Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Apr. 01, 2022 | May 10, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | ATLAS TECHNICAL CONSULTANTS, INC. | |
Trading Symbol | ATCX | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --01-01 | |
Amendment Flag | false | |
Entity Central Index Key | 0001751143 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Apr. 1, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38745 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-0808563 | |
Entity Address, Address Line One | 13215 Bee Cave Parkway | |
Entity Address, Address Line Two | Building B | |
Entity Address, Address Line Three | Suite 230 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78738 | |
City Area Code | (512) | |
Local Phone Number | 851-1501 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Class A Common Stock | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 35,115,892 | |
Class B Common Stock | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 3,333,893 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 01, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and equivalents | $ 9,088 | $ 10,697 |
Accounts receivable, net | 104,933 | 105,362 |
Unbilled receivables, net | 55,028 | 45,924 |
Prepaid expenses | 5,778 | 5,061 |
Other current assets | 4,207 | 4,039 |
Total current assets | 179,034 | 171,083 |
Property and equipment, net | 15,697 | 13,757 |
Intangible assets, net | 142,578 | 107,314 |
Goodwill | 132,854 | 124,348 |
Other long-term assets | 40,274 | 4,015 |
TOTAL ASSETS | 510,437 | 420,517 |
Current liabilities: | ||
Trade accounts payable | 39,204 | 42,521 |
Accrued liabilities | 11,438 | 17,124 |
Current maturities of long-term debt | 4,930 | 3,606 |
Other current liabilities | 40,036 | 26,489 |
Total current liabilities | 95,608 | 89,740 |
Long-term debt, net of current maturities and loan costs | 504,431 | 462,193 |
Other long-term liabilities | 49,069 | 20,074 |
Total liabilities | 649,108 | 572,007 |
COMMITMENTS AND CONTINGENCIES (NOTE 12) | ||
Class A common stock, $.0001 par value, 400,000,000 shares authorized, 35,115,892 and 33,645,212 shares issued and outstanding at April 1, 2022 and December 31, 2021, respectively, | 4 | 3 |
Class B common stock, $.0001 par value, 100,000,000 shares authorized, 3,333,893 and 3,328,101 shares issued and outstanding at April 1, 2022 and December 31, 2021, respectively. | ||
Additional paid in capital | (85,456) | (102,692) |
Non-controlling interest | (20,606) | (20,210) |
Retained deficit | (32,613) | (28,591) |
Total shareholders’ deficit | (138,671) | (151,490) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 510,437 | $ 420,517 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parentheticals) - $ / shares | Apr. 01, 2022 | Dec. 31, 2021 |
Class A Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 400,000,000 | 400,000,000 |
Common stock, issued shares | 35,115,892 | 33,645,212 |
Common stock, outstanding shares | 35,115,892 | 33,645,212 |
Class B Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 3,333,893 | 3,328,101 |
Common stock, outstanding shares | 3,333,893 | 3,328,101 |
Unaudited Statements of Operati
Unaudited Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 135,187 | $ 123,269 |
Subcontractor costs | (25,831) | (21,676) |
Other costs of revenues | (46,036) | (42,952) |
Gross profit (excluding depreciation expense) | 63,320 | 58,641 |
Operating expenses: | ||
Personnel costs and benefits | (34,470) | (33,910) |
Selling general and administrative | (15,036) | (11,875) |
Depreciation and amortization | (6,968) | (4,560) |
Total operating expenses | (56,474) | (50,345) |
Operating income | 6,846 | 8,296 |
Interest expense | (11,119) | (23,042) |
Loss before income taxes | (4,273) | (14,746) |
Income tax expense | (145) | (44) |
Net loss | (4,418) | (14,790) |
Provision for non-controlling interest | 396 | 12,169 |
Redeemable preferred stock dividends | (5,899) | |
Net loss attributable to Class A common stock shareholders | $ (4,022) | $ (8,520) |
Loss Per Class A Common Share (in Dollars per share) | $ (0.12) | $ (0.6) |
Weighted average of shares outstanding: | ||
Class A common shares (basic and diluted) (in Shares) | 34,039,775 | 14,256,484 |
Unaudited Statements of Shareho
Unaudited Statements of Shareholders’ Deficit - USD ($) $ in Thousands | Class ACommon Stock | Class BCommon Stock | Additional Paid in Capital | Non- Controlling Interests | Retained Deficit | Total |
Balance at Dec. 31, 2020 | $ 1 | $ 2 | $ (37,382) | $ (90,566) | $ (6,203) | $ (134,148) |
Balance (in Shares) at Dec. 31, 2020 | 12,842 | 22,439 | ||||
Equity based compensation | 446 | 446 | ||||
Conversion of shares | $ 1 | (9,344) | 9,344 | 1 | ||
Conversion of shares (in Shares) | 2,315 | (2,315) | ||||
Net (loss) | (8,654) | (6,136) | (14,790) | |||
Dividends on redeemable preferred stock | (3,515) | (2,384) | (5,899) | |||
Balance at Apr. 02, 2021 | $ 2 | $ 2 | (46,280) | (93,391) | (14,723) | (154,390) |
Balance (in Shares) at Apr. 02, 2021 | 15,157 | 20,124 | ||||
Balance at Dec. 31, 2021 | $ 3 | (102,692) | (20,210) | (28,591) | (151,490) | |
Balance (in Shares) at Dec. 31, 2021 | 33,646 | 3,328 | ||||
Equity based compensation | 1,706 | 1,706 | ||||
Equity based compensation (in Shares) | 62 | |||||
Conversion of shares | ||||||
Conversion of shares (in Shares) | 181 | (181) | ||||
Net (loss) | (396) | (4,022) | (4,418) | |||
Shares issued | $ 1 | 15,530 | 15,531 | |||
Shares issued (in Shares) | 1,227 | 186 | ||||
Balance at Apr. 01, 2022 | $ 4 | $ (85,456) | $ (20,606) | $ (32,613) | $ (138,671) | |
Balance (in Shares) at Apr. 01, 2022 | 35,116 | 3,333 |
Unaudited Statements of Cash Fl
Unaudited Statements of Cash Flows - USD ($) $ in Thousands | Apr. 01, 2022 | Apr. 02, 2021 |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (4,418) | $ (14,790) |
Depreciation and amortization | 6,968 | 4,560 |
Equity-based compensation expense | 1,052 | 446 |
Interest expense, paid in kind | 864 | |
Loss (gain) on sale of property and equipment | 11 | |
Write-off of deferred financing costs related to debt extinguishment | 15,197 | |
Amortization of deferred financing costs | 279 | 631 |
Provision for bad debts | (189) | |
(Increase) decrease in accounts receivable and unbilled receivable | 4,003 | 9,536 |
(Increase) decrease in prepaid expenses | (343) | (2,691) |
(Increase) decrease in other current assets | (160) | 1,752 |
(Decrease) in trade accounts payable | (10,267) | (5,409) |
(Decrease) in accrued liabilities | (7,355) | (5,629) |
Dividends on preferred shares accrued and not paid | (5,524) | (3,205) |
(Increase) in other long-term assets | (298) | (391) |
Net cash provided by (used in) operating activities | (16,063) | 693 |
Purchases of property and equipment | (2,432) | (691) |
Purchase of business, net of cash acquired | (24,757) | (97) |
Net cash (used in) investing activities | (27,189) | (788) |
Proceeds from issuance of debt | 44,607 | 461,754 |
Payment of loan acquisition costs | (7,560) | |
Repayments of debt | (1,324) | (294,463) |
Payment of contingent earnout | (1,640) | |
Payment of redeemable preferred stock dividends | (1,185) | |
Repayment of redeemable preferred stock | (156,186) | |
Net cash provided by financing activities | 41,643 | 2,360 |
Net change in cash and equivalents | (1,609) | 2,265 |
Cash and equivalents - beginning of period | 10,697 | 14,062 |
Cash and equivalents - end of period | 9,088 | 16,327 |
Supplemental information: | ||
Interest | $ 11,344 | 5,656 |
Taxes | 44 | |
Capital assets financed | 165 | |
Contingent consideration share settled |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Apr. 01, 2022 | |
Organization and Basis of Presentation [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Organization Atlas Technical Consultants, Inc. (the “Company”, “We”, or “Atlas” and formerly named Boxwood Merger Corp. (“Boxwood”)) was a blank check company, incorporated in Delaware on June 28, 2017. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization, or other similar business transaction, one or more operating businesses or assets. On February 14, 2020 (the “Closing Date”), the Company consummated its acquisition of Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), pursuant to the Unit Purchase Agreement, dated as of August 12, 2019, as amended on January 22, 2020 (the “Purchase Agreement”), by and among the Company, Atlas TC Holdings LLC, a wholly-owned subsidiary of the Company and a Delaware limited liability company (“Holdings”), Atlas TC Buyer LLC, a wholly-owned subsidiary of Holdings and a Delaware limited liability company (the “Buyer”), Atlas Intermediate and Atlas Technical Consultants Holdings LP, a Delaware limited partnership (the “Seller”). The acquisition of Atlas Intermediate pursuant to the Purchase Agreement, together with the other transactions contemplated by the Purchase Agreement is referred to herein as the “Atlas Business Combination.” Following the consummation of the Atlas Business Combination, the combined company is organized in an “Up-C” structure in which the business of Atlas Intermediate and its subsidiaries is held by Holdings and will continue to operate through the subsidiaries of Atlas Intermediate, and in which the Company’s only direct assets will consist of common units of Holdings (“Holdings Units”). The Company is the sole manager of Holdings in accordance with the terms of the Amended and Restated Limited Liability Company Agreement of Holdings (the “Holdings LLC Agreement”) entered into in connection with the consummation of the Atlas Business Combination. The Company has approximately 124 offices in 41 states, employs approximately 3,550 employees, and is headquartered in Austin, Texas. The Company is an infrastructure and environmental solutions company and a provider of professional testing, inspection, engineering, environmental, program management and consulting services, offering solutions to public and private sector clients in the transportation, commercial, water, government, education, industrial, healthcare and power markets. Services are provided throughout the United States and its territories to a broad base of clients, with no single client representing 10% or more of our revenues for either the quarter ended April 1, 2022 or April 2, 2021. Services are rendered primarily on a time and materials and cost-plus basis with approximately 90% of our contracts on that basis and the remainder represented by firm fixed price contracts. Basis of Presentation The acquisition of Atlas Intermediate has been accounted for as a reverse recapitalization. Under this method of accounting, Atlas is treated as the acquired company and Atlas Intermediate is treated as the acquirer for financial reporting purposes. Therefore, the consolidated financial results include information regarding Atlas Intermediate as the Company’s predecessor entity. Thus, the financial statements included in this report reflect (i) the historical operating results of Atlas Intermediate prior to the Atlas Business Combination; (ii) the combined results of the Company, which does not have any operating results and includes only certain costs such as the compensation for the Company’s board of directors (the “Board”), certain legal fees and taxes, and Atlas Intermediate following the Atlas Business Combination; (iii) the assets, liabilities and members’ capital of Atlas Intermediate at their historical costs; and (iv) the Company’s equity and earnings per share presented for the period from the Closing Date. The accompanying interim statements of the Company have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the audited financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K that the Company filed with the SEC on March 15, 2022. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (as defined herein), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company currently anticipates its emerging growth status to expire during the quarter ended December 29, 2023. Fiscal Year The Company’s fiscal year ends on the Friday closest to December 31 with fiscal quarters based on thirteen- week periods ending on the Friday closest to March 31, June 30 and September 30. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 01, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts Receivable and Accrued Billings The Company records its trade accounts receivable and unbilled receivables at their face amounts less allowances. On a periodic basis, the Company monitors the trade accounts receivable and unbilled receivables from its customers for any collectability issues. The allowance for doubtful accounts is established based on reviews of individual customer accounts, recent loss experience, current economic conditions, and other pertinent factors. The Company writes off accounts after a determination has been made by management that the amounts at issue are no longer likely to be collected, following the exercise of reasonable collection efforts, and upon management’s determination that the costs of pursuing collection outweigh the likelihood of recovery. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. As of April 1, 2022 and December 31, 2021, the allowance for trade accounts receivable was $3.8 million and $3.3 million, respectively, while the allowance for unbilled receivables was $0.8 million and $0.6 million, respectively. The allowances reflect the Company’s best estimate of collectability risks on outstanding receivables and unbilled services. Property and Equipment Purchases of new assets and costs of improvement to extend the useful life of existing assets are capitalized. Routine maintenance and repairs are charged to expenses as incurred. When an asset is sold or retired, the costs and related accumulated depreciation are eliminated from the accounts, and the resulting gains or losses on disposal are recognized in the accompanying Consolidated Statement of Operations. The Company depreciates its assets on a straight-line basis over the assets’ useful lives, which range from three to ten years. Impairment of Long-Lived Assets The Company assesses long-lived assets for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. The Company recognizes an impairment if the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. If an impairment is indicated based on a comparison of the assets’ carrying amounts and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amounts of the assets exceed the respective fair values of the assets. There were no impairment charges for the quarters ended April 1, 2022 and April 2, 2021. Goodwill Goodwill represents the excess of the cost of net assets acquired over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles – Goodwill and Other, we evaluate goodwill annually for impairment on October 1, or whenever events or changes in circumstances indicate the asset may be impaired, using the quantitative method. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors include macroeconomic and industry conditions, cost factors, overall financial performance, and other relevant entity-specific events. If we determine that this threshold is met, then performing the two-step quantitative impairment test is unnecessary. We may elect to bypass the qualitative assessment and proceed directly to the quantitative test for any reporting unit. The two-step impairment test requires a comparison of the carrying value of the assets and liabilities associated with a reporting unit, including goodwill, with the fair value of the reporting unit. We determine fair value through the discounted cash flow method. We make certain subjective and complex judgments in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of our reporting units. If the carrying value of our reporting unit exceeds the fair value of our reporting unit, we would calculate the implied fair value as compared to the carrying value to determine the appropriate impairment charge, if any. There were no impairment charges for the quarters ended April 1, 2022 and April 2, 2021. Revenue Recognition Below is a description of the basic types of contracts from which the Company may earn revenue: Time and Materials Contracts Under the time and materials (“T&M”) arrangements, contract fees are based upon time and materials incurred. The contracts may be structured as basic time and materials, cost plus a margin or time and materials subject to a maximum contract value (the “ceiling”). Due to the potential limitation of the contract’s ceiling, the economic factors of the contracts subject to a ceiling differ from the economic factors of basic T&M and cost-plus contracts. The majority of the Company’s contracts are for projects where it bills the client monthly at hourly billing or unit rates. The billing rates are determined by contract terms. Under cost plus contracts, the Company charges its clients for contract related costs at cost, an agreed upon overhead rate plus a fixed fee or rate. Under time and materials contracts with a ceiling, the Company charges the clients for time and materials based upon the work performed however there is a ceiling or a not to exceed value. There are often instances that a contract is modified to extend the contract value past the original or amended ceiling. As the consideration is variable depending on the outcome of the contract renegotiation, the Company will estimate the total contract price in accordance with the variable consideration guidelines and will only include consideration that it expects to receive from the customer. When the Company is reaching the ceiling, the contract will be renegotiated, or we cease work when the maximum contract value is reached. The Company will continue to work if it is probable that the contract will be extended. The Company is only entitled to consideration for the work it has performed, and the ceiling amount is not a guaranteed contract value. The Company earned approximately 90% of its revenues under T&M contracts during the quarters ended April 1, 2022 and April 2, 2021. Fixed Price Contracts Under fixed price contracts, the Company’s clients may pay an agreed amount negotiated in advance for a specified scope of work. The Company is guaranteed to receive the consideration to the extent that the Company delivers under the contract. The Company assesses contracts quarterly and may recognize any expected future loss before actually incurring the loss. When the Company is expecting to reach the total consideration under the contract or the scope of work changes, the Company will attempt to negotiate a change order. Change Orders and Claims Change orders are modifications of an original contract that effectively change the provisions of the contract without adding new provisions. Either the Company or its client may initiate change orders. They may include changes in specifications or design, manner of performance, facilities, equipment, materials, sites, and period of completion of the work or changes in the amount of our compensation. Management evaluates when a change order is probable based upon its experience in negotiating change orders, the customer’s written approval of such changes or separate documentation of change order costs that are identifiable. Change orders may take time to be formally documented and terms of such change orders are agreed with the client before the work is performed. Sometimes circumstances require that work progresses before an agreement is reached with the client. If the Company is having difficulties in renegotiating the change order, the Company will stop work if possible, record all costs incurred to date, and determine, on a project-by-project basis, the appropriate final revenue recognition. Claims are amounts in excess of the agreed contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. Costs related to change orders and claims are recognized when they are incurred. The Company evaluates claims on an individual basis and recognizes revenue it believes is probable to collect. Performance Obligations The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, is not distinct. However, in some instances, we may also promise to provide distinct goods or services within a contract, resulting in multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. Typically, we sell a customer a specific service and use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s performance obligations are satisfied as work progresses or at a point in time. Revenue on our cost-reimbursable contracts is recognized over time using direct costs incurred or direct costs incurred to date as compared to the estimated total direct costs for performance obligations because it best depicts the transfer of control to the customer. Contract costs include labor, subcontractors’ costs, and other direct costs. Gross revenue from services transferred to customers at a point in time is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the reports and/or analysis performed. As of April 1, 2022 and December 31, 2021, we had $851 million and $808 million of remaining performance obligations, or backlog, respectively, of which $511 million and $485 million, respectively, or 60% is expected to be recognized over the next 12 months and the majority of the balance over the next 24 months. Project cancellations or scope adjustments may occur, from time to time, with respect to contracts reflected in backlog. Most of our government contracts are multi-year contracts for which funding is appropriated on an annual basis, therefore backlog includes only those amounts that have been funded and authorized and does not reflect the full amounts we may receive over the term of such contracts. In the case of non-government contracts, backlog includes future revenue at contract rates, excluding contract renewals or extensions that are at the discretion of the client. For contracts with a not-to-exceed maximum amount, we include revenue from such contracts in backlog to the extent of the remaining estimated amount. Our backlog for the period beyond 12 months may be subject to variation from year-to-year as existing contracts are completed, delayed, or renewed or new contracts are awarded, delayed, or cancelled. As a result, we believe that year-to-year comparisons of the portion of backlog expected to be performed more than one year in the future are difficult to assess and not necessarily indicative of future revenues or profitability. U.S. Federal Acquisition Regulations The Company has contracts with the U.S. federal, state and local governments that contain provisions requiring compliance with the U.S. Federal Acquisition Regulations (“FAR”). These regulations are generally applicable to all its contracts that are directly funded or partially funded by pass-through funds from the U.S. federal government. These provisions limit the recovery of certain specified indirect costs on contracts subject to the FAR. Cost-plus contracts covered by the FAR provide for upward or downward adjustments if actual recoverable costs differ from the estimate billed under forward pricing arrangements. Most of the Company’s government contracts are subject to termination at the convenience of the government. Contracts typically provide for reimbursement of costs incurred and payment of fees earned through the date of such termination. Government contracts that are subject to the FAR are subject to audits performed by the Defense Contract Audit Agency (“DCAA”) and many other state governmental agencies. As such, the Company’s overhead rates, cost proposals, incurred government contract costs and internal control systems are subject to review. During the course of its audits, the DCAA or a state agency may question incurred costs if it believes the Company has accounted for such costs in a manner inconsistent with the requirements of the FAR or Cost Accounting Standards and recommend that the applicable contracting officer disallow such costs. Historically, the Company has not incurred significant disallowed costs because of such audits. However, the Company can provide no assurance that the rate audits will not result in material disallowances of incurred costs in the future. The Company provides for a refund liability to the extent that it expects to refund some of the consideration received from a customer. The liability at April 1, 2022 and December 31, 2021 was $0, respectively. Disaggregation of Revenues As described further in Note 2 “Summary of Significant Accounting Policies”, the Company has one operating segment, Engineering, Testing, Inspection and Other Consultative Services, which reflects how the Company is being managed. The Company provides public and private sector clients with comprehensive support in managing large-scale infrastructure improvement programs including engineering, design, program development/management, compliance services, acquisition, and project control services, as well as construction engineering and inspection and materials testing. Approximately 50% of the Company’s revenues in each reporting period presented are derived from federal, state, and local government related projects. All services performed by the Company are rendered in the United States and its territories via two contract types, time and materials or fixed price contracts. The Company derives 90% of its revenues from T&M contracts, the remainder are earned under fixed price contracts. Cash Flows The Company has presented its cash flows using the indirect method and considers all highly liquid investments with an original maturity of three months or less at acquisition to be cash equivalents. At times, our cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance limit. Comprehensive Income There are no other components of comprehensive income other than net income and the provision for non-controlling interest associated with Holdings Units. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable. These risks primarily relate to the concentration of customers who are large, governmental customers and regional governmental customers. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements (“ASC 820”), establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows: Level 1 — Inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that management has the ability to access. Level 2 — Inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Level 3 — Inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company has various financial instruments, including cash and cash equivalents, accounts receivable and payable, accrued liabilities, and long-term debt. The carrying value of the Company’s cash and cash equivalents, accounts receivable, and payable and accrued liabilities approximate their fair value due to their short-term nature. The Company believes that the aggregate fair value of its long-term debt approximates their carrying amounts as the interest rates on the debt are either reset on a frequent basis or reflect current market rates. The Company applies the provisions of ASC 805, Business Combinations, in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. The allocation of the purchase price to identifiable intangible assets is based on valuations performed to determine the fair values of such assets as of the acquisition dates. Depending on the size and complexity of the acquisition, the Company may engage a third-party independent valuation specialist to assist in management’s determination of fair values of tangible and intangible assets acquired and liabilities assumed. The fair values of earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. The Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheet. Changes in the estimated fair value of contingent earnout payments are included in operating expenses in the accompanying Consolidated Statements of Operations. Several factors are considered when determining contingent consideration liabilities as part of the purchase price, including whether (i) the valuation of the acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (ii) the former owners of the acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of other key employees. The contingent earn-out payments are not affected by employment termination. The Company reviews and re-assesses the estimated fair value of contingent consideration liabilities on a quarterly basis, and the updated fair value could differ materially from the initial estimates. The Company measures contingent consideration recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration liabilities on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are projections over the earn-out period, and the probability outcome percentages that are assigned to each scenario. Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent consideration liabilities. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and amount paid will be recorded in earnings. The Company records the current portion of contingent consideration liability within other current liabilities and the noncurrent portion of contingent consideration liability within other long-term liabilities within its Consolidated Balance Sheet. The following table summarizes the changes in the fair value of estimated contingent consideration (in thousands): Contingent consideration, as of December 31, 2021 $ 31,461 Additions for acquisitions 9,500 Adjustment to preliminary liability for changes in fair value - Reduction of liability for payment made (3,270 ) Total contingent consideration, as of April 1, 2022 37,691 Current portion of contingent consideration (16,577 ) Contingent consideration, less current portion $ 21,114 The Company may at its discretion settle part of the contingent consideration with cash, common shares or a combination of cash and common shares. During the quarter ended April 1, 2022, we settled a portion of the $3.3 million payment with 186,368 shares of Class B common stock. Equity Based Compensation The Company recognizes the cost of services received in an equity-based payment transaction with an employee as services are received and records either a corresponding increase in equity or a liability, depending on whether the instruments granted satisfy the equity or liability classification criteria. The measurement objective for these equity awards is the estimated fair value at the grant date of the equity instruments that the Company is obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. The compensation cost for an award classified as an equity instrument is recognized ratably over the requisite service period, including an estimate of forfeitures. The requisite service period is the period during which an employee is required to provide service in exchange for an award. The Company granted restricted stock units (“RSUs”) during the second quarters of 2021 and 2020 to reward, motivate and retain selected management personnel. Please refer to Note 9 “Equity Based Compensation” for further information. An additional grant of RSUs was made to a member of the Company’s leadership team on December 31, 2020 to reflect an increase in responsibility. The Company granted its Board of Directors RSUs during the first quarter of 2021 and 2020 as part of their annual board compensation packages. During the second quarter of 2021, the Company granted certain members of its leadership team performance share units (“PSUs”) based on both performance and relative share price factors that may affect the ultimate vesting of shares. During the third quarter of 2021, the Company granted its Chief Executive Officer, Chief Financial Officer and Chief Strategy Officer stock options with market conditions that may affect their ultimate vesting. Equity compensation was $1.1 million and $0.4 million for the quarters ended April 1, 2022 and April 2, 2021, respectively. Income Taxes The Company accounts for income taxes in accordance with the FASB ASC Topic 740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. Redeemable Preferred Stock On February 14, 2020, in connection with the consummation of the Atlas Business Combination, Holdings and GSO COF III AIV-2 LP (“GSO AIV-2”) entered into a subscription agreement, dated February 14, 2020 (the “Subscription Agreement”) pursuant to which, GSO AIV-2 purchased 145,000 units of a new class of Series A Senior Preferred Units of Holdings (the “Preferred Units”) at a price per Preferred Unit of $978.21 for an aggregate cash purchase price of $141,840,450, which represented a 2.179% original issue discount on the Preferred Units (such purchase, the “GSO Placement”). The GSO Placement was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder. The Preferred Units ranked senior in priority to all other existing and future equity securities of Holdings with respect to liquidation preference and distribution rights. The Preferred Units had a liquidation preference of $1,000 per Preferred Unit (the “Liquidation Preference”). Subject to any limitations set forth in the Atlas Credit Agreement (as defined in Note 6 – Long-Term Debt), the Preferred Units were paid a dividend of 5% per annum, plus either an additional 6.25% per annum in cash or 7.25% per annum in additional Preferred Units, at Holdings’ option, payable quarterly in arrears. If a cash dividend was not able to be made because of a limitation under the Atlas Credit Agreement, then the Liquidation Preference with respect to any Preferred Unit would have increased to 3.5625% in any quarter until a cash dividend could be made. The Preferred Units did not possess voting rights and were not convertible into any other security of Holdings. Holdings was permitted to redeem the Preferred Units beginning on the second anniversary of the Closing Date at a price of 103% of the Liquidation Preference (the “Redemption Premium”), and on the third anniversary of their issuance at the Liquidation Preference, in each case plus accrued and unpaid dividends. The Preferred Units could only be redeemed by Holdings within the first two years of the Closing Date upon a change of control as described below, in which case such Preferred Units would have been redeemed at a customary make-whole amount as if the Preferred Units were redeemed on the second anniversary. Subject to the terms of Holdings’ and its subsidiaries’ senior credit agreements, Holdings was required to redeem the Preferred Units at the Redemption Premium, plus accrued and unpaid dividends, in the event of (i) a change of control, (ii) sales or other dispositions of all or substantially all of Holdings’ assets and (iii) the insolvency or bankruptcy of Holdings or any of its material subsidiaries. Finally, holders of the Preferred Units were permitted to require Holdings to redeem their Preferred Units at the Liquidation Preference, plus accrued and unpaid dividends, beginning on the eighth anniversary of the Closing Date, subject to certain customary limitations. The Preferred Units were redeemed in full at par without a premium on February 25, 2021. The Company incurred redeemable preferred stock dividends of $5.9 million during the quarter ended April 2, 2021. Segment The Company has one operating and reporting segment, Engineering, Testing, Inspection and Other Consultative Services. This financial information is reviewed regularly by our chief operating decision maker to assess performance and make decisions regarding the allocation of resources and is equivalent to our consolidated information. Our chief operating decision maker does not review below the consolidated level. Our chief operating decision maker is our Chief Executive Officer. Adoption of Accounting Pronouncements and Recent Accounting Pronouncements In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective and we adopted and implemented the standard on January 1, 2022 with a modified retrospective transition approach, as permitted, applying the new standard to all leases existing at the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The adoption of this standard had a material effect on our balance sheet, the most significant effects relating to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office, vehicles and equipment operating leases and; (2) providing significant new disclosures about our leasing activities. See Note 15 for further information. In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) - Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing after December 15, 2022. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Atlas Business Combination and
Atlas Business Combination and Non-Controlling Interest | 3 Months Ended |
Apr. 01, 2022 | |
Business Combinations [Abstract] | |
ATLAS BUSINESS COMBINATION AND NON-CONTROLLING INTEREST | NOTE 3 – ATLAS BUSINESS COMBINATION AND NON-CONTROLLING INTEREST On the Closing Date, the Company completed the acquisition of Atlas Intermediate and its subsidiaries and in return the Atlas Intermediate members received 24.0 million shares of Class B common stock in the Company amongst other consideration such as repayment of $171.5 million of debt in effect as of the closing date. The shares of non-economic Class B common stock of the Company entitle each holder to one vote per share, and each Class B share, along with its corresponding Holdings Unit, is redeemable on a one-for-one basis for one share of Class A common stock at the option of the Unit Holders (formerly members) as their lock-up periods expire. Upon the redemption by any Class B common stock, along with the corresponding Holdings Units, for Class A common stock, a corresponding number of shares of Class B common stock will be cancelled. Because the holders of our Class B common stock have effective control of the combined company after the Closing Date through their majority voting interests in both the Company and, accordingly, Atlas Intermediate, the Atlas Business Combination was accounted for as a reverse recapitalization. Although the Company was the legal acquirer, Atlas Intermediate was the accounting acquirer. As a result, the reports filed by the Company subsequent to the Atlas Business Combination are prepared “as if” Atlas Intermediate is the predecessor and legal successor to the Company. The historical operations of Atlas Intermediate are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Atlas Intermediate prior to the Atlas Business Combination; (ii) the combined results of the Company, which does not have any operating results and includes only certain costs such as the compensation for the Company’s Board, certain legal fees and taxes, and Atlas Intermediate following the Atlas Business Combination; (iii) the assets, liabilities and members’ capital of Atlas Intermediate at their historical cost; and (iv) the Company’s equity and earnings per share for the period from the Closing Date. |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Apr. 01, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
BUSINESS ACQUISITIONS | NOTE 4 – BUSINESS ACQUISITIONS In April 2021, the Company acquired Atlantic Engineering Laboratories, Inc. and Atlantic Engineering Laboratories of New York, Inc. (collectively, “AEL”) for cash and an amount of equity consideration totaling $24.5 million. The Company issued 738,566 shares of Class A common stock to the former owner of AEL, which represented $7.5 million of the total consideration paid. AEL is a materials testing and inspection firm based in Avenel, New Jersey, and provides steel, concrete, soil and other testing and inspection services to a diverse mix of public and private clients primarily in New York and New Jersey. AEL added approximately 290 professionals to the Company’s workforce and is expected to strengthen the Company’s materials testing and inspection services in the Northeast. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies. In July 2021, the Company acquired O’Neill Services Group (“O’Neill), a quality assurance and environmental services firm that services clients throughout the Pacific Northwest. O’Neill, headquartered in Redmond, Washington, employs 90 people and received $24.4 million in the form of cash and stock consideration. The Company issued 653,728 shares of Class A common stock which represented $6.5 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies. In March 2022, the Company acquired TranSmart Technologies, Inc. (“TranSmart”) for an initial purchase price of $29.8 million which was paid in a combination of cash and shares of our Class A common stock. TranSmart specializes in Intelligent Transportation Systems (ITS) and engineering for transportation agencies and customers throughout the Midwest. TranSmart was founded in 1986 and is headquartered in Chicago, Illinois employs approximately 100 employees specializing in ITS, engineering, design and construction/program management services. The Company issued 872,752 of Class A common stock which represented $9.9 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies. In March 2022, the Company acquired 1 Alliance Geomatics, LLC (“1 Alliance”) for an initial purchase price of $22.0 million which was paid in a combination of cash and shares of our Class A common stock. 1 Alliance is a provider of geospatial services to transportation and water resources clients from its four offices within the Pacific Northwest. 1 Alliance, based in Bellevue, Washington, was founded in 2012 and employs approximately 70 people. The Company issued 355,649 of Class A common stock which represented $4.3 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies. Acquisition costs of approximately $0.5 million and $0.7 million have been expensed in the quarters ended April 1, 2022 and April 2, 2021, respectively, in the Consolidated Statement of Operations within operating expenses. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition (in thousands): AEL* O’Neill* TranSmart* Alliance* Cash $ 684 $ 1,608 - - Accounts receivable 6,026 4,201 6,244 2,489 Unbilled receivable 858 - 1,832 2,115 Property and equipment 52 1,049 139 1,733 Other current and long-term assets 130 - 298 174 Intangible assets 13,816 22,735 23,555 16,314 Liabilities (3,065 ) (1,546 ) (5,062 ) (3,557 ) Net assets acquired $ 18,501 28,047 27,006 19,268 Consideration paid (cash and equity consideration) $ 24,502 $ 24,369 25,763 16,517 Contingent earnout liability at fair value (cash) 7,045 7,106 4,000 5,500 Total Consideration 31,547 31,475 29,763 22,017 Excess consideration over the amounts assigned to the net assets acquired (goodwill) $ 13,045 3,428 2,757 2,749 * The above purchase price allocation is tentative and preliminary and subject to further updates as we complete the purchase price allocation. |
Goodwill and Intangibles
Goodwill and Intangibles | 3 Months Ended |
