Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 01, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38523 | |
Entity Registrant Name | CHARAH SOLUTIONS, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4228671 | |
Entity Address, Address Line One | 12601 Plantside Drive | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40299 | |
City Area Code | 502 | |
Local Phone Number | 245-1353 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 33,725,884 | |
Entity Central Index Key | 0001730346 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, par value $0.01 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CHRA | |
Security Exchange Name | NYSE | |
8.50% Senior Notes due 2026 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.50% Senior Notes due 2026 | |
Trading Symbol | CHRB | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 11,184 | $ 24,266 |
Restricted cash | 22,054 | 34,908 |
Trade accounts receivable, net | 50,676 | 49,303 |
Contract assets | 24,912 | 26,844 |
Inventory | 4,793 | 6,289 |
Prepaid expenses and other current assets | 7,652 | 6,113 |
Total current assets | 121,271 | 147,723 |
Real estate, property and equipment, net | 75,943 | 70,473 |
Goodwill | 62,193 | 62,193 |
Intangible assets, net | 51,557 | 53,531 |
Equity method investments | 7 | 7 |
Other assets | 10,483 | 10,180 |
Total assets | 321,454 | 344,107 |
Current liabilities: | ||
Accounts payable | 31,396 | 30,641 |
Contract liabilities | 6,593 | 6,199 |
Capital lease obligations, current portion | 8,826 | 6,979 |
Notes payable, current maturities | 8,196 | 7,567 |
Asset retirement obligations, current portion | 24,776 | 27,534 |
Accrued liabilities | 25,160 | 36,874 |
Other current liabilities | 460 | 460 |
Total current liabilities | 105,407 | 116,254 |
Deferred tax liabilities | 985 | 949 |
Contingent payments for acquisitions | 1,950 | 1,950 |
Asset retirement obligations | 9,193 | 14,879 |
Capital lease obligations, less current portion | 25,757 | 19,444 |
Notes payable, less current maturities | 132,539 | 133,661 |
Other liabilities | 641 | 641 |
Total liabilities | 276,472 | 287,778 |
Commitments and contingencies | ||
Mezzanine equity | ||
Series A Preferred Stock — $0.01 par value; 50 shares authorized, 26 shares issued and outstanding as of March 31, 2022 and December 31, 2021; aggregate liquidation preference of $33,775 and $32,712 as of March 31, 2022 and December 31, 2021, respectively | 37,676 | 35,532 |
Stockholders’ equity | ||
Retained losses | (106,719) | (94,679) |
Common Stock — $0.01 par value; 200,000 shares authorized, 33,408 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 334 | 334 |
Additional paid-in capital | 113,432 | 114,880 |
Total stockholders’ equity | 7,047 | 20,535 |
Non-controlling interest | 259 | 262 |
Total equity | 7,306 | 20,797 |
Total liabilities, mezzanine equity and stockholders’ equity | $ 321,454 | $ 344,107 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Series A Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A Preferred Stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Series A Preferred Stock, shares issued (in shares) | 26,000 | 26,000 |
Series A Preferred Stock, shares outstanding (in shares) | 26,000 | 26,000 |
Series A Preferred Stock, aggregate liquidation preference | $ 33,775 | $ 32,712 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 33,408,000 | 33,408,000 |
Common stock, shares outstanding (in shares) | 33,408,000 | 33,408,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 66,051 | $ 52,107 |
Cost of sales | (69,818) | (46,522) |
Gross profit | (3,767) | 5,585 |
General and administrative expenses | (8,952) | (9,432) |
Gain on sales-type lease | 0 | 5,568 |
Gains on sales of real estate, property and equipment, net | 3,543 | 547 |
Gain on ARO settlement | 2,451 | 0 |
Other operating expenses from ERT services | (667) | (290) |
Operating (loss) income | (7,392) | 1,978 |
Interest expense, net | (4,573) | (3,235) |
Income from equity method investment | 0 | 202 |
Loss before income taxes | (11,965) | (1,055) |
Income tax expense | 78 | 157 |
Net loss | (12,043) | (1,212) |
Less (loss) income attributable to non-controlling interest | (3) | 75 |
Net loss attributable to Charah Solutions, Inc. | (12,040) | (1,287) |
Deemed and imputed dividends on Series A Preferred Stock | (149) | (147) |
Series A Preferred Stock dividends | (2,090) | (2,067) |
Net loss attributable to common stockholders | $ (14,279) | $ (3,501) |
Net loss attributable to common stockholders per common share: | ||
Basic (in dollars per share) | $ (0.43) | $ (0.12) |
Diluted (in dollars per share) | $ (0.43) | $ (0.12) |
Weighted-average shares outstanding used in loss per common share: | ||
Basic (in shares) | 33,408 | 30,113 |
Diluted (in shares) | 33,408 | 30,113 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Total | Common Stock | Additional Paid-In Capital | Retained Losses | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2020 | 26,000 | |||||
Beginning balance at Dec. 31, 2020 | $ 27,423 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Deemed and imputed dividends on Series A Preferred Stock | $ 1,503 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 26,000 | |||||
Ending balance at Mar. 31, 2021 | $ 28,926 | |||||
Balance beginning of period (in shares) at Dec. 31, 2020 | 30,077,018 | |||||
Balance beginning of period at Dec. 31, 2020 | 20,316 | $ 19,906 | $ 300 | $ 108,471 | $ (88,865) | $ 410 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (1,212) | (1,287) | (1,287) | 75 | ||
Shares issued under share-based compensation plans (in shares) | 152,337 | |||||
Shares issued under share-based compensation plans | 0 | $ 2 | (2) | |||
Taxes paid related to net settlement of shares (in shares) | (970) | |||||
Taxes paid related to the net settlement of shares | (1) | (1) | (1) | |||
Share-based compensation expense | 298 | 298 | 298 | |||
Deemed and imputed dividends on Series A Preferred Stock | (147) | (147) | (147) | |||
Series A Preferred Stock dividends | (2,067) | (2,067) | (2,067) | |||
Balance end of period (in shares) at Mar. 31, 2021 | 30,228,385 | |||||
Balance end of period at Mar. 31, 2021 | $ 17,187 | 16,702 | $ 302 | 106,552 | (90,152) | 485 |
Beginning balance (in shares) at Dec. 31, 2021 | 26,000 | |||||
Beginning balance at Dec. 31, 2021 | $ 35,532 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Deemed and imputed dividends on Series A Preferred Stock | $ 2,144 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 26,000 | |||||
Ending balance at Mar. 31, 2022 | $ 37,676 | |||||
Balance beginning of period (in shares) at Dec. 31, 2021 | 33,408,000 | 33,407,806 | ||||
Balance beginning of period at Dec. 31, 2021 | $ 20,797 | 20,535 | $ 334 | 114,880 | (94,679) | 262 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (12,043) | (12,040) | (12,040) | (3) | ||
Shares issued under share-based compensation plans (in shares) | 750 | |||||
Shares issued under share-based compensation plans | 0 | |||||
Taxes paid related to net settlement of shares (in shares) | (260) | |||||
Taxes paid related to the net settlement of shares | 0 | |||||
Share-based compensation expense | 791 | 791 | 791 | |||
Deemed and imputed dividends on Series A Preferred Stock | (149) | (149) | (149) | |||
Series A Preferred Stock dividends | $ (2,090) | (2,090) | (2,090) | |||
Balance end of period (in shares) at Mar. 31, 2022 | 33,408,000 | 33,408,296 | ||||
Balance end of period at Mar. 31, 2022 | $ 7,306 | $ 7,047 | $ 334 | $ 113,432 | $ (106,719) | $ 259 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (12,043) | $ (1,212) |
Adjustments to reconcile net loss to net cash and restricted cash (used in) provided by operating activities: | ||
Depreciation and amortization | 6,571 | 6,146 |
Paid-in-kind interest on long-term debt | 0 | 1,230 |
Amortization of debt issuance costs | 561 | 165 |
Deferred income taxes | 36 | 157 |
Gain on sales-type lease | 0 | (5,568) |
Gains on sales of real estate, property and equipment | (3,543) | (644) |
Income from equity method investment | 0 | (202) |
Non-cash share-based compensation | 791 | 298 |
Gain on interest rate swap | 0 | (120) |
Gain on ARO settlements | (2,451) | 0 |
Increase (decrease) in cash and restricted cash due to changes in: | ||
Trade accounts receivable | 279 | 9,297 |
Contract assets and liabilities | 2,326 | 23,910 |
Inventory | 1,497 | (873) |
Accounts payable | 1,652 | (475) |
Asset retirement obligation | (5,992) | (1,637) |
Other assets and liabilities | (13,596) | (16,406) |
Net cash and restricted cash (used in) provided by operating activities | (23,912) | 14,066 |
Cash flows from investing activities: | ||
Net proceeds from the sales of real estate, property and equipment | 3,095 | 446 |
Purchases of property and equipment | (2,126) | (1,534) |
Cash and restricted cash received from ERT transaction | 0 | 34,900 |
Payments of working capital adjustment and other items for the sale of subsidiary | 0 | (7,321) |
Net cash and restricted cash provided by investing activities | 969 | 26,491 |
Cash flows from financing activities: | ||
Net proceeds on the line of credit | 0 | 7,082 |
Proceeds from long-term debt | 1,402 | 1,009 |
Principal payments on long-term debt | (2,367) | (5,975) |
Payments of debt issuance costs | (144) | 0 |
Principal payments on capital lease obligations | (1,884) | (536) |
Taxes paid related to net settlement of shares | 0 | (3) |
Net cash and restricted cash (used in) provided by financing activities | (2,993) | 1,577 |
Net (decrease) increase in cash and restricted cash | (25,936) | 43,127 |
Cash and restricted cash, beginning of period | 59,174 | 29,211 |
Cash and restricted cash, end of period | 33,238 | 72,338 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 3,865 | 2,002 |
Cash paid during the period for taxes | 0 | (210) |
Supplemental disclosures and non-cash investing and financing transactions: | ||
Gross proceeds from the line of credit | 0 | 37,480 |
Gross payments on the line of credit | 0 | (30,398) |
Sale of structural fill asset through a sales-type lease | 0 | 6,000 |
Proceeds from the sale of equipment in accounts receivable, net | 1,652 | 728 |
Series A Preferred Stock dividends payable included in accrued expenses | 2,090 | 2,067 |
Deemed and imputed dividends on Series A Preferred Stock | 2,144 | 1,503 |
Equipment acquired through capital leases | 10,043 | 0 |
Property and equipment included in accounts payable and accrued expenses | 496 | 205 |
As reported within the unaudited condensed consolidated balance sheet: | ||
Cash | 11,184 | 24,429 |
Restricted cash | 22,054 | 47,909 |
Total cash and restricted cash as presented in the balance sheet | $ 33,238 | $ 72,338 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Organization Charah Solutions, Inc. (together with its wholly-owned subsidiaries, “Charah Solutions,” the “Company,” “we,” “us, or “our”), is a holding company formed in Delaware in January 2018. The Company's majority shareholder is Bernhard Capital Partners Management, LP and its affiliates (collectively, “BCP”). BCP owns approximately 59% of the total voting power of our outstanding shares of common stock and the outstanding Series A Preferred Stock (“Preferred Stock”) on an as-converted basis. BCP owns all of the outstanding shares of Preferred Stock and it is convertible at BCP's option at any time into shares of common stock. Description of Business Operations The Company is a leading national service provider of mission-critical environmental services and byproduct recycling to the power generation industry, enabling our customers to address challenges related to the remediation of coal ash ponds and landfills at open and closed power plant sites while continuously operating and providing necessary electric power to communities nationwide. Services offered include a suite of remediation and compliance services, byproduct services, raw material sales and Environmental Risk Transfer (“ERT”) services. The Company has corporate offices in Kentucky and North Carolina and principally operates in the eastern and mid-central United States. Under the Jumpstart Our Business Startups Act (the “JOBS Act”), the Company meets the definition of an “emerging growth company,” which allows the Company to have an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. The Company intends to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act until the Company is no longer an emerging growth company. Among other things, we are not required to provide an auditor attestation report on the assessment of the internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 and our disclosure obligations regarding executive compensation may be reduced. We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the IPO, or December 31, 2023. However, if certain events occur before the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.07 billion, or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period. Basis for Presentation The Company’s fiscal year ends December 31. The accompanying unaudited condensed consolidated financial statements include the assets, liabilities, stockholders’ equity and results of operations of the Company and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, which consist of normal recurring adjustments. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Segment Information The Company operates as one reportable segment, reflecting the suite of end-to-end services we offer our utility partners and how our Chief Operating Decision Maker (“CODM”) reviews consolidated financial information to evaluate results of operations, assess performance and allocate resources. Due to the nature of the Company’s business, the Company's Chief Executive Officer, who is also the CODM, evaluates the performance of the Company and allocates resources of the Company based on consolidated gross profit, general and administrative expenses, balance sheet, liquidity, capital spending, safety statistics and business development reports for the Company as a whole. Since the Company has a single operating segment, all required financial segment information can be found in the unaudited condensed consolidated financial statements. We provide the following services through our one segment: remediation and compliance services, byproduct services, raw material sales and ERT services. Remediation and compliance services are associated with our customers’ need for multi-year environmental improvement and sustainability initiatives, whether driven by regulatory requirements, power generation customer initiatives or consumer expectations and standards. Byproduct services consist of recurring and mission-critical coal ash management and operations for coal-fired power generation facilities while also supporting both our power generation customers’ desire to recycle their recurring and legacy volumes of coal combustion residuals (“CCRs”), commonly known as coal ash, and our ultimate end customers’ need for high-quality, cost-effective supplemental cementitious materials (“SCMs”) that provide a sustainable, environmentally-friendly substitute for Portland cement in concrete. Our raw material sales provide customers with the raw materials essential to their business while also providing the sourcing, logistics, and management needed to facilitate these raw material transactions around the globe. ERT services represent an innovative solution designed to meet our coal fired plant energy providers’ evolving and increasingly complex plant closure and environmental remediation needs. These customers need to retire and decommission older or underutilized assets while maximizing the assets value and improving the environment. Our ERT services manage the sites' environmental remediation requirements, benefiting the communities and lowering the coal fired plant energy providers’ costs. Impact of the COVID-19 Pandemic In March 2020, the World Health Organization categorized the disease caused by a novel coronavirus (“COVID-19”) to be a pandemic. Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statement does not include any adjustments that might result from the outcome of this uncertainty. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which includes modifications to the limitation on business interest expense and net operating loss carryforward provisions and provided a payment delay of certain employer payroll taxes during 2020. The Company deferred $1,637 of employer payroll taxes otherwise due in 2020, with 50% paid in the year ended December 31, 2021 and the remaining 50% due by December 31, 2022. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , requiring all leases to be recognized on the balance sheet as a right-of-use asset and a lease liability, unless the lease is a short term lease (generally a lease with a term of 12 months or less).At the commencement date of the lease, the Company will recognize: (i) a lease liability for the Company’s obligation to make payments under the lease agreement, measured on a discounted basis; and (ii) a right-of-use asset that represents the Company’s right to use, or control the use of, the specified asset for the lease term. This ASU originally required recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective transition method. In July 2018, the FASB issued ASU No. 2018-11, which provided an additional (and optional) transition method that permits the application of this ASU at the adoption date with recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In June 2020, the FASB issued ASU No. 2020-05 and delayed the effective date of this ASU, extending the effective date for non-public business entities, and making the ASU effective for the Company for the fiscal year ending December 31, 2022, and interim periods within the fiscal year ending December 31, 2023, with early adoption permitted. The Company has not yet selected a transition method and, while we are still in the process of assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows, we expect the adoption of this standard will have a material impact on our consolidated financial position due to the recognition of the right-of-use asset and lease liability related to operating leases. We had operating leases with remaining rental payments of approximately $28,852 as of March 31, 2022. The discounted minimum remaining rental payments will be the starting point for determining the right-of-use asset and lease liability. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments , which introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income, and (4) beneficial interests in securitized financial assets. The amendments contained in this ASU will be applied through a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. In November 2018, the FASB issued ASU No. 2018-19, which amended the effective date of ASU No. 2016-13 and clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20. In October 2019, the FASB delayed the effective date of this ASU, extending the effective date for non-public business entities and making the ASU effective for the Company for the fiscal year ending December 31, 2023, and interim periods therein, with early adoption permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another rate that is expected to be discontinued. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). This ASU provides supplemental guidance and clarification to ASU No. 2020-04, and these updates must be adopted concurrently, cumulatively referred to as “Topic 848.” The amendments in Topic 848 are currently effective for all entities, and upon adoption, may be applied prospectively to contract modifications made on or before December 31, 2022. The Company is still assessing the impact of Topic 848 on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU simplifies the guidance on accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible debt with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock unless certain other conditions are met. Also, the ASU requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock |
Asset Acquisition
Asset Acquisition | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | Asset Acquisitions Gibbons Creek Asset Acquisition As part of our ERT service offerings, in February 2021, the Company, through its wholly-owned special purpose vehicle subsidiary Gibbons Creek Environmental Redevelopment Group (“GCERG”), closed on an Asset Purchase Agreement (the “APA” or the “Agreement”) with Texas Municipal Power Agency to acquire, remediate and redevelop the Gibbons Creek Steam Electric Station and Reservoir (the “Gibbons Creek Transaction”). As part of this Agreement, GCERG took ownership of the 6,166 acre area (collectively, the “Purchased Assets”), which includes the closed power station and adjacent property, the 3,500 acre reservoir, dam and floodway. GCERG assumed all environmental responsibilities and became responsible for the decommissioning of the coal power plant as well as performing all environmental remediation work for the site landfills and ash ponds. At closing of the APA, GCERG became liable for and expressly fully assumed any and all environmental liabilities and environmental compliance, as well as, without limitation, any remediation, investigation, management, mitigation, closure, maintenance, reporting, removal, disposal of and any other actions with respect to any hazardous substances at, on, in, under, or emanating from the Purchased Assets. GCERG, at its discretion, is redeveloping the property in an environmentally conscious manner which the Company expects to expand economic activity and benefit the surrounding communities as well as restore the property to a state that will enable it to be put to its best potential use. The existing power plant has been demolished, and GCERG is working with the Texas Commission on Environmental Quality to complete all environmental remediation required for the property and then plans to redevelop the remediated property within all zoning restrictions. The redevelopment of the property is expected to be completed within 34 months from the date of acquisition. The Gibbons Creek Transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations, with the assumed liabilities net of cash received or owed to us by the seller comprising the purchase price. Since the fair value of the net assets acquired exceeded the cost, the Company allocated the difference pro rata on the basis of relative fair values to reduce land, property and equipment, and intangible assets acquired. The assets acquired and liabilities assumed as recognized within the Company's condensed consolidated balance sheet upon closing on the APA consisted of the following: Consideration and direct transaction costs: Asset retirement obligations $ (50,590) Bond and insurance accrued expenses, net (2,229) Direct transaction costs (2,336) Total consideration and transaction costs incurred $ (55,155) Assets Acquired: Cash $ 6,354 Restricted cash 28,546 Water rights 5,196 Land 14,385 Plant, machinery and equipment 610 Vehicles 64 Total allocated value of assets acquired $ 55,155 The Company has identified asset retirement obligations within the assumed liabilities to be initially measured and valued in accordance with ASC 410, Asset Retirement and Environmental Obligations . We developed our estimates of these obligations using input from our operations personnel. Our estimates are based on our interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Absent quoted market prices, the estimate of fair value is based on the best available information, including the results of present value techniques. We use professional engineering judgment and estimated prices paid for similar work to determine the fair value of these obligations. We are required to recognize these obligations at market prices whether we plan to contract with third parties or perform the work ourselves. Once we determined the estimated closure and post-closure costs for each asset retirement obligation, we inflation-adjusted those costs to the expected time of payment and discounted those expected future costs back to present value using an inflation rate of 3.0%. We discounted these costs to present value using the credit-adjusted, risk-free rate effective at the time the obligation was incurred, consistent with the expected cash flow approach. Any changes in expectations that result in an upward revision to the estimated cash flows are treated as a new liability and discounted at the current rate, while downward revisions are discounted at the historical weighted average rate of the recorded obligation. The credit-adjusted, risk-free discount rate used to calculate the present value of an obligation is specific to each individual asset retirement obligation. The weighted average rate applicable to our long-term asset retirement obligations related to the Gibbons Creek Transaction was approximately 4.5% at the acquisition date. Because these obligations are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final capping, closure, and post-closure activities could result in a material change in these liabilities, related assets, and results of operations. We assess the appropriateness of the estimates used to develop our recorded balances annually, or more often if conditions warrant. Changes in inflation rates or the estimated costs, timing, or extent of future final closure and post-closure activities typically result in a current adjustment to the recorded liability and land asset. Demolition costs will be capitalized as part of the land as incurred as part of preparing the site for sale, since, at the acquisition date, (i) we planned to demolish the existing structure as part of the redevelopment plan for the acquired property, (ii) demolition is expected to occur within a reasonable period of time after acquisition, and (iii) such expected costs will be incurred to make the land saleable to a third party. As part of the acquisition, the Company acquired certain plant, machinery and equipment and vehicles for which management committed to a plan to sell. Property and equipment of $193 that was initially classified as held for sale was subsequently sold to third parties. To date, the Company has completed the sale of nearly 80% of the real property acreage acquired through the Gibbons Creek Transaction. The sale of property included 4,860 acres of the 6,166-acre area, the 3,500-acre reservoir, dam and spillway. There were no sales of real property acreage for the three months ended March 31, 2022 and 2021, respectively. Avon Lake Asset Acquisition On April 4, 2022, the Company, through its wholly-owned special purpose vehicle subsidiary Avon Lake Environmental Redevelopment Group, LLC (“ALERG”), completed the full acquisition of the Avon Lake Generating Station and adjacent property (the "Avon Lake Property") from GenOn Power Midwest, LP, (“GenOn”) and will begin environmental remediation and sustainable redevelopment of the property immediately. As part of this agreement, the Company acquired the Avon Lake Property, which is a 40-acre area located on Lake Erie that consists of multiple parcels of land adjacent to the retired generating plant, including the generating station, submerged lands lease in Lake Erie, substation/switch gear and transformers, administrative offices and structures, coal rail and storage yard parcels as well as the interconnection agreement. ALERG assumed all liabilities related to the Avon Lake Property and will be responsible for the shutdown and decommissioning of the coal power plant and performing all environmental remediation and redevelopment work at the site. Cheswick Generating Station Asset Acquisition On April 6, 2022, the Company, through its wholly-owned special purpose vehicle subsidiaries Cheswick Plant Environmental Redevelopment Group, LLC, Cheswick Lefever LLC and Harwick Operating Company (collectively, “CPERG”), completed the full acquisition of the Cheswick Generating Station, the Lefever Ash Landfill and the Monarch Wastewater Treatment Facility from GenOn and will begin environmental remediation and sustainable redevelopment of the Pennsylvania properties immediately. The Cheswick Generating Station ceased electrical generation operations on March 31, 2022. As part of this agreement, the Company, through CPERG, has acquired the properties from GenOn, which consist of: ▪ The retired Cheswick Generating Station, a 565 MW coal-fired plant previously operated by GenOn, located in Springdale, PA. The 56-acre primary generating station site, along with an adjacent 27-acre parcel, consists of an operating rail line, a coal yard, bottom ash emergency and recycle ponds, waste ponds and a coal pile runoff pond, coal delivery equipment, and an ash handling parcel. CPERG will be responsible for the shutdown and decommissioning of the coal power plant, the remediation of the two ash ponds and performing all environmental remediation and redevelopment work at the site. ▪ The Lefever Ash Landfill in Cheswick, PA. The 182-acre site, including the 50-acre landfill facility, is currently operating and provides disposal of coal combustion residuals (CCR) and residual waste from the Cheswick Generating Station under an active solid waste permit. CPERG will be responsible for the closure design, remediation closure work and post closure monitoring of the landfill. ▪ The Monarch Wastewater Treatment Facility in Allegheny County, PA. CPERG will be responsible for day-to-day management and operations and compliance with all applicable environmental regulations. The closing date of both transactions occurred subsequent to the end of the reporting period and the preliminary allocation of the purchase price to the net assets has not yet been completed. The Company received gross cash and restricted cash of $36,763 from GenOn related to these transactions. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | RevenueWe disaggregate our revenue from customers by customer arrangement and geographic region as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below. Three Months Ended March 31, 2022 2021 Construction contracts $ 30,840 $ 19,939 Byproduct services 24,018 26,473 Raw material sales 11,193 5,695 Total revenue $ 66,051 $ 52,107 As of March 31, 2022, the Company had remaining performance obligations with an aggregate transaction price of $457,494 on construction contracts for which we recognize revenue over time. We expect to recognize approximately 23% of our remaining performance obligations as revenue during the remainder of 2022, 10% in 2023, 8% in 2024, and 59% thereafter. Revenue associated with our remaining performance obligations includes performance obligations related to our construction contracts. The balance of remaining performance obligations does not include variable consideration that was determined to be constrained as of March 31, 2022. As of March 31, 2022, there were $1,691 of unapproved change orders associated with project scope changes included in determining the profit or loss on certain construction contracts, of which $164 were approved subsequent to quarter-end. The Company did not have any foreign revenue for the three months ended March 31, 2022 and 2021. The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and contract liabilities on the accompanying unaudited condensed consolidated balance sheets. Our contract assets are as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Retainage 9,491 9,681 Total contract assets $ 24,912 $ 26,844 Our contract liabilities are as follows: March 31, 2022 December 31, 2021 Billings in excess of costs and estimated earnings $ 5,505 $ 5,716 Deferred revenue 1,088 483 Total contract liabilities $ 6,593 $ 6,199 We recognized revenue of $5,772 for the three months ended March 31, 2022 that was previously included in contract liabilities at December 31, 2021. The Company's net position on uncompleted contracts is as follows: March 31, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 236,562 $ 227,195 Estimated earnings 18,356 22,331 Total costs and estimated earnings 254,918 249,526 Less billings to date (245,002) (238,079) Net balance in process $ 9,916 $ 11,447 The net balance in process classified on the accompanying unaudited condensed consolidated balance sheets is as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Billings in excess of costs and estimated earnings (5,505) (5,716) Net balance in process $ 9,916 $ 11,447 Anticipated losses on long-term contracts are recognized when such losses become evident. As of March 31, 2022 and December 31, 2021, accruals for anticipated losses on long-term contracts were $136 and $159, respectively. |
