Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
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 | 34,081,219 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-39394 | |
Entity Tax Identification Number | 46-4195044 | |
Entity Incorporation State Country Code | DE | |
Entity Address Address Line1 | 5120 Northshore Drive | |
Entity Address City Or Town | North Little Rock | |
Entity Address State Or Province | AR | |
Entity Address Postal Zip Code | 72118 | |
City Area Code | 501 | |
Local Phone Number | 900-6400 | |
Security12b Title | Common Stock, par value $0.000004 per share | |
Security Exchange Name | NYSE |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 9,486 | $ 23,240 |
Accounts receivable, net | 104,734 | 112,360 |
Contract assets | 73,466 | 51,629 |
Prepaid and other current assets | 16,752 | 13,695 |
Total current assets | 204,438 | 200,924 |
Non-current assets: | ||
Property and equipment, net | 59,745 | 56,825 |
Operating lease right-of-use asset, net | 32,869 | 32,260 |
Finance lease right-of-use asset, net | 14,588 | 13,248 |
Goodwill | 463,450 | 364,449 |
Other intangible assets, net | 134,424 | 140,813 |
Other assets | 8,584 | 8,267 |
Total assets | 918,098 | 816,786 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 58,645 | 59,920 |
Accrued payroll and benefits | 24,125 | 34,660 |
Business acquisitions contingent consideration, current | 11,782 | 3,592 |
Current portion of operating lease liabilities | 10,074 | 9,963 |
Current portion of finance lease liabilities | 4,155 | 3,956 |
Current portion of long-term debt | 16,715 | 14,196 |
Total current liabilities | 125,496 | 126,287 |
Non-current liabilities: | ||
Business acquisitions contingent consideration, long-term | 28,679 | 2,448 |
Other non-current liabilities | 6,309 | 6,569 |
Deferred tax liabilities, net | 5,849 | 6,064 |
Operating lease liability, net of current portion | 25,459 | 25,048 |
Finance lease liability, net of current portion | 8,921 | 8,185 |
Long-term debt, net of deferred financing fees | 280,948 | 148,988 |
Total liabilities | 500,698 | 342,606 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in-capital | 548,443 | 531,831 |
Accumulated deficit | (223,713) | (210,356) |
Accumulated other comprehensive (loss) income | (258) | (223) |
Total stockholders’ equity | 324,472 | 321,252 |
Total liabilities, convertible and redeemable series A-2 preferred stock and stockholders' equity | 918,098 | 816,786 |
Conversion Option | ||
Non-current liabilities: | ||
Conversion option | 19,037 | 19,017 |
Convertible And Redeemable Series A-2 Preferred Stock | ||
Non-current liabilities: | ||
Redeemable series preferred stock | $ 92,928 | $ 152,928 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Common stock, par value | $ 0.000004 | $ 0.000004 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 30,617,862 | 30,190,231 |
Common stock, shares outstanding | 30,617,862 | 30,190,231 |
Convertible And Redeemable Series A-2 Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 11,667 | 17,500 |
Temporary equity, shares issued | 11,667 | 17,500 |
Temporary equity, shares outstanding | 11,667 | 17,500 |
Temporary equity, aggregate liquidation preference | $ 122.2 | $ 182.2 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenues | $ 155,325 | $ 131,428 |
Cost of revenues (exclusive of depreciation and amortization shown below) | 96,557 | 81,633 |
Selling, general and administrative expense | 57,074 | 49,613 |
Fair value changes in business acquisition contingencies | 106 | (398) |
Depreciation and amortization | 11,653 | 10,555 |
Loss from operations | (10,065) | (9,975) |
Other expense | ||
Other income (expense), net | 507 | (1,836) |
Interest expense, net | (3,306) | (1,541) |
Total other income (expense), net | (2,799) | (3,377) |
Loss before expense from income taxes | (12,864) | (13,352) |
Income tax expense | 493 | 1,367 |
Net loss | (13,357) | (14,719) |
Equity adjustment from foreign currency translation | (35) | 12 |
Comprehensive loss | (13,392) | (14,707) |
Convertible and redeemable series A-2 preferred stock dividend | (2,814) | (4,100) |
Net loss attributable to common stockholders | $ (16,171) | $ (18,819) |
Weighted average common shares outstanding - basic | 30,381 | 29,857 |
Weighted average common shares outstanding - diluted | 30,381 | 29,857 |
Net loss per share attributable to common stockholders - basic | $ (0.53) | $ (0.63) |
Net loss per share attributable to common stockholders - diluted | $ (0.53) | $ (0.63) |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Convertible And Redeemable Series A-2 Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2022 | $ 313,187 | $ 492,676 | $ (179,497) | $ 8 | ||
Beginning balance, shares at Dec. 31, 2022 | 29,746,793 | |||||
Beginning balance at Dec. 31, 2022 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2022 | 17,500 | |||||
Net loss | (14,719) | (14,719) | ||||
Stock-based compensation | 13,035 | 13,035 | ||||
Dividend payment to the Series A-2 preferred stockholders | (4,100) | $ (4,100) | (4,100) | |||
Common stock issued | $ 2,690 | 2,690 | ||||
Common stock issued, shares | 214,571 | 214,571 | ||||
Accumulated other comprehensive income | $ 12 | 12 | ||||
Ending balance at Mar. 31, 2023 | 310,105 | 504,301 | (194,216) | 20 | ||
Ending balance, shares at Mar. 31, 2023 | 17,500 | |||||
Ending balance at Mar. 31, 2023 | $ 152,928 | |||||
Ending balance, shares at Mar. 31, 2023 | 29,961,364 | |||||
Beginning balance at Dec. 31, 2023 | 321,252 | 531,831 | (210,356) | (223) | ||
Beginning balance, shares at Dec. 31, 2023 | 30,190,231 | |||||
Beginning balance at Dec. 31, 2023 | $ 152,928 | |||||
Beginning balance, shares at Dec. 31, 2023 | 17,500 | |||||
Net loss | (13,357) | (13,357) | ||||
Stock-based compensation | 11,272 | 11,272 | ||||
Redemption of Series A-2 preferred stock, shares | (5,833) | |||||
Redemption of Series A-2 preferred stock | $ (60,000) | |||||
Dividend payment to the Series A-2 preferred stockholders | (2,814) | $ (2,800) | (2,814) | |||
Common stock issued | $ 8,154 | 8,154 | ||||
Common stock issued, shares | 427,631 | 427,631 | ||||
Accumulated other comprehensive income | $ (35) | (35) | ||||
Ending balance at Mar. 31, 2024 | $ 324,472 | $ 548,443 | $ (223,713) | $ (258) | ||
Ending balance, shares at Mar. 31, 2024 | 11,667 | |||||
Ending balance at Mar. 31, 2024 | $ 92,928 | |||||
Ending balance, shares at Mar. 31, 2024 | 30,617,862 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Operating activities: | |||
Net loss | $ (13,357) | $ (14,719) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
(Recovery) provision for credit loss | (886) | 444 | $ 3,142 |
Depreciation and amortization | 11,653 | 10,555 | |
Amortization of right-of-use asset | 2,625 | 2,491 | |
Stock-based compensation expense | 11,272 | 13,035 | |
Fair value changes in financial instruments | (297) | 1,873 | |
Fair value changes in business acquisition contingencies | 106 | (398) | |
Deferred income taxes | (414) | 1,367 | |
Other | (91) | 458 | |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable and contract assets | (9,093) | 9,615 | |
Prepaid expenses and other current assets | (2,538) | (3,363) | |
Accounts payable and other accrued liabilities | (7,824) | (11,643) | |
Accrued payroll and benefits | (10,000) | (4,350) | |
Change in operating leases | (3,177) | (2,336) | |
Net cash (used in) provided by operating activities | (22,021) | 3,029 | |
Investing activities: | |||
Proceeds from corporate owned and property insurance | 40 | 75 | |
Purchases of property and equipment | (5,979) | (4,134) | |
Proprietary software development and other software costs | (1,300) | (638) | |
Purchase price true ups | 320 | (505) | |
Cash paid for acquisitions, net of cash acquired | (58,119) | (6,525) | |
Net cash used in investing activities | (65,038) | (11,727) | |
Financing activities: | |||
Proceeds from line of credit | 166,995 | ||
Repayment of the line of credit | (78,799) | ||
Repayment of aircraft loan | (261) | ||
Proceeds from term loan | 50,000 | ||
Repayment of term loan | (3,281) | (2,188) | |
Payment of contingent consideration and other purchase price true ups | (363) | (27) | |
Repayment of finance leases | (1,083) | (1,029) | |
Payments of deferred financing costs | (348) | ||
Proceeds from issuance of common stock for exercised stock options | 487 | 2,690 | |
Dividend payment to the series A-2 stockholders | (4,100) | ||
Repayment to the series A-2 stockholders | (60,000) | ||
Net cash provided by (used in) financing activities | 73,347 | (4,654) | |
Change in cash, cash equivalents and restricted cash | (13,712) | (13,352) | |
Foreign exchange impact on cash balance | (42) | 318 | |
Cash, cash equivalents and restricted cash: | |||
Beginning of year | 23,240 | 89,828 | 89,828 |
End of period | 9,486 | 76,794 | $ 23,240 |
Supplemental disclosures of cash flows information: | |||
Cash paid for interest | 3,098 | 1,347 | |
Cash paid for income tax | 292 | 155 | |
Supplemental disclosures of non-cash investing and financing activities: | |||
Accrued purchases of property and equipment | 163 | 3,096 | |
Property and equipment purchased under finance leases | 2,058 | 2,405 | |
Common stock issued to acquire new businesses | 6,580 | ||
Acquisitions unpaid contingent consideration | 40,461 | $ 7,855 | |
Accrued dividend payment | 2,814 | ||
Acquisitions contingent consideration paid in common stock | $ 1,087 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (13,357) | $ (14,719) |
Description of the Business and
Description of the Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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 120 offices across the United States, Canada, Australia and Europe and approximately 3,200 employees as of March 31, 2024. 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 segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects and development projects. The Company works closely with clients to navigate the regulatory process at the local, state, provincial and federal levels, identify the potential environmental and political impacts of their decisions and develop practical mitigation approaches, as needed. In addition to environmental toxicology, and given the Company's expertise in helping businesses plan for and respond to disruptions, the Company's scientists and response teams have helped clients navigate their preparation for and response to emergency response situations. Measurement and Analysis segment is one of the largest providers of environmental testing and laboratory services in North America. The Company's highly credentialed 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. The Company's offerings include source and ambient air testing and monitoring, leak detection, and advanced multi-media laboratory services, including air, soil, stormwater, wastewater and drinking water analysis. Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily to treat contaminated water, remove contaminants from soil or create biogas from waste. The Company's team, including engineers, scientists and consultants, provides these services to assist clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations. The Company does not own the properties or facilities at which it implements these projects or the underlying liabilities, nor does the Company own material amounts of the equipment used in projects. Basis of Presentation —The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The unaudited condensed consolidated financial statements include all accounts of the Company and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2023 . Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All intercompany transactions, accounts and profits, have been eliminated in the unaudited condensed consolidated financial statements. |
Summary of New Accounting Prono
Summary of New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Summary of New Accounting Pronouncements | 2. SUMMARY OF NEW ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures. The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. ASU 2023-07 is effective for the Company's fiscal year beginning January 1, 2024 and requires the use of a retrospective approach to all prior periods presented. The Company adopted the standard on January 1, 2024 , and plans to adopt the standard for interim periods beginning January 1, 2025, with early adoption permitted. The Company is evaluating the potential impact of its adoption of ASU 2023-07 on the Company's audited Consolidated Financial Statements but does not anticipate that such an adoption will have a material impact. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2023, the FASB issued ASU 2023-05, under which an entity that qualifies as either a joint venture or a corporate joint venture is required to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture must initially measure its assets and liabilities at fair value on the formation date. The amendments in ASU 2023-05 are effective for all joint ventures within the ASU’s scope that are formed on or after January 1, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for the Company beginning January 1, 2025 and allows the use of a prospective or retrospective approach. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements. |
Revenues and Accounts Receivabl
Revenues and Accounts Receivable | 3 Months Ended |
Mar. 31, 2024 | |
Revenues And Accounts Receivable [Abstract] | |
Revenues and Accounts Receivable | 3. REVENUES AND ACCOUNTS RECEIVABLE The Company’s main revenue sources derive from the following revenue streams: Assessment, Permitting and Response Revenues —Assessment, Permitting and Response revenues are generated from multidisciplinary environmental consulting services. The majority of the contracts are fixed-price or time and material based. Measurement and Analysis Revenues —Measurement and Analysis revenues are generated from emissions sampling, testing and reporting services, leak detection services, ambient air monitoring services and laboratory testing services. The majority of the contracts are fixed-price or time-and-materials based. Remediation and Reuse Revenues —Remediation and Reuse revenues are generated from engineering, design, implementation and operating and maintenance (“O&M”) services primarily to treat contaminated water, remove contaminants from soil or create biogas from waste. Engineering, design and implementation contracts are predominantly fixed-fee and time-and-materials based. Services on the majority of O&M contracts are provided under long-term fixed-fee contracts. Disaggregation of Revenue —The Company disaggregates revenue by its operating segments and geographic location . The Company believes disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, and uncertainty of revenue and cash flows are affected by economic factors. Disaggregated revenue disclosures are provided in Note 18 - Segment Information and Geographic Location 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 other accrued expenses, respectively, on the unaudited condensed consolidated statements of financial position. Amounts are generally billed at periodic intervals (e.g. weekly, bi-weekly or monthly) as work progresses in accordance with agreed-upon contractual terms. The Company utilizes the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component as the period between when the Company transfers services to a customer and when the customer pays for those services is one year or less. Amounts recorded as unbilled receivables are generally for services the Company is not entitled to bill based on the passage of time. Under certain contracts, billing occurs subsequent to revenue recognition, resulting in contract assets. The Company sometimes receives advances or deposits from customers before revenue is recognized, resulting in contract liabilities. The following table present s the Company’s contract balances: March 31, December 31, 2024 2023 Contract assets $ 73,466 $ 51,629 Contract liabilities 10,016 8,132 Contract assets acquired through business acquisitions were $ 0.3 million and $ 2.2 million as of March 31, 2024 and December 31, 2023 , respectively. No material contract liabilities were acquired through business acquisitions as of March 31, 2024 and December 31, 2023. Revenue recognized during the three months ended March 31, 2024, included in the contract liabilities balance at the beginning of the year was $ 4.5 million. The revenue recognized from the contract liabilities consisted of the Company satisfying performance obligations during the normal course of business. 