Apr. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | NOTE 5 – GOODWILL AND INTANGIBLES The carrying amount, including changes therein, of goodwill was as follows (in thousands): Balance as of December 31, 2021 $ 124,348 Acquisitions 5,506 Disposals - Measurement period adjustments 3,000 Balance as of April 1, 2022 $ 132,854 The Company did not recognize any impairments of goodwill in the quarters ended April 1, 2022 or April 2, 2021. Intangible assets as of April 1, 2022 and December 31, 2021 consist of the following (in thousands): April 2, 2022 December 31, 2021 Remaining Gross Accumulated Net book Gross Accumulated Net book useful life amount amortization value amount amortization value (in years) Definite life intangible assets: Customer relationships $ 187,126 $ (51,179 ) $ 135,947 $ 149,917 $ (47,310 ) $ 102,607 8.0 Tradenames 28,240 (21,621 ) 6,619 25,580 (20,890 ) 4,690 2.3 Non-competes 600 (588 ) 12 600 (583 ) 17 0.6 Total intangibles $ 215,966 $ (73,388 ) $ 142,578 $ 176,097 $ (68,783 ) $ 107,314 Amortization expense for the quarters ended April 1, 2022 and April 2, 2021 was $4.6 million and $3.2 million, respectively. Amortization of intangible assets for the next five years and thereafter is expected to be as follows (in thousands): 2022 (nine months remaining) $ 15,966 2023 20,917 2024 19,566 2025 18,399 2026 18,215 Thereafter 49,515 $ 142,578 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 01, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 6 – LONG-TERM DEBT On February 25, 2021, Atlas Intermediate, as the borrower, entered into two new credit facilities consisting of (i) a $432.0 million senior secured term loan at closing and, subject to the satisfaction of certain terms and conditions, a committed delayed draw term loan facility to be used for future acquisitions, within 18 month of February 25, 2021 and subject to certain conditions, in an aggregate principal amount of up to $75.0 million, of which $61 million has been used ($26.0 million in connection with the acquisitions during the first quarter of 2022) and $14 million remains available as of April 1, 2022, and an uncommitted incremental term loan facility that may be incurred after closing (the “Term Loan”) pursuant to a Credit Agreement dated February 25, 2021, by and among Holdings, Atlas Intermediate, Wilmington Trust, National Association, as administrative agent and collateral agent, and certain lenders thereto, including certain Blackstone entities, which may include, Blackstone Alternative Credit Advisors LP, and its managed funds and accounts, and its affiliates, Blackstone Holdings Finance Co. L.L.C. and its affiliates, and/or certain other of their respective funds, accounts, clients managed, advised or sub-advised, or any of their respective affiliates (the “Term Loan Agreement”) and (ii) a $40.0 million senior secured revolver which aggregate principal amount may be increased, subject to the satisfaction of certain terms and conditions, including obtaining commitments therefor, by up to $20.0 million (the “Revolver”) pursuant to the Credit Agreement dated February 25, 2021, by and among Holdings, Intermediate, JPMorgan Chase Bank, N.A., as administrative agent, swingline lender, issuing bank, lender, sole bookrunner and sole lead arranger (the “ABL Revolver Agreement,” and together with the Term Loan Agreement, collectively the “Credit Agreements”). The Term Loan Agreement refinances the Atlas Credit Agreement dated as of February 14, 2020, with Macquarie Capital Funding LLC, as administrative agent and certain lenders, which repayment was effectuated partially in cash and partially by way of a cashless exchange of existing term loans and preferred equity for Term Loans. The Term Loan Agreement and ABL Revolver Agreement are collectively referred to as the “Atlas 2021 Credit Agreements” by the Company. The initial Term Loan will mature on February 25, 2028 and the Revolver will mature on February 25, 2026. Interest on any outstanding borrowings is payable monthly under the ABL Revolver Agreement, quarterly under the Term Loan Agreement or, in each case, at the end of the applicable interest period in arrears. The cash interest rates under the Term Loan Agreement will be equal to either (i) the Adjusted LIBO Rate (as defined in the Term Loan Agreement), plus 5.50%, or (ii) an Alternate Base Rate (as defined in the Term Loan Agreement), plus 4.50%. In addition, the term loan requires an additional 2.0% interest that can be made at the option of the Company in cash or payment-in-kind (PIK). The interest rates under the ABL Revolver Agreement will be equal to either (i) the Adjusted LIBO Rate (as defined in the ABL Revolver Agreement), plus 2.50%, or (ii) the ABR (as defined in the ABL Revolver Agreement), plus 1.50%. The Credit Agreements are guaranteed by Holdings and secured by (i) in the case of the ABL Revolver Agreement, a first priority security interest in the current assets, including accounts receivable, of Holdings, Intermediate and its subsidiaries and (ii) in the case of the Term Loan Agreement, a pledge of the equity interests of the subsidiaries of Holdings and Intermediate, and subject to the first lien security interest on current assets under the Revolver, a first priority lien on substantially all other assets of Holdings, Intermediate and all of their direct and indirect subsidiaries. The Term Loan Agreement contains a financial covenant which requires Holdings, Atlas Intermediate and all of their direct and indirect subsidiaries on a consolidated basis to maintain a Total Net Leverage Ratio (as defined in each Credit Agreement) tested on a quarterly basis that does not exceed (i) 8.25 to 1.00 with respect to the fiscal quarters ending on April 2, 2021 and July 2, 2021, (ii) 8.00 to 1.00 for the fiscal quarters ending October 1, 2021 and December 31, 2021, (iii) 7.50 to 1.00 for the fiscal quarters ending April 1, 2022 and July 1, 2022, (iv) 7.25 to 1.00 for the fiscal quarters ending September 30, 2022 and December 30, 2022, (v) 7.00 to 1.00 for the fiscal quarters ending March 31, 2023 and June 30, 2023, (vi) 6.75 to 1.00 for the fiscal quarters ending September 29, 2023 and December 29, 2023, and (vii) 6.50 to 1.00 for March 29, 2024 and each fiscal quarter ending thereafter. The ABL Revolver Agreement contains a “springing” financial covenant which requires Holdings, Intermediate and all their direct and indirect subsidiaries on a consolidated basis to maintain a Fixed Charge Coverage Ratio (as defined in the ABL Revolver Agreement) of no less than 1.10 to 1.00 when the outstanding principal amount of loans under the Revolver exceeds $0 or the aggregate exposure for letters of credit under the Revolver exceeds $5 million. The Company has been in compliance with the terms of the Atlas Credit Facility and Atlas Credit Agreement as of April 1, 2022 and December 31, 2021, respectively. Long-term debt consisted of the following (in thousands): April 1, December 31, Atlas 2021 credit agreement - term loan $ 499,794 $ 467,000 Atlas 2021 credit agreement – revolving 17,439 - Atlas 2021 credit agreement – PIK 6,392 Subtotal 517,233 473,392 Less: Loan costs, net (7,872 ) (7,593 ) Less current maturities of long-term debt (4,930 ) (3,606 ) Long-term debt $ 504,431 $ 462,193 Aggregate long-term principal payments subsequent to April 1, 2022, are as follows (in thousands): 2022 (nine months remaining) $ 3,698 2023 4,930 2024 4,930 2025 4,930 2026 17,439 Thereafter 481,306 $ 517,233 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Apr. 01, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 7 – SHAREHOLDERS’ EQUITY Shares Outstanding Prior to the Atlas Business Combination, the Company was a special purpose acquisition company with no operations, formed as a vehicle to affect a business combination with one or more operating businesses. After the consummation of the Atlas Business Combination, the Company became a holding company whose sole material operating asset consists of its interest in Atlas Intermediate. The following table summarizes the changes in the outstanding stock from the December 31, 2021 through April 1, 2022: Class A Class B Beginning Balance, as of December 31, 2021 33,645,212 3,328,101 Issuances 1,299,896 176,576 Transfers to Class A from Class B 170,784 (170,784 ) Shares Outstanding at April 1, 2022 35,115,892 3,333,893 Class A Common Stock Class B Common Stock Private Placement In connection with the Company’s entry into the Contribution Agreement, the Company agreed to issue and sell in a private placement an aggregate of 1,000,000 shares of Class A common stock for a purchase price of $10.23 per share, and aggregate consideration of $10.2 million (the “Private Placement”). The Private Placement was consummated concurrently with the Closing Date and the proceeds of the Private Placement were used to fund a portion of the cash consideration paid to the Unit Holders. Non-controlling Interest As of April 1, 2022 and December 31, 2021, the Company ownership and voting structure was comprised of holders of our Class A common stock that participate 100% in the results of Atlas Technical Consultants, Inc. and 9% and 91.0%, respectively, in Atlas Intermediate and its subsidiaries and holders of our Class B common stock that participate in the results of Atlas Intermediate and its subsidiaries until their Class B common stock is converted to Class A common stock. The holders of our Class B common stock participate in 9.0% and 9.0% as of April 1, 2022 and December 31, 2021, respectively, of Atlas Intermediate and its subsidiaries. In connection with the Atlas Business Combination, it was determined that the results of Atlas Intermediate and its subsidiaries would be fully consolidated within the results of the Company. Due to the participation of the holders of our Class B common stock in the results of Atlas Intermediate and subsidiaries, a non-controlling interest was deemed to exist. Non-controlling ownership interests in Atlas Intermediate and its subsidiaries are presented in the Consolidated Balance Sheet within shareholders’ equity as a separate component. In addition, consolidated net income includes earnings attributable to both the shareholders and the non-controlling interests. We did not have any distributions during the quarters ended April 1, 2022 and April 2, 2021. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Apr. 01, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 8 – LOSS PER SHARE The Atlas Business Combination was structured as a reverse capitalization by which the Company issued stock for the net assets of Atlas Intermediate accompanied by a recapitalization. Earnings per share is calculated for the Company only for periods after the Atlas Business Combination due to the reverse recapitalization. (Loss) per share was calculated as follows (in thousands except share and per share amounts): Quarter Ended Quarter Ended Numerator: Net (loss) post Atlas Business Combination $ (4,418 ) $ (14,790 ) Provision for non-controlling interest 396 12,169 Redeemable preferred stock dividends - (5,899 ) Net (loss) attributable to Class A common shares - basic and diluted $ (4,022 ) $ (8,520 ) Denominator: Weighted average shares outstanding - basic and diluted 34,039,775 14,256,484 Net (loss) per Class A common share, basic and diluted $ (0.12 ) $ (0.60 ) The Class B common shares are excluded as these shareholders do not share in the income of Atlas Technical Consultants, Inc. and represent a non-controlling interest in the results of Atlas Intermediate and its subsidiaries. The warrants and private placement warrants were exchanged for shares of Class A common stock in late 2020. Please refer Note 7 “Shareholders’ Equity” for further information. |
Equity Based Compensation
Equity Based Compensation | 3 Months Ended |
Apr. 01, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY BASED COMPENSATION | NOTE 9 – EQUITY BASED COMPENSATION Equity based compensation was $1.1 million and $0.4 million for the quarters ended April 1, 2022 and April 2, 2021, respectively. The Company has incurred costs relating to three forms of equity based compensation: restricted share units, performance share units and price-vested stock options granted subsequent to the Atlas Business Combination. All discussed in further detail herein. Restricted and Performance Share Units During the second quarters of 2021 and 2020, the Company awarded 378,353 and 510,136 restricted share units (“RSUs”) to approximately ninety employees at a grant day fair market value of $11.42 and $8.95 per share, respectively. The Company estimates the fair value of the RSUs as the closing price of the Company’s Class A common stock on the grant date of the award, which is expensed over the applicable vesting period. The fair market value on the date of issuance was $4.3 million and $4.6 million for the 2021 and 2020 grants, respectively. The vesting period for these RSUs is equal annual tranches, pro-ratably over three years, and there is no performance requirement attached to the RSUs other than continued service to the Company. During the three months ended July 2, 2021, 158,977 of the shares granted in 2020 vested and 11,602 shares were forfeited. On December 31, 2020, the Company granted to a member of its executive team 75,000 RSUs of the Company’s Class A common stock, par value $0.0001 to reflect an increase in responsibility. The value of these RSUs approximated $0.5 million and is set to cliff vest on December 31, 2022. On March 3, 2021, the Company granted to its Board of Directors 54,053 RSUs with a one-year vesting period and a grant date fair market value of $9.00 per share. There are no performance requirements to these RSUs other than continued service to the Company throughout the one-year vesting period. The value of this grant was $0.5 million. During the second quarter of 2021, the Company also awarded 182,763 performance share units (“PSUs”) to its leadership team. The PSUs have both performance and market conditions that are required to be met for the shares to vest. The split between performance and market conditions is approximately 66.7% and 33.3%, respectively. If the conditions are met, the shares will cliff vest on the third anniversary of the award date. The Company has accounted for the portion of the award tied to the achievement of performance conditions based upon share price of $11.38 on the date of issuance and the probable number of shares anticipated to vest and accounted for the shares tied to market conditions based upon the fair market value as calculated in a Monte Carlo simulation. The Company will assess the probability of the performance conditions being achieved each quarter and adjust recorded stock compensation expense as appropriate. The fair market value as of the grant date was $1.4 million and $1.2 million for the performance and market based share units, respectively. On March 18, 2022, the Company granted to its Board of Directors 54,053 RSUs with a one-year vesting period and a grant date fair market value of $12.21 per share. There are no performance requirements to these RSUs other than continued service to the Company throughout the one-year vesting period. The value of this grant was $0.7 million. The Company estimates forfeitures of its stock awards. Actual forfeitures may differ from those estimates. The Company currently estimates its forfeitures as 3% of the RSUs awards granted each year but will continue to reassess its estimate on a quarterly basis. A summary of our RSU and PSU activity is as follows: RSU PSU Number of Shares Weighted- Number of Shares Weighted- Nonvested Balance ay December 31, 2020 585 $ 8.70 - $ - Granted Vested Forfeited Estimated Forfeiture Nonvested Balance as of April 2, 2021 585 8.70 - - Nonvested Balance as of December 31, 2021 819 $ 9.88 183 $ 14.06 Granted 53 12.21 Vested (54 ) 9.00 Forfeited Estimated Forfeiture Nonvested Balance as of April 1,2022 818 $ 10.13 183 $ 14.06 Price-Vested Stock Options During the third quarter of 2021, the Company awarded 547,943 of price-vested stock options (the “options” or “stock options”) in aggregate to its Chief Executive, Chief Financial, and Chief Strategy Officers (collectively the “option awardees”). These options vested equally in four tranches on the second, third, fourth and fifth anniversary of the option grant date and is dependent upon the option awardees remaining employed by the Company and the stock price on the applicable tranche anniversary to be equal to or exceed a prescribed share price within the stock option agreement. The strike price of each options for each tranche is $10.50, which was the Company’s closing stock price on the option grant date. The Company has valued the options at fair market value based upon a Monte Carlo with Geometric Brown Motion simulation and will recognize the compensation cost for each tranche over a range of 5.17 to 5.93 years with values per option ranging from $2.29 to $3.55. The fair market value of the options as of the grant date was $1.6 million. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Apr. 01, 2022 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | NOTE 10 – RELATED-PARTY TRANSACTIONS During the quarters ended April 1, 2022 and April 2, 2022, the Company leased office space at fair value from former owners of acquired companies that became shareholders and/or officers of the Company. The Company recognized lease expenses under these leases within the Statement of Operations in the amount of $0.2 million and $0.2 million for the quarters ended April 1, 2022 and April 2, 2021, respectively. During the quarters ended April 1, 2022 and April 2, 2021, the Company performed certain environmental consulting work for an affiliate of one of its principal shareholders or members and collected fees related to these services in the amount of $0 and $0.1 million, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Apr. 01, 2022 | |