Balance Sheet Items
Balance Sheet Items | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Items | Balance Sheet Items Real estate, property and equipment, net The following table shows the components of real estate, property and equipment, net: March 31, 2022 December 31, 2021 Plant, machinery and equipment $ 63,961 $ 63,937 Structural fill site improvements 55,760 55,760 Vehicles 11,805 11,718 Office equipment 600 600 Buildings and leasehold improvements 267 267 Land, land improvements and structural fill sites 12,082 12,231 Capital lease assets 41,215 31,172 Construction in progress 1,539 1,522 Total real estate, property and equipment $ 187,229 $ 177,207 Less: accumulated depreciation (111,286) (106,734) Real estate, property and equipment, net $ 75,943 $ 70,473 Land, land improvements and structural fill sites include $5,875 of real property acquired in the Gibbons Creek Transaction that the Company is actively demolishing and for which depreciation expense is not being recorded. During the three months ended March 31, 2022 and 2021, the Company capitalized $842 and $148, respectively, of demolition costs and sold scrap with a cost basis of $990 and $0, respectively. Depreciation expense was $4,597 and $4,173 for the three months ended March 31, 2022 and 2021, respectively. Capital leases The following table shows the components of capital lease assets, net: March 31, 2022 December 31, 2021 Capital lease assets $ 41,215 $ 31,172 Less: accumulated depreciation (5,518) (3,606) Capital lease assets, net $ 35,697 $ 27,566 The Company's depreciation of capital lease assets is included within depreciation expense as disclosed above. Sales-type lease In March 2021, the Company amended an existing ground lease with a third party concerning one of the Company's structural fill assets with a 30-year term expiring on December 31, 2050. The lease includes multiple options that may be exercised at any time during the lease term for the lessee to purchase all or a portion of the premises as well as a put option (the “Put Option”) that provides the Company the option to require the lessee to purchase all of the premises at the end of the lease term. In accordance with ASC 840, Leases , the Company considered whether this lease, as amended, met any of the following four criteria as part of classifying the lease at the amendment date: (a) the lease transfers ownership of the property to the lessee by the end of the lease term; (b) the lease contains a bargain purchase option; (c) the lease term is equal to 75 percent or more of the estimated economic life of the lease property; and (d) the present value of the minimum lease payments, excluding executory costs, equals or exceeds 90 percent of the excess of the fair value of the lease property to the lessor at lease inception. This lease was recorded as a sales-type capital lease due to the Put Option provision contained within the lease agreement that represents a transfer of ownership of the property by the end of the lease term. Additionally, the Company determined that collectability of the lease payments was reasonably assured and that there were not any significant uncertainties related to costs that it has yet to incur with respect to the lease. At the amendment date of the lease, a discount rate of 3.9% implicit in the sales-type lease was used to calculate the present value of the minimum lease payments, which the Company recorded as a lease receivable. The Company recognized a gain of $5,568 within operating income in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2021. The following table reflects the classification of the lease receivable within our accompanying unaudited condensed consolidated balance sheet: March 31, 2022 December 31, 2021 Lease receivable $ 5,921 $ 5,937 Less: current portion in prepaid expenses and other current assets (66) (65) Non-current portion in other assets $ 5,855 $ 5,872 Asset Sale Agreement In June 2021, the Company consummated an asset sale with an unrelated third party in which the Company assigned a lease agreement to the purchaser and sold certain grinding-related inventory and fixed assets for an aggregate sale price of $2,852. The Company received $1,250 in cash at closing, with the remaining portion to be paid over time on specified dates, with the final payment to be received 36 months from the closing date. The Company determined that the note receivable included a significant financing component. As a result, the sale price and gain on sale were determined on a discounted cash flow basis. The following table reflects the classification of the note receivable within our unaudited condensed consolidated balance sheet: March 31, 2022 December 31, 2021 Note receivable $ 1,352 $ 1,352 Less: current portion in prepaid expenses and other current assets (500) (500) Non-current portion in other assets $ 852 $ 852 Accrued liabilities The following table shows the components of accrued liabilities: March 31, 2022 December 31, 2021 Accrued expenses $ 18,815 $ 25,074 Accrued interest 2,192 2,008 Accrued preferred stock dividends 2,090 1,994 Accrued payroll and bonuses 2,063 7,798 Accrued liabilities $ 25,160 $ 36,874 |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations As of March 31, 2022, the Company owns one structural fill site with continuing maintenance and monitoring requirements after its closure and four tracts of real property with decommissioning, remediation and monitoring requirements. As of March 31, 2022 and December 31, 2021, the Company has accrued $33,969 and $42,413, respectively, for the asset retirement obligations ( “ ARO ” ). The following table reflects the activity for our asset retirement obligations: Three Months Ended March 31, 2022 2021 Balance, beginning of period $ 42,413 $ 5,159 Liabilities incurred — 50,590 Liabilities settled (6,394) (1,870) Accretion 401 233 Gain on ARO settlement (2,451) — Balance, end of period 33,969 54,112 Less: current portion (24,776) (18,729) Non-current portion $ 9,193 $ 35,383 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions ATC Group Services LLC (“ATC”), an entity owned by BCP, our majority stockholder, provided environmental consulting and engineering services at certain service sites. Expenses to ATC were $18 and $54 for the three months ended March 31, 2022 and 2021, respectively. The Company had no receivables outstanding from ATC at March 31, 2022 and December 31, 2021. The Company had payables and accrued expenses, net of credit memos, due to ATC of $14 and $4 at March 31, 2022 and December 31, 2021, respectively. As further discussed in Note 9, Long-term Debt, in August 2021, the Company completed an offering of $135,000, in the aggregate, of the Company’s 8.50% Senior Notes due 2026 (the “Notes”), which amount included the exercise by the underwriters of their option to purchase an additional $5,000 aggregate principal amount of Notes. B. Riley Securities, Inc. (“B. Riley”), a shareholder of the Company with board representation, served as the lead book-running manager and underwriter for this offering, purchasing a principal amount of $80,325 of the Notes. Fees paid to B. Riley related to this offering were $7,914. These fees were capitalized as debt issuance costs within notes payable, less current maturities in the accompanying unaudited condensed consolidated balance sheets and will be amortized prospectively through interest expense, net in the accompanying unaudited condensed consolidated statements of operations using the effective interest method through the maturity date of the Notes. As further discussed in Note 11, Mezzanine Equity, in March 2020, the Company entered into an agreement with an investment fund affiliated with BCP to sell 26,000 shares of Preferred Stock. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but instead are tested for impairment annually or more often if events or changes in circumstances indicate that the fair value of the asset may have decreased below its carrying value. We perform our impairment test effective October 1st of each year and evaluate for impairment indicators between annual impairment tests, of which there were none. There was no goodwill activity during the three months ended March 31, 2022. Indefinite-Lived and Definite-Lived Intangible Assets Our intangible assets, net include a trade name that is considered to have an indefinite life and customer relationships that are considered to have a definite life. Our customer relationships are amortized on a straight-line basis over their estimated useful lives of 10 years. The amortization expense of our definite-lived intangible assets was $1,974 for the three months ended March 31, 2022 and 2021. The Company’s intangible assets consist of the following: March 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangibles Customer relationships $ 78,942 $ (40,701) $ 38,241 $ 78,942 $ (38,727) $ 40,215 Indefinite-lived intangibles Charah trade name 13,316 13,316 Total $ 51,557 $ 53,531 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Senior Notes On August 25, 2021, the Company completed a public offering of $135,000, in the aggregate, of the Company’s Notes, which amount includes the exercise by the underwriters of their option to purchase an additional $5,000 aggregate principal amount of Notes. The Notes were issued pursuant to the First Supplemental Indenture (the “First Supplemental Indenture”), dated as of August 25, 2021, between the Company and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”). The First Supplemental Indenture supplements the Indenture entered into by and between the Company and the Trustee, dated as of August 25, 2021 (the “Base Indenture” and, together with the First Supplemental Indenture, the “Indenture”). The public offering price of the Notes was 100.0% of the principal amount. The Company received proceeds before payment of expenses and other fees of $135,000. The Company used the proceeds, along with cash from the sale of equity to B. Riley, to fully repay and terminate the Company’s Credit Facility, as defined below, with any remaining proceeds to be used for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital. The Notes bear interest at the rate of 8.50% per annum. Interest on the Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing October 31, 2021. The Notes will mature on August 31, 2026. The Company may redeem the Notes for cash in whole or in part at any time (i) on or after August 31, 2023 and prior to August 31, 2024, at a price equal to 103% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after August 31, 2024 and prior to August 31, 2025, at a price equal to 102% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, and (iii) on or after August 31, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes. If the Company is redeeming less than all of the Notes, the Trustee will select the Notes to be redeemed by such method as the Trustee deems fair and appropriate in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. The Indenture also contains customary event of default and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes may declare the Notes to be immediately due and payable. The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. As a result of the issuance of the Notes, $12,116 of third-party fees were capitalized as debt issuance costs that will be amortized through interest expense, net in the accompanying unaudited condensed consolidated statements of operations using the effective interest method through the maturity date of the Notes. Asset-Based Lending Credit Agreement On November 9, 2021, the Company entered into a new Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, the lenders party thereto and certain subsidiary guarantors named therein. The Credit Agreement provides for a four The Credit Agreement provides for borrowings of either base rate loans or Eurodollar loans. Principal amounts borrowed are payable on the maturity date with such borrowings bearing interest that is payable (i) with respect to base rate loans, monthly and (ii) with respect to Eurodollar loans, the last day of each Interest Period (as defined below); provided that if any Interest Period for a Eurodollar loan exceeds three months, interest will be payable on the respective dates that fall every three months after the beginning of such Interest Period. Eurodollar Loans bear interest at a rate per annum equal to the Adjusted LIBOR for one, three or six months (the “Interest Period”), plus an applicable margin of 2.25%. Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month Adjusted LIBOR loans plus 100 basis points, plus an applicable rate of 125 basis points. The Credit Agreement contains a provision for sustainability adjustments annually that will impact the applicable margin by between positive 0.05% and negative 0.05% based on the achievement, or lack thereof, of certain metrics agreed upon between JPMorgan and the Company and publicly reported through the Company’s annual non-financial sustainability report. The Credit Agreement is guaranteed by certain of the Company’s subsidiaries and is secured by substantially all of the Company’s and such subsidiaries’ assets. The Credit Agreement contains customary restrictive covenants for asset-based loans that may limit the Company’s ability to, among other things: incur additional indebtedness, sell assets, make loans to others, make investments, enter into mergers, make certain restricted payments, incur liens, and engage in certain other transactions without the prior consent of the lenders. A covenant testing period (“Covenant Testing Period”) is a period in which excess availability (which is defined in the Credit Agreement as the sum of availability and an amount up to $1,000), is less than the greater of (a) 12.5% of the lesser of the aggregate revolving commitments and the borrowing base, (b) the lesser of $7,500 and the PP&E Component as defined in the Credit Agreement, and (c) $3,500, for three consecutive business days. During a Covenant Testing Period, the Credit Agreement requires the Company to maintain a fixed charge coverage ratio as defined in the Credit Agreement, determined for any period of twelve (12) consecutive months ending on the last day of each fiscal quarter, of at least 1.00 to 1.00. As of March 31, 2022, the Company has not drawn on the Credit Agreement. Outstanding letters of credit were $15,237 and $19,027 as of March 31, 2022 and December 31, 2021. As of March 31, 2022, all outstanding letters of credit were issued with JPMorgan. At this time, the Company does not intend to draw down on the Credit Agreement. Based on the applicable financial statement balances as of March 31, 2022, if the Company were to borrow in excess of $4,974 on the Credit Agreement, the financial covenants associated with the Credit Agreement would become applicable. As a result of entering into the Credit Agreement, $1,408 of third-party fees were capitalized as debt issuance costs that will be amortized through interest expense, net in the unaudited condensed consolidated Statements of Operations using the effective interest method through the maturity date of the Credit Agreement. Unamortized debt issuance costs as of March 31, 2022 and December 31, 2021 were $1,291 and $1,338, respectively. Previous Credit Facility On September 21, 2018, we entered into a credit agreement (the “Credit Facility”) by and among us, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent (the “Administrative Agent”). The Credit Facility included: • A revolving loan not to exceed $50,000 (the “Revolving Loan”); • A term loan of $205,000 (the “Closing Date Term Loan”); and • A commitment to loan up to a further $25,000 in term loans, which expired in March 2020 (the “Delayed Draw Commitment” and the term loans funded under such Delayed Draw Commitment, the “Delayed Draw Term Loan,” together with the Closing Date Term Loan, the “Term Loan”). Pursuant to the terms of the Credit Facility and its related amendments, all amounts associated with the Revolving Loan and the Term Loan under the Credit Facility were set to mature in July 2022. The interest rates per annum applicable to the loans under the Credit Facility were based on a fluctuating rate of interest measured by reference to, at our election, either (i) the Eurodollar rate, currently LIBOR, or (ii) an alternative base rate. Various margins were added to the interest rate based upon our consolidated net leverage ratio (as defined in the Credit Facility). Customary fees were payable regarding the Credit Facility and included (i) commitment fees for the unused portions of the Credit Facility and (ii) fees on outstanding letters of credit. Amounts borrowed under the Credit Facility were secured by substantially all of the assets of the Company. The Credit Facility contained various customary representations, warranties, restrictive covenants, certain affirmative covenants, including reporting requirements, and customary events of default. The following table summarizes the major components of debt at each balance sheet date and provides maturities and interest rate ranges for each major category as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Various equipment notes entered into in November 2017, payable in monthly installments ranging from $6 to $24, including interest at 5.2%, maturing in December 2022 through December 2023. The notes are secured by equipment with a net book value of $688 as of March 31, 2022. $ 1,458 $ 1,748 Various equipment notes entered into in 2018, payable in monthly installments ranging from $1 to $39, including interest ranging from 5.6% to 6.8%, maturing in March 2023 through May 2025. The notes are secured by equipment with a net book value of $4,983 as of March 31, 2022. 5,430 5,952 Various equipment notes entered into in 2019, payable in monthly installments ranging from $2 to $23, including interest ranging from 3.9% to 6.4%, maturing in April 2024 through December 2024. The notes are secured by equipment with a net book value of $2,275 as of March 31, 2022. 2,416 2,633 Various equipment notes entered into in 2020, payable in monthly installments ranging from $9 to $10, including interest of 5.4%, maturing in August 2025. The notes are secured by equipment with a net book value of $1,652 as of March 31, 2022. 1,524 1,624 Various equipment notes entered into in 2021, payable in monthly installments ranging from $3 to $9, including interest ranging from 4.0% to 6.5%, maturing in February 2026 through August 2026. The notes are secured by equipment with a net book value of $1,602 as of March 31, 2022. 1,769 1,861 Various commercial insurance premium financing agreements entered into in 2021, payable in monthly installments ranging from $24 to $117, including interest ranging from 3.0% to 3.9%, maturing in October 2021 through April 2022. 117 467 A commercial insurance premium financing agreement entered into in 2022, payable in monthly installments of $143, including interest of 4.2%, maturing in November 2022. 1,126 — A $10,000 equipment line with a bank, entered into in December 2017, secured by all equipment purchased with the proceeds of the loan. Interest is calculated on any outstanding amounts using a fixed rate of 4.5%. The equipment line converted to a term loan in September 2018 with a maturity date of June 22, 2023. The term loan is secured by equipment with a net book value of $1,885 as of March 31, 2022. 2,867 3,387 Senior Unsecured Notes, issued August 2021 (see Note 9). The Notes are senior unsecured obligations of the Company, bearing stated interest at 8.5%, and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. 135,000 135,000 Total 151,707 152,672 Less debt issuance costs, net (10,972) (11,444) 140,735 141,228 Less current maturities (8,196) (7,567) Notes payable due after one year $ 132,539 $ 133,661 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Long-term Debt Senior Notes On August 25, 2021, the Company completed a public offering of $135,000, in the aggregate, of the Company’s Notes, which amount includes the exercise by the underwriters of their option to purchase an additional $5,000 aggregate principal amount of Notes. The Notes were issued pursuant to the First Supplemental Indenture (the “First Supplemental Indenture”), dated as of August 25, 2021, between the Company and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”). The First Supplemental Indenture supplements the Indenture entered into by and between the Company and the Trustee, dated as of August 25, 2021 (the “Base Indenture” and, together with the First Supplemental Indenture, the “Indenture”). The public offering price of the Notes was 100.0% of the principal amount. The Company received proceeds before payment of expenses and other fees of $135,000. The Company used the proceeds, along with cash from the sale of equity to B. Riley, to fully repay and terminate the Company’s Credit Facility, as defined below, with any remaining proceeds to be used for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital. The Notes bear interest at the rate of 8.50% per annum. Interest on the Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing October 31, 2021. The Notes will mature on August 31, 2026. The Company may redeem the Notes for cash in whole or in part at any time (i) on or after August 31, 2023 and prior to August 31, 2024, at a price equal to 103% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after August 31, 2024 and prior to August 31, 2025, at a price equal to 102% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, and (iii) on or after August 31, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes. If the Company is redeeming less than all of the Notes, the Trustee will select the Notes to be redeemed by such method as the Trustee deems fair and appropriate in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. The Indenture also contains customary event of default and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes may declare the Notes to be immediately due and payable. The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. As a result of the issuance of the Notes, $12,116 of third-party fees were capitalized as debt issuance costs that will be amortized through interest expense, net in the accompanying unaudited condensed consolidated statements of operations using the effective interest method through the maturity date of the Notes. Asset-Based Lending Credit Agreement On November 9, 2021, the Company entered into a new Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, the lenders party thereto and certain subsidiary guarantors named therein. The Credit Agreement provides for a four The Credit Agreement provides for borrowings of either base rate loans or Eurodollar loans. Principal amounts borrowed are payable on the maturity date with such borrowings bearing interest that is payable (i) with respect to base rate loans, monthly and (ii) with respect to Eurodollar loans, the last day of each Interest Period (as defined below); provided that if any Interest Period for a Eurodollar loan exceeds three months, interest will be payable on the respective dates that fall every three months after the beginning of such Interest Period. Eurodollar Loans bear interest at a rate per annum equal to the Adjusted LIBOR for one, three or six months (the “Interest Period”), plus an applicable margin of 2.25%. Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month Adjusted LIBOR loans plus 100 basis points, plus an applicable rate of 125 basis points. The Credit Agreement contains a provision for sustainability adjustments annually that will impact the applicable margin by between positive 0.05% and negative 0.05% based on the achievement, or lack thereof, of certain metrics agreed upon between JPMorgan and the Company and publicly reported through the Company’s annual non-financial sustainability report. The Credit Agreement is guaranteed by certain of the Company’s subsidiaries and is secured by substantially all of the Company’s and such subsidiaries’ assets. The Credit Agreement contains customary restrictive covenants for asset-based loans that may limit the Company’s ability to, among other things: incur additional indebtedness, sell assets, make loans to others, make investments, enter into mergers, make certain restricted payments, incur liens, and engage in certain other transactions without the prior consent of the lenders. A covenant testing period (“Covenant Testing Period”) is a period in which excess availability (which is defined in the Credit Agreement as the sum of availability and an amount up to $1,000), is less than the greater of (a) 12.5% of the lesser of the aggregate revolving commitments and the borrowing base, (b) the lesser of $7,500 and the PP&E Component as defined in the Credit Agreement, and (c) $3,500, for three consecutive business days. During a Covenant Testing Period, the Credit Agreement requires the Company to maintain a fixed charge coverage ratio as defined in the Credit Agreement, determined for any period of twelve (12) consecutive months ending on the last day of each fiscal quarter, of at least 1.00 to 1.00. As of March 31, 2022, the Company has not drawn on the Credit Agreement. Outstanding letters of credit were $15,237 and $19,027 as of March 31, 2022 and December 31, 2021. As of March 31, 2022, all outstanding letters of credit were issued with JPMorgan. At this time, the Company does not intend to draw down on the Credit Agreement. Based on the applicable financial statement balances as of March 31, 2022, if the Company were to borrow in excess of $4,974 on the Credit Agreement, the financial covenants associated with the Credit Agreement would become applicable. As a result of entering into the Credit Agreement, $1,408 of third-party fees were capitalized as debt issuance costs that will be amortized through interest expense, net in the unaudited condensed consolidated Statements of Operations using the effective interest method through the maturity date of the Credit Agreement. Unamortized debt issuance costs as of March 31, 2022 and December 31, 2021 were $1,291 and $1,338, respectively. Previous Credit Facility On September 21, 2018, we entered into a credit agreement (the “Credit Facility”) by and among us, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent (the “Administrative Agent”). The Credit Facility included: • A revolving loan not to exceed $50,000 (the “Revolving Loan”); • A term loan of $205,000 (the “Closing Date Term Loan”); and • A commitment to loan up to a further $25,000 in term loans, which expired in March 2020 (the “Delayed Draw Commitment” and the term loans funded under such Delayed Draw Commitment, the “Delayed Draw Term Loan,” together with the Closing Date Term Loan, the “Term Loan”). Pursuant to the terms of the Credit Facility and its related amendments, all amounts associated with the Revolving Loan and the Term Loan under the Credit Facility were set to mature in July 2022. The interest rates per annum applicable to the loans under the Credit Facility were based on a fluctuating rate of interest measured by reference to, at our election, either (i) the Eurodollar rate, currently LIBOR, or (ii) an alternative base rate. Various margins were added to the interest rate based upon our consolidated net leverage ratio (as defined in the Credit Facility). Customary fees were payable regarding the Credit Facility and included (i) commitment fees for the unused portions of the Credit Facility and (ii) fees on outstanding letters of credit. Amounts borrowed under the Credit Facility were secured by substantially all of the assets of the Company. The Credit Facility contained various customary representations, warranties, restrictive covenants, certain affirmative covenants, including reporting requirements, and customary events of default. The following table summarizes the major components of debt at each balance sheet date and provides maturities and interest rate ranges for each major category as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Various equipment notes entered into in November 2017, payable in monthly installments ranging from $6 to $24, including interest at 5.2%, maturing in December 2022 through December 2023. The notes are secured by equipment with a net book value of $688 as of March 31, 2022. $ 1,458 $ 1,748 Various equipment notes entered into in 2018, payable in monthly installments ranging from $1 to $39, including interest ranging from 5.6% to 6.8%, maturing in March 2023 through May 2025. The notes are secured by equipment with a net book value of $4,983 as of March 31, 2022. 5,430 5,952 Various equipment notes entered into in 2019, payable in monthly installments ranging from $2 to $23, including interest ranging from 3.9% to 6.4%, maturing in April 2024 through December 2024. The notes are secured by equipment with a net book value of $2,275 as of March 31, 2022. 2,416 2,633 Various equipment notes entered into in 2020, payable in monthly installments ranging from $9 to $10, including interest of 5.4%, maturing in August 2025. The notes are secured by equipment with a net book value of $1,652 as of March 31, 2022. 1,524 1,624 Various equipment notes entered into in 2021, payable in monthly installments ranging from $3 to $9, including interest ranging from 4.0% to 6.5%, maturing in February 2026 through August 2026. The notes are secured by equipment with a net book value of $1,602 as of March 31, 2022. 1,769 1,861 Various commercial insurance premium financing agreements entered into in 2021, payable in monthly installments ranging from $24 to $117, including interest ranging from 3.0% to 3.9%, maturing in October 2021 through April 2022. 117 467 A commercial insurance premium financing agreement entered into in 2022, payable in monthly installments of $143, including interest of 4.2%, maturing in November 2022. 1,126 — A $10,000 equipment line with a bank, entered into in December 2017, secured by all equipment purchased with the proceeds of the loan. Interest is calculated on any outstanding amounts using a fixed rate of 4.5%. The equipment line converted to a term loan in September 2018 with a maturity date of June 22, 2023. The term loan is secured by equipment with a net book value of $1,885 as of March 31, 2022. 2,867 3,387 Senior Unsecured Notes, issued August 2021 (see Note 9). The Notes are senior unsecured obligations of the Company, bearing stated interest at 8.5%, and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. 135,000 135,000 Total 151,707 152,672 Less debt issuance costs, net (10,972) (11,444) 140,735 141,228 Less current maturities (8,196) (7,567) Notes payable due after one year $ 132,539 $ 133,661 |