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 March 31, 2024 and December 31, 2023, the estimated revenue expected to be recognized in the future related to unsatisfied performance obligations was approximately $ 83.8 million and $ 81.9 million, respectively. As of March 31, 2024, the Company expected to recognize approximately 70 % of this amount as revenue within a year , and the remaining 30 % to be recognized as revenue beyond one year . Accounts Receivable, Net —Th e Company extends non-interest-bearing trade credit to its customers in the ordinary course of business. Accounts receivable, net consisted of the following: March 31, December 31, Accounts receivable, invoiced $ 106,870 $ 115,064 Accounts receivable, other 483 20 Allowance for doubtful accounts ( 2,619 ) ( 2,724 ) Accounts receivable, net $ 104,734 $ 112,360 The Company did no t have any customers that exceeded 10.0% of its gross receivables as of March 31, 2024 and December 31, 2023 and did no t have any customers that exceed 10% of its revenue for the three months ended March 31, 2024 and 2023. The allowance for doubtful accounts consisted of the following: Beginning Balance Bad Debt (Recovery) Expense Charged to Allowance Ending Balance Three months ended March 31, 2024 $ 2,724 $ ( 886 ) $ 781 $ 2,619 Year ended December 31, 2023 1,915 3,142 ( 2,333 ) 2,724 |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | 4. PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets consisted of the following: March 31, December 31, 2024 2023 Deposits $ 1,756 $ 1,764 Prepaid expenses 11,992 8,112 Supplies 3,004 3,819 Prepaid and other current assets $ 16,752 $ 13,695 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost or estimated fair value for assets acquired through business combinations. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term, including options that are deemed to be reasonably assured, or the estimated useful life of the improvement. Property and equipment, net, consisted of the following: Estimated March 31, December 31, Useful Life 2024 2023 Lab and test equipment 7 years $ 20,823 $ 20,341 Vehicles 5 years 6,063 6,033 Equipment 3 - 7 years 52,324 50,387 Furniture and fixtures 7 years 2,961 2,963 Leasehold improvements 7 years 11,845 10,808 Aircraft 10 - 20 years 12,312 12,312 Building 39 years 5,748 5,748 112,076 108,592 Land 1,089 1,089 Construction in progress 6,147 3,956 Less accumulated depreciation ( 59,567 ) ( 56,812 ) Total property and equipment, net $ 59,745 $ 56,825 Total depreciation expense included in the unaudited condensed consolidated statements of operations was $ 2.9 million and $ 2.2 million for the three months ended March 31, 2024 and 2023 , respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | 6. LEASES Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has finance leases for its vehicle and equipment leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years , and in some instances include one or more options to renew. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases. Finance and operating lease assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease. The Company calculates the present value of its finance and operating leases using an estimated incremental borrowing rate (“IBR”), which requires judgment. For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. For all other leases, the Company estimates the IBR based on the stated interest rate on the contract. Since many of the inputs used to calculate the rate implicit in the leases are not readily determinable from the lessee’s perspective, the Company does 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 ("ROU") 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. The Company does not record operating lease ROU assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets. When a lease is terminated before the expiration of the lease term, irrespective of whether the lease is classified as a finance lease or an operating lease, the lessee would derecognize the ROU asset and corresponding lease liability. Any difference would be recognized as a gain or loss related to the termination of the lease. Similarly, if a lessee is required to make any payments or receives any consideration when terminating the lease, it would include such amounts in the determination of the gain or loss upon termination. The components of lease expense were as follows: For the Three Months Ended March 31, Statement of Operations Location 2024 2023 Operating lease cost Lease cost Selling, general and administrative expense $ 2,994 $ 2,741 Variable lease cost Selling, general and administrative expense 456 326 Total operating lease cost 3,450 3,067 Finance lease cost Amortization of ROU assets Depreciation and amortization 1,278 1,154 Interest on lease liabilities Interest expense—net 189 130 Total finance lease cost 1,467 1,284 Total lease cost $ 4,917 $ 4,351 Supplemental cash flow information related to leases was as follows: For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 3,158 $ 2,557 Operating cash flows used in finance leases 189 130 Financing cash flows used in finance leases 1,085 1,029 Lease liabilities arising from new ROU assets: Operating leases 3,111 7,999 Finance leases 2,066 2,405 Weighted average remaining lease terms and weighted average discount rates were: March 31, 2024 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.31 3.56 Weighted average discount rate 4.42 % 6.44 % March 31, 2023 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.62 3.43 Weighted average discount rate 3.31 % 5.57 % The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year: Operating Leases Finance Leases Remainder of 2024 $ 8,760 $ 3,772 2025 9,617 3,989 2026 7,441 3,346 2027 5,120 2,344 2028 3,928 1,139 2029 and thereafter 4,293 99 Total undiscounted future minimum lease payments 39,159 14,689 Less imputed interest ( 3,626 ) ( 1,613 ) Total discounted future minimum lease payments $ 35,533 $ 13,076 |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Business Acquisitions | 7. BUSINESS ACQUISITIONS In line with the Company’s strategic growth initiatives, the Company acquired certain businesses during the three months ended March 31, 2024 and during the year ended December 31, 2023. The results of each of those acquired businesses are included in the unaudited condensed consolidated financial statements beginning on the respective acquisition date. Each transaction qualified as an acquisition of a business and was accounted for as a business combination. All acquisitions resulted in the recognition of goodwill. The Company paid these premiums resulting in such goodwill for a number of reasons, including expected synergies from combining operations of the acquiree and the Company while also growing the Company’s customer base, acquiring assembled workforces, expanding its presence in certain markets and expanding and advancing its product and service offerings. The Company recorded the assets acquired and liabilities assumed at their acquisition date fair value, with the difference between the fair value of the net assets acquired and the acquisition consideration reflected as goodwill. The identifiable intangible assets for acquisitions are valued using the excess earnings method discounted cash flow approach for customer relationships, the relief from royalty method for trade names, the patent and external proprietary software 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 unaudited condensed consolidated statements of financial position in accounts payable and other accrued liabilities, other non-current liabilities or accounts receivable-net in the case of working capital deficits. Contingent consideration outstanding from acquisitions are included on the unaudited condensed consolidated statements of financial position in business acquisition contingent consideration, current or in business acquisitions contingent consideration, long-term. The contingent consideration elements of the purchase price of the acquisitions are related to earn-outs which are based on the expected achievement of revenue or earnings thresholds as of the date of the acquisition and for which the maximum potential amount is limited. The Company considers several factors when determining whether or not contingent consideration liabilities are part of the purchase price, including the following: (i) the valuation of its acquisitions is not supported solely by the initial consideration paid, (ii) the former stockholders of acquired companies that remain as key employees receive compensation other than contingent consideration payments at a reasonable level compared with the compensation of the Company’s other key employees and (iii) contingent consideration payments are not affected by employment termination. The Company reviews and assesses the estimated fair value of contingent consideration at each reporting period. The Company may be required to make up to $ 40.4 million in aggregate earn-out payments between the years 2024 and 2026 in connection with certain of its business acquisitions, of which up to $ 14.2 million may be paid only in cash, up to $ 13.1 million may be paid only in common stock and up to $ 13.1 million may be paid, at the Company’s option, in cash or common stock. Transaction costs related to business combinations totaled $ 2.5 million and $ 0.8 million for the three months ended March 31, 2024 and March 31, 2023, respectively. These costs are expensed within selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. Acquisitions Completed During the Three Months Ended March 31, 2024 Epic Environmental Pty LTD (“EPIC”) —In January 2024, the Company completed the acquisition of EPIC by acquiring 100 % of its common stock. EPIC is an environmental science and engineering consultancy, based in Brisbane, Australia, and serving clients across Australia. Two Dot Consulting, LLC. (“2DOT”) —In February 2024, the Company completed the acquisition of 2DOT by acquiring 100 % of its ownership interest. 2DOT is a leading environmental consultancy specializing in regulatory services to the oil and gas, and renewable sectors in the Rocky Mountain and adjacent regions, and is based in Denver, Colorado. The following table summarizes the elements of the purchase price of the acquisitions completed during the three months ended March 31, 2024: Cash Common Other Contingent Total EPIC $ 19,914 $ 4,748 $ 678 $ 11,113 $ 36,453 2DOT 39,393 1,832 — 24,652 65,877 Total $ 59,307 $ 6,580 $ 678 $ 35,765 $ 102,330 The upfront cash payment made to acquire the acquisitions completed during the three months ended March 31, 2024 was funded through our revolving line of credit. The other purchase price components mainly consist of deferred purchase price liabilities and working capital amounts. The preliminary purchase price attributable to the acquisitions was allocated as follows: EPIC 2DOT Total (1) Cash $ 1,045 $ 143 $ 1,188 Accounts receivable and contract assets 1,772 2,003 3,775 Other current assets 78 278 356 Current assets 2,895 2,424 5,319 Property and equipment 43 111 154 Operating lease right-of-use asset 1 301 302 Goodwill 35,199 64,050 99,249 Total assets 38,138 66,886 105,024 Current liabilities 1,685 816 2,501 Operating lease liability—net of current portion — 193 193 Total liabilities 1,685 1,009 2,694 Purchase price $ 36,453 $ 65,877 $ 102,330 ___________________________________ (1) The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. EPIC and 2DOT are included in the Company’s Remediation and Reuse segment. For the acquisitions completed during the three months ended March 31, 2024, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2024 includes revenue of $ 3.9 million, and pre-tax income of $ 1.3 million, related to these acquisitions. Acquisitions Completed During the Year Ended December 31, 2023 Frontier Analytical Laboratories (“Frontier”) —In January 2023, the Company completed the acquisition of Frontier by acquiring certain of its assets and operations. Frontier is a specialized environmental laboratory based in El Dorado Hills, CA. Environmental Alliance, Inc. (“EAI”) —In February 2023, the Company completed the acquisition of EAI by acquiring 100.0 % of its common stock. EAI provides environmental remediation and consulting services, and is based in Wilmington, DE. GreenPath Energy LTD (“GreenPath”) —In May 2023, the Company completed the acquisition of GreenPath by acquiring 100.0 % of its common stock. GreenPath is a leading optical gas imaging and fugitive emissions management services firm and is based in Calgary, Canada. Matrix Solutions, Inc. ("Matrix") —In June 2023, the Company completed the acquisition of Matrix by acquiring 100.0 % of its common stock. Matrix is one of Canada’s leading environmental and engineering consulting companies and is based in Calgary, Canada. Vandrensning ApS. ("Vandrensning") —In July 2023, the Company completed the acquisition of Vandrensning by acquiring 100.0 % of its common stock. Vandrensning, based outside of Copenhagen, Denmark, specializes in water treatment solutions. Goodwill associated with the Frontier acquisition is deductible for income tax purposes. Frontier and GreenPath are included in the Company’s Measurement and Analysis segment. EAI, Matrix and Vandrensning are included in the Company’s Remediation and Reuse segment. For the acquisitions completed during the three months ended March 31, 2023, the results of operations since the acquisition dates have been combined with those of the Company. The Company’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2023 includes revenue of $ 1.0 million, and pre-tax income of $ 0.1 million, related to these acquisitions. During the three months ended March 31, 2024, measurement period adjustments of $ 0.3 million were recorded to goodwill as a result of the Company’s efforts to complete the valuation of certain acquired assets and assumed liabilities related to the acquisitions completed during the year ended December 31, 2023 (Note 8). Supplemental Unaudited Pro-Forma — The unaudited condensed consolidated financial information summarized in the following table gives effect to the 2024 and the 2023 acquisitions discussed above assuming they occurred on January 1, 2023. These unaudited consolidated pro-forma operating results do not assume any impact from revenue, cost or other operating synergies that are expected or may have been realized as a result of the acquisitions. These unaudited consolidated pro-forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the acquisitions occurred on January 1, 2023, nor does the information purport to reflect results for any future period. For the Three Months Ended March 31, 2024 2023 As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 155,325 $ 3,025 $ 158,350 $ 131,428 $ 23,646 $ 155,074 Net (loss) income ( 13,357 ) 1,336 ( 12,021 ) ( 14,719 ) ( 897 ) ( 15,616 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8. GOODWILL AND INTANGIBLE ASSETS Amounts related to goodwill are as follows: Assessment, Measurement Remediation Total Balance as of December 31, 2023 $ 184,946 $ 93,890 $ 85,613 $ 364,449 Goodwill acquired during the period — — 99,249 99,249 Prior year acquisitions measurement period adjustments — — ( 320 ) ( 320 ) Foreign currency translation impact — — 72 72 Balance as of March 31, 2024 $ 184,946 $ 93,890 $ 184,614 $ 463,450 Amounts related to finite-lived intangible assets are as follows: March 31, 2024 Estimated Gross Accumulated Net Finite lived intangible assets Customer relationships 2 - 15 years $ 228,166 $ 121,456 $ 106,710 Covenants not to compete 4 - 5 years 36,250 31,411 4,839 Trade names 1 - 5 years 24,434 21,306 3,128 Proprietary software 3 - 5 years 27,339 20,119 7,220 Patent 16 years 17,479 4,952 12,527 Total $ 333,668 $ 199,244 $ 134,424 December 31, 2023 Estimated Gross Accumulated Net Finite lived intangible assets Customer relationships 2 - 15 years $ 227,986 $ 116,226 $ 111,760 Covenants not to compete 4 - 5 years 36,250 30,889 5,361 Trade names 1 - 5 years 24,434 20,719 3,714 Proprietary software 3 - 5 years 26,486 19,309 7,177 Patent 16 years 17,479 4,678 12,801 Total $ 332,635 $ 191,821 $ 140,813 Intangible assets with finite lives are stated at cost, less accumulated amortization and impairment losses, if any. These intangible assets are amortized using the straight-line method over the estimated useful lives of the assets. Amortization expense was $ 7.4 million and $ 7.2 million for the three months ended March 31, 2024 and March 31, 2023, respectively. Future amortization expense is estimated to be as follows for each of the five following years and thereafter: December 31, 2024 (remaining) $ 27,027 2025 18,888 2026 16,183 2027 15,250 2028 11,914 Thereafter 45,162 Total $ 134,424 |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | 9. ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES Accounts payable and other accrued liabilities consisted of the following: March 31, December 31, 2024 2023 Accounts payable $ 25,027 $ 31,053 Accrued expenses 17,984 16,059 Other business acquisitions purchase price obligations 1,700 1,022 Contract liabilities 10,016 8,132 Other current liabilities 3,918 3,654 Total accounts payable and other accrued liabilities $ 58,645 $ 59,920 |