Employee Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 11 – EMPLOYEE BENEFIT PLANS The Company maintains employee savings plans which allow for voluntary contributions into designated investment funds by eligible employees. The Company may, at the discretion of its Board, make additional contributions to these plans. Total contributions related to these plans made by the Company in the quarters ended April 1, 2022 and April 2, 2021 were $2.1 and $1.8 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES The Company is subject to certain claims and lawsuits typically filed against engineering companies, alleging primarily professional errors or omissions. The Company carries professional liability insurance, subject to certain deductibles and policy limits, against such claims. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on its financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters. |
Covid-19 Pandemic
Covid-19 Pandemic | 3 Months Ended |
Apr. 01, 2022 | |
Covid-19 Pandemic [Abstract] | |
COVID-19 PANDEMIC | NOTE 13 – COVID-19 PANDEMIC As a result of the COVID-19 outbreak, the U.S. government enacted Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 (the “CARES Act”) In connection with the CARES Act, CARES Act, CARES Act, |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 – INCOME TAXES Following the consummation of the Atlas Business Combination, we are organized as an umbrella partnership C-Corporation structure also known as an “Up-C” structure in which the business of Atlas Intermediate and its subsidiaries is held by Holdings and will continue to operate through the subsidiaries of Atlas Intermediate, and in which our only direct assets consist of common units of Holdings. We are the sole manager of Holdings in accordance with the terms of the Holdings LLC Agreement entered into in connection with the consummation of the Atlas Business Combination. Previously, Atlas Intermediate was treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of the Company being passed through to the partners and members. As such, no recognition of federal or state income taxes have been provided for in the accompanying consolidated financial statements except for income taxes relating to the C-Corp subsidiaries directly owned by Atlas Intermediate and the State of Texas Margin tax. Subsequent to the Atlas Business Combination, income taxes relating to Atlas Technical Consulting, Inc, the C-Corps owned directly by Atlas Intermediate, the State of Texas Margin tax, and the State of Washington Business and Occupation tax are considered within the provision of non-controlling interest as it is generated through the results of Atlas Intermediate and its subsidiaries. Our effective tax rate from continuing operations was (3.4%) and (0.2%) for the quarters ending April 2, 2022 and April 2, 2021, respectively. Reconciliation between the amount determined by applying the U.S. federal income tax rate of 21% to pretax income from continuing operations and income tax expense is attributable to changes in our mix of pre-tax losses/earnings and the effect of non-controlling interest in income of consolidated subsidiaries.. The Company provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, a valuation allowance has been recorded to reduce net deferred tax assets to an amount that management believes is more than likely not to be realized. The Company had no unrecognized tax benefits as of April 1, 2022 or December 31, 2021. Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. There are no accruals for interest and penalties as of April 1, 2022 or December 31, 2021. |
Leases
Leases | 3 Months Ended |
Apr. 01, 2022 | |
Lessee Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | NOTE 15 – LEASES The Company determines whether contractual arrangements contain a lease by evaluating whether those arrangements either implicitly or explicitly identify an asset, whether the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the term of the arrangement, and whether the Company has the right to direct the use of the asset. The Company has entered into various operating leases primarily for office space, vehicles and office equipment. The office space leases generally have fixed payments with expiration dates ranging from 2022 to 2026, some of which have options to extend the leases from 5 to 10 years and some have options to terminate at the Company's discretion. The Company’s vehicle and office equipment leases generally have fixed payments with expiration dates ranging from 2022 to 2026. Renewal options are included in the lease term if it is reasonably certain that the Company will exercise those options. Periods for which the Company is reasonably certain not to exercise termination options are also included in the lease term. For leases with a term of 12 months or less, the Company has made an accounting policy election to not recognize right-of-use (ROU) assets or lease liabilities for qualifying leases. For these leases, the Company recognizes lease expense on a straight-line basis over the lease term. The Company has certain agreements with lease and non-lease components, such as office space leases, which are combined as a single lease component based on the Company’s practical expedient election. The Company’s real estate leases require that it pay maintenance in addition to rent. Additionally, the real estate leases generally require payment of real estate taxes and insurance. Maintenance, real estate taxes, and insurance payments are generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the ROU asset and lease liability. Discount Rate The discount rate for a lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the Company is required to use its incremental borrowing rate, which is the rate the Registrants would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. The Company uses the secured rate which corresponds with the term of the applicable lease. The following table provides the components of lease cost for the Company's operating leases for the quarter ended April 1 (in thousands): 2022 Lease cost: Operating lease cost $ 3,796 Short-term lease cost 211 Total lease cost $ 4,007 The following table provides other key information related to the Company's operating leases at April 1 (in thousands): 2022 Cash paid for amounts included in the measurement of lease liabilities: $ - Operating cash flows from operating leases 3,717 Right-of-use asset obtained in exchange for new operating lease liabilities $ 3,717 The following table provides the total future minimum rental payments for operating leases, as well as a reconciliation of these undiscounted cash flows to the lease liabilities recognized on the Balance Sheets as of April 1, 2022 (in thousands). Operating Leases 2022 $ 3,377 2023 11,982 2024 7,846 2025 3,841 2026 2,455 Thereafter 3,176 Total $ 32,677 Weighted-average discount rate 5.37 % Weighted-average remaining lease term (in years) 3.71 Current lease liabilities (included in other current liabilities) $ 12,162 Non-current lease liabilities (included in other long-term liabilities) 23,709 Right-of-use assets (included in other long-term assets) 34,408 |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Apr. 01, 2022 | |
Accounting Policies [Abstract] | |
Accounts Receivable and Accrued Billings | Accounts Receivable and Accrued Billings The Company records its trade accounts receivable and unbilled receivables at their face amounts less allowances. On a periodic basis, the Company monitors the trade accounts receivable and unbilled receivables from its customers for any collectability issues. The allowance for doubtful accounts is established based on reviews of individual customer accounts, recent loss experience, current economic conditions, and other pertinent factors. The Company writes off accounts after a determination has been made by management that the amounts at issue are no longer likely to be collected, following the exercise of reasonable collection efforts, and upon management’s determination that the costs of pursuing collection outweigh the likelihood of recovery. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. As of April 1, 2022 and December 31, 2021, the allowance for trade accounts receivable was $3.8 million and $3.3 million, respectively, while the allowance for unbilled receivables was $0.8 million and $0.6 million, respectively. The allowances reflect the Company’s best estimate of collectability risks on outstanding receivables and unbilled services. |
Property and Equipment | Property and Equipment Purchases of new assets and costs of improvement to extend the useful life of existing assets are capitalized. Routine maintenance and repairs are charged to expenses as incurred. When an asset is sold or retired, the costs and related accumulated depreciation are eliminated from the accounts, and the resulting gains or losses on disposal are recognized in the accompanying Consolidated Statement of Operations. The Company depreciates its assets on a straight-line basis over the assets’ useful lives, which range from three to ten years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses long-lived assets for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. The Company recognizes an impairment if the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. If an impairment is indicated based on a comparison of the assets’ carrying amounts and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amounts of the assets exceed the respective fair values of the assets. There were no impairment charges for the quarters ended April 1, 2022 and April 2, 2021. Goodwill Goodwill represents the excess of the cost of net assets acquired over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles – Goodwill and Other, we evaluate goodwill annually for impairment on October 1, or whenever events or changes in circumstances indicate the asset may be impaired, using the quantitative method. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors include macroeconomic and industry conditions, cost factors, overall financial performance, and other relevant entity-specific events. If we determine that this threshold is met, then performing the two-step quantitative impairment test is unnecessary. We may elect to bypass the qualitative assessment and proceed directly to the quantitative test for any reporting unit. The two-step impairment test requires a comparison of the carrying value of the assets and liabilities associated with a reporting unit, including goodwill, with the fair value of the reporting unit. We determine fair value through the discounted cash flow method. We make certain subjective and complex judgments in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of our reporting units. If the carrying value of our reporting unit exceeds the fair value of our reporting unit, we would calculate the implied fair value as compared to the carrying value to determine the appropriate impairment charge, if any. There were no impairment charges for the quarters ended April 1, 2022 and April 2, 2021. |
Goodwill | Goodwill Goodwill represents the excess of the cost of net assets acquired over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles – Goodwill and Other, we evaluate goodwill annually for impairment on October 1, or whenever events or changes in circumstances indicate the asset may be impaired, using the quantitative method. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors include macroeconomic and industry conditions, cost factors, overall financial performance, and other relevant entity-specific events. If we determine that this threshold is met, then performing the two-step quantitative impairment test is unnecessary. We may elect to bypass the qualitative assessment and proceed directly to the quantitative test for any reporting unit. The two-step impairment test requires a comparison of the carrying value of the assets and liabilities associated with a reporting unit, including goodwill, with the fair value of the reporting unit. We determine fair value through the discounted cash flow method. We make certain subjective and complex judgments in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of our reporting units. If the carrying value of our reporting unit exceeds the fair value of our reporting unit, we would calculate the implied fair value as compared to the carrying value to determine the appropriate impairment charge, if any. There were no impairment charges for the quarters ended April 1, 2022 and April 2, 2021. |
Revenue Recognition | Revenue Recognition Below is a description of the basic types of contracts from which the Company may earn revenue: |
