 | ||
Number of additional common stock outstanding owned by related party | 2,534,239 | ||
Acquisition Targets | Selling, General and Administrative Expenses | |||
Related Party Transaction [Line Items] | |||
Payment to related party | $ 100 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 5 Months Ended | 12 Months Ended | ||
May 22, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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% | 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 | $ 5.7 | $ 2.6 | $ 1.2 | |
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% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Feb. 01, 2023 |
Subsequent Event | EAI | |
Subsequent Event [Line Items] | |
Percentage of interests acquired | 100% |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Elements of Purchase Price of Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Feb. 01, 2023 | Jan. 03, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Subsequent Event [Line Items] | ||||||
Cash | $ 29,744 | $ 59,486 | $ 175,450 | |||
Other Purchase Price Components | 1,678 | 11,866 | (1,789) | |||
Total Purchase Price | $ 34,088 | $ 87,076 | $ 243,865 | |||
Frontier | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash | [1] | $ 1,146 | ||||
Total Purchase Price | $ 1,146 | |||||
EAI | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash | [1] | $ 3,750 | ||||
Other Purchase Price Components | [2] | 1,412 | ||||
Total Purchase Price | $ 5,162 | |||||
[1] The cash portion of this acquisition’s purchase price was funded through cash on hand. The other purchase price component consists of liabilities assumed. |