Accrued Payroll and Benefits
Accrued Payroll and Benefits | 3 Months Ended |
Mar. 31, 2024 | |
Statement of Financial Position [Abstract] | |
Accrued Payroll and Benefits | 10. ACCRUED PAYROLL AND BENEFITS Accrued payroll and benefits consisted of the following: March 31, December 31, 2024 2023 Accrued bonuses $ 4,526 $ 18,453 Accrued paid time off 5,036 1,316 Accrued payroll 11,007 11,814 Accrued other 3,556 3,077 Total accrued payroll and benefits $ 24,125 $ 34,660 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. INCOME TAXES The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting (“ASC 270”), and ASC 740. The Company’s effective tax rate (“ETR”) from continuing operations was ( 3.8 )% and ( 10.2 )% for the three months ended March 31, 2024 and March 31, 2023, respectively. Income tax expense recorded by the Company during the three months ended March 31, 2024 and March 31, 2023 was $ 0.5 million and $ 1.4 million, respectively. The difference between the ETR and federal statutory rate of 21.0 % is primarily attributable to items recorded for U.S. GAAP but permanently disallowed for U.S. federal income tax purposes, recognition of a U.S. federal and state valuation allowance and state and foreign income tax provisions. A valuation allowance is recorded when it is more-likely-than-not some of the Company’s deferred tax assets may not be realized. Significant judgment is applied when assessing the need for a valuation allowance and the Company considers future taxable income, reversals of existing deferred tax assets and liabilities and ongoing prudent and feasible tax planning strategies, in making such assessment. As of March 31, 2024, the Company’s U.S. federal, state and various foreign net deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance is maintained. The Company records uncertain tax positions in accordance with ASC 740, on the basis of a two-step process in which (i) the Company determines whether it is more likely than not a tax position will be sustained on the basis of the technical merits of such position and (ii) for those tax positions meeting the more-likely-than-not recognition threshold, the Company would recognize the largest amount of tax benefit that is more than 50.0% likely to be realized upon ultimate settlement with the related tax authority. The Company has determined it has no uncertain tax positions as of March 31, 2024 . The Company classifies interest and penalties recognized on uncertain tax positions as a component of income tax expense. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 12. DEBT Debt consisted of the following: March 31, December 31, 2024 2023 Term loan facility $ 200,938 $ 154,219 Revolving line of credit 88,195 — Aircraft loan 10,084 10,344 Less deferred debt issuance costs ( 1,554 ) ( 1,379 ) Total debt 297,663 163,184 Less current portion of long-term debt ( 16,715 ) ( 14,196 ) Long-term debt, less current portion $ 280,948 $ 148,988 Deferred Financing Costs —Costs relating to debt issuance have been deferred and are presented as discounted against the underlying debt instrument. These costs are amortized to interest expense over the terms of the underlying debt instruments. 2021 Credit Facility —On April 27, 2021, the Company entered into a Senior Secured Credit Agreement providing for a $ 300.0 million credit facility comprised of a $ 175.0 million term loan and a $ 125.0 million revolving line of credit (the “2021 Credit Facility”), and used a portion of the proceeds from the 2 021 Credit Facility to repay all amounts outstanding under the prior credit facility. The revolving line of credit portion of the 2021 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. In January 2024, the Company partially exercised its option to request an increase in the aggregate commitments to provide an additional $ 100.0 million credit availability under the 2021 Credit Facility, comprised of an additional $ 50.0 million term loan ("Additional Term Loan") and an additional $ 50.0 million in availability under the revolving line of credit. The 2021 Credit Facility term loan must be repaid in quarterly installments and shall amortize at the following future quarterly rates: Quarterly Installment Rate Date 2021 Credit Facility Term Loan Additional Term Loan June 30, 2024 1.88 % 1.25 % September 30, 2024 1.88 % 1.25 % December 31, 2024 1.88 % 1.25 % March 31, 2025 1.88 % 1.25 % June 30, 2025 1.88 % 1.25 % September 30, 2025 1.88 % 1.25 % December 31, 2025 2.50 % 1.25 % March 31, 2026 2.50 % 1.88 % April 27, 2026 Remaining balance Remaining balance Quarterly installment repayments for the three months ended March 31, 2024 and March 31, 2023 were $ 3.3 million and $ 2.2 million, respectively. On May 31, 2023, the Company amended its 2021 Credit Facility agreement to transition the reference rate from LIBOR to SOFR plus 0.10 %. The transition to SOFR did not materially impact the interest rate paid by the Company or change any material terms of the 2021 Credit Facility. The 2021 Credit Facility term loan and the revolving line of credit bear interest subject to the applicable spread based on Company’s leverage ratio and SOFR plus 0.10% as follows: Pricing Tier Consolidated Leverage Ratio Senior Credit Facilities SOFR Spread Senior Credit Facilities Base Rate Spread Commitment Fee Letter of Credit Fee 1 ≥ 3.75 x to 1.0 2.50 % 1.50 % 0.25 % 2.50 % 2 < 3.75 x to 1.0 but ≥ 3.25 to 1.0 2.25 1.25 0.23 2.25 3 < 3.25 x to 1.0 but ≥ 2.50 to 1.0 2.00 1.00 0.20 2.00 4 < 2.50 x to 1.0 but ≥ 1.75 to 1.0 1.75 0.75 0.15 1.75 5 < 1.75 x to 1.0 1.50 0.50 0.15 1.50 On May 30, 2023, the Company amended the interest rate swap transaction it entered into on January 27, 2022 (the "2022 Interest Rate Swap"), to convert the floating component of the interest rate on $ 100.0 million of borrowings to 1-Month Term SOFR and a new coupon of 1.319 % until January 27, 2025 . Prior to the amendment, the floating component of the interest rate was subject to LIBOR and a coupon of 1.39 %. The transition to SOFR did not materially impact the interest rate paid by the Company or change any material terms of the 2022 Interest Rate Swap. Further, on May 30, 2023, the Company entered into a second interest rate swap transaction fixing the floating component of the interest rate on an additional $ 70.0 million of borrowings to 1-Month Term SOFR and a coupon of 3.88 % until April 27, 2026 . 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. Effective September 1, 2023, the interest rate reduction was decreased to 0.025 % based on the most recent annual assessment of the Company’s achievement of these objectives. 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 and applies through and including the fiscal quarter ending September 30, 2023 and then further steps 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. In January, 2024, the Company exercised its credit facility covenant holiday, increasing its leverage capacity from 3.75 times to 4.25 times for four quarters beginning with the first quarter of 2024 . As of March 31, 2024 and December 31, 2023, the Company’s consolidated total leverage ratio (as defined in the 2021 Credit Facility) was 3.4 times and 1.9 times, respectively, 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 revolving line of credit 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 three months ended March 31, 2024 and March 31, 2023, before giving effect to the impact of the interest rate swaps, was 7.3 % and 6.1 %, respectively, and after giving effect to the impact of the interest rate swaps, was 2.8 % and 2.3 %, 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. Loan and Aircraft Security Agreement —On May 18, 2023, the Company entered into a Loan and Aircraft Security Agreement to finance $ 10.9 million of the purchase a new aircraft (the "Aircraft Loan"). The Aircraft Loan must be repaid in 60 monthly consecutive installments and all outstanding amounts will become due on May 18, 2028. The Aircraft Loan bears interest subject to 1-Month Term SOFR and a coupon of 1.86 %. The entire principal balance may be prepaid in full subject to a 3.0 %, 2.0 % and 1.0 % prepayment fee if paid prior to the first, second and third anniversary of the loan, respectively. The aircraft serves as collateral security for the Aircraft Loan. Equipment Line of Credit —The Company has a $ 5.0 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 expired on March 31, 2024 . Interest on leases financed under this facility was based on the three-year swap rate at the time of funding. Equipment leased through this line of credit met the finance lease criteria as per ASC 842 and accordingly is accounted for as finance lease right-of-use assets and finance lease liabilities. The following is a schedule of the aggregate annual maturities of long-term debt presented on the unaudited condensed consolidated statement of financial position, gross of deferred debt issuance cost of $ 1.6 million, based on the terms of the 2021 Credit Facility and the Aircraft Loan: 2021 Credit Facility March 31, Term Loan Revolver Aircraft Loan Total 2025 $ 15,625 — $ 1,090 $ 16,715 2026 18,126 88,195 1,169 107,490 2027 167,187 — 1,251 168,438 2028 — — 1,341 1,341 2029 — — 5,233 5,233 Total $ 200,938 $ 88,195 $ 10,084 $ 299,217 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The following financial instruments are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): March 31, December 31, 2024 2023 Interest rate swap (1) $ 3,778 $ 3,461 Total assets $ 3,778 $ 3,461 Business acquisitions contingent consideration, current $ 11,782 $ 3,592 Business acquisitions contingent consideration, long-term 28,679 2,448 Conversion option 19,037 19,017 Total liabilities $ 59,498 $ 25,057 _____________________________ (1) Included in other assets in the unaudited condensed 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: Interest Rate Swap Total Assets Business Acquisitions Contingent Consideration, Current Business Acquisitions Contingent Consideration, Long-term Conversion Option Total Liabilities Balance at December 31, 2022 $ 6,046 $ 6,046 $ 3,801 $ 4,454 $ 25,731 $ 33,986 Acquisitions — — 25 — — 25 Changes in fair value included in earnings ( 968 ) ( 968 ) ( 515 ) 117 905 507 Payment of contingent consideration payable — — ( 27 ) — — ( 27 ) Reclass of long term to short term contingent liabilities — — 1,450 ( 1,450 ) — — Balance at March 31, 2023 $ 5,078 $ 5,078 $ 4,734 $ 3,121 $ 26,636 $ 34,491 Balance at December 31, 2023 $ 3,461 $ 3,461 $ 3,592 $ 2,448 $ 19,017 $ 25,057 Acquisitions — — 9,628 26,137 — 35,765 Changes in fair value included in earnings 317 317 12 94 20 126 Payment of contingent consideration payable — — ( 1,450 ) — — ( 1,450 ) Balance at March 31, 2024 $ 3,778 $ 3,778 $ 11,782 $ 28,679 $ 19,037 $ 59,498 Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3): Interest Rate Swaps —The interest rate swaps fair value is estimated based on a mid-market price for the swaps as of the close of business of the reporting period. The fair value is prepared by discounting future cash flows of the swap to arrive at a current value of the swap. Forward curves and volatility levels inputs are determined on the basis of observable market inputs when available and on the basis of estimates when observable market inputs are not available. The Company does not apply hedge accounting but instead recognizes the instrument at fair value on the unaudited condensed consolidated statement of financial position within other assets, with changes in fair value recognized as other (expense) income in each reporting period. Business Acquisitions Contingent Consideration — 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. Prior to the second quarter of 2023, the fair value of the contingent consideration payable associated with the acquisition of Sensible was determined using a Monte Carlo simulation of earnings in a risk-neutral Geometric Brownian Motion framework. The method used to price these liabilities is considered level 3 due to the subjective nature of the unobservable inputs used to determine the fair value. The input is the expected achievement of earn-out thresholds. Conversion Option —The fair value of the conversion option associated with the issuance of the Convertible and Redeemable Series A-2 Preferred Stock (Note 15) was estimated using a “with-and-without” method. The “with-and-without” methodology considers the value of the security on an as-is basis and then wit hout the embedded conversion premium. The difference between the two scenarios is the implied fair value of the embedded derivative. The unobservable input is the required rate of return on the Series A-2. The considerable quantifiable inputs in the valuation relate to the timing of conversions or redemptions. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. COMMITMENTS AND CONTINGENCIES Leases —The Company leases office facilities over various terms expiring through 2031 . Certain of these operating leases contain rent escalation clauses. The Company also has vehicle and equipment leases that expire through 2028 (Note 6 and 12). Other Commitments —The Company has commitments under the 2021 Credit Facility, its Aircraft Loan, its equipment line of credit and its lease obligations (Note 6 and 12). Contingencies —The Company is subject to purchase price contingencies related to earn-outs associated with certain acquisitions (Note 7 and 13). Legal —In the normal course of business, the Company is at times subject to pending and threatened legal actions. In management’s opinion, the potential loss resulting from the resolution of these matters is not expected to have a material effect on the unaudited condensed consolidated results of operations, financial position or cash flows of the Company. |
Convertible and Redeemable Seri
Convertible and Redeemable Series A-2 Preferred Stock | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity Disclosure [Abstract] | |