Time and Materials Contracts | Time and Materials Contracts Under the time and materials (“T&M”) arrangements, contract fees are based upon time and materials incurred. The contracts may be structured as basic time and materials, cost plus a margin or time and materials subject to a maximum contract value (the “ceiling”). Due to the potential limitation of the contract’s ceiling, the economic factors of the contracts subject to a ceiling differ from the economic factors of basic T&M and cost-plus contracts. The majority of the Company’s contracts are for projects where it bills the client monthly at hourly billing or unit rates. The billing rates are determined by contract terms. Under cost plus contracts, the Company charges its clients for contract related costs at cost, an agreed upon overhead rate plus a fixed fee or rate. Under time and materials contracts with a ceiling, the Company charges the clients for time and materials based upon the work performed however there is a ceiling or a not to exceed value. There are often instances that a contract is modified to extend the contract value past the original or amended ceiling. As the consideration is variable depending on the outcome of the contract renegotiation, the Company will estimate the total contract price in accordance with the variable consideration guidelines and will only include consideration that it expects to receive from the customer. When the Company is reaching the ceiling, the contract will be renegotiated, or we cease work when the maximum contract value is reached. The Company will continue to work if it is probable that the contract will be extended. The Company is only entitled to consideration for the work it has performed, and the ceiling amount is not a guaranteed contract value. The Company earned approximately 90% of its revenues under T&M contracts during the quarters ended April 1, 2022 and April 2, 2021. |
Fixed Price Contracts | Fixed Price Contracts Under fixed price contracts, the Company’s clients may pay an agreed amount negotiated in advance for a specified scope of work. The Company is guaranteed to receive the consideration to the extent that the Company delivers under the contract. The Company assesses contracts quarterly and may recognize any expected future loss before actually incurring the loss. When the Company is expecting to reach the total consideration under the contract or the scope of work changes, the Company will attempt to negotiate a change order. |
Change Orders and Claims | Change Orders and Claims Change orders are modifications of an original contract that effectively change the provisions of the contract without adding new provisions. Either the Company or its client may initiate change orders. They may include changes in specifications or design, manner of performance, facilities, equipment, materials, sites, and period of completion of the work or changes in the amount of our compensation. Management evaluates when a change order is probable based upon its experience in negotiating change orders, the customer’s written approval of such changes or separate documentation of change order costs that are identifiable. Change orders may take time to be formally documented and terms of such change orders are agreed with the client before the work is performed. Sometimes circumstances require that work progresses before an agreement is reached with the client. If the Company is having difficulties in renegotiating the change order, the Company will stop work if possible, record all costs incurred to date, and determine, on a project-by-project basis, the appropriate final revenue recognition. Claims are amounts in excess of the agreed contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. Costs related to change orders and claims are recognized when they are incurred. The Company evaluates claims on an individual basis and recognizes revenue it believes is probable to collect. |
Performance Obligations | Performance Obligations The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, is not distinct. However, in some instances, we may also promise to provide distinct goods or services within a contract, resulting in multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. Typically, we sell a customer a specific service and use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s performance obligations are satisfied as work progresses or at a point in time. Revenue on our cost-reimbursable contracts is recognized over time using direct costs incurred or direct costs incurred to date as compared to the estimated total direct costs for performance obligations because it best depicts the transfer of control to the customer. Contract costs include labor, subcontractors’ costs, and other direct costs. Gross revenue from services transferred to customers at a point in time is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the reports and/or analysis performed. As of April 1, 2022 and December 31, 2021, we had $851 million and $808 million of remaining performance obligations, or backlog, respectively, of which $511 million and $485 million, respectively, or 60% is expected to be recognized over the next 12 months and the majority of the balance over the next 24 months. Project cancellations or scope adjustments may occur, from time to time, with respect to contracts reflected in backlog. Most of our government contracts are multi-year contracts for which funding is appropriated on an annual basis, therefore backlog includes only those amounts that have been funded and authorized and does not reflect the full amounts we may receive over the term of such contracts. In the case of non-government contracts, backlog includes future revenue at contract rates, excluding contract renewals or extensions that are at the discretion of the client. For contracts with a not-to-exceed maximum amount, we include revenue from such contracts in backlog to the extent of the remaining estimated amount. Our backlog for the period beyond 12 months may be subject to variation from year-to-year as existing contracts are completed, delayed, or renewed or new contracts are awarded, delayed, or cancelled. As a result, we believe that year-to-year comparisons of the portion of backlog expected to be performed more than one year in the future are difficult to assess and not necessarily indicative of future revenues or profitability. |
U.S. Federal Acquisition Regulations | U.S. Federal Acquisition Regulations The Company has contracts with the U.S. federal, state and local governments that contain provisions requiring compliance with the U.S. Federal Acquisition Regulations (“FAR”). These regulations are generally applicable to all its contracts that are directly funded or partially funded by pass-through funds from the U.S. federal government. These provisions limit the recovery of certain specified indirect costs on contracts subject to the FAR. Cost-plus contracts covered by the FAR provide for upward or downward adjustments if actual recoverable costs differ from the estimate billed under forward pricing arrangements. Most of the Company’s government contracts are subject to termination at the convenience of the government. Contracts typically provide for reimbursement of costs incurred and payment of fees earned through the date of such termination. Government contracts that are subject to the FAR are subject to audits performed by the Defense Contract Audit Agency (“DCAA”) and many other state governmental agencies. As such, the Company’s overhead rates, cost proposals, incurred government contract costs and internal control systems are subject to review. During the course of its audits, the DCAA or a state agency may question incurred costs if it believes the Company has accounted for such costs in a manner inconsistent with the requirements of the FAR or Cost Accounting Standards and recommend that the applicable contracting officer disallow such costs. Historically, the Company has not incurred significant disallowed costs because of such audits. However, the Company can provide no assurance that the rate audits will not result in material disallowances of incurred costs in the future. The Company provides for a refund liability to the extent that it expects to refund some of the consideration received from a customer. The liability at April 1, 2022 and December 31, 2021 was $0, respectively. |
Disaggregation of Revenues | Disaggregation of Revenues As described further in Note 2 “Summary of Significant Accounting Policies”, the Company has one operating segment, Engineering, Testing, Inspection and Other Consultative Services, which reflects how the Company is being managed. The Company provides public and private sector clients with comprehensive support in managing large-scale infrastructure improvement programs including engineering, design, program development/management, compliance services, acquisition, and project control services, as well as construction engineering and inspection and materials testing. Approximately 50% of the Company’s revenues in each reporting period presented are derived from federal, state, and local government related projects. All services performed by the Company are rendered in the United States and its territories via two contract types, time and materials or fixed price contracts. The Company derives 90% of its revenues from T&M contracts, the remainder are earned under fixed price contracts. |
Cash Flows | Cash Flows The Company has presented its cash flows using the indirect method and considers all highly liquid investments with an original maturity of three months or less at acquisition to be cash equivalents. At times, our cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance limit. |
Comprehensive Income | Comprehensive Income There are no other components of comprehensive income other than net income and the provision for non-controlling interest associated with Holdings Units. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable. These risks primarily relate to the concentration of customers who are large, governmental customers and regional governmental customers. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements (“ASC 820”), establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows: Level 1 — Inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that management has the ability to access. Level 2 — Inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Level 3 — Inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company has various financial instruments, including cash and cash equivalents, accounts receivable and payable, accrued liabilities, and long-term debt. The carrying value of the Company’s cash and cash equivalents, accounts receivable, and payable and accrued liabilities approximate their fair value due to their short-term nature. The Company believes that the aggregate fair value of its long-term debt approximates their carrying amounts as the interest rates on the debt are either reset on a frequent basis or reflect current market rates. The Company applies the provisions of ASC 805, Business Combinations, in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. The allocation of the purchase price to identifiable intangible assets is based on valuations performed to determine the fair values of such assets as of the acquisition dates. Depending on the size and complexity of the acquisition, the Company may engage a third-party independent valuation specialist to assist in management’s determination of fair values of tangible and intangible assets acquired and liabilities assumed. The fair values of earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. The Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheet. Changes in the estimated fair value of contingent earnout payments are included in operating expenses in the accompanying Consolidated Statements of Operations. Several factors are considered when determining contingent consideration liabilities as part of the purchase price, including whether (i) the valuation of the acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (ii) the former owners of the acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of other key employees. The contingent earn-out payments are not affected by employment termination. The Company reviews and re-assesses the estimated fair value of contingent consideration liabilities on a quarterly basis, and the updated fair value could differ materially from the initial estimates. The Company measures contingent consideration recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The Company uses a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration liabilities on the acquisition date and at each reporting period. The significant unobservable inputs used in the fair value measurements are projections over the earn-out period, and the probability outcome percentages that are assigned to each scenario. Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent consideration liabilities. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and amount paid will be recorded in earnings. The Company records the current portion of contingent consideration liability within other current liabilities and the noncurrent portion of contingent consideration liability within other long-term liabilities within its Consolidated Balance Sheet. The following table summarizes the changes in the fair value of estimated contingent consideration (in thousands): Contingent consideration, as of December 31, 2021 $ 31,461 Additions for acquisitions 9,500 Adjustment to preliminary liability for changes in fair value - Reduction of liability for payment made (3,270 ) Total contingent consideration, as of April 1, 2022 37,691 Current portion of contingent consideration (16,577 ) Contingent consideration, less current portion $ 21,114 The Company may at its discretion settle part of the contingent consideration with cash, common shares or a combination of cash and common shares. During the quarter ended April 1, 2022, we settled a portion of the $3.3 million payment with 186,368 shares of Class B common stock. |