Mezzanine Equity
Mezzanine Equity | 3 Months Ended |
Mar. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine Equity | Mezzanine EquityIn March 2020, the Company entered into an agreement with an investment fund affiliated with BCP to sell 26 (twenty-six thousand) shares of Series A Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an initial aggregate liquidation preference of $26,000, net of a 3% Original Issue Discount (“OID”) of $780 for net proceeds of $25,220 in a private placement (the “Preferred Stock Offering”). Proceeds from the Preferred Stock Offering were used for liquidity and general corporate purposes. In connection with the issuance of the Preferred Stock, the Company incurred direct expenses of $966, including financial advisory fees, closing costs, legal expenses and other offering-related expenses. The Preferred Stock was initially recorded net of OID and direct expenses, which will be accreted through paid-in-capital as a deemed dividend from the date of issuance through the first possible known redemption date, March 16, 2023. As of March 31, 2022 and December 31, 2021, the Company had accrued dividends of $1,063 and $1,030, respectively, associated with the Preferred Stock, which was recorded at a fair value of $2,090 and $1,994, respectively, using observable information for similar items and is classified as a level 2 fair value measurement. Dividend Rights The Preferred Stock ranks senior to the Company’s common stock with respect to dividend rights and rights on the distribution of assets in any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock had an initial liquidation preference of $1 (one thousand dollars) per share. The holders of the Preferred Stock are entitled to a cumulative dividend paid in cash at the rate of 10.0% per annum, payable on a quarterly basis. If we do not declare and pay a dividend to the holders of the Preferred Stock, the dividend rate will increase to 13.0% per annum, and the dividends are paid-in-kind by adding such amount to the liquidation preference. The Company’s intention is to pay dividends in-kind for the foreseeable future. The dividend rate will increase to 16.0% per annum upon the occurrence and during the continuance of an event of default. As of March 31, 2022, the liquidation preference of the Preferred Stock was $33,775. Conversion Features The Preferred Stock is convertible at the option of the holders at any time into shares of common stock at a conversion price of $2.77 per share (the “Conversion Price”), which represents a 30% premium to the 20-day volume-weighted average price ended March 4, 2020. As of March 31, 2022, the maximum number of common shares that could be required to be issued if converted is 12,193 (twelve million one hundred ninety-three thousand). The conversion rate is subject to the following customary anti-dilution and other adjustments: • the issuance of common stock as a dividend or the subdivision, combination, or reclassification of common stock into a greater or lesser number of shares of common stock; • the dividend, distribution or other issuance of rights, options or warrants to holders of common stock entitling them to subscribe for or purchase shares of common stock at a price per share that is less than the market value for such issuance; • the issuance of a dividend or similar distribution in-kind, which can include shares of any class of capital stock, evidences of the Company’s indebtedness, assets or other property or securities, to holders of common stock; • a transaction in which a subsidiary of the Company ceases to be a subsidiary of the Company as a result of the distribution of the equity interests of the subsidiary to the holders of the Company’s common stock; and • the payment of a cash dividend to the holders of common stock. On or after the three-year anniversary of the date of issuance, if the holders have not elected to convert all their shares of Preferred Stock, the Company may give 30 days’ notice to the holders giving the holders the option to choose, in their sole discretion, to have all outstanding shares of Preferred Stock converted into shares of common stock or redeemed in cash at the then applicable Redemption Price (as defined below). The Company may not issue this conversion notice unless (i) the average volume-weighted average price per share of the Company’s common stock during each of the 20 consecutive trading days before the conversion is greater than 120% of the conversion price; (ii) the Company’s common stock is listed on a national securities exchange; (iii) a registration statement for the re-sale of the common stock is then effective; and (iv) the Company is not then in possession of material non-public information as determined by Regulation FD promulgated under the Exchange Act. The Preferred Stock and the associated dividend payable on March 31, 2020, did not generate a beneficial conversion feature (“BCF”) upon issuance as the fair value of the Company’s common stock was less than the conversion price. If a BCF is recognized, a reduction to paid-in capital and the Preferred Stock will be recorded and subsequently accreted through the first redemption date. Additionally, the Company determined that the nature of the Preferred Stock was more akin to an equity instrument and that the economic characteristics and risks of the embedded conversion options were clearly and closely related to the Preferred Stock. As such, the conversion options were not required to be bifurcated from the host under ASC 815, Derivatives and Hedging . Redemption Rights If the Company undergoes certain change of control transactions, the Company will be required to immediately make an offer to repurchase all of the then-outstanding shares of Preferred Stock for cash consideration per share equal to the greater of (i) 100% of the Liquidation Preference, plus accrued and unpaid dividends, if any, plus, if applicable for a transaction occurring before the third anniversary of the closing, a make-whole premium determined pursuant to a calculation of the present value of the dividends that would have accrued through such anniversary, discounted at a rate equal to the applicable treasury rate plus 0.50% (the “Make-Whole Premium”); provided that if the transaction occurs before the first anniversary of the closing, the Make-Whole Premium shall be no greater than $4,000 and (ii) the closing sale price of the common stock on the date of such redemption multiplied by the number of shares of common stock issuable upon conversion of the outstanding Preferred Stock. On or after the three-year anniversary of the issuance of the Preferred Stock, the Company may redeem the Preferred Stock, in whole or in part, for an amount in cash equal to the greater of (i) the closing sale price of the common stock on the date the Company delivers such notice multiplied by the number of shares of common stock issuable upon conversion of the outstanding Preferred Stock and (ii) (x) if the redemption occurs before the fourth anniversary of the date of the closing, 103% of the Liquidation Preference, plus accrued and unpaid dividends, or (y) if the redemption occurs on or after the fourth anniversary of the date of the closing, the Liquidation Preference plus accrued and unpaid dividends (the foregoing clauses (i) or (ii), as applicable, the “Redemption Price”). On or after the seven-year anniversary of the date of issuance, the holders have the right, subject to applicable law, to require the Company to redeem the Preferred Stock, in whole or in part, into cash consideration equal to the liquidation preference, plus all accrued and unpaid dividends, from any source of funds legally available for such purpose. Since the redemption of the Preferred Stock is contingently or optionally redeemable and therefore not certain to occur, the Preferred Stock is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity . As the Preferred Stock is redeemable in certain circumstances at the option of the holder and is redeemable in certain circumstances upon the occurrence of an event that is not solely within our control, we have classified the Preferred Stock in mezzanine equity in the accompanying unaudited condensed consolidated balance sheets. Liquidation Rights In the event of any liquidation, winding-up or dissolution of the Company, whether voluntary or involuntary, the holders of the Preferred Stock would receive an amount in cash equal to the greater of (i) 100% of the liquidation preference plus a Make-Whole Premium and (ii) the amount such holders would be entitled to receive at such time if the Preferred Stock were converted into Company common stock immediately before the liquidation event. The Make-Whole Premium is removed from the calculation for a liquidation event occurring after the third anniversary of the issuance date. Voting Rights The holders of the Preferred Stock are entitled to vote with the holders of the common stock on an as-converted basis in addition to voting as a separate class as provided by applicable Delaware law and the Company’s organizational documents. The holders, acting exclusively and as a separate class, shall have the right to appoint either a non-voting observer to the Company’s Board of Directors or one director to the Company’s Board of Directors. Registration Rights The holders of the Preferred Stock have certain customary registration rights with respect to the shares of common stock into which the Preferred Stock is converted, pursuant to the terms of a registration rights agreement. |
Contract Assets and Liabilities
Contract Assets and Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract Assets and Liabilities | RevenueWe disaggregate our revenue from customers by customer arrangement and geographic region as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below. Three Months Ended March 31, 2022 2021 Construction contracts $ 30,840 $ 19,939 Byproduct services 24,018 26,473 Raw material sales 11,193 5,695 Total revenue $ 66,051 $ 52,107 As of March 31, 2022, the Company had remaining performance obligations with an aggregate transaction price of $457,494 on construction contracts for which we recognize revenue over time. We expect to recognize approximately 23% of our remaining performance obligations as revenue during the remainder of 2022, 10% in 2023, 8% in 2024, and 59% thereafter. Revenue associated with our remaining performance obligations includes performance obligations related to our construction contracts. The balance of remaining performance obligations does not include variable consideration that was determined to be constrained as of March 31, 2022. As of March 31, 2022, there were $1,691 of unapproved change orders associated with project scope changes included in determining the profit or loss on certain construction contracts, of which $164 were approved subsequent to quarter-end. The Company did not have any foreign revenue for the three months ended March 31, 2022 and 2021. The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and contract liabilities on the accompanying unaudited condensed consolidated balance sheets. Our contract assets are as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Retainage 9,491 9,681 Total contract assets $ 24,912 $ 26,844 Our contract liabilities are as follows: March 31, 2022 December 31, 2021 Billings in excess of costs and estimated earnings $ 5,505 $ 5,716 Deferred revenue 1,088 483 Total contract liabilities $ 6,593 $ 6,199 We recognized revenue of $5,772 for the three months ended March 31, 2022 that was previously included in contract liabilities at December 31, 2021. The Company's net position on uncompleted contracts is as follows: March 31, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 236,562 $ 227,195 Estimated earnings 18,356 22,331 Total costs and estimated earnings 254,918 249,526 Less billings to date (245,002) (238,079) Net balance in process $ 9,916 $ 11,447 The net balance in process classified on the accompanying unaudited condensed consolidated balance sheets is as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Billings in excess of costs and estimated earnings (5,505) (5,716) Net balance in process $ 9,916 $ 11,447 Anticipated losses on long-term contracts are recognized when such losses become evident. As of March 31, 2022 and December 31, 2021, accruals for anticipated losses on long-term contracts were $136 and $159, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company adopted the Charah Solutions, Inc. 2018 Omnibus Incentive Plan (the “2018 Plan”), pursuant to which employees, consultants, and directors of the Company and its affiliates, including named executive officers, are eligible to receive awards. The 2018 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards, and performance awards intended to align the interests of participants with those of Company's stockholders. The Company has reserved 5,007 shares of common stock for issuance under the 2018 Plan. A summary of the Company’s non-vested share activity for the three months ended March 31, 2022 is as follows: Restricted Stock Performance Stock Total Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Balance as of December 31, 2021 885 $ 4.62 648 $ 4.24 1,533 $ 4.46 Granted 2 4.78 — — 2 4.78 Forfeited — — — — — — Vested (1) 4.78 — — (1) 4.78 Balance as of March 31, 2022 886 $ 4.62 648 $ 4.24 1,534 $ 4.46 Restricted Stock Performance Stock Total Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Balance as of December 31, 2021 0.88 $ 4,072 1.26 $ 2,979 1.04 $ 7,051 Balance as of March 31, 2022 0.63 $ 4,425 1.01 $ 3,231 0.79 $ 7,656 Stock-based compensation expense related to the restricted stock issued was $571 and $257 during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, total unrecognized stock-based compensation expense related to non-vested awards of restricted stock, net of estimated forfeitures, was $975, and is expected to be recognized over a weighted-average period of 1.40 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We were party to a lawsuit filed against North Carolina by an environmental advocacy group alleging that the issuance by the state of certain permits associated with our Brickhaven clay mine reclamation site exceeded the state’s power. In December 2020, the Company, the environmental advocacy group and the state settled, resolved and dismissed all matters. Before the settlement, all customer-related work at the Brickhaven site had been completed. The settlement allows for all completed work to remain unchanged. Per the settlement, the Company will not place any additional material at the site, will place a deed restriction requiring engineering oversight for the future development of the site and will continue groundwater monitoring at the site. In April 2021, the state approved the Company’s application to modify its permit to conform to the work as completed. The Company will continue its work with the state to complete the remaining site closure operations. In addition to the above matter, we are from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. For all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Although it is difficult to predict the ultimate outcome of these lawsuits, claims and proceedings, we do not believe that the ultimate disposition of any of these matters, individually or in the aggregate, would have a material adverse effect on our results of operations, financial position or cash flows. We maintain liability insurance for certain risks that is subject to certain self-insurance limits. We believe amounts previously recorded are sufficient to cover any liabilities arising from the proceedings with all outstanding legal claims. Except as reflected in such accruals, we are currently unable to estimate a range of reasonably possible loss or a range of reasonably possible loss in excess of the amount accrued for outstanding legal matters. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company had income tax expense of $78 and $157 for the three months ended March 31, 2022 and 2021, respectively, due to current state income tax expense and adjustments to the valuation allowance on deferred tax assets. The effective income tax rate for the three months ended March 31, 2022 was 23.2% without regard to the impact of the valuation allowance and includes the effect of state income taxes, nondeductible items. The Company’s income is subject to a federal statutory rate of 21.0% and an estimated state statutory rate of 3.9% before considering the valuation allowance. The Company evaluates its effective income tax rate at each interim period and adjusts it accordingly as facts and circumstances warrant. The determination of the annual estimated effective income tax rate at each interim period requires certain estimates and judgments including, but not limited to, the expected operating income for the year, estimated permanent differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur and additional information is obtained. At March 31, 2022, deferred tax liabilities, net of deferred tax assets, was $985. A valuation allowance has been recorded for the deferred tax assets as the Company has determined that it is not more likely than not that the tax benefits related to all the deferred tax assets will be realized. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance on its deferred tax assets. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss attributable to the Company’s stockholders by the weighted-average number of shares outstanding during the period. Diluted loss per share reflects all potentially dilutive ordinary shares outstanding during the period and is computed by dividing net loss attributable to the Company’s stockholders by the weighted-average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. Basic and diluted loss per share is determined using the following information: Three Months Ended March 31, 2022 2021 Numerator: Net loss attributable to Charah Solutions, Inc. $ (12,040) $ (1,287) Deemed and imputed dividends on Series A Preferred Stock (149) (147) Series A Preferred Stock dividends (2,090) (2,067) Net loss attributable to common stockholders $ (14,279) $ (3,501) Denominator: Weighted average shares outstanding 33,408 30,113 Dilutive share-based awards — — Total weighted average shares outstanding, including dilutive shares 33,408 30,113 Net loss attributable to common stockholders per common share Basic $ (0.43) $ (0.12) Diluted $ (0.43) $ (0.12) The holders of the Preferred Stock have non-forfeitable rights to common stock dividends or common stock dividend equivalents. Accordingly, the Preferred Stock qualifies as participating securities. As a result of the net loss per share for the three months ended March 31, 2022 and 2021, the inclusion of all potentially dilutive shares would be anti-dilutive. Therefore, dilutive shares of 13,114 and 11,788 were excluded from the computation of the weighted-average shares for diluted net loss per share for the three months ended March 31, 2022 and 2021, respectively. A summary of securities excluded from the computation of diluted earnings per share is presented below: Three Months Ended March 31, 2022 2021 Diluted earnings per share: Anti-dilutive restricted and performance stock units 1,300 1,393 Anti-dilutive Series A Preferred Stock convertible into common stock 11,814 10,395 Potentially dilutive securities, excluded as anti-dilutive 13,114 11,788 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business Operations and Basis for Presentation | Description of Business Operations The Company is a leading national service provider of mission-critical environmental services and byproduct recycling to the power generation industry, enabling our customers to address challenges related to the remediation of coal ash ponds and landfills at open and closed power plant sites while continuously operating and providing necessary electric power to communities nationwide. Services offered include a suite of remediation and compliance services, byproduct services, raw material sales and Environmental Risk Transfer (“ERT”) services. The Company has corporate offices in Kentucky and North Carolina and principally operates in the eastern and mid-central United States. Under the Jumpstart Our Business Startups Act (the “JOBS Act”), the Company meets the definition of an “emerging growth company,” which allows the Company to have an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. The Company intends to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act until the Company is no longer an emerging growth company. Among other things, we are not required to provide an auditor attestation report on the assessment of the internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 and our disclosure obligations regarding executive compensation may be reduced. We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the IPO, or December 31, 2023. However, if certain events occur before the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.07 billion, or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period. Basis for Presentation The Company’s fiscal year ends December 31. The accompanying unaudited condensed consolidated financial statements include the assets, liabilities, stockholders’ equity and results of operations of the Company and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, which consist of normal recurring adjustments. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. |
Segment Information | Segment Information The Company operates as one reportable segment, reflecting the suite of end-to-end services we offer our utility partners and how our Chief Operating Decision Maker (“CODM”) reviews consolidated financial information to evaluate results of operations, assess performance and allocate resources. Due to the nature of the Company’s business, the Company's Chief Executive Officer, who is also the CODM, evaluates the performance of the Company and allocates resources of the Company based on consolidated gross profit, general and administrative expenses, balance sheet, liquidity, capital spending, safety statistics and business development reports for the Company as a whole. Since the Company has a single operating segment, all required financial segment information can be found in the unaudited condensed consolidated financial statements. We provide the following services through our one segment: remediation and compliance services, byproduct services, raw material sales and ERT services. Remediation and compliance services are associated with our customers’ need for multi-year environmental improvement and sustainability initiatives, whether driven by regulatory requirements, power generation customer initiatives or consumer expectations and standards. Byproduct services consist of recurring and mission-critical coal ash management and operations for coal-fired power generation facilities while also supporting both our power generation customers’ desire to recycle their recurring and legacy volumes of coal combustion residuals (“CCRs”), commonly known as coal ash, and our ultimate end customers’ need for high-quality, cost-effective supplemental cementitious materials (“SCMs”) that provide a sustainable, environmentally-friendly substitute for Portland cement in concrete. Our raw material sales provide customers with the raw materials essential to their business while also providing the sourcing, logistics, and management needed to facilitate these raw material transactions around the globe. ERT services represent an innovative solution designed to meet our coal fired plant energy providers’ evolving and increasingly complex plant closure and environmental remediation needs. These customers need to retire and decommission older or underutilized assets while maximizing the assets value and improving the |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , requiring all leases to be recognized on the balance sheet as a right-of-use asset and a lease liability, unless the lease is a short term lease (generally a lease with a term of 12 months or less).At the commencement date of the lease, the Company will recognize: (i) a lease liability for the Company’s obligation to make payments under the lease agreement, measured on a discounted basis; and (ii) a right-of-use asset that represents the Company’s right to use, or control the use of, the specified asset for the lease term. This ASU originally required recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective transition method. In July 2018, the FASB issued ASU No. 2018-11, which provided an additional (and optional) transition method that permits the application of this ASU at the adoption date with recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In June 2020, the FASB issued ASU No. 2020-05 and delayed the effective date of this ASU, extending the effective date for non-public business entities, and making the ASU effective for the Company for the fiscal year ending December 31, 2022, and interim periods within the fiscal year ending December 31, 2023, with early adoption permitted. The Company has not yet selected a transition method and, while we are still in the process of assessing the impact of this new standard on our consolidated financial position, results of operations and cash flows, we expect the adoption of this standard will have a material impact on our consolidated financial position due to the recognition of the right-of-use asset and lease liability related to operating leases. We had operating leases with remaining rental payments of approximately $28,852 as of March 31, 2022. The discounted minimum remaining rental payments will be the starting point for determining the right-of-use asset and lease liability. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments , which introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income, and (4) beneficial interests in securitized financial assets. The amendments contained in this ASU will be applied through a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. In November 2018, the FASB issued ASU No. 2018-19, which amended the effective date of ASU No. 2016-13 and clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20. In October 2019, the FASB delayed the effective date of this ASU, extending the effective date for non-public business entities and making the ASU effective for the Company for the fiscal year ending December 31, 2023, and interim periods therein, with early adoption permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another rate that is expected to be discontinued. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). This ASU provides supplemental guidance and clarification to ASU No. 2020-04, and these updates must be adopted concurrently, cumulatively referred to as “Topic 848.” The amendments in Topic 848 are currently effective for all entities, and upon adoption, may be applied prospectively to contract modifications made on or before December 31, 2022. The Company is still assessing the impact of Topic 848 on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU simplifies the guidance on accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible debt with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock unless certain other conditions are met. Also, the ASU requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock |
Asset Acquisition (Tables)
Asset Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition, Contingent Consideration | The assets acquired and liabilities assumed as recognized within the Company's condensed consolidated balance sheet upon closing on the APA consisted of the following: Consideration and direct transaction costs: Asset retirement obligations $ (50,590) Bond and insurance accrued expenses, net (2,229) Direct transaction costs (2,336) Total consideration and transaction costs incurred $ (55,155) Assets Acquired: Cash $ 6,354 Restricted cash 28,546 Water rights 5,196 Land 14,385 Plant, machinery and equipment 610 Vehicles 64 Total allocated value of assets acquired $ 55,155 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Three Months Ended March 31, 2022 2021 Construction contracts $ 30,840 $ 19,939 Byproduct services 24,018 26,473 Raw material sales 11,193 5,695 Total revenue $ 66,051 $ 52,107 |
Balance Sheet Items (Tables)
Balance Sheet Items (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment, Net | The following table shows the components of real estate, property and equipment, net: March 31, 2022 December 31, 2021 Plant, machinery and equipment $ 63,961 $ 63,937 Structural fill site improvements 55,760 55,760 Vehicles 11,805 11,718 Office equipment 600 600 Buildings and leasehold improvements 267 267 Land, land improvements and structural fill sites 12,082 12,231 Capital lease assets 41,215 31,172 Construction in progress 1,539 1,522 Total real estate, property and equipment $ 187,229 $ 177,207 Less: accumulated depreciation (111,286) (106,734) Real estate, property and equipment, net $ 75,943 $ 70,473 |
Schedule of Capital Leased Assets | The following table shows the components of capital lease assets, net: March 31, 2022 December 31, 2021 Capital lease assets $ 41,215 $ 31,172 Less: accumulated depreciation (5,518) (3,606) Capital lease assets, net $ 35,697 $ 27,566 |
Schedule of Lease Receivable | The following table reflects the classification of the lease receivable within our accompanying unaudited condensed consolidated balance sheet: March 31, 2022 December 31, 2021 Lease receivable $ 5,921 $ 5,937 Less: current portion in prepaid expenses and other current assets (66) (65) Non-current portion in other assets $ 5,855 $ 5,872 |
Schedule of Notes Receivable | The following table reflects the classification of the note receivable within our unaudited condensed consolidated balance sheet: March 31, 2022 December 31, 2021 Note receivable $ 1,352 $ 1,352 Less: current portion in prepaid expenses and other current assets (500) (500) Non-current portion in other assets $ 852 $ 852 |