Convertible and Redeemable Series A-2 Preferred Stock | 15. CONVERTIBLE AND REDEEMABLE SERIES A-2 PREFERRED STOCK On April 13, 2020, the Company entered into an agreement to issue 17,500 shares of the Convertible and Redeemable Series A-2 Preferred Stock with a par value of $ 0.0001 per share and a detachable warrant to purchase shares of the Company’s common stock with a 10-year life, in exchange for gross proceeds of $ 175.0 million, net of $ 1.3 million debt issuance costs. The Convertible and Redeemable Series A-2 Preferred Stock warrants were exercised in full on July 30, 2020. The Company paid dividends on shares of the Convertible and Redeemable Series A-2 Preferred Stock of $ 2.8 million for the first quarter of 2024 in April 2024, and $ 4.1 million during the three months ended March 31, 2023. The Convertible and Redeemable Series A-2 Preferred Stock terms include 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) convertible into common stock beginning in April 2024 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) 9.0 % dividend rate 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) debt incurrence test ratio of 4.5 times, and (viii) minimum repayment amount of $ 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. In January 2024, the Company redeemed $ 60 million of the outstanding Convertible and Redeemable Series A-2 Preferred Stock with cash. As of March 31, 2024, the aggregate amount of the Convertible and Redeemable Series A-2 Preferred Stock issued and outstanding was $ 122.2 million, or 11,667 shares. 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 March 31, 2024, the Company has determined that a change of control is not probable. Additionally, as of March 31, 2024, 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 March 31, 2024, the Company has determined that the instrument is not probable of becoming redeemable, and does not believe subsequent adjustment of the carrying value of the instrument will be necessary. The Convertible and Redeemable Series A-2 Preferred Stock contains a conversion option of the preferred shares to shares of common stock beginning in April 2024. As of March 31, 2024 and December 31, 2023, this conversion embedded feature had a net fair value of $ 19.0 million. The change in net fair value of less than $ 0.1 million and $ 0.9 million for the three months ended March 31, 2024 and March 31, 2023, respectively, which were recorded to other (expense) income. |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | 16. STOCKHOLDERS’ EQUITY Authorized Capital Stock— The Company was authorized to issue 190,000,000 shares of common stock, with a par value of $ 0.000004 per share as of March 31, 2024 and December 31, 2023. Common Stock Issuances — The Co mpany issued the following shares of common stock: Three Months Ended March 31, 2024 2023 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions 220,734 $ 29.81 $ 6,580 — $ — $ — Exercise of options 27,396 17.80 487 124,455 21.61 2,690 Restricted shares, net (1) 144,251 37.58 — 90,116 36.81 — Payment of earn-out liability 35,250 30.84 1,087 — — — Total 427,631 $ 31.75 $ 8,154 214,571 $ 27.99 $ 2,690 (1) Represents the non-cash release of common shares due to the vesting of restricted stock. Employee Equity Incentive Plans— The Company has two plans under which stock-based awards have been issued: (i) the Montrose Amended & Restated 2017 Stock Incentive Plan (“2017 Plan”) and (ii) the Montrose Amended & Restated 2013 Stock Option Plan (“2013 Plan”) (collectively the “Plans”). As of March 31, 2024 and March 31, 2023, there was $ 113.8 million and $ 146.6 million, respectively, of total unrecognized stock-based compensation expense related to unvested options, restricted stock units ("RSUs") and stock appreciation rights ("SARs") granted under the Plans. Such unrecognized expense is expected to be recognized over a weighted-average three year period. The following number of shares were authorized to be issued and available for grant: March 31, 2024 2017 Plan 2013 Plan Total Shares authorized to be issued 7,538,276 2,036,219 9,574,495 Shares available for grant (1) 1,674,558 — 1,674,558 March 31, 2023 2017 Plan 2013 Plan Total Shares authorized to be issued 6,329,913 2,037,019 8,366,932 Shares available for grant (1) 893,522 — 893,522 (1) In January 2024 and January 2023 the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, a chieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information on stock appreciation rights. There were no stock-based compensation expenses related to the 2013 Plan in the three months ended March 31, 2024 and 2023. Total stock-based compensation expense for the 2017 Plans was as follows: Three Months Ended March 31, 2024 2023 Options RSUs SARs Total Options RSUs SARs Total Cost of revenue $ 274 $ 637 $ — $ 911 $ 349 $ 543 $ — $ 892 Selling, general and administrative expense 789 7,282 2,290 10,361 1,724 8,154 2,265 12,143 Total $ 1,063 $ 7,919 $ 2,290 $ 11,272 $ 2,073 $ 8,697 $ 2,265 $ 13,035 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 no RSAs granted during the three months ended March 31, 2024 and 2023. 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. The Board of Directors approved the grant of RSUs under certain supplemental incentive plans ("SI Plans"). There were zero and 246,417 RSUs issued under these SI Plans during the three months ended March 31, 2024 and March 31, 2023, respectively. The majority of the RSUs issued under these SI Plans during the three months ended March 31, 2024 vested 1/3 on the date of grant, and will vest 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 each such date. The remaining RSUs vest annually over a 4-year period from the date of grant, subject to continued service through each such date. RSAs and RSUs activity was as follows: Three Months Ended March 31, 2024 2023 Shares Average Price per Share Fair Value Shares Average Price per Share Fair Value Awards granted 259,118 $ 39.65 $ 10,273 464,186 $ 32.62 $ 15,140 Awards forfeited ( 14,336 ) 37.04 531 — — — There were an aggregate of 3,090,801 and 2,528,383 shares underlying outstanding RSAs and RSUs awards as of March 31, 2024 and March 31, 2023, respectively. Stock Appreciation Rights— As of March 31, 2024, there were 3,000,000 units of SARs outstanding 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 the grant based on achievement of performance hurdles over a five-year period, subject to continued service on the vesting date. The performance hurdles are as follows: 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. None of the market conditions have been achieved as of March 31, 2024. 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 March 31, 2024 was 7.71 years. Options —Options issued to all optionees under the 2017 Plan vest over 4-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 the grant date and the remaining half on the fourth anniversary of the grant date, with the exception of certain annual grants to certain executive officers, which vest annually over a 3-year and 1-year period. The following summarizes the options activity of the 2017 Plan: Options to 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 Outstanding as of December 31, 2022 2,579,566 $ 30.58 $ 14.96 7.8 $ 37,292 Granted 233,955 32.16 13.90 — — Forfeited/ cancelled ( 34,619 ) 35.16 — — — Exercised ( 101,279 ) 24.55 — — 2,467 Outstanding as of March 31, 2023 2,677,623 $ 30.89 $ 15.47 7.8 $ 21,127 Outstanding as of December 31, 2023 2,516,272 $ 30.92 $ 15.95 7.0 $ 13,825 Forfeited/ cancelled ( 36,105 ) 38.78 — — — Expired ( 13,010 ) 44.16 — — — Exercised ( 18,746 ) 23.26 — — 200 Outstanding as of March 31, 2024 2,448,411 $ 30.80 $ 16.00 6.8 $ 25,468 Exercisable at March 31, 2024 1,513,438 $ 31.13 $ — 6.4 $ 15,380 The following weighted-average assumptions were used in the Black-Scholes option-pricing model calculation: March 31, 2023 Common stock value (per share) $ 32.16 Expected volatility 33.79 % Risk-free interest rate 3.72 % Expected life (years) 7.00 Forfeiture rate None Dividend rate None Montrose Amended & Restated 2013 Stock Option Plan — The following summarizes the activity of the 2013 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of December 31, 2022 855,695 $ 6.43 $ 2.10 3.3 $ 32,478 Exercised ( 23,176 ) 8.78 — — 963 Outstanding as of March 31, 2023 832,519 6.37 2.06 3.0 24,393 Outstanding as of December 31, 2023 792,191 $ 6.40 $ 2.16 2.4 $ 20,380 Exercised ( 8,650 ) 5.95 — — 289 Outstanding as of March 31, 2024 783,541 $ 6.41 $ 2.18 2.2 $ 25,669 Exercisable at March 31, 2024 783,541 6.41 2.2 25,669 Total shares outstanding from exercised options were 1,577,184 shares and 1,434,885 shares as of March 31, 2024 and March 31, 2023, respectively. Common Stock Reserved for Future Issuances — The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: March 31, 2024 2023 Montrose 2013 Stock Incentive Plan 783,541 832,519 Montrose 2017 Stock Incentive Plan (1) 9,692,222 8,722,930 Total 10,475,763 9,555,449 (1) In January 2024 and 2023, the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, 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 | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 17. NET LOSS PER SHARE Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during each period. The Convertible and Redeemable Series A-2 Preferred Stock is considered a participating security during the applicable periods. Net losses are not allocated to the Convertible and Redeemable Series A-2 stockholders, as they were not contractually obligated to share in the Company’s losses. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding for the period using the treasury-stock method or the as-converted method. Potentially dilutive shares are comprised of RSAs, RSUs, SARs, and shares of common stock underlying stock options outstanding under the Plans. During the three months ended March 31, 2024 and March 31, 2023, there is no difference in the number of shares used to calculate basic and diluted shares outstanding during the applicable period due to the Company’s net loss attributable to common stockholders and potentially dilutive shares being anti-dilutive. The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company: Three Months Ended March 31, 2024 2023 Net loss $ ( 13,357 ) $ ( 14,719 ) Convertible and redeemable series A-2 preferred stock dividend ( 2,814 ) ( 4,100 ) Net loss attributable to common stockholders – basic and diluted ( 16,171 ) ( 18,819 ) Weighted-average common shares outstanding – basic and diluted 30,381 29,857 Net loss per share attributable to common stockholders – basic and diluted $ ( 0.53 ) $ ( 0.63 ) T he 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: March 31, 2024 (1) 2023 (1) Stock options 3,231,952 3,510,142 Restricted stock 2,569,253 2,151,785 Series A-2 4,292,268 4,735,220 SARs 3,000,000 3,000,000 _____________________________ (1) Includes 7,789,349 and 7,362,459 common stock equivalents that are out of the money as of March 31, 2024 and March 31, 2023 , respectively. |
Segment and Geographic Location
Segment and Geographic Location Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment and Geographic Location Information | 18. SEGMENT AND GEOGRAPHIC LOCATION 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, types of customers, methods used to distribute the products and the nature of the regulatory environment. Our Chief Executive Officer who serves as the Chief Operating Decision Maker (“CODM”), reviews segment Adjusted EBITDA as 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. Beginning in the first quarter of 2023, the calculation of Segment adjusted EBITDA no longer adjusts for start-up losses and investment in new services as the CODM no longer reviews the Segment Adjusted EBITDA measure without these costs. The CODM does not review segment assets as a measure of segment performance. During the first quarter of 2023, the Company determined to discontinue one of its specialty service lines within the lab testing business (the "Discontinued Specialty Lab"). On December 29, 2023, the Company sold the assets of the Discontinued Specialty Lab for a total sales price of $ 4.8 million, of which $ 0.5 million was received in cash and $ 4.3 million was issued as a promissory note receivable. The promissory note receivable is subject to an annual 9.0 % interest rate and will be repaid in 60 monthly installments with the remaining balance payable in full on December 29, 2028. The promissory note receivable balance, net of expected loss and payment, was $ 2.1 million as of March 31, 2024 and December 31, 2023, respectively. The discontinuation of this specialty service line, which was part of the Company's Measurement and Analysis segment, did not represent a strategic shift that had a major effect on the Company’s operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations. Corporate and Other includes costs associated with general corporate overhead (including executive, legal, finance, safety, human resources, marketing, and IT related costs) that are not directly related to supporting operations. Overhead costs that are directly related to supporting operations (such as insurance, software, licenses, shared services, and payroll processing costs) are allocated to the operating segments on a basis that reasonably approximates an estimate of the use of these services. Segment revenues and Adjusted EBITDA consiste d of the following: Three Months Ended March 31, 2024 2023 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 58,580 $ 16,280 $ 52,214 $ 14,266 Measurement and Analysis 45,494 6,504 42,527 6,387 Remediation and Reuse 51,251 5,012 36,687 5,278 Total Operating Segments 155,325 27,795 131,428 25,931 Corporate and Other — ( 10,873 ) — ( 9,328 ) Total $ 155,325 $ 16,922 $ 131,428 $ 16,603 Presented below is a reconciliation of the Company’s segment measure of profit and loss to net loss: For the Three Months 2024 2023 Total $ 16,922 $ 16,603 Interest expense, net ( 3,306 ) ( 1,541 ) Income tax expense ( 493 ) ( 1,367 ) Depreciation and amortization ( 11,653 ) ( 10,555 ) Stock-based compensation ( 11,272 ) ( 13,035 ) Acquisition costs ( 2,525 ) ( 775 ) Fair value changes in financial instruments 297 ( 1,873 ) Fair value changes in business acquisition contingencies ( 106 ) 398 Expenses related to financing transactions ( 144 ) ( 4 ) Discontinued Specialty Lab (596 ) (1) ( 2,436 ) (1) Other losses and expenses ( 481 ) (2) ( 134 ) Net loss $ ( 13,357 ) $ ( 14,719 ) _______________________________ (1) Amounts consist of operating losses before depreciation related to the Discontinued Specialty Lab. (2) Amount consists of costs associated with a lease abandonment. The following table presents revenues by geograph ic location: For the Three Months 2024 2023 United States $ 128,842 $ 126,801 Canada 21,281 3,880 Other international 5,202 747 Total revenue $ 155,325 $ 131,428 |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 19. RELATED-PARTY TRANSACTIONS The Company did no t have any material related party transactions during the three months ended March 31, 2024 and March 31, 2023 . |
Defined Contribution Plan
Defined Contribution Plan | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 20. DEFINED CONTRIBUTION PLAN On January 1, 2014, the Company established the Montrose Environmental Group 401(k) Savings Plan (the “401(k) Savings Plan”). As of March 31, 2024, and December 31, 2023 , 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. 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 5.0 % of the participant’s compensation. Employer contributions under the 401(k) Savings Plan were $ 2.7 million and $ 2.1 million for the three months ended March 31, 2024 and March 31, 2023, respectively, and are included within selling, general, and administrative expense on the unaudited condensed consolidated statements of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. SUBSEQUENT EVENTS On April 22, 2024, the Company issued an aggregate of 3,450,000 shares of common stock in an underwritten secondary public offering, inclusive of the shares of common stock issued in connection with the underwriters exercise in full of their option to purchase additional shares of common stock. The Company sold the shares to the underwriters at the public offering price of $ 37.15 per share, less underwriting discounts and commissions of $ 1.67175 per share, resulting in net proceeds to the Company after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company of approximately $ 121.8 million . On April 1, 2024 , the Company acquired substantially all of the assets of Engineering & Technical Associates, Inc., free and clear of any encumbrances. The purchase price was $ 2.0 million, of which $ 1.6 million was funded with cash on hand, and the remaining $ 0.4 million will be paid as deferred consideration in the Company's common stock in 2025. |
Description of the Business a_2
Description of the Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation —The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The unaudited condensed consolidated financial statements include all accounts of the Company and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2023 . Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All intercompany transactions, accounts and profits, have been eliminated in the unaudited condensed consolidated financial statements. |
Recently Adopted Accounting Pronouncements /Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures. The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. ASU 2023-07 is effective for the Company's fiscal year beginning January 1, 2024 and requires the use of a retrospective approach to all prior periods presented. The Company adopted the standard on January 1, 2024 , and plans to adopt the standard for interim periods beginning January 1, 2025, with early adoption permitted. The Company is evaluating the potential impact of its adoption of ASU 2023-07 on the Company's audited Consolidated Financial Statements but does not anticipate that such an adoption will have a material impact. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2023, the FASB issued ASU 2023-05, under which an entity that qualifies as either a joint venture or a corporate joint venture is required to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture must initially measure its assets and liabilities at fair value on the formation date. The amendments in ASU 2023-05 are effective for all joint ventures within the ASU’s scope that are formed on or after January 1, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for the Company beginning January 1, 2025 and allows the use of a prospective or retrospective approach. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements. |
Revenues and Accounts Receiva_2
Revenues and Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenues And Accounts Receivable [Abstract] | |
Schedule of Contract Balances | The following table present s the Company’s contract balances: March 31, December 31, 2024 2023 Contract assets $ 73,466 $ 51,629 Contract liabilities 10,016 8,132 |
Schedule of Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consisted of the following: March 31, December 31, Accounts receivable, invoiced $ 106,870 $ 115,064 Accounts receivable, other 483 20 Allowance for doubtful accounts ( 2,619 ) ( 2,724 ) Accounts receivable, net $ 104,734 $ 112,360 |
Schedule of Allowance for Doubtful Accounts | The allowance for doubtful accounts consisted of the following: Beginning Balance Bad Debt (Recovery) Expense Charged to Allowance Ending Balance Three months ended March 31, 2024 $ 2,724 $ ( 886 ) $ 781 $ 2,619 Year ended December 31, 2023 1,915 3,142 ( 2,333 ) 2,724 |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consisted of the following: March 31, December 31, 2024 2023 Deposits $ 1,756 $ 1,764 Prepaid expenses 11,992 8,112 Supplies 3,004 3,819 Prepaid and other current assets $ 16,752 $ 13,695 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net, consisted of the following: Estimated March 31, December 31, Useful Life 2024 2023 Lab and test equipment 7 years $ 20,823 $ 20,341 Vehicles 5 years 6,063 6,033 Equipment 3 - 7 years 52,324 50,387 Furniture and fixtures 7 years 2,961 2,963 Leasehold improvements 7 years 11,845 10,808 Aircraft 10 - 20 years 12,312 12,312 Building 39 years 5,748 5,748 112,076 108,592 Land 1,089 1,089 Construction in progress 6,147 3,956 Less accumulated depreciation ( 59,567 ) ( 56,812 ) Total property and equipment, net $ 59,745 $ 56,825 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows: For the Three Months Ended March 31, Statement of Operations Location 2024 2023 Operating lease cost Lease cost Selling, general and administrative expense $ 2,994 $ 2,741 Variable lease cost Selling, general and administrative expense 456 326 Total operating lease cost 3,450 3,067 Finance lease cost Amortization of ROU assets Depreciation and amortization 1,278 1,154 Interest on lease liabilities Interest expense—net 189 130 Total finance lease cost 1,467 1,284 Total lease cost $ 4,917 $ 4,351 |
Summary of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow information related to leases was as follows: For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 3,158 $ 2,557 Operating cash flows used in finance leases 189 130 Financing cash flows used in finance leases 1,085 1,029 Lease liabilities arising from new ROU assets: Operating leases 3,111 7,999 Finance leases 2,066 2,405 |
Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates | Weighted average remaining lease terms and weighted average discount rates were: March 31, 2024 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.31 3.56 Weighted average discount rate 4.42 % 6.44 % March 31, 2023 Operating Leases Finance Leases Weighted average remaining lease term (years) 4.62 3.43 Weighted average discount rate 3.31 % 5.57 % |
Schedule of Maturities of Lease Liabilities | The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year: Operating Leases Finance Leases Remainder of 2024 $ 8,760 $ 3,772 2025 9,617 3,989 2026 7,441 3,346 2027 5,120 2,344 2028 3,928 1,139 2029 and thereafter 4,293 99 Total undiscounted future minimum lease payments 39,159 14,689 Less imputed interest ( 3,626 ) ( 1,613 ) Total discounted future minimum lease payments $ 35,533 $ 13,076 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Acquisition [Line Items] | |
Summary of Supplemental Unaudited Pro-Forma Information | The unaudited condensed consolidated financial information summarized in the following table gives effect to the 2024 and the 2023 acquisitions discussed above assuming they occurred on January 1, 2023. These unaudited consolidated pro-forma operating results do not assume any impact from revenue, cost or other operating synergies that are expected or may have been realized as a result of the acquisitions. These unaudited consolidated pro-forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the acquisitions occurred on January 1, 2023, nor does the information purport to reflect results for any future period. For the Three Months Ended March 31, 2024 2023 As Acquisitions Consolidated As Acquisitions Consolidated Revenues $ 155,325 $ 3,025 $ 158,350 $ 131,428 $ 23,646 $ 155,074 Net (loss) income ( 13,357 ) 1,336 ( 12,021 ) ( 14,719 ) ( 897 ) ( 15,616 ) |
EPIC, Two Dot | |
Business Acquisition [Line Items] | |
Summary of Main Elements of Purchase Price of Acquisitions | The following table summarizes the elements of the purchase price of the acquisitions completed during the three months ended March 31, 2024: Cash Common Other Contingent Total EPIC $ 19,914 $ 4,748 $ 678 $ 11,113 $ 36,453 2DOT 39,393 1,832 — 24,652 65,877 Total $ 59,307 $ 6,580 $ 678 $ 35,765 $ 102,330 |
Summary of Purchase Price Attributable to Acquisitions | The preliminary purchase price attributable to the acquisitions was allocated as follows: EPIC 2DOT Total (1) Cash $ 1,045 $ 143 $ 1,188 Accounts receivable and contract assets 1,772 2,003 3,775 Other current assets 78 278 356 Current assets 2,895 2,424 5,319 Property and equipment 43 111 154 Operating lease right-of-use asset 1 301 302 Goodwill 35,199 64,050 99,249 Total assets 38,138 66,886 105,024 Current liabilities 1,685 816 2,501 Operating lease liability—net of current portion — 193 193 Total liabilities 1,685 1,009 2,694 Purchase price $ 36,453 $ 65,877 $ 102,330 ___________________________________ (1) The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amounts Related to Goodwill | Amounts related to goodwill are as follows: Assessment, Measurement Remediation Total Balance as of December 31, 2023 $ 184,946 $ 93,890 $ 85,613 $ 364,449 Goodwill acquired during the period — — 99,249 99,249 Prior year acquisitions measurement period adjustments — — ( 320 ) ( 320 ) Foreign currency translation impact — — 72 72 Balance as of March 31, 2024 $ 184,946 $ 93,890 $ 184,614 $ 463,450 |
Schedule of Amounts Related to Finite-Lived Intangible Assets | Amounts related to finite-lived intangible assets are as follows: March 31, 2024 Estimated Gross Accumulated Net Finite lived intangible assets Customer relationships 2 - 15 years $ 228,166 $ 121,456 $ 106,710 Covenants not to compete 4 - 5 years 36,250 31,411 4,839 Trade names 1 - 5 years 24,434 21,306 3,128 Proprietary software 3 - 5 years 27,339 20,119 7,220 Patent 16 years 17,479 4,952 12,527 Total $ 333,668 $ 199,244 $ 134,424 December 31, 2023 Estimated Gross Accumulated Net Finite lived intangible assets Customer relationships 2 - 15 years $ 227,986 $ 116,226 $ 111,760 Covenants not to compete 4 - 5 years 36,250 30,889 5,361 Trade names 1 - 5 years 24,434 20,719 3,714 Proprietary software 3 - 5 years 26,486 19,309 7,177 Patent 16 years 17,479 4,678 12,801 Total $ 332,635 $ 191,821 $ 140,813 |
Schedule of Future Amortization Expense | Future amortization expense is estimated to be as follows for each of the five following years and thereafter: December 31, 2024 (remaining) $ 27,027 2025 18,888 2026 16,183 2027 15,250 2028 11,914 Thereafter 45,162 Total $ 134,424 |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Summary of Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following: March 31, December 31, 2024 2023 Accounts payable $ 25,027 $ 31,053 Accrued expenses 17,984 16,059 Other business acquisitions purchase price obligations 1,700 1,022 Contract liabilities 10,016 8,132 Other current liabilities 3,918 3,654 Total accounts payable and other accrued liabilities $ 58,645 $ 59,920 |
Accrued Payroll and Benefits (T
Accrued Payroll and Benefits (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Statement of Financial Position [Abstract] | |
Schedule of Accrued Payroll and Benefits | Accrued payroll and benefits consisted of the following: March 31, December 31, 2024 2023 Accrued bonuses $ 4,526 $ 18,453 Accrued paid time off 5,036 1,316 Accrued payroll 11,007 11,814 Accrued other 3,556 3,077 Total accrued payroll and benefits $ 24,125 $ 34,660 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: March 31, December 31, 2024 2023 Term loan facility $ 200,938 $ 154,219 Revolving line of credit 88,195 — Aircraft loan 10,084 10,344 Less deferred debt issuance costs ( 1,554 ) ( 1,379 ) Total debt 297,663 163,184 Less current portion of long-term debt ( 16,715 ) ( 14,196 ) Long-term debt, less current portion $ 280,948 $ 148,988 |
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: Quarterly Installment Rate Date 2021 Credit Facility Term Loan Additional Term Loan June 30, 2024 1.88 % 1.25 % September 30, 2024 1.88 % 1.25 % December 31, 2024 1.88 % 1.25 % March 31, 2025 1.88 % 1.25 % June 30, 2025 1.88 % 1.25 % September 30, 2025 1.88 % 1.25 % December 31, 2025 2.50 % 1.25 % March 31, 2026 2.50 % 1.88 % April 27, 2026 Remaining balance Remaining balance |
Summary of 2021 Credit Facility Interest Rate Subject to Leverage Ratio and SOFR | The 2021 Credit Facility term loan and the revolving line of credit bear interest subject to the applicable spread based on Company’s leverage ratio and SOFR plus 0.10% as follows: Pricing Tier Consolidated Leverage Ratio Senior Credit Facilities SOFR Spread Senior Credit Facilities Base Rate Spread Commitment Fee Letter of Credit Fee 1 ≥ 3.75 x to 1.0 2.50 % 1.50 % 0.25 % 2.50 % 2 < 3.75 x to 1.0 but ≥ 3.25 to 1.0 2.25 1.25 0.23 2.25 3 < 3.25 x to 1.0 but ≥ 2.50 to 1.0 2.00 1.00 0.20 2.00 4 < 2.50 x to 1.0 but ≥ 1.75 to 1.0 1.75 0.75 0.15 1.75 5 < 1.75 x to 1.0 1.50 0.50 0.15 1.50 |
Schedule of Aggregate Annual Maturities of Long-Term Debt | The following is a schedule of the aggregate annual maturities of long-term debt presented on the unaudited condensed consolidated statement of financial position, gross of deferred debt issuance cost of $ 1.6 million, based on the terms of the 2021 Credit Facility and the Aircraft Loan: 2021 Credit Facility March 31, Term Loan Revolver Aircraft Loan Total 2025 $ 15,625 — $ 1,090 $ 16,715 2026 18,126 88,195 1,169 107,490 2027 167,187 — 1,251 168,438 2028 — — 1,341 1,341 2029 — — 5,233 5,233 Total $ 200,938 $ 88,195 $ 10,084 $ 299,217 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Level 3) | The following financial instruments are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): March 31, December 31, 2024 2023 Interest rate swap (1) $ 3,778 $ 3,461 Total assets $ 3,778 $ 3,461 Business acquisitions contingent consideration, current $ 11,782 $ 3,592 Business acquisitions contingent consideration, long-term 28,679 2,448 Conversion option 19,037 19,017 Total liabilities $ 59,498 $ 25,057 _____________________________ (1) Included in other assets in the unaudited condensed 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: Interest Rate Swap Total Assets Business Acquisitions Contingent Consideration, Current Business Acquisitions Contingent Consideration, Long-term Conversion Option Total Liabilities Balance at December 31, 2022 $ 6,046 $ 6,046 $ 3,801 $ 4,454 $ 25,731 $ 33,986 Acquisitions — — 25 — — 25 Changes in fair value included in earnings ( 968 ) ( 968 ) ( 515 ) 117 905 507 Payment of contingent consideration payable — — ( 27 ) — — ( 27 ) Reclass of long term to short term contingent liabilities — — 1,450 ( 1,450 ) — — Balance at March 31, 2023 $ 5,078 $ 5,078 $ 4,734 $ 3,121 $ 26,636 $ 34,491 Balance at December 31, 2023 $ 3,461 $ 3,461 $ 3,592 $ 2,448 $ 19,017 $ 25,057 Acquisitions — — 9,628 26,137 — 35,765 Changes in fair value included in earnings 317 317 12 94 20 126 Payment of contingent consideration payable — — ( 1,450 ) — — ( 1,450 ) Balance at March 31, 2024 $ 3,778 $ 3,778 $ 11,782 $ 28,679 $ 19,037 $ 59,498 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Issued Shares of Common Stock | The Co mpany issued the following shares of common stock: Three Months Ended March 31, 2024 2023 Shares Average Price per Share Total Shares Average Price per Share Total Acquisitions 220,734 $ 29.81 $ 6,580 — $ — $ — Exercise of options 27,396 17.80 487 124,455 21.61 2,690 Restricted shares, net (1) 144,251 37.58 — 90,116 36.81 — Payment of earn-out liability 35,250 30.84 1,087 — — — Total 427,631 $ 31.75 $ 8,154 214,571 $ 27.99 $ 2,690 (1) Represents the non-cash release of common shares due to 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: March 31, 2024 2017 Plan 2013 Plan Total Shares authorized to be issued 7,538,276 2,036,219 9,574,495 Shares available for grant (1) 1,674,558 — 1,674,558 March 31, 2023 2017 Plan 2013 Plan Total Shares authorized to be issued 6,329,913 2,037,019 8,366,932 Shares available for grant (1) 893,522 — 893,522 (1) In January 2024 and January 2023 the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, a chieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information on stock appreciation rights. |
Schedule of Stock-based Compensation Expense | Total stock-based compensation expense for the 2017 Plans was as follows: Three Months Ended March 31, 2024 2023 Options RSUs SARs Total Options RSUs SARs Total Cost of revenue $ 274 $ 637 $ — $ 911 $ 349 $ 543 $ — $ 892 Selling, general and administrative expense 789 7,282 2,290 10,361 1,724 8,154 2,265 12,143 Total $ 1,063 $ 7,919 $ 2,290 $ 11,272 $ 2,073 $ 8,697 $ 2,265 $ 13,035 |
Summary of Performance Hurdles | The performance hurdles are as follows: 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-Scholes option-pricing model calculation: March 31, 2023 Common stock value (per share) $ 32.16 Expected volatility 33.79 % Risk-free interest rate 3.72 % Expected life (years) 7.00 Forfeiture rate None Dividend rate None |
Schedule of Common Stock Reserved for Future Issuance | The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: March 31, 2024 2023 Montrose 2013 Stock Incentive Plan 783,541 832,519 Montrose 2017 Stock Incentive Plan (1) 9,692,222 8,722,930 Total 10,475,763 9,555,449 (1) In January 2024 and 2023, the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited, or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. The Company expects to have sufficient shares available under the 2017 Plan to satisfy the future settlement of outstanding awards. Shares reserved for future issuance include 3,000,000 shares underlying the 3,000,000 performance SARs granted in December 2021 that are subject to vesting based on the achievement of certain market conditions. Assuming achievement at the highest price performance hurdle, approximately 2,000,000 shares of common stock would be issued upon vesting of these performance SARs. To date, none of the market conditions have been achieved. |
Montrose Amended & Restated 2017 Stock Incentive Plan | |
Schedule of Restricted Stock Activity | RSAs and RSUs activity was as follows: Three Months Ended March 31, 2024 2023 Shares Average Price per Share Fair Value Shares Average Price per Share Fair Value Awards granted 259,118 $ 39.65 $ 10,273 464,186 $ 32.62 $ 15,140 Awards forfeited ( 14,336 ) 37.04 531 — — — |
Summary of Stock Option Activity | The following summarizes the options activity of the 2017 Plan: 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 Outstanding as of December 31, 2022 2,579,566 $ 30.58 $ 14.96 7.8 $ 37,292 Granted 233,955 32.16 13.90 — — Forfeited/ cancelled ( 34,619 ) 35.16 — — — Exercised ( 101,279 ) 24.55 — — 2,467 Outstanding as of March 31, 2023 2,677,623 $ 30.89 $ 15.47 7.8 $ 21,127 Outstanding as of December 31, 2023 2,516,272 $ 30.92 $ 15.95 7.0 $ 13,825 Forfeited/ cancelled ( 36,105 ) 38.78 — — — Expired ( 13,010 ) 44.16 — — — Exercised ( 18,746 ) 23.26 — — 200 Outstanding as of March 31, 2024 2,448,411 $ 30.80 $ 16.00 6.8 $ 25,468 Exercisable at March 31, 2024 1,513,438 $ 31.13 $ — 6.4 $ 15,380 |
Montrose Amended and Restated 2013 Stock Option Plan | |