Equity Based Compensation | Equity Based Compensation The Company recognizes the cost of services received in an equity-based payment transaction with an employee as services are received and records either a corresponding increase in equity or a liability, depending on whether the instruments granted satisfy the equity or liability classification criteria. The measurement objective for these equity awards is the estimated fair value at the grant date of the equity instruments that the Company is obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. The compensation cost for an award classified as an equity instrument is recognized ratably over the requisite service period, including an estimate of forfeitures. The requisite service period is the period during which an employee is required to provide service in exchange for an award. The Company granted restricted stock units (“RSUs”) during the second quarters of 2021 and 2020 to reward, motivate and retain selected management personnel. Please refer to Note 9 “Equity Based Compensation” for further information. An additional grant of RSUs was made to a member of the Company’s leadership team on December 31, 2020 to reflect an increase in responsibility. The Company granted its Board of Directors RSUs during the first quarter of 2021 and 2020 as part of their annual board compensation packages. During the second quarter of 2021, the Company granted certain members of its leadership team performance share units (“PSUs”) based on both performance and relative share price factors that may affect the ultimate vesting of shares. During the third quarter of 2021, the Company granted its Chief Executive Officer, Chief Financial Officer and Chief Strategy Officer stock options with market conditions that may affect their ultimate vesting. Equity compensation was $1.1 million and $0.4 million for the quarters ended April 1, 2022 and April 2, 2021, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the FASB ASC Topic 740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. |
Redeemable Preferred Stock | Redeemable Preferred Stock On February 14, 2020, in connection with the consummation of the Atlas Business Combination, Holdings and GSO COF III AIV-2 LP (“GSO AIV-2”) entered into a subscription agreement, dated February 14, 2020 (the “Subscription Agreement”) pursuant to which, GSO AIV-2 purchased 145,000 units of a new class of Series A Senior Preferred Units of Holdings (the “Preferred Units”) at a price per Preferred Unit of $978.21 for an aggregate cash purchase price of $141,840,450, which represented a 2.179% original issue discount on the Preferred Units (such purchase, the “GSO Placement”). The GSO Placement was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder. The Preferred Units ranked senior in priority to all other existing and future equity securities of Holdings with respect to liquidation preference and distribution rights. The Preferred Units had a liquidation preference of $1,000 per Preferred Unit (the “Liquidation Preference”). Subject to any limitations set forth in the Atlas Credit Agreement (as defined in Note 6 – Long-Term Debt), the Preferred Units were paid a dividend of 5% per annum, plus either an additional 6.25% per annum in cash or 7.25% per annum in additional Preferred Units, at Holdings’ option, payable quarterly in arrears. If a cash dividend was not able to be made because of a limitation under the Atlas Credit Agreement, then the Liquidation Preference with respect to any Preferred Unit would have increased to 3.5625% in any quarter until a cash dividend could be made. The Preferred Units did not possess voting rights and were not convertible into any other security of Holdings. Holdings was permitted to redeem the Preferred Units beginning on the second anniversary of the Closing Date at a price of 103% of the Liquidation Preference (the “Redemption Premium”), and on the third anniversary of their issuance at the Liquidation Preference, in each case plus accrued and unpaid dividends. The Preferred Units could only be redeemed by Holdings within the first two years of the Closing Date upon a change of control as described below, in which case such Preferred Units would have been redeemed at a customary make-whole amount as if the Preferred Units were redeemed on the second anniversary. Subject to the terms of Holdings’ and its subsidiaries’ senior credit agreements, Holdings was required to redeem the Preferred Units at the Redemption Premium, plus accrued and unpaid dividends, in the event of (i) a change of control, (ii) sales or other dispositions of all or substantially all of Holdings’ assets and (iii) the insolvency or bankruptcy of Holdings or any of its material subsidiaries. Finally, holders of the Preferred Units were permitted to require Holdings to redeem their Preferred Units at the Liquidation Preference, plus accrued and unpaid dividends, beginning on the eighth anniversary of the Closing Date, subject to certain customary limitations. The Preferred Units were redeemed in full at par without a premium on February 25, 2021. The Company incurred redeemable preferred stock dividends of $5.9 million during the quarter ended April 2, 2021. |
Segment | Segment The Company has one operating and reporting segment, Engineering, Testing, Inspection and Other Consultative Services. This financial information is reviewed regularly by our chief operating decision maker to assess performance and make decisions regarding the allocation of resources and is equivalent to our consolidated information. Our chief operating decision maker does not review below the consolidated level. Our chief operating decision maker is our Chief Executive Officer. |
Adoption of Accounting Pronouncements and Recent Accounting Pronouncements | Adoption of Accounting Pronouncements and Recent Accounting Pronouncements In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective and we adopted and implemented the standard on January 1, 2022 with a modified retrospective transition approach, as permitted, applying the new standard to all leases existing at the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The adoption of this standard had a material effect on our balance sheet, the most significant effects relating to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office, vehicles and equipment operating leases and; (2) providing significant new disclosures about our leasing activities. See Note 15 for further information. In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) - Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing after December 15, 2022. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Accounting Policies [Abstract] | |
Schedule of changes in the fair value of estimated contingent consideration | Contingent consideration, as of December 31, 2021 $ 31,461 Additions for acquisitions 9,500 Adjustment to preliminary liability for changes in fair value - Reduction of liability for payment made (3,270 ) Total contingent consideration, as of April 1, 2022 37,691 Current portion of contingent consideration (16,577 ) Contingent consideration, less current portion $ 21,114 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of fair values of the assets acquired and liabilities | AEL* O’Neill* TranSmart* Alliance* Cash $ 684 $ 1,608 - - Accounts receivable 6,026 4,201 6,244 2,489 Unbilled receivable 858 - 1,832 2,115 Property and equipment 52 1,049 139 1,733 Other current and long-term assets 130 - 298 174 Intangible assets 13,816 22,735 23,555 16,314 Liabilities (3,065 ) (1,546 ) (5,062 ) (3,557 ) Net assets acquired $ 18,501 28,047 27,006 19,268 Consideration paid (cash and equity consideration) $ 24,502 $ 24,369 25,763 16,517 Contingent earnout liability at fair value (cash) 7,045 7,106 4,000 5,500 Total Consideration 31,547 31,475 29,763 22,017 Excess consideration over the amounts assigned to the net assets acquired (goodwill) $ 13,045 3,428 2,757 2,749 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Balance as of December 31, 2021 $ 124,348 Acquisitions 5,506 Disposals - Measurement period adjustments 3,000 Balance as of April 1, 2022 $ 132,854 |
Schedule of intangible assets | April 2, 2022 December 31, 2021 Remaining Gross Accumulated Net book Gross Accumulated Net book useful life amount amortization value amount amortization value (in years) Definite life intangible assets: Customer relationships $ 187,126 $ (51,179 ) $ 135,947 $ 149,917 $ (47,310 ) $ 102,607 8.0 Tradenames 28,240 (21,621 ) 6,619 25,580 (20,890 ) 4,690 2.3 Non-competes 600 (588 ) 12 600 (583 ) 17 0.6 Total intangibles $ 215,966 $ (73,388 ) $ 142,578 $ 176,097 $ (68,783 ) $ 107,314 |
Schedule of amortization of intangible assets | 2022 (nine months remaining) $ 15,966 2023 20,917 2024 19,566 2025 18,399 2026 18,215 Thereafter 49,515 $ 142,578 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | April 1, December 31, Atlas 2021 credit agreement - term loan $ 499,794 $ 467,000 Atlas 2021 credit agreement – revolving 17,439 - Atlas 2021 credit agreement – PIK 6,392 Subtotal 517,233 473,392 Less: Loan costs, net (7,872 ) (7,593 ) Less current maturities of long-term debt (4,930 ) (3,606 ) Long-term debt $ 504,431 $ 462,193 |
Schedule of aggregate long-term principal payments | 2022 (nine months remaining) $ 3,698 2023 4,930 2024 4,930 2025 4,930 2026 17,439 Thereafter 481,306 $ 517,233 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of outstanding stock and warrants | Class A Class B Beginning Balance, as of December 31, 2021 33,645,212 3,328,101 Issuances 1,299,896 176,576 Transfers to Class A from Class B 170,784 (170,784 ) Shares Outstanding at April 1, 2022 35,115,892 3,333,893 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of (loss) per share | Quarter Ended Quarter Ended Numerator: Net (loss) post Atlas Business Combination $ (4,418 ) $ (14,790 ) Provision for non-controlling interest 396 12,169 Redeemable preferred stock dividends - (5,899 ) Net (loss) attributable to Class A common shares - basic and diluted $ (4,022 ) $ (8,520 ) Denominator: Weighted average shares outstanding - basic and diluted 34,039,775 14,256,484 Net (loss) per Class A common share, basic and diluted $ (0.12 ) $ (0.60 ) |
Equity Based Compensation (Tabl
Equity Based Compensation (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSU and PSU activity | RSU PSU Number of Shares Weighted- Number of Shares Weighted- Nonvested Balance ay December 31, 2020 585 $ 8.70 - $ - Granted Vested Forfeited Estimated Forfeiture Nonvested Balance as of April 2, 2021 585 8.70 - - Nonvested Balance as of December 31, 2021 819 $ 9.88 183 $ 14.06 Granted 53 12.21 Vested (54 ) 9.00 Forfeited Estimated Forfeiture Nonvested Balance as of April 1,2022 818 $ 10.13 183 $ 14.06 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 01, 2022 | |
Leases | |
Schedule of components of lease cost | 2022 Lease cost: Operating lease cost $ 3,796 Short-term lease cost 211 Total lease cost $ 4,007 |
Schedule of provides other key information related | 2022 Cash paid for amounts included in the measurement of lease liabilities: $ - Operating cash flows from operating leases 3,717 Right-of-use asset obtained in exchange for new operating lease liabilities $ 3,717 |
Schedule of future minimum rental payments for operating leases | Operating Leases 2022 $ 3,377 2023 11,982 2024 7,846 2025 3,841 2026 2,455 Thereafter 3,176 Total $ 32,677 Weighted-average discount rate 5.37 % Weighted-average remaining lease term (in years) 3.71 Current lease liabilities (included in other current liabilities) $ 12,162 Non-current lease liabilities (included in other long-term liabilities) 23,709 Right-of-use assets (included in other long-term assets) 34,408 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | 3 Months Ended |
Apr. 01, 2022 | |
Organization and Basis of Presentation [Line Items] | |
Services provided, description | Services are provided throughout the United States and its territories to a broad base of clients, with no single client representing 10% or more of our revenues for either the quarter ended April 1, 2022 or April 2, 2021. Services are rendered primarily on a time and materials and cost-plus basis with approximately 90% of our contracts on that basis and the remainder represented by firm fixed price contracts. |
Expire date | Dec. 29, 2023 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Allowance for trade accounts receivable | $ 3.8 | $ 3.3 | |
Allowance for unbilled receivables | $ 0.8 | 0.6 | |
Time and material contract percentage | 90.00% | ||
Remaining performance obligations | $ 851 | 808 | |
Performance obligations | $ 511 | 485 | |
Performance obligation expected recognized percentage | 60.00% | ||
Refund liability | $ 0 | $ 0 | |
Revenue, percentage | 50.00% | ||
Revenues from T&M, percentage | 90.00% | ||
Settlement amount | $ 3.3 | ||
Number of common stock converted (in Shares) | 186,368 | ||
Equity compensation | $ 1.1 | $ 0.4 | |
Tax benefits | 50.00% | ||
Preferred units dividend percentage | 5.00% | ||
Preferred stock additional cash percentage | 6.25% | ||
Additional preferred stock percentage | 7.25% | ||
Liquidation preference percentage | 103.00% | ||
Employee Stock Ownership Plan (ESOP), Classification of Dividends | $5.9 | ||
Subscription Agreement [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Liquidation preference of per preferred unit (in Dollars per share) | $ 1,000 | ||
Atlas Credit Agreement [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Liquidation preference percentage | 3.5625% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of changes in the fair value of estimated contingent consideration $ in Thousands | 3 Months Ended |
Apr. 01, 2022USD ($) | |
Schedule of changes in the fair value of estimated contingent consideration [Abstract] | |
Contingent consideration, as of December 31, 2021 | $ 31,461 |
Additions for acquisitions | 9,500 |
Adjustment to preliminary liability for changes in fair value | |
Reduction of liability for payment made | (3,270) |
Total contingent consideration, as of April 1, 2022 | 37,691 |
Current portion of contingent consideration | (16,577) |
Contingent consideration, less current portion | $ 21,114 |
Atlas Business Combination an_2
Atlas Business Combination and Non-Controlling Interest (Details) | 3 Months Ended |
Apr. 01, 2022 | |
Acquisition of Atlas Intermediate Subsidiaries [Member] | |
Atlas Business Combination and Non-Controlling Interest (Details) [Line Items] | |
Business combination, description | the Company completed the acquisition of Atlas Intermediate and its subsidiaries and in return the Atlas Intermediate members received 24.0 million shares of Class B common stock in the Company amongst other consideration such as repayment of $171.5 million of debt in effect as of the closing date. |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ / shares in Millions | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2022 | Jul. 31, 2021 | Apr. 30, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Business Acquisitions (Details) [Line Items] | |||||
Initial purchase price (in Dollars per share) | $ 22 | ||||
Total consideration recieved | $ 4,300,000 | ||||
Atlantic Engineering Laboratories, Inc. and Atlantic Engineering Laboratories of New York, Inc. [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Total consideration paid | $ 7,500,000 | ||||
O’Neill Services Group [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Total consideration received | $ 6,500,000 | ||||
Class A Common Stock [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Number of shares issued | 355,649 | ||||
Atlantic Engineering Laboratories, Inc. and Atlantic Engineering Laboratories of New York, Inc. [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Payment to purchase agreement | 24,500,000 | ||||