Schedule of Accrued Liabilities | The following table shows the components of accrued liabilities: March 31, 2022 December 31, 2021 Accrued expenses $ 18,815 $ 25,074 Accrued interest 2,192 2,008 Accrued preferred stock dividends 2,090 1,994 Accrued payroll and bonuses 2,063 7,798 Accrued liabilities $ 25,160 $ 36,874 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table reflects the activity for our asset retirement obligations: Three Months Ended March 31, 2022 2021 Balance, beginning of period $ 42,413 $ 5,159 Liabilities incurred — 50,590 Liabilities settled (6,394) (1,870) Accretion 401 233 Gain on ARO settlement (2,451) — Balance, end of period 33,969 54,112 Less: current portion (24,776) (18,729) Non-current portion $ 9,193 $ 35,383 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | The Company’s intangible assets consist of the following: March 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangibles Customer relationships $ 78,942 $ (40,701) $ 38,241 $ 78,942 $ (38,727) $ 40,215 Indefinite-lived intangibles Charah trade name 13,316 13,316 Total $ 51,557 $ 53,531 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the major components of debt at each balance sheet date and provides maturities and interest rate ranges for each major category as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Various equipment notes entered into in November 2017, payable in monthly installments ranging from $6 to $24, including interest at 5.2%, maturing in December 2022 through December 2023. The notes are secured by equipment with a net book value of $688 as of March 31, 2022. $ 1,458 $ 1,748 Various equipment notes entered into in 2018, payable in monthly installments ranging from $1 to $39, including interest ranging from 5.6% to 6.8%, maturing in March 2023 through May 2025. The notes are secured by equipment with a net book value of $4,983 as of March 31, 2022. 5,430 5,952 Various equipment notes entered into in 2019, payable in monthly installments ranging from $2 to $23, including interest ranging from 3.9% to 6.4%, maturing in April 2024 through December 2024. The notes are secured by equipment with a net book value of $2,275 as of March 31, 2022. 2,416 2,633 Various equipment notes entered into in 2020, payable in monthly installments ranging from $9 to $10, including interest of 5.4%, maturing in August 2025. The notes are secured by equipment with a net book value of $1,652 as of March 31, 2022. 1,524 1,624 Various equipment notes entered into in 2021, payable in monthly installments ranging from $3 to $9, including interest ranging from 4.0% to 6.5%, maturing in February 2026 through August 2026. The notes are secured by equipment with a net book value of $1,602 as of March 31, 2022. 1,769 1,861 Various commercial insurance premium financing agreements entered into in 2021, payable in monthly installments ranging from $24 to $117, including interest ranging from 3.0% to 3.9%, maturing in October 2021 through April 2022. 117 467 A commercial insurance premium financing agreement entered into in 2022, payable in monthly installments of $143, including interest of 4.2%, maturing in November 2022. 1,126 — A $10,000 equipment line with a bank, entered into in December 2017, secured by all equipment purchased with the proceeds of the loan. Interest is calculated on any outstanding amounts using a fixed rate of 4.5%. The equipment line converted to a term loan in September 2018 with a maturity date of June 22, 2023. The term loan is secured by equipment with a net book value of $1,885 as of March 31, 2022. 2,867 3,387 Senior Unsecured Notes, issued August 2021 (see Note 9). The Notes are senior unsecured obligations of the Company, bearing stated interest at 8.5%, and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. 135,000 135,000 Total 151,707 152,672 Less debt issuance costs, net (10,972) (11,444) 140,735 141,228 Less current maturities (8,196) (7,567) Notes payable due after one year $ 132,539 $ 133,661 |
Contract Assets and Liabiliti_2
Contract Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Asset and Liabilities | Our contract assets are as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Retainage 9,491 9,681 Total contract assets $ 24,912 $ 26,844 Our contract liabilities are as follows: March 31, 2022 December 31, 2021 Billings in excess of costs and estimated earnings $ 5,505 $ 5,716 Deferred revenue 1,088 483 Total contract liabilities $ 6,593 $ 6,199 |
Costs in Excess of Billings and Billings in Excess of Costs | The Company's net position on uncompleted contracts is as follows: March 31, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 236,562 $ 227,195 Estimated earnings 18,356 22,331 Total costs and estimated earnings 254,918 249,526 Less billings to date (245,002) (238,079) Net balance in process $ 9,916 $ 11,447 The net balance in process classified on the accompanying unaudited condensed consolidated balance sheets is as follows: March 31, 2022 December 31, 2021 Costs and estimated earnings in excess of billings $ 15,421 $ 17,163 Billings in excess of costs and estimated earnings (5,505) (5,716) Net balance in process $ 9,916 $ 11,447 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of the Company’s non-vested share activity for the three months ended March 31, 2022 is as follows: Restricted Stock Performance Stock Total Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Balance as of December 31, 2021 885 $ 4.62 648 $ 4.24 1,533 $ 4.46 Granted 2 4.78 — — 2 4.78 Forfeited — — — — — — Vested (1) 4.78 — — (1) 4.78 Balance as of March 31, 2022 886 $ 4.62 648 $ 4.24 1,534 $ 4.46 Restricted Stock Performance Stock Total Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Weighted Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Balance as of December 31, 2021 0.88 $ 4,072 1.26 $ 2,979 1.04 $ 7,051 Balance as of March 31, 2022 0.63 $ 4,425 1.01 $ 3,231 0.79 $ 7,656 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted loss per share is determined using the following information: Three Months Ended March 31, 2022 2021 Numerator: Net loss attributable to Charah Solutions, Inc. $ (12,040) $ (1,287) Deemed and imputed dividends on Series A Preferred Stock (149) (147) Series A Preferred Stock dividends (2,090) (2,067) Net loss attributable to common stockholders $ (14,279) $ (3,501) Denominator: Weighted average shares outstanding 33,408 30,113 Dilutive share-based awards — — Total weighted average shares outstanding, including dilutive shares 33,408 30,113 Net loss attributable to common stockholders per common share Basic $ (0.43) $ (0.12) Diluted $ (0.43) $ (0.12) |
Schedule of Antidilutive Securities Excluded from Computation | A summary of securities excluded from the computation of diluted earnings per share is presented below: Three Months Ended March 31, 2022 2021 Diluted earnings per share: Anti-dilutive restricted and performance stock units 1,300 1,393 Anti-dilutive Series A Preferred Stock convertible into common stock 11,814 10,395 Potentially dilutive securities, excluded as anti-dilutive 13,114 11,788 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2022Segment | Mar. 31, 2022segment | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 27, 2020USD ($) | |
Related Party Transaction [Line Items] | |||||
Number of reportable segments | 1 | 1 | |||
COVID-19 | |||||
Related Party Transaction [Line Items] | |||||
Payroll taxes due 2020 | $ 1,637 | ||||
Accrued payroll, percentage of deferred payment | 50.00% | ||||
COVID-19 | Forecast | |||||
Related Party Transaction [Line Items] | |||||
Accrued payroll, percentage of deferred payment | 50.00% | ||||
Charah Solutions | BCP | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage by noncontrolling owners | 59.00% | 59.00% |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Narrative (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Accounting Changes and Error Corrections [Abstract] | |
Rental payments | $ 28,852 |
Asset Acquisition - Narrative (
Asset Acquisition - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2021USD ($)a | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Apr. 06, 2022USD ($)a | Apr. 04, 2022a | |
Schedule of Asset Acquisition [Line Items] | |||||
Property redevelopment term | 34 months | ||||
Structural fill site costs, inflation rate | 3.00% | ||||
Asset retirement obligation, weighted average rate | 4.50% | ||||
Net proceeds from the sales of real estate, property and equipment | $ | $ 3,095,000 | $ 446,000 | |||
Real Property Acreage | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Net proceeds from the sales of real estate, property and equipment | $ | $ 0 | $ 0 | |||
Sale Of Plant, Machinery And Equipment And Vehicles | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Purchases from third party | $ | $ 193,000 | ||||
Texas Municipal Power Agency | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 6,166 | ||||
Gibbons Creek Steam Reservoir, Dam and Floodway | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 3,500 | ||||
Gibbons Creek Steam Electric Station And Reservoir | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 4,860 | ||||
Sale of property percentage | 80.00% | ||||
Avon Lake Asset Acquisition | Subsequent Event | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 40 | ||||
Cheswick Generating Station Asset Acquisition Primary Generating Station Site | Subsequent Event | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 56 | ||||
Cheswick Generating Station Asset Acquisition | Subsequent Event | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 27 | ||||
Cash and restricted cash received | $ | $ 36,763 | ||||
Cheswick Generating Station In Cheswick, PA | Subsequent Event | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 182 | ||||
Cheswick Generating Station Asset Acquisition Landfill Facility | Subsequent Event | |||||
Schedule of Asset Acquisition [Line Items] | |||||
Area of land | 50 |
Asset Acquisition - Assets acqu
Asset Acquisition - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Consideration and direct transaction costs: | |||||
Asset retirement obligations | $ (33,969) | $ (42,413) | $ (54,112) | $ (5,159) | |
Asset Purchase Agreement | |||||
Consideration and direct transaction costs: | |||||
Asset retirement obligations | $ (50,590) | ||||
Bond and insurance accrued expenses, net | (2,229) | ||||
Direct transaction costs | (2,336) | ||||
Total consideration and transaction costs incurred | (55,155) | ||||
Assets Acquired: | |||||
Cash | 6,354 | ||||
Restricted cash | 28,546 | ||||
Water rights | 5,196 | ||||
Land | 14,385 | ||||
Plant, machinery and equipment | 610 | ||||
Vehicles | 64 | ||||
Total allocated value of assets acquired | $ 55,155 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 66,051 | $ 52,107 |
Construction contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 30,840 | 19,939 |
Byproduct services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,018 | 26,473 |
Raw material sales | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 11,193 | $ 5,695 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 457,494 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 23.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 10.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 8.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 59.00% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Unapproved change orders | $ 1,691,000 | |
Approved change orders | 164,000 | |
Revenue | 66,051,000 | $ 52,107,000 |
Non-US | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 0 | $ 0 |
Balance Sheet Items - Schedule
Balance Sheet Items - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | $ 187,229 | $ 177,207 |
Less: accumulated depreciation | (111,286) | (106,734) |
Real estate, property and equipment, net | 75,943 | 70,473 |
Plant, machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 63,961 | 63,937 |
Structural fill site improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 55,760 | 55,760 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 11,805 | 11,718 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 600 | 600 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 267 | 267 |
Land, land improvements and structural fill sites | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 12,082 | 12,231 |
Capital lease assets | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | 41,215 | 31,172 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total real estate, property and equipment | $ 1,539 | $ 1,522 |
Balance Sheet Items - Narrative
Balance Sheet Items - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Land improvements | $ 5,875 | |||
Demolition cost capitalized | 842 | $ 148 | ||
Cost basis on scrap sold | 990 | 0 | ||
Depreciation | $ 4,597 | 4,173 | ||
Sale leaseback transaction, terms | 30 years | |||
Discount rate | 3.90% | |||
Gain on sales-type lease | $ 0 | $ 5,568 | ||
Non-current assets held for sale | $ 2,852 | |||
Proceeds from sale of assets | $ 1,250 | |||
Asset sale agreement, final payment to be received, term | 36 months |
Balance Sheet Items - Capital L
Balance Sheet Items - Capital Lease Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Capital lease assets | $ 41,215 | $ 31,172 |
Less: accumulated depreciation | (5,518) | (3,606) |
Capital lease assets, net | $ 35,697 | $ 27,566 |
Balance Sheet Items - Lease Rec
Balance Sheet Items - Lease Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Lease receivable | $ 5,921 | $ 5,937 |
Less: current portion in prepaid expenses and other current assets | (66) | (65) |
Non-current portion in other assets | $ 5,855 | $ 5,872 |
Balance Sheet Items - Note Rece
Balance Sheet Items - Note Receivable (Details) - Notes Receivable - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Note receivable | $ 1,352 | $ 1,352 |
Less: current portion in prepaid expenses and other current assets | (500) | (500) |
Non-current portion in other assets | $ 852 | $ 852 |
Balance Sheet Items - Accrued L
Balance Sheet Items - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 18,815 | $ 25,074 |
Accrued interest | 2,192 | 2,008 |
Accrued preferred stock dividends | 2,090 | 1,994 |
Accrued payroll and bonuses | 2,063 | 7,798 |
Accrued liabilities | $ 25,160 | $ 36,874 |
Asset Retirement Obligations -
Asset Retirement Obligations - Narrative (Details) $ in Thousands | Mar. 31, 2022USD ($)tract_of_real_propertySite | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Asset Retirement Obligation Disclosure [Abstract] | ||||
Number of structural sites owned and operated | Site | 1 | |||
Number of tracts of real property | tract_of_real_property | 4 | |||
Asset retirement obligation | $ | $ 33,969 | $ 42,413 | $ 54,112 | $ 5,159 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Balance, beginning of period | $ 42,413 | $ 5,159 | |
Liabilities incurred | 0 | 50,590 | |
Liabilities settled | (6,394) | (1,870) | |
Accretion | 401 | 233 | |
Gain on ARO settlement | (2,451) | 0 | |
Balance, end of period | 33,969 | 54,112 | |
Less: current portion | (24,776) | (18,729) | $ (27,534) |
Non-current portion | $ 9,193 | $ 35,383 | $ 14,879 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) shares in Thousands | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Aug. 25, 2021 | |
8.50% Senior Notes due 2026 | Senior Notes | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument | $ 135,000,000 | |||||
Interest rate | 8.50% | 8.50% | 8.50% | |||
Additional purchase amount | $ 5,000,000 | |||||
Amendment No. 3 to Credit Agreement | Series A Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Issuance of Series A Preferred Stock, net of issuance costs (in shares) | 26 | 26 | ||||
Affiliated Entity | ATC Group Services, LLC | Environmental Consulting and Engineering Services | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 18,000 | $ 54,000 | ||||
Receivable from related parties | $ 0 | 0 | $ 0 | |||
Payable to related parties | $ 14,000 | 14,000 | $ 4,000 | |||
B. Riley | 8.50% Senior Notes due 2026 | Senior Notes | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument | $ 80,325,000 | |||||
Payments of debt issuance costs | $ 7,914,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 1,974 | $ 1,974 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, useful life | 10 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Indefinite-lived intangibles | ||
Intangible Assets, Gross (Including Goodwill) [Roll Forward] | ||
Intangible assets, net | 51,557 | 53,531 |
Charah trade name | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Indefinite-lived intangibles | 13,316 | 13,316 |
Customer relationships | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross Carrying Amount | 78,942 | 78,942 |
Accumulated Amortization | (40,701) | (38,727) |
Net Carrying Amount | $ 38,241 | $ 40,215 |
Long-term Debt (Details)
Long-term Debt (Details) | Nov. 09, 2021USD ($)trading_day | Aug. 25, 2021USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Sep. 21, 2018USD ($) |
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 10,972,000 | $ 11,444,000 | |||
Write off of deferred issuance cost | 1,291,000 | 1,338,000 | |||
Charah, LLC | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding | $ 15,237,000 | $ 19,027,000 | |||
8.50% Senior Notes due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument | $ 135,000,000 | ||||
Debt instrument, redemption price, percentage | 100.00% | ||||
Interest rate | 8.50% | 8.50% | |||
Percentage of principal amount, minimum | 25.00% | ||||
Debt issuance costs | $ 12,116,000 | ||||
8.50% Senior Notes due 2026 | Senior Notes | Period 1 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 103.00% | ||||
8.50% Senior Notes due 2026 | Senior Notes | Period 2 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 102.00% | ||||
8.50% Senior Notes due 2026 | Senior Notes | Period 3 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100.00% | ||||
8.50% Senior Notes Due 2026, Additional Borrowings | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument | $ 5,000,000 | ||||
Credit Agreement | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 1,408,000 | ||||
Credit Agreement | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt amount threshold for financial covenants | $ 4,974,000 | ||||
Credit Agreement | Line of Credit | Maximum | |||||
Debt Instrument [Line Items] | |||||
Provision for sustainability adjustment, percentage | (0.05%) | ||||
Credit Agreement | Line of Credit | Minimum | |||||
Debt Instrument [Line Items] | |||||
Provision for sustainability adjustment, percentage | 0.05% | ||||
Credit Agreement | Line of Credit | Adjusted LIBO Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 2.25% | ||||
Additional basis spread on basis spread | 1.25% | ||||
Credit Agreement | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0.50% | ||||
Credit Agreement | Line of Credit | One Month Adjusted LIBOR Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 1.00% | ||||
Credit Agreement | Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, term | 4 years | ||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Accordion feature, higher borrowing capacity option | 5,000,000 | ||||
Maximum availability | $ 1,000,000 | ||||
Percentage of lesser of the aggregate revolving commitments and the borrowing base | 0.125 | ||||
PP&E component | $ 7,500,000 | ||||
Line of credit facility, consecutive business days, maximum borrowing capacity | $ 3,500,000 | ||||
Line of credit facility, consecutive business day | trading_day | 3 | ||||
Line of credit facility, threshold consecutive months | trading_day | 12 | ||||
Line of credit facility, fixed charge coverage ratio | 1 | ||||
Credit Agreement | Line of Credit | Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 5,000,000 | ||||
Credit Agreement | Line of Credit | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 5,000,000 | ||||
Syndicated Credit Facility | Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Syndicated Credit Facility | Line of Credit | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 205,000,000 | ||||
Syndicated Credit Facility | Line of Credit | Loan Commitment | |||||
Debt Instrument [Line Items] | |||||
Accordion feature, higher borrowing capacity option | $ 25,000,000 |
Notes Payable - Schedule of Deb
Notes Payable - Schedule of Debt (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 25, 2021 |
Debt Instrument [Line Items] | |||
Total | $ 151,707,000 | $ 152,672,000 | |
Less debt issuance costs, net | (10,972,000) | (11,444,000) | |
Long-term debt | 140,735,000 | 141,228,000 | |
Less current maturities | (8,196,000) | (7,567,000) | |
Notes payable due after one year | 132,539,000 | 133,661,000 | |
Notes Payable | Equipment Notes Payable, 5.2% Due December 2022 and 2023 | |||
Debt Instrument [Line Items] | |||
Total | $ 1,458,000 | 1,748,000 | |
Interest rate | 5.20% | ||
Equipment net book value | $ 688,000 | ||
Notes Payable | Equipment Notes Payable, 5.2% Due December 2022 and 2023 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | 6,000 | ||
Notes Payable | Equipment Notes Payable, 5.2% Due December 2022 and 2023 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | 24,000 | ||
Notes Payable | Equipment Notes Payable, 5.6% to 6.8% Due March 2023 Through May 2025 | |||
Debt Instrument [Line Items] | |||
Total | 5,430,000 | 5,952,000 | |
Equipment net book value | 4,983,000 | ||
Notes Payable | Equipment Notes Payable, 5.6% to 6.8% Due March 2023 Through May 2025 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 1,000 | ||
Interest rate | 5.60% | ||
Notes Payable | Equipment Notes Payable, 5.6% to 6.8% Due March 2023 Through May 2025 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 39,000 | ||
Interest rate | 6.80% | ||
Notes Payable | Equipment Notes Payable, 3.9% to 6.4% Due April 2024 Through December 2024 | |||
Debt Instrument [Line Items] | |||
Total | $ 2,416,000 | 2,633,000 | |
Equipment net book value | 2,275,000 | ||
Notes Payable | Equipment Notes Payable, 3.9% to 6.4% Due April 2024 Through December 2024 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 2,000 | ||
Interest rate | 3.90% | ||
Notes Payable | Equipment Notes Payable, 3.9% to 6.4% Due April 2024 Through December 2024 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 23,000 | ||
Interest rate | 6.40% | ||
Notes Payable | Equipment Notes Payable, 5.4 % Due August 2025 | |||
Debt Instrument [Line Items] | |||
Total | $ 1,524,000 | 1,624,000 | |
Interest rate | 5.40% | ||
Equipment net book value | $ 1,652,000 | ||
Notes Payable | Equipment Notes Payable, 5.4 % Due August 2025 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | 9,000 | ||
Notes Payable | Equipment Notes Payable, 5.4 % Due August 2025 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | 10,000 | ||
Term Loan | Equipment Notes Payable 5.4% Due February 2026 | |||
Debt Instrument [Line Items] | |||
Total | 1,769,000 | 1,861,000 | |
Equipment net book value | 1,602,000 | ||
Term Loan | Equipment Notes Payable 5.4% Due February 2026 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 3,000 | ||
Interest rate | 4.00% | ||
Term Loan | Equipment Notes Payable 5.4% Due February 2026 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 9,000 | ||
Interest rate | 6.50% | ||
Line of Credit | Equipment Notes Payable 3.9 % Due October 2021 | |||
Debt Instrument [Line Items] | |||
Total | $ 117,000 | 467,000 | |
Line of Credit | Equipment Notes Payable 3.9 % Due October 2021 | Minimum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 24,000 | ||
Interest rate | 3.00% | ||
Line of Credit | Equipment Notes Payable 3.9 % Due October 2021 | Maximum | |||
Debt Instrument [Line Items] | |||
Monthly installments | $ 117,000 | ||
Interest rate | 0.039% | ||
Line of Credit | Commercial Insurance Premium Financing Agreement 4.2 % Due November 2022 | |||
Debt Instrument [Line Items] | |||
Total | $ 1,126,000 | 0 | |
Monthly installments | $ 143,000 | ||
Interest rate | 4.20% | ||
Line of Credit | 4.5% Equipment Line Of Credit | |||
Debt Instrument [Line Items] | |||
Total | $ 2,867,000 | 3,387,000 | |
Long-term debt | $ 1,885,000 | ||
Interest rate | 4.50% | ||
Initial commitment | $ 10,000,000 | ||
Senior Notes | 8.50% Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Total | $ 135,000,000 | $ 135,000,000 | |
Less debt issuance costs, net | $ (12,116,000) | ||
Interest rate | 8.50% | 8.50% |
Mezzanine Equity (Details)
Mezzanine Equity (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2022USD ($)$ / sharesshares | Mar. 31, 2020$ / sharesshares | Mar. 31, 2022USD ($)trading_day$ / sharesshares | Dec. 31, 2021USD ($)$ / shares | Mar. 31, 2021USD ($) | Mar. 04, 2020$ / shares | |
Temporary Equity [Line Items] | ||||||
Series A preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Series A preferred stock dividends payable included in accrued expenses | $ 2,090,000 | $ 2,090,000 | $ 2,067,000 | |||
Liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||
Dividend in cash, liquidation preference percentage | 10.00% | |||||
Dividend other than cash, liquidation preference percentage | 13.00% | |||||
Dividend other than cash, liquidation preference percentage, upon default | 16.00% | |||||
Series A preferred stock, aggregate liquidation preference | $ 33,775,000 | $ 33,775,000 | $ 32,712,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 2.77 | |||||
Weighted average price percentage of preferred stock | 30.00% | |||||
Common stock issuable if preferred stock is converted (in shares) | shares | 12,193 | 12,193 | ||||
Threshold trading days | trading_day | 30 | |||||
Threshold consecutive trading days | trading_day | 20 | |||||
Conversion price, percentage | 120.00% | |||||
Conversion price, upon change of control | 100.00% | 100.00% | ||||
Dividend discount spread on treasury rate | 0.50% | 0.50% | ||||
Make whole payment, maximum | $ 4,000,000 | $ 4,000,000 | ||||
Conversion price, upon early redemption | 103.00% | 103.00% | ||||
Series A Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Debt instrument, convertible, conversion term | 3 years | |||||
Series A Preferred Stock | Period 1 | ||||||
Temporary Equity [Line Items] | ||||||
Debt instrument, convertible, conversion term | 3 years | |||||
Series A Preferred Stock | Period 2 | ||||||
Temporary Equity [Line Items] | ||||||
Debt instrument, convertible, conversion term | 7 years | |||||
Amendment No. 3 to Credit Agreement | Series A Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Issuance of series A preferred stock, net of issuance costs (in shares) | shares | 26 | 26 | ||||
Series A preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Original issue discount, rate | 3.00% | 3.00% | ||||
Amendment No. 3 to Credit Agreement | Series A Preferred Stock | Private Placement | ||||||
Temporary Equity [Line Items] | ||||||
Proceeds from issuance, net of discount | $ 26,000,000 | |||||
Original issue discount, amount | 780,000 | |||||
Proceeds from private placement | 25,220,000 | |||||
Payments of stock issuance costs | 966,000 | |||||
Series A preferred stock dividends payable included in accrued expenses | $ 1,063,000 | $ 1,063,000 | $ 1,030,000 |
Contract Assets and Liabiliti_3
Contract Assets and Liabilities - Schedule of Asset and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Contract with Customer, Asset, after Allowance for Credit Loss, Current [Abstract] | ||
Costs and estimated earnings in excess of billings | $ 15,421 | $ 17,163 |
Retainage | 9,491 | 9,681 |
Total contract assets | 24,912 | 26,844 |
Contract with Customer, Liability [Abstract] | ||
Billings in excess of costs and estimated earnings | 5,505 | 5,716 |
Deferred revenue | 1,088 | 483 |
Total contract liabilities | 6,593 | 6,199 |
Revenue recognized | $ 5,772 | $ 5,772 |
Contract Assets and Liabiliti_4
Contract Assets and Liabilities - Activity (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Costs incurred on uncompleted contracts | $ 236,562 | $ 227,195 |
Estimated earnings | 18,356 | 22,331 |
Total costs and estimated earnings | 254,918 | 249,526 |
Less billings to date | (245,002) | (238,079) |
Net balance in process | $ 9,916 | $ 11,447 |
Contract Assets and Liabiliti_5
Contract Assets and Liabilities - Balance Sheet Classification (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Costs and estimated earnings in excess of billings | $ 15,421 | $ 17,163 |
Billings in excess of costs and estimated earnings | (5,505) | (5,716) |
Net balance in process | 9,916 | 11,447 |
Long-term contracts, loss accrual | $ 136 | $ 159 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Common Stock | 2018 Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized to be issued (in units) | 5,007 | |
Restricted Stock Units (RSU) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 571 | $ 257 |
Unrecognized compensation cost | $ 975 | |
Compensation cost not yet recognized, period for recognition | 1 year 4 months 24 days | |
Performance Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 220 | $ 41 |
Unrecognized compensation cost | $ 787 | |
Compensation cost not yet recognized, period for recognition | 1 year 10 months 6 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Shares | ||
Beginning balance (in shares) | 1,533 | |
Granted (in shares) | 2 | |
Forfeited (in shares) | 0 | |
Vested (in shares) | (1) | |
Ending balance (in shares) | 1,534 | 1,533 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 4.46 | |
Granted (in dollars per share) | 4.78 | |
Forfeited (in dollars per share) | 0 | |
Vested (in dollars per share) | 4.78 | |
Ending balance (in dollars per share) | $ 4.46 | $ 4.46 |
Weighted Average Remaining Contractual Terms (Years) | 9 months 14 days | 1 year 14 days |
Aggregate Intrinsic Value | $ 7,656 | $ 7,051 |
Restricted Stock | ||
Shares | ||
Beginning balance (in shares) | 885 | |
Granted (in shares) | 2 | |
Forfeited (in shares) | 0 | |
Vested (in shares) | (1) | |
Ending balance (in shares) | 886 | 885 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 4.62 | |
Granted (in dollars per share) | 4.78 | |
Forfeited (in dollars per share) | 0 | |
Vested (in dollars per share) | 4.78 | |
Ending balance (in dollars per share) | $ 4.62 | $ 4.62 |
Weighted Average Remaining Contractual Terms (Years) | 7 months 17 days | 10 months 17 days |
Aggregate Intrinsic Value | $ 4,425 | $ 4,072 |
Performance Stock | ||
Shares | ||
Beginning balance (in shares) | 648 | |
Granted (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Vested (in shares) | 0 | |
Ending balance (in shares) | 648 | 648 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 4.24 | |
Granted (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0 | |
Vested (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 4.24 | $ 4.24 |
Weighted Average Remaining Contractual Terms (Years) | 1 year 3 days | 1 year 3 months 3 days |
Aggregate Intrinsic Value | $ 3,231 | $ 2,979 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 78 | $ 157 | |
Effective tax rate | 23.20% | ||
Statutory tax rate | 21.00% | ||
Statutory tax rate prior to valuation allowance | 3.90% | ||
Deferred tax liabilities | $ 985 | $ 949 |
Loss Per Share - Calculation of
Loss Per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss attributable to Charah Solutions, Inc. | $ (12,040) | $ (1,287) |
Deemed and imputed dividends on Series A Preferred Stock | (149) | (147) |
Series A Preferred Stock dividends | (2,090) | (2,067) |
Net loss attributable to common stockholders | $ (14,279) | $ (3,501) |
Denominator: | ||
Weighted-average shares outstanding (in shares) | 33,408 | 30,113 |
Dilutive share-based awards (in shares) | 0 | 0 |
Total weighted average shares outstanding, including dilutive shares (in shares) | 33,408 | 30,113 |
Net loss attributable to common stockholders per common share | ||
Basic (in dollars per share) | $ (0.43) | $ (0.12) |
Diluted (in dollars per share) | $ (0.43) | $ (0.12) |
Loss Per Share - Antidilutive S
Loss Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted and performance stock units (in shares) | 13,114 | 11,788 |
Anti-dilutive restricted and performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted and performance stock units (in shares) | 1,300 | 1,393 |
Anti-dilutive Series A Preferred Stock convertible into common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted and performance stock units (in shares) | 11,814 | 10,395 |