Summary of Stock Option Activity | The following summarizes the activity of the 2013 Plan: Options to Weighted- Weighted Weighted Aggregate Outstanding as of December 31, 2022 855,695 $ 6.43 $ 2.10 3.3 $ 32,478 Exercised ( 23,176 ) 8.78 — — 963 Outstanding as of March 31, 2023 832,519 6.37 2.06 3.0 24,393 Outstanding as of December 31, 2023 792,191 $ 6.40 $ 2.16 2.4 $ 20,380 Exercised ( 8,650 ) 5.95 — — 289 Outstanding as of March 31, 2024 783,541 $ 6.41 $ 2.18 2.2 $ 25,669 Exercisable at March 31, 2024 783,541 6.41 2.2 25,669 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company: Three Months Ended March 31, 2024 2023 Net loss $ ( 13,357 ) $ ( 14,719 ) Convertible and redeemable series A-2 preferred stock dividend ( 2,814 ) ( 4,100 ) Net loss attributable to common stockholders – basic and diluted ( 16,171 ) ( 18,819 ) Weighted-average common shares outstanding – basic and diluted 30,381 29,857 Net loss per share attributable to common stockholders – basic and diluted $ ( 0.53 ) $ ( 0.63 ) |
Common Stock Equivalents Excluded from Calculation of Diluted Loss Per Share Attributable to Common Stockholders | T he 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: March 31, 2024 (1) 2023 (1) Stock options 3,231,952 3,510,142 Restricted stock 2,569,253 2,151,785 Series A-2 4,292,268 4,735,220 SARs 3,000,000 3,000,000 _____________________________ (1) Includes 7,789,349 and 7,362,459 common stock equivalents that are out of the money as of March 31, 2024 and March 31, 2023 , respectively. |
Segment and Geographic Locati_2
Segment and Geographic Location Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Components of Segment Revenues and Adjusted EBITDA | Segment revenues and Adjusted EBITDA consiste d of the following: Three Months Ended March 31, 2024 2023 Segment Segment Segment Adjusted Segment Adjusted Revenues EBITDA Revenues EBITDA Assessment, Permitting and Response $ 58,580 $ 16,280 $ 52,214 $ 14,266 Measurement and Analysis 45,494 6,504 42,527 6,387 Remediation and Reuse 51,251 5,012 36,687 5,278 Total Operating Segments 155,325 27,795 131,428 25,931 Corporate and Other — ( 10,873 ) — ( 9,328 ) Total $ 155,325 $ 16,922 $ 131,428 $ 16,603 |
Reconciliation of Segment Measure to Net Loss | Presented below is a reconciliation of the Company’s segment measure of profit and loss to net loss: For the Three Months 2024 2023 Total $ 16,922 $ 16,603 Interest expense, net ( 3,306 ) ( 1,541 ) Income tax expense ( 493 ) ( 1,367 ) Depreciation and amortization ( 11,653 ) ( 10,555 ) Stock-based compensation ( 11,272 ) ( 13,035 ) Acquisition costs ( 2,525 ) ( 775 ) Fair value changes in financial instruments 297 ( 1,873 ) Fair value changes in business acquisition contingencies ( 106 ) 398 Expenses related to financing transactions ( 144 ) ( 4 ) Discontinued Specialty Lab (596 ) (1) ( 2,436 ) (1) Other losses and expenses ( 481 ) (2) ( 134 ) Net loss $ ( 13,357 ) $ ( 14,719 ) _______________________________ (1) Amounts consist of operating losses before depreciation related to the Discontinued Specialty Lab. (2) Amount consists of costs associated with a lease abandonment. |
Schedule of Revenues by Geographic Location | The following table presents revenues by geograph ic location: For the Three Months 2024 2023 United States $ 128,842 $ 126,801 Canada 21,281 3,880 Other international 5,202 747 Total revenue $ 155,325 $ 131,428 |
Description of the Business a_3
Description of the Business and Basis of Presentation - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 Employee Office Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity formation, month and year | 2013-11 |
Number of offices in which entity operates | Office | 120 |
Entity number of employees | Employee | 3,200 |
Number of operating segments | Segment | 3 |
Summary of New Accounting Pro_2
Summary of New Accounting Pronouncements - Additional Information (Details) - Accounting Standards Update 2023-07 | Mar. 31, 2024 |
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, 2024 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Change in accounting principle, accounting standards update, early adoption | true |
Revenues and Accounts Receiva_3
Revenues and Accounts Receivable - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenues And Accounts Receivable [Abstract] | ||
Contract assets | $ 73,466 | $ 51,629 |
Contract liabilities | $ 10,016 | $ 8,132 |
Revenues and Accounts Receiva_4
Revenues and Accounts Receivable - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) Customer | Dec. 31, 2023 USD ($) Customer | Mar. 31, 2023 Customer | |
Accounts Notes And Loans Receivable [Line Items] | |||
Contracts assets acquired through business acquisitions | $ 300,000 | $ 2,200,000 | |
Contract liabilities acquired through business acquisitions | 0 | 0 | |
Contract with customer liabilities, revenue recognized | 4,500,000 | ||
Revenue remaining performance obligations | $ 83,800,000 | $ 81,900,000 | |
Number of customers more than 10% of Accounts receivable | Customer | 0 | 0 | |
Number of customers more than 10% of revenue | Customer | 0 | 0 |
Revenues and Accounts Receiva_5
Revenues and Accounts Receivable - Additional Information (Details1) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations | $ 83.8 | $ 81.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-04-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations, percentage | 70% | |
Revenue remaining performance obligations, satisfaction period | 9 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligations, percentage | 30% | |
Revenue remaining performance obligations, satisfaction period | 1 year |
Revenues and Accounts Receiva_6
Revenues and Accounts Receivable - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Revenues And Accounts Receivable [Abstract] | |||
Accounts receivable, invoiced | $ 106,870 | $ 115,064 | |
Accounts receivable, other | 483 | 20 | |
Allowance for doubtful accounts | (2,619) | (2,724) | $ (1,915) |
Accounts receivable, net | $ 104,734 | $ 112,360 |
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, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenues And Accounts Receivable [Abstract] | |||
Beginning Balance | $ 2,724 | $ 1,915 | $ 1,915 |
Bad Debt (Recovery) Expense | (886) | $ 444 | 3,142 |
Charged to Allowance | 781 | (2,333) | |
Ending Balance | $ 2,619 | $ 2,724 |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits | $ 1,756 | $ 1,764 |
Prepaid expenses | 11,992 | 8,112 |
Supplies | 3,004 | 3,819 |
Prepaid and other current assets | $ 16,752 | $ 13,695 |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 112,076 | $ 108,592 |
Less accumulated depreciation | (59,567) | (56,812) |
Total property and equipment, net | $ 59,745 | 56,825 |
Lab and test equipment | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 20,823 | 20,341 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Property and equipment, gross | $ 6,063 | 6,033 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 52,324 | 50,387 |
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 | $ 2,961 | 2,963 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Property and equipment, gross | $ 11,845 | 10,808 |
Aircraft | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 12,312 | 12,312 |
Aircraft | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 10 years | |
Aircraft | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 20 years | |
Building | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life | 39 years | |
Property and equipment, gross | $ 5,748 | 5,748 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,089 | 1,089 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,147 | $ 3,956 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property Plant And Equipment [Line Items] | ||
Depreciation expense | $ 2.9 | $ 2.2 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Minimum | |
Lessee Lease Description [Line Items] | |
Lessee operating and finance lease term | 1 year |
Maximum | |
Lessee Lease Description [Line Items] | |
Lessee operating and finance lease term | 15 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee Lease Description [Line Items] | ||
Total operating lease cost | $ 3,450 | $ 3,067 |
Total finance lease cost | 1,467 | 1,284 |
Total lease cost | 4,917 | 4,351 |
Selling, General and Administrative Expenses | ||
Lessee Lease Description [Line Items] | ||
Lease cost | 2,994 | 2,741 |
Variable lease cost | 456 | 326 |
Depreciation and Amortization | ||
Lessee Lease Description [Line Items] | ||
Amortization of ROU assets | 1,278 | 1,154 |
Interest Expense, Net | ||
Lessee Lease Description [Line Items] | ||
Interest on lease liabilities | $ 189 | $ 130 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related To Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating cash flows used in operating leases | $ 3,158 | $ 2,557 |
Operating cash flows used in finance leases | 189 | 130 |
Financing cash flows used in finance leases | 1,085 | 1,029 |
Operating leases | 3,111 | 7,999 |
Finance leases | $ 2,066 | $ 2,405 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Details) | Mar. 31, 2024 | Mar. 31, 2023 |
Leases [Abstract] | ||
Weighted average remaining lease term, Operating Leases | 4 years 3 months 21 days | 4 years 7 months 13 days |
Weighted average remaining lease term, Finance Leases | 3 years 6 months 21 days | 3 years 5 months 4 days |
Weighted average discount rate, Operating Leases | 4.42% | 3.31% |
Weighted average discount rate, Finance Leases | 6.44% | 5.57% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
Operating Leases, Remainder of 2024 | $ 8,760 |
Operating Leases, 2025 | 9,617 |
Operating Leases, 2026 | 7,441 |
Operating Leases, 2027 | 5,120 |
Operating Leases, 2028 | 3,928 |
Operating Leases, 2029 and thereafter | 4,293 |
Operating Leases, Total undiscounted future minimum lease payments | 39,159 |
Operating Leases, Less imputed interest | (3,626) |
Operating Leases, Total discounted future minimum lease payments | 35,533 |
Finance Leases, Remainder of 2024 | 3,772 |
Finance Leases, 2025 | 3,989 |
Finance Leases, 2026 | 3,346 |
Finance Leases, 2027 | 2,344 |
Finance Leases, 2028 | 1,139 |
Finance Leases, 2029 and thereafter | 99 |
Finance Leases, Total undiscounted future minimum lease payments | 14,689 |
Finance Leases, Less imputed interest | (1,613) |
Finance Leases, Total discounted future minimum lease payments | $ 13,076 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||||
Mar. 31, 2024 | Mar. 31, 2023 | Feb. 28, 2024 | Jan. 31, 2024 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Feb. 28, 2023 | |
Business Acquisition [Line Items] | ||||||||
Transaction costs related to business combinations | $ 2,525 | $ 775 | ||||||
Common Stock | 6,580 | |||||||
Business combination, paid in cash | 59,307 | |||||||
Acquisitions measurement period adjustments | 300 | |||||||
EPIC | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
Common Stock | 4,748 | |||||||
Business combination, paid in cash | 19,914 | |||||||
EAI | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
2DOT | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
Common Stock | 1,832 | |||||||
Business combination, paid in cash | 39,393 | |||||||
GreenPath | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
Matrix | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
Vandrensning | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of interests acquired | 100% | |||||||
EnvStd and IAG | 2026 Earn Out | ||||||||
Business Acquisition [Line Items] | ||||||||
Payment through cash or common stock | 13,100 | |||||||
Common Stock | 13,100 | |||||||
Business combination, earn-out payment, maximum | 40,400 | |||||||
Business combination, paid in cash | 14,200 | |||||||
EPIC, Two Dot | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenue | 3,900 | |||||||
Pre-tax income (loss) | $ 1,300 | |||||||
Frontier, EAI, GreenPath and Matrix | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenue | 1,000 | |||||||
Pre-tax income (loss) | $ 100 |
Business Acquisitions - Summary
Business Acquisitions - Summary of Elements of Purchase Price of Acquisitions (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Business Acquisition [Line Items] | |
Cash | $ 59,307 |
Common Stock | 6,580 |
Other Purchase Price Components | 678 |
Contingent Consideration | 35,765 |
Total Purchase Price | 102,330 |
EPIC | |
Business Acquisition [Line Items] | |
Cash | 19,914 |
Common Stock | 4,748 |
Other Purchase Price Components | 678 |
Contingent Consideration | 11,113 |
Total Purchase Price | 36,453 |
2DOT | |
Business Acquisition [Line Items] | |
Cash | 39,393 |
Common Stock | 1,832 |
Contingent Consideration | 24,652 |
Total Purchase Price | $ 65,877 |
Business Acquisitions - Summa_2
Business Acquisitions - Summary of Purchase Price Attributable to Acquisitions (Details) $ in Thousands | Mar. 31, 2024 USD ($) | [1] |
Business Acquisition [Line Items] | ||
Cash | $ 1,188 | |
Accounts receivable and contract assets | 3,775 | |
Other current assets | 356 | |
Current assets | 5,319 | |
Property and equipment | 154 | |
Operating lease right-of-use-asset | 302 | |
Goodwill | 99,249 | |
Total assets | 105,024 | |
Current liabilities | 2,501 | |
Operating lease liability - net of current portion | 193 | |
Total liabilities | 2,694 | |
Purchase price | 102,330 | |
EPIC | ||
Business Acquisition [Line Items] | ||
Cash | 1,045 | |
Accounts receivable and contract assets | 1,772 | |
Other current assets | 78 | |
Current assets | 2,895 | |
Property and equipment | 43 | |
Operating lease right-of-use-asset | 1 | |
Goodwill | 35,199 | |
Total assets | 38,138 | |
Current liabilities | 1,685 | |
Total liabilities | 1,685 | |
Purchase price | 36,453 | |
2DOT | ||
Business Acquisition [Line Items] | ||
Cash | 143 | |
Accounts receivable and contract assets | 2,003 | |
Other current assets | 278 | |
Current assets | 2,424 | |
Property and equipment | 111 | |
Operating lease right-of-use-asset | 301 | |
Goodwill | 64,050 | |
Total assets | 66,886 | |
Current liabilities | 816 | |
Operating lease liability - net of current portion | 193 | |
Total liabilities | 1,009 | |
Purchase price | $ 65,877 | |
[1] The Company is continuing to obtain information to complete the valuation of certain of these acquisitions' assets and liabilities. |
Business Acquisitions - Summa_3
Business Acquisitions - Summary of Supplemental Unaudited Pro-Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | ||
Revenues | $ 155,325 | $ 131,428 |
Net (loss) income | (13,357) | (14,719) |
Acquisition Proforma | ||
Business Acquisition [Line Items] | ||
Revenues | 3,025 | 23,646 |
Net (loss) income | 1,336 | (897) |
Consolidated Proforma | ||
Business Acquisition [Line Items] | ||
Revenues | 158,350 | 155,074 |
Net (loss) income | $ (12,021) | $ (15,616) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Amounts Related to Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 364,449 |
Goodwill acquired during the period | 99,249 |
Prior year acquisitions measurement period adjustments | (320) |
Foreign currency translation impact | 72 |
Ending balance | 463,450 |
Assessment, Permitting and Response | |
Goodwill [Line Items] | |
Beginning balance | 184,946 |
Ending balance | 184,946 |
Measurement and Analysis | |
Goodwill [Line Items] | |
Beginning balance | 93,890 |
Ending balance | 93,890 |
Remediation and Reuse Segment | |
Goodwill [Line Items] | |
Beginning balance | 85,613 |
Goodwill acquired during the period | 99,249 |
Prior year acquisitions measurement period adjustments | (320) |
Foreign currency translation impact | 72 |
Ending balance | $ 184,614 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Amounts Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | $ 333,668 | $ 332,635 |
Accumulated Amortization | 199,244 | 191,821 |
Total | 134,424 | 140,813 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Balance | 228,166 | 227,986 |
Accumulated Amortization | 121,456 | 116,226 |
Total | $ 106,710 | $ 111,760 |
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 | $ 36,250 | $ 36,250 |
Accumulated Amortization | 31,411 | 30,889 |
Total | $ 4,839 | $ 5,361 |
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 | $ 24,434 | $ 24,434 |
Accumulated Amortization | 21,306 | 20,719 |
Total | $ 3,128 | $ 3,714 |
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 | $ 27,339 | $ 26,486 |
Accumulated Amortization | 20,119 | 19,309 |
Total | $ 7,220 | $ 7,177 |
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 | 4,952 | 4,678 |
Total | $ 12,527 | $ 12,801 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 7.4 | $ 7.2 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (remaining) | $ 27,027 | |
2025 | 18,888 | |
2026 | 16,183 | |
2027 | 15,250 | |
2028 | 11,914 | |
Thereafter | 45,162 | |
Total | $ 134,424 | $ 140,813 |
Accounts Payable and Other Ac_3
Accounts Payable and Other Accrued Liabilities - Summary of Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 25,027 | $ 31,053 |
Accrued expenses | 17,984 | 16,059 |
Other business acquisitions purchase price obligations | 1,700 | 1,022 |
Contract liabilities | 10,016 | 8,132 |
Other current liabilities | 3,918 | 3,654 |
Total accounts payable and other accrued liabilities | $ 58,645 | $ 59,920 |
Accrued Payroll and Benefits -
Accrued Payroll and Benefits - Schedule of Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accrued bonuses | $ 4,526 | $ 18,453 |
Accrued paid time off | 5,036 | 1,316 |
Accrued payroll | 11,007 | 11,814 |
Accrued other | 3,556 | 3,077 |
Total accrued payroll and benefits | $ 24,125 | $ 34,660 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Annual effective tax rate ("ETR") from continuing operations | (3.80%) | (10.20%) |
Income tax (benefit) expense | $ 493,000 | $ 1,367,000 |
Federal statutory rate | 21% | |
Uncertain tax positions | $ 0 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Line Of Credit Facility [Line Items] | ||
Less deferred debt issuance costs | $ (1,554) | $ (1,379) |
Total debt | 297,663 | 163,184 |
Less current portion of long-term debt | (16,715) | (14,196) |
Long-term debt, less current portion | 280,948 | 148,988 |
Term Loan Facility | ||
Line Of Credit Facility [Line Items] | ||
Total debt | 200,938 | 154,219 |
Revolving Line of Credit | ||
Line Of Credit Facility [Line Items] | ||
Total debt | 88,195 | |
Aircraft Loan | ||
Line Of Credit Facility [Line Items] | ||
Total debt | $ 10,084 | $ 10,344 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 13 Months Ended | ||||||
May 31, 2023 | May 30, 2023 | May 18, 2023 | Apr. 27, 2021 | Sep. 30, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Sep. 30, 2023 | Jan. 31, 2024 | |
Line Of Credit Facility [Line Items] | ||||||||||
Gross of deferred debt issuance cost | $ 1,554,000 | $ 1,379,000 | ||||||||
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 | 1.319% | |||||||||
Floating Component | Second Interest Rate Swap | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Credit facility maturity date | Apr. 27, 2026 | |||||||||
Line of credit facility, additional borrowings | $ 70,000,000 | |||||||||
Interest rate | 3.88% | |||||||||
LIBOR | Interest Rate Swap | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Interest rate | 1.39% | |||||||||
2021 Credit Facility Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | $ 100,000,000 | ||||||||
Leverage Capacity, Description | increasing its leverage capacity from 3.75 times to 4.25 times for four quarters beginning with the first quarter of 2024 | |||||||||
Credit facility maturity date | Apr. 27, 2026 | |||||||||
Percentage of interest rate reduction | 0.025% | 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 | 340% | 190% | ||||||||
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 | 7.30% | 6.10% | ||||||||
2021 Credit Facility Term Loan | Interest Rate Swap | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 2.80% | 2.30% | ||||||||
2021 Credit Facility Term Loan | SOFR | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Interest rate | 0.10% | |||||||||
Incremental Term Loans | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | |||||||||
Equipment Line Of Credit | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||||||||
Credit facility maturity date | Mar. 31, 2024 | |||||||||
Loan and Aircraft Security Agreement | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Debt instrument face amount | $ 10,900,000 | |||||||||
Percentage of prepayment fee for year one | 3% | |||||||||
Percentage of prepayment fee for year two | 2% | |||||||||
Percentage of prepayment fee for year three | 1% | |||||||||
Loan and Aircraft Security Agreement | SOFR | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Interest rate | 1.86% | |||||||||
Term Loan Facility | 2021 Credit Facility Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 175,000,000 | 50,000,000 | ||||||||
Installment repayment amount | $ 3,300,000 | $ 2,200,000 | ||||||||
Revolving Line of Credit | 2021 Credit Facility Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 125,000,000 | $ 50,000,000 | ||||||||
Revolving Line of Credit | Letter of Credit | 2021 Credit Facility Term Loan | ||||||||||
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 | 3 Months Ended |
Mar. 31, 2024 | |
Term Loan Facility | |
Subsequent Event [Line Items] | |
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 |
Additional Term Loan | |
Subsequent Event [Line Items] | |
Debt instrument, quarterly installment rate, June 30, 2024 | 1.25% |
Debt instrument, quarterly installment rate, September 30, 2024 | 1.25% |
Debt instrument, quarterly installment rate, December 31, 2024 | 1.25% |
Debt instrument, quarterly installment rate, March 31, 2025 | 1.25% |
Debt instrument, quarterly installment rate, June 30, 2025 | 1.25% |
Debt instrument, quarterly installment rate, September 30, 2025 | 1.25% |
Debt instrument, quarterly installment rate, December 31, 2025 | 1.25% |
Debt instrument, quarterly installment rate, March 31, 2026 | 1.88% |
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 SOFR (Details) - 2021 Credit Facility Term Loan | May 31, 2023 | Apr. 27, 2021 |
SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 0.10% | |
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 | Base Rate Plus | ||
Subsequent Event [Line Items] | ||
Interest rate | 1.50% | |
Pricing Tier1 | SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 2.50% | |
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 | Base Rate Plus | ||
Subsequent Event [Line Items] | ||
Interest rate | 1.25% | |
Pricing Tier2 | SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 2.25% | |
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 | Base Rate Plus | ||
Subsequent Event [Line Items] | ||
Interest rate | 1% | |
Pricing Tier3 | SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 2% | |
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 | Base Rate Plus | ||
Subsequent Event [Line Items] | ||
Interest rate | 0.75% | |
Pricing Tier4 | SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 1.75% | |
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 | Base Rate Plus | ||
Subsequent Event [Line Items] | ||
Interest rate | 0.50% | |
Pricing Tier5 | SOFR | ||
Subsequent Event [Line Items] | ||
Interest rate | 1.50% |
Debt - Schedule of Aggregate An
Debt - Schedule of Aggregate Annual Maturities of Long-Term Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Line of Credit Facility [Line Items] | |
2025 | $ 16,715 |
2026 | 107,490 |
2027 | 168,438 |
2028 | 1,341 |
2029 | 5,233 |
Total | 299,217 |
2021 Credit Facility Revolver | |
Line of Credit Facility [Line Items] | |
2026 | 88,195 |
Total | 88,195 |
2021 Credit Facility Term Loan | |
Line of Credit Facility [Line Items] | |
2025 | 15,625 |
2026 | 18,126 |
2027 | 167,187 |
Total | 200,938 |
Aircraft Loan | |
Line of Credit Facility [Line Items] | |
2025 | 1,090 |
2026 | 1,169 |
2027 | 1,251 |
2028 | 1,341 |
2029 | 5,233 |
Total | $ 10,084 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Fair Value, Recurring - Level 3 - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Level 3 Liabilities | $ 59,498 | $ 25,057 | $ 34,491 | $ 33,986 | ||
Level 3 Assets | 3,778 | 3,461 | 5,078 | 6,046 | ||
Business Acquisitions Contingent Consideration, Current | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Level 3 Liabilities | 11,782 | 3,592 | 4,734 | 3,801 | ||
Business Acquisitions Contingent Consideration, Long-Term | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Level 3 Liabilities | 28,679 | 2,448 | 3,121 | 4,454 | ||
Conversion Option | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Level 3 Liabilities | 19,037 | 19,017 | 26,636 | 25,731 | ||
Interest Rate Swap | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Level 3 Assets | $ 3,778 | [1] | $ 3,461 | [1] | $ 5,078 | $ 6,046 |
[1] Included in other assets in the unaudited condensed 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 | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | $ 25,057 | $ 33,986 | |
Total Assets, Beginning balance | 3,461 | 6,046 | |
Acquisitions | 35,765 | 25 | |
Asset value, Changes in fair value included in earnings | $ 317 | $ (968) | |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair value changes in business acquisition contingencies | Fair value changes in business acquisition contingencies | |
Changes in fair value included in earnings | $ 126 | $ 507 | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair value changes in business acquisition contingencies | Fair value changes in business acquisition contingencies | |
Payment of contingent consideration payable | $ (1,450) | $ (27) | |
Ending balance | 59,498 | 34,491 | |
Total Assets, Ending balance | 3,778 | 5,078 | |
Business Acquisitions Contingent Consideration, Current | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 3,592 | 3,801 | |
Acquisitions | 9,628 | 25 | |
Changes in fair value included in earnings | 12 | (515) | |
Payment of contingent consideration payable | (1,450) | (27) | |
Reclass of long term to short term contingent liabilities | 1,450 | ||
Ending balance | 11,782 | 4,734 | |
Business Acquisitions Contingent Consideration, Long-Term | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 2,448 | 4,454 | |
Acquisitions | 26,137 | ||
Changes in fair value included in earnings | 94 | 117 | |
Reclass of long term to short term contingent liabilities | (1,450) | ||
Ending balance | 28,679 | 3,121 | |
Conversion Option | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 19,017 | 25,731 | |
Changes in fair value included in earnings | 20 | 905 | |
Ending balance | 19,037 | 26,636 | |
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total Assets, Beginning balance | 3,461 | [1] | 6,046 |
Asset value, Changes in fair value included in earnings | 317 | (968) | |
Total Assets, Ending balance | $ 3,778 | [1] | $ 5,078 |
[1] Included in other assets in the unaudited condensed consolidated statement of financial position. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments And Contingencies [Line Items] | |
Lessee operating lease, expiration year | 2031 |
Office Equipment | |
Commitments And Contingencies [Line Items] | |
Lessee operating lease, expiration year | 2028 |
Convertible and Redeemable Se_2
Convertible and Redeemable Series A-2 Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Apr. 13, 2020 | Jan. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Temporary Equity [Line Items] | ||||||
Period between issuance and expiration of outstanding warrant | 10 years | |||||
Proceeds from the Series A-2 and Warrant | $ 175,000 | |||||
Preferred stock, dividends paid | $ 2,814 | $ 4,100 | ||||
Number of debt incurrence test ratio | 4.5 | |||||
Compound embedded derivative, change in net fair value | $ 297 | (1,873) | ||||
Convertible And Redeemable Series A-2 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Number of shares issued | 17,500 | 11,667 | 17,500 | |||
Par value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Debt issuance costs, net | $ 1,300 | |||||
Preferred stock, dividends paid | $ 2,800 | 4,100 | ||||
Percentage of discount on common stock market price | 15% | |||||
Percentage of dividend rate steps downs per year | 9% | |||||
Percentage of dividend rate increase per annum in the event of noncompliance | 12% | |||||
Number of days dividend increase rate applicable noncompliance event occurred | 90 days | |||||
Percentage of dividend rate increase per annum upon noncompliance occurred and thereafter | 14% | |||||
Minimum repayment amount | $ 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. In January 2024, the Company redeemed $60 million of the outstanding Convertible and Redeemable Series A-2 Preferred Stock with cash. As of March 31, 2024, the aggregate amount of the Convertible and Redeemable Series A-2 Preferred Stock issued and outstanding was $122.2 million, or 11,667 shares. | |||||
Aggregate stated value of stock redeemed | $ 25,000 | |||||
Redeemed outstanding amount | 92,928 | $ 152,928 | $ 152,928 | $ 152,928 | ||
Temporary equity, aggregate liquidation preference | 122,200 | 182,200 | ||||
Compound embedded derivative, fair value net | $ 19,000 | $ 19,000 | ||||
Redeemed in cash | $ 60,000 | |||||
Number of shares outstanding | 11,667 | 17,500 | 17,500 | 17,500 | ||
Convertible And Redeemable Series A-2 Preferred Stock | Other (Expense) Income | ||||||
Temporary Equity [Line Items] | ||||||
Compound embedded derivative, change in net fair value | $ 900 | |||||
Convertible And Redeemable Series A-2 Preferred Stock | Maximum | Other (Expense) Income | ||||||
Temporary Equity [Line Items] | ||||||
Compound embedded derivative, change in net fair value | $ 100 | |||||
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 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2023 | ||
Class Of Stock [Line Items] | |||||
Common stock, shares authorized | 190,000,000 | 190,000,000 | |||
Common stock, par value | $ 0.000004 | $ 0.000004 | |||
Total unrecognized stock-based compensation expense related to unvested options, restricted stock and stock appreciation rights granted under the Plans | $ 113,800,000 | $ 146,600,000 | |||
Unrecognized expense expected to be recognized period | 3 years | ||||
Stock compensation expenses | $ 11,272,000 | $ 13,035,000 | |||
Shares, granted | [1] | 144,251 | 90,116 | ||
Restricted shares outstanding | 3,090,801 | 2,528,383 | |||
Montrose 2017 Stock Incentive Plan | Restricted Stock | |||||
Class Of Stock [Line Items] | |||||
Shares, granted | 0 | 0 | |||
Montrose 2017 Stock Incentive Plan | Stock Options | Board of Directors | |||||
Class Of Stock [Line Items] | |||||
Shares of vested over period | 4 years | ||||
Montrose 2017 Stock Incentive Plan | Stock Options | Executive Officers | |||||
Class Of Stock [Line Items] | |||||
Shares of vested over period | 3 years | ||||
Vesting frequency of period | 1 year | ||||
Montrose 2017 Stock Incentive Plan | Stock Options | On the two-year anniversary of the grant | Board of Directors | |||||
Class Of Stock [Line Items] | |||||
Shares, vesting rights, percentage | 50% | ||||
Montrose 2017 Stock Incentive Plan | Stock Options | Fourth Anniversary | Board of Directors | |||||
Class Of Stock [Line Items] | |||||
Shares, vesting rights, percentage | 50% | ||||
Montrose Amended and Restated 2013 Stock Option Plan | |||||
Class Of Stock [Line Items] | |||||
Shares outstanding from exercised options | 1,577,184 | 1,434,885 | |||
Two Thousand Seventeen Plan | Restricted Stock | |||||
Class Of Stock [Line Items] | |||||
Stock compensation expenses | $ 7,919,000 | $ 8,697,000 | |||
Two Thousand Seventeen Plan | Stock Options | |||||
Class Of Stock [Line Items] | |||||
Stock compensation expenses | 1,063,000 | 2,073,000 | |||
Two Thousand Seventeen Plan | Stock Appreciation Rights (SARs) | |||||
Class Of Stock [Line Items] | |||||
Stock compensation expenses | $ 2,290,000 | 2,265,000 | |||
Shares, granted | 3,000,000 | ||||
Exercise price | $ 66.79 | ||||
Shares of vested over period | 5 years | ||||
Remaining contractual terms | 10 years | ||||
Fair value vested in period | $ 46,000,000 | ||||
Weighted average remaining contract life | 7 years 8 months 15 days | ||||
2013 Plan | |||||
Class Of Stock [Line Items] | |||||
Stock compensation expenses | $ 0 | $ 0 | |||
Supplemental Incentive Plans | |||||
Class Of Stock [Line Items] | |||||
Shares, granted | 0 | 246,417 | |||
Supplemental Incentive Plans | RSUs | |||||
Class Of Stock [Line Items] | |||||
Shares of vested over period | 4 years | ||||
Supplemental Incentive Plans | RSUs | First Quater | |||||
Class Of Stock [Line Items] | |||||
Shares, vesting rights, percentage | 33.33% | ||||
Supplemental Incentive Plans | RSUs | First Anniversary | |||||
Class Of Stock [Line Items] | |||||
Shares, vesting rights, percentage | 33.33% | ||||
Supplemental Incentive Plans | RSUs | Second Anniversary | |||||
Class Of Stock [Line Items] | |||||
Shares, vesting rights, percentage | 33.33% | ||||
[1] Represents the non-cash release of common shares due to the vesting of restricted stock. |
Stockholder's Equity - Summary
Stockholder's Equity - Summary of Issued Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Equity [Abstract] | |||
Acquisitions, Shares | 220,734 | ||
Exercise of options, Shares | 27,396 | 124,455 | |
Restricted shares, net | [1] | 144,251 | 90,116 |
Payment of earn-out liability, Shares | 35,250 | ||
Total, Shares | 427,631 | 214,571 | |
Acquisitions, Average Price per Share | $ 29.81 | ||
Exercise of options, Average Price per Share | 17.8 | $ 21.61 | |
Restricted shares, net, Average Price per Share | [1] | 37.58 | 36.81 |
Payment of earn-out liability, Average Price per Share | 30.84 | ||
Total, Average Price per Share | $ 31.75 | $ 27.99 | |
Acquisitions, Total | $ 6,580 | ||
Exercise of options, Total | 487 | $ 2,690 | |
Payment of earn-out liability, Total | 1,087 | ||
Total | $ 8,154 | $ 2,690 | |
[1] Represents the non-cash release of common shares due to the vesting of restricted stock. |
Stockholder's Equity - Summar_2
Stockholder's Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Details) - shares | Mar. 31, 2024 | Jan. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2023 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares authorized to be issued | 9,574,495 | 8,366,932 | ||||
Shares available for grant | 1,674,558 | 893,522 | [1] | |||
2017 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares authorized to be issued | 7,538,276 | 6,329,913 | ||||
Shares available for grant | 1,674,558 | [1] | 1,207,563 | 893,522 | [1] | 1,189,801 |
2013 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares authorized to be issued | 2,036,219 | 2,037,019 | ||||
[1] In January 2024 and January 2023 the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, a chieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information on stock appreciation rights. |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Number of Shares Authorized to be Issued and Available for Grant (Parenthetical) (Details) - shares | Mar. 31, 2024 | Jan. 31, 2024 | Mar. 31, 2023 | [1] | Jan. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for grant | 1,674,558 | 893,522 | ||||
2017 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for grant | 1,674,558 | [1] | 1,207,563 | 893,522 | 1,189,801 | |
[1] In January 2024 and January 2023 the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, a chieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information on stock appreciation rights. |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | $ 11,272 | $ 13,035 |
2017 Plan | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 1,063 | 2,073 |
2017 Plan | Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 7,919 | 8,697 |
2017 Plan | Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 2,290 | 2,265 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 911 | 892 |
Cost of Revenue | 2017 Plan | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 274 | 349 |
Cost of Revenue | 2017 Plan | Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 637 | 543 |
Selling, General and Administrative Expenses | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 10,361 | 12,143 |
Selling, General and Administrative Expenses | 2017 Plan | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 789 | 1,724 |
Selling, General and Administrative Expenses | 2017 Plan | Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | 7,282 | 8,154 |
Selling, General and Administrative Expenses | 2017 Plan | Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock compensation expenses | $ 2,290 | $ 2,265 |
Stockholder's Equity - Schedu_2
Stockholder's Equity - Schedule of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted, Shares | [1] | 144,251 | 90,116 |
Montrose 2017 Stock Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted, Average Price per Share | $ 13.9 | ||
Montrose 2017 Stock Incentive Plan | Restricted stock units awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted, Shares | 259,118 | 464,186 | |
Awards forfeited, Shares | (14,336) | ||
Awards granted, Average Price per Share | $ 39.65 | $ 32.62 | |
Awards forfeited, Average Price per Share | $ 37.04 | ||
Awards granted, Fair Value | $ 10,273 | $ 15,140 | |
Awards forfeited, Fair Value | $ 531 | ||
[1] Represents the non-cash release of common shares due to the vesting of restricted stock. |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Performance Hurdles (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
SAR Stock Price Performance Hurdle One | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 133.58 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
SAR Stock Price Performance Hurdle Two | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 166.98 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
SAR Stock Price Performance Hurdle Three | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
SARs Stock Price Performance Hurdle | $ 200.37 |
Portion of SARs Subject to Performance Hurdle | 0.33% |
Stockholder's Equity - Summar_3
Stockholder's Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Options to Purchase Common Stock Exercised | (27,396) | (124,455) | ||
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 | 2,516,272 | 2,579,566 | 2,579,566 | |
Options to Purchase Common Stock Granted | 233,955 | |||
Options to Purchase Common Stock Forfeited/cancelled | (36,105) | (34,619) | ||
Options to Purchase Common Stock Expired | (13,010) | |||
Options to Purchase Common Stock Exercised | (18,746) | (101,279) | ||
Options to Purchase Common Stock Outstanding Ending Balance | 2,448,411 | 2,677,623 | 2,516,272 | 2,579,566 |
Options to Purchase Common Stock Exercisable | 1,513,438 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-Average Exercise Price per Share Outstanding Beginning Balance | $ 30.92 | $ 30.58 | $ 30.58 | |
Weighted-Average Exercise Price per Share Granted | 32.16 | |||
Weighted-Average Exercise Price per Share Forfeited/cancelled | 38.78 | 35.16 | ||
Weighted-Average Exercise Price per Share Expired | 44.16 | |||
Weighted-Average Exercise Price per Share Exercised | 23.26 | 24.55 | ||
Weighted-Average Exercise Price per Share Outstanding Ending Balance | 30.8 | 30.89 | 30.92 | $ 30.58 |
Weighted-Average Exercise Price per Share Exercisable | 31.13 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Average Grant Date Fair Value per Share Outstanding Beginning Balance | 15.95 | 14.96 | 14.96 | |
Weighted Average Grant Date Fair Value per Share Granted | 13.9 | |||
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 16 | $ 15.47 | $ 15.95 | $ 14.96 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 6 years 9 months 18 days | 7 years 9 months 18 days | 7 years | 7 years 9 months 18 days |
Weighted Average Remaining Contract Life (in Years) Exercisable | 6 years 4 months 24 days | |||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 25,468 | $ 21,127 | $ 13,825 | $ 37,292 |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 200 | $ 2,467 | ||
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 15,380 | |||
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 | 792,191 | 855,695 | 855,695 | |
Options to Purchase Common Stock Exercised | (8,650) | (23,176) | ||
Options to Purchase Common Stock Outstanding Ending Balance | 783,541 | 832,519 | 792,191 | 855,695 |
Options to Purchase Common Stock Exercisable | 783,541 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-Average Exercise Price per Share Outstanding Beginning Balance | $ 6.4 | $ 6.43 | $ 6.43 | |
Weighted-Average Exercise Price per Share Exercised | 5.95 | 8.78 | ||
Weighted-Average Exercise Price per Share Outstanding Ending Balance | 6.41 | 6.37 | 6.4 | $ 6.43 |
Weighted-Average Exercise Price per Share Exercisable | 6.41 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Average Grant Date Fair Value per Share Outstanding Beginning Balance | 2.16 | 2.1 | 2.1 | |
Weighted Average Grant Date Fair Value per Share Ending Balance | $ 2.18 | $ 2.06 | $ 2.16 | $ 2.1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contract Life (in Years) Outstanding | 2 years 2 months 12 days | 3 years | 2 years 4 months 24 days | 3 years 3 months 18 days |
Weighted Average Remaining Contract Life (in Years) Exercisable | 2 years 2 months 12 days | |||
Aggregate Intrinsic Value of In-The-Money Options Outstanding | $ 25,669 | $ 24,393 | $ 20,380 | $ 32,478 |
Aggregate Intrinsic Value of In-The-Money Options Exercised | 289 | $ 963 | ||
Aggregate Intrinsic Value of In-The-Money Options Exercisable | $ 25,669 |
Stockholder's Equity - Summar_4
Stockholder's Equity - Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock value (per share) | $ 32.16 |
Expected volatility | 33.79% |
Risk-free interest rate | 3.72% |
Expected life (years) | 7 years |
Forfeiture rate | 0% |
Dividend rate | 0% |
Stockholder's Equity - Schedu_3
Stockholder's Equity - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Mar. 31, 2024 | Jan. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2023 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock reserved for future issuance | 10,475,763 | 9,555,449 | ||||
Montrose 2013 Stock Incentive Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock reserved for future issuance | 783,541 | 832,519 | ||||
Montrose 2017 Stock Incentive Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock reserved for future issuance | 9,692,222 | [1] | 1,207,563 | 8,722,930 | [1] | 1,189,801 |
[1] In January 2024 and 2023, the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, 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 - Schedule
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Parenthetical) (Details) - shares | 1 Months Ended | |||||||
Jan. 31, 2021 | Mar. 31, 2024 | Jan. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2023 | Jan. 31, 2022 | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock reserved for future issuance | 10,475,763 | 9,555,449 | ||||||
Montrose 2017 Stock Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock reserved for future issuance | 9,692,222 | [1] | 1,207,563 | 8,722,930 | [1] | 1,189,801 | ||
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 2024 and 2023, the Board of Directors ratified the addition of 1,207,563 and 1,189,801 shares of common stock, respectively, 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 Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (13,357) | $ (14,719) |
Convertible and redeemable series A-2 preferred stock dividend | (2,814) | (4,100) |
Net loss attributable to common stockholders -basic | (16,171) | (18,819) |
Net loss attributable to common stockholders -diluted | $ (16,171) | $ (18,819) |
Weighted-average common shares outstanding - basic | 30,381 | 29,857 |
Weighted-average common shares outstanding - diluted | 30,381 | 29,857 |
Net loss per share attributable to common stockholders - basic | $ (0.53) | $ (0.63) |
Net loss per share attributable to common stockholders - diluted | $ (0.53) | $ (0.63) |
Net Loss Per Share - Common Sto
Net Loss Per Share - Common Stock Equivalents Excluded from Calculation of Diluted Loss Per Share Attributable to Common Stockholders (Details) - shares | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Stock Options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of loss per share amount | [1] | 3,231,952 | 3,510,142 |
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of loss per share amount | [1] | 2,569,253 | 2,151,785 |
Series A-2 | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of loss per share amount | [1] | 4,292,268 | 4,735,220 |
Stock Appreciation Rights (SARs) | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of loss per share amount | [1] | 3,000,000 | 3,000,000 |
[1] Includes 7,789,349 and 7,362,459 common stock equivalents that are out of the money as of March 31, 2024 and March 31, 2023 , respectively. |
Net Loss Per Share - Common S_2
Net Loss Per Share - Common Stock Equivalents Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders (Parenthetical) (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Number of shares out of money | 7,789,349 | 7,362,459 |
Segment and Geographic Locati_3
Segment and Geographic Location Information - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Dec. 29, 2023 USD ($) | Mar. 31, 2024 USD ($) Segment | Dec. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 3 | ||
Number of reportable segments | Segment | 3 | ||
Discontinuing Specialty Lab | |||
Segment Reporting Information [Line Items] | |||
Sales Price Of Assets | $ 4.8 | ||
Cash received | 0.5 | ||
Promissory note receivable | $ 4.3 | ||
Promissory note receivable, Annual interest rate | 9% | ||
Promissory note receivable, net of expected losses and payment | $ 2.1 | $ 2.1 |
Segment and Geographic Locati_4
Segment and Geographic Location Information - Components of Segment Revenues and Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Segment Revenues | $ 155,325 | $ 131,428 |
Segment Adjusted EBITDA | 16,922 | 16,603 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment Revenues | 155,325 | 131,428 |
Segment Adjusted EBITDA | 27,795 | 25,931 |
Assessment, Permitting and Response | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment Revenues | 58,580 | 52,214 |
Segment Adjusted EBITDA | 16,280 | 14,266 |
Measurement and Analysis | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment Revenues | 45,494 | 42,527 |
Segment Adjusted EBITDA | 6,504 | 6,387 |
Remediation and Reuse | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment Revenues | 51,251 | 36,687 |
Segment Adjusted EBITDA | 5,012 | 5,278 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | $ (10,873) | $ (9,328) |
Segment and Geographic Locati_5
Segment and Geographic Location Information - Reconciliation of Segment Measure to Net Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | |||
Segment Reporting Information [Line Items] | ||||
Total | $ 16,922 | $ 16,603 | ||
Interest expense, net | (3,306) | (1,541) | ||
Income tax expense | (493) | (1,367) | ||
Depreciation and amortization | (11,653) | (10,555) | ||
Stock-based compensation | (11,272) | (13,035) | ||
Acquisition costs | (2,525) | (775) | ||
Fair value changes in financial instruments | 297 | (1,873) | ||
Fair value changes in business acquisition contingencies | (106) | 398 | ||
Expenses related to financing transactions | (144) | (4) | ||
Discontinued Specialty Lab | [1] | (2,436) | ||
Other losses and expenses | (481) | [2] | (134) | |
Net loss | $ (13,357) | $ (14,719) | ||
[1] Amounts consist of operating losses before depreciation related to the Discontinued Specialty Lab. Amount consists of costs associated with a lease abandonment. |
Segment and Geographic Locati_6
Segment and Geographic Location Information - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 155,325 | $ 131,428 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 128,842 | 126,801 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 21,281 | 3,880 |
Other International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 5,202 | $ 747 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transactions [Abstract] | ||
Related party transaction amount | $ 0 | $ 0 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, description | 401(k) Savings Plan | ||
Defined contribution plan, maximum annual contributions per employee, percent | 85% | 85% | |
Defined contribution plan, employer matching contribution, percent of match | 100% | ||
Defined contribution plan participant's compensation percent | 3% | ||
Defined contribution plan percentage of participant's elective deferrals | 50% | ||
Selling, General and Administrative Expenses | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, employer discretionary contribution amount | $ 2.7 | $ 2.1 | |
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 | 5% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||||
Apr. 22, 2024 | Apr. 18, 2024 | Apr. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | ||||||
Common stock issued, shares | 427,631 | 214,571 | ||||
Common stock, par value | $ 0.000004 | $ 0.000004 | ||||
Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Common stock issued, shares | 427,631 | 214,571 | ||||
Subsequent Event | Engineering & Technical Associates, Inc | ||||||
Subsequent Event [Line Items] | ||||||
Asset acquisition, agreement date | Apr. 01, 2024 | |||||
Purchase price | $ 2 | |||||
Payment through cash on hand | 1.6 | |||||
Subsequent Event | Common Stock | Engineering & Technical Associates, Inc | ||||||
Subsequent Event [Line Items] | ||||||
Payments through deferred consideration | $ 0.4 | |||||
Subsequent Event | Common Stock | IPO | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds | $ 121.8 | |||||
Subsequent Event | Common Stock | Secondary Public Offering | ||||||
Subsequent Event [Line Items] | ||||||
Common stock issued, shares | 3,450,000 | |||||
Subsequent Event | Common Stock | Underwriters | ||||||
Subsequent Event [Line Items] | ||||||
Initial Shares of public offering price | $ 37.15 | |||||
Discounts and commisions per share | $ 1.67175 |