Number of shares issued | $ 738,566 | ||||
O’Neill Services Group [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Payment to purchase agreement | 24,400,000 | ||||
Number of shares issued | $ 653,728 | ||||
TranSmart Technologies, Inc [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Business combination, description | the Company acquired TranSmart Technologies, Inc. (“TranSmart”) for an initial purchase price of $29.8 million which was paid in a combination of cash and shares of our Class A common stock. TranSmart specializes in Intelligent Transportation Systems (ITS) and engineering for transportation agencies and customers throughout the Midwest. TranSmart was founded in 1986 and is headquartered in Chicago, Illinois employs approximately 100 employees specializing in ITS, engineering, design and construction/program management services. The Company issued 872,752 of Class A common stock which represented $9.9 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies.In March 2022, the Company acquired 1 Alliance Geomatics, LLC (“1 Alliance”) for an initial purchase price of $22.0 million which was paid in a combination of cash and shares of our Class A common stock. 1 Alliance is a provider of geospatial services to transportation and water resources clients from its four offices within the Pacific Northwest. 1 Alliance, based in Bellevue, Washington, was founded in 2012 and employs approximately 70 people. The Company issued 355,649 of Class A common stock which represented $4.3 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies | ||||
Business Acquisition [Member] | |||||
Business Acquisitions (Details) [Line Items] | |||||
Acquisition costs | $ 500,000 | $ 700,000 |
Business Acquisitions (Detail_2
Business Acquisitions (Details) - Schedule of fair values of the assets acquired and liabilities $ in Thousands | 3 Months Ended | |
Apr. 01, 2022USD ($) | [1] | |
AEL [Member] | ||
Business Acquisitions (Details) - Schedule of fair values of the assets acquired and liabilities [Line Items] | ||
Cash | $ 684 | |
Accounts receivable | 6,026 | |
Unbilled receivable | 858 | |
Property and equipment | 52 | |
Other current and long-term assets | 130 | |
Intangible assets | 13,816 | |
Liabilities | (3,065) | |
Net assets acquired | 18,501 | |
Consideration paid (cash and equity consideration) | 24,502 | |
Contingent earnout liability at fair value (cash) | 7,045 | |
Total Consideration | 31,547 | |
Excess consideration over the amounts assigned to the net assets acquired (goodwill) | 13,045 | |
O’Neill [Member] | ||
Business Acquisitions (Details) - Schedule of fair values of the assets acquired and liabilities [Line Items] | ||
Cash | 1,608 | |
Accounts receivable | 4,201 | |
Unbilled receivable | ||
Property and equipment | 1,049 | |
Other current and long-term assets | ||
Intangible assets | 22,735 | |
Liabilities | (1,546) | |
Net assets acquired | 28,047 | |
Consideration paid (cash and equity consideration) | 24,369 | |
Contingent earnout liability at fair value (cash) | 7,106 | |
Total Consideration | 31,475 | |
Excess consideration over the amounts assigned to the net assets acquired (goodwill) | 3,428 | |
TranSmart [Member] | ||
Business Acquisitions (Details) - Schedule of fair values of the assets acquired and liabilities [Line Items] | ||
Cash | ||
Accounts receivable | 6,244 | |
Unbilled receivable | 1,832 | |
Property and equipment | 139 | |
Other current and long-term assets | 298 | |
Intangible assets | 23,555 | |
Liabilities | (5,062) | |
Net assets acquired | 27,006 | |
Consideration paid (cash and equity consideration) | 25,763 | |
Contingent earnout liability at fair value (cash) | 4,000 | |
Total Consideration | 29,763 | |
Excess consideration over the amounts assigned to the net assets acquired (goodwill) | 2,757 | |
Alliance [Member] | ||
Business Acquisitions (Details) - Schedule of fair values of the assets acquired and liabilities [Line Items] | ||
Cash | ||
Accounts receivable | 2,489 | |
Unbilled receivable | 2,115 | |
Property and equipment | 1,733 | |
Other current and long-term assets | 174 | |
Intangible assets | 16,314 | |
Liabilities | (3,557) | |
Net assets acquired | 19,268 | |
Consideration paid (cash and equity consideration) | 16,517 | |
Contingent earnout liability at fair value (cash) | 5,500 | |
Total Consideration | 22,017 | |
Excess consideration over the amounts assigned to the net assets acquired (goodwill) | $ 2,749 | |
[1] | The above purchase price allocation is tentative and preliminary and subject to further updates as we complete the purchase price allocation. |
Goodwill and Intangibles (Detai
Goodwill and Intangibles (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 4.6 | $ 3.2 |
Goodwill and Intangibles (Det_2
Goodwill and Intangibles (Details) - Schedule of goodwill $ in Thousands | 3 Months Ended |
Apr. 01, 2022USD ($) | |
Schedule of goodwill [Abstract] | |
Balance | $ 124,348 |
Acquisitions | 5,506 |
Disposals | |
Measurement period adjustments | 3,000 |
Balance | $ 132,854 |
Goodwill and Intangibles (Det_3
Goodwill and Intangibles (Details) - Schedule of intangible assets - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Apr. 01, 2022 | Dec. 31, 2021 | |
Goodwill and Intangibles (Details) - Schedule of intangible assets [Line Items] | ||
Gross amount | $ 215,966 | $ 176,097 |
Accumulated amortization | (73,388) | (68,783) |
Net book value | 142,578 | 107,314 |
Customer relationships [Member] | ||
Goodwill and Intangibles (Details) - Schedule of intangible assets [Line Items] | ||
Gross amount | 187,126 | 149,917 |
Accumulated amortization | (51,179) | (47,310) |
Net book value | 135,947 | $ 102,607 |
Remaining useful life (in years) | 8 years | |
Tradenames [Member] | ||
Goodwill and Intangibles (Details) - Schedule of intangible assets [Line Items] | ||
Gross amount | 28,240 | $ 25,580 |
Accumulated amortization | (21,621) | (20,890) |
Net book value | 6,619 | $ 4,690 |
Remaining useful life (in years) | 2 years 3 months 18 days | |
Non-competes [Member] | ||
Goodwill and Intangibles (Details) - Schedule of intangible assets [Line Items] | ||
Gross amount | 600 | $ 600 |
Accumulated amortization | (588) | (583) |
Net book value | $ 12 | $ 17 |
Remaining useful life (in years) | 7 months 6 days |
Goodwill and Intangibles (Det_4
Goodwill and Intangibles (Details) - Schedule of amortization of intangible assets $ in Thousands | Apr. 01, 2022USD ($) |
Schedule of amortization of intangible assets [Abstract] | |
2022 (nine months remaining) | $ 15,966 |
2023 | 20,917 |
2024 | 19,566 |
2025 | 18,399 |
2026 | 18,215 |
Thereafter | 49,515 |
Amortization of intangible assets | $ 142,578 |
Long-Term Debt (Details)
Long-Term Debt (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Feb. 25, 2021 | Apr. 01, 2022 | Dec. 31, 2021 | |
Long-Term Debt (Details) [Line Items] | |||
Credit agreement, description | On February 25, 2021, Atlas Intermediate, as the borrower, entered into two new credit facilities consisting of (i) a $432.0 million senior secured term loan at closing and, subject to the satisfaction of certain terms and conditions, a committed delayed draw term loan facility to be used for future acquisitions, within 18 month of February 25, 2021 and subject to certain conditions, in an aggregate principal amount of up to $75.0 million, of which $61 million has been used ($26.0 million in connection with the acquisitions during the first quarter of 2022) and $14 million remains available as of April 1, 2022, and an uncommitted incremental term loan facility that may be incurred after closing (the “Term Loan”) pursuant to a Credit Agreement dated February 25, 2021, by and among Holdings, Atlas Intermediate, Wilmington Trust, National Association, as administrative agent and collateral agent, and certain lenders thereto, including certain Blackstone entities, which may include, Blackstone Alternative Credit Advisors LP, and its managed funds and accounts, and its affiliates, Blackstone Holdings Finance Co. | ||
Term loan agreement, description | L.L.C. and its affiliates, and/or certain other of their respective funds, accounts, clients managed, advised or sub-advised, or any of their respective affiliates (the “Term Loan Agreement”) and (ii) a $40.0 million senior secured revolver which aggregate principal amount may be increased, subject to the satisfaction of certain terms and conditions, including obtaining commitments therefor, by up to $20.0 million (the “Revolver”) pursuant to the Credit Agreement dated February 25, 2021, by and among Holdings, Intermediate, JPMorgan Chase Bank, N.A., as administrative agent, swingline lender, issuing bank, lender, sole bookrunner and sole lead arranger (the “ABL Revolver Agreement,” and together with the Term Loan Agreement, collectively the “Credit Agreements”). | In addition, the term loan requires an additional 2.0% interest that can be made at the option of the Company in cash or payment-in-kind (PIK). The interest rates under the ABL Revolver Agreement will be equal to either (i) the Adjusted LIBO Rate (as defined in the ABL Revolver Agreement), plus 2.50%, or (ii) the ABR (as defined in the ABL Revolver Agreement), plus 1.50%. | |
ATC [Member] | |||
Long-Term Debt (Details) [Line Items] | |||
Credit agreement, description | under the ABL Revolver Agreement, quarterly under the Term Loan Agreement or, in each case, at the end of the applicable interest period in arrears. The cash interest rates under the Term Loan Agreement will be equal to either (i) the Adjusted LIBO Rate (as defined in the Term Loan Agreement), plus 5.50%, or (ii) an Alternate Base Rate (as defined in the Term Loan Agreement), plus 4.50%. | ||
Credit facility interest terms, description | The Term Loan Agreement contains a financial covenant which requires Holdings, Atlas Intermediate and all of their direct and indirect subsidiaries on a consolidated basis to maintain a Total Net Leverage Ratio (as defined in each Credit Agreement) tested on a quarterly basis that does not exceed (i) 8.25 to 1.00 with respect to the fiscal quarters ending on April 2, 2021 and July 2, 2021, (ii) 8.00 to 1.00 for the fiscal quarters ending October 1, 2021 and December 31, 2021, (iii) 7.50 to 1.00 for the fiscal quarters ending April 1, 2022 and July 1, 2022, (iv) 7.25 to 1.00 for the fiscal quarters ending September 30, 2022 and December 30, 2022, (v) 7.00 to 1.00 for the fiscal quarters ending March 31, 2023 and June 30, 2023, (vi) 6.75 to 1.00 for the fiscal quarters ending September 29, 2023 and December 29, 2023, and (vii) 6.50 to 1.00 for March 29, 2024 and each fiscal quarter ending thereafter. | ||
ETS [Member] | |||
Long-Term Debt (Details) [Line Items] | |||
Maturity date description | The ABL Revolver Agreement contains a “springing” financial covenant which requires Holdings, Intermediate and all their direct and indirect subsidiaries on a consolidated basis to maintain a Fixed Charge Coverage Ratio (as defined in the ABL Revolver Agreement) of no less than 1.10 to 1.00 when the outstanding principal amount of loans under the Revolver exceeds $0 or the aggregate exposure for letters of credit under the Revolver exceeds $5 million. | ||
Revolver [Member] | |||
Long-Term Debt (Details) [Line Items] | |||
Mature date | Feb. 25, 2028 |
Long-Term Debt (Details) - Sche
Long-Term Debt (Details) - Schedule of long term debt - USD ($) $ in Thousands | Apr. 01, 2022 | Dec. 31, 2021 |
Schedule of long term debt [Abstract] | ||
Atlas 2021 credit agreement - term loan | $ 499,794 | $ 467,000 |
Atlas 2021 credit agreement – revolving | 17,439 | |
Atlas 2021 credit agreement – PIK | 6,392 | |
Subtotal | 517,233 | 473,392 |
Less: Loan costs, net | (7,872) | (7,593) |
Less current maturities of long-term debt | (4,930) | (3,606) |
Long-term debt | $ 504,431 | $ 462,193 |
Long-Term Debt (Details) - Sc_2
Long-Term Debt (Details) - Schedule of aggregate long-term principal payments $ in Thousands | Apr. 01, 2022USD ($) |
Schedule of aggregate long-term principal payments [Abstract] | |
2022 (nine months remaining) | $ 3,698 |
2023 | 4,930 |
2024 | 4,930 |
2025 | 4,930 |
2026 | 17,439 |
Thereafter | 481,306 |
Total | $ 517,233 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 01, 2022 | Dec. 31, 2021 | |
Shareholders' Equity (Details) [Line Items] | ||
Non-controlling interest, description | As of April 1, 2022 and December 31, 2021, the Company ownership and voting structure was comprised of holders of our Class A common stock that participate 100% in the results of Atlas Technical Consultants, Inc. and 9% and 91.0%, respectively, in Atlas Intermediate and its subsidiaries and holders of our Class B common stock that participate in the results of Atlas Intermediate and its subsidiaries until their Class B common stock is converted to Class A common stock. | |
Common stock participate non-controlling interest percentage | 9.00% | 9.00% |
Class A Common Stock [Member] | ||
Shareholders' Equity (Details) [Line Items] | ||
Common stock, shares outstanding | 35,115,892 | 33,645,212 |
Common stock, shares issued | 35,115,892 | 33,645,212 |
Description of voting rights of common stock | Holders of the Company’s Class A common stock are entitled to one vote for each share. | |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Class A Common Stock [Member] | Private Placement Warrants [Member] | ||
Shareholders' Equity (Details) [Line Items] | ||
Private placement aggregate of shares | 1,000,000 | |
Purchase price per shares (in Dollars per share) | $ 10.23 | |
Aggregate consideration private placement amount (in Dollars) | $ 10.2 | |
Class B Common Stock [Member] | ||
Shareholders' Equity (Details) [Line Items] | ||
Common stock, shares outstanding | 3,333,893 | 3,328,101 |
Common stock, shares issued | 3,333,893 | 3,328,101 |
Description of voting rights of common stock | Class B common stock was initially issued to the holders of Holdings Units in Atlas Intermediate in connection with the Atlas Business Combination and are non-economic but entitle the holder to one vote per share and may be converted to Class A shares at any time by the holder. | |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Schedule of outstanding stock and warrants shares in Thousands | 3 Months Ended |
Apr. 01, 2022shares | |
Class A Common Stock [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning Balance, as of December 31, 2021 | 33,645,212 |
Issuances | 1,299,896 |
Transfers to Class A from Class B | 170,784 |
Shares Outstanding at April 1, 2022 | 35,115,892 |
Class B Common Stock [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning Balance, as of December 31, 2021 | 3,328,101 |
Issuances | 176,576 |
Transfers to Class A from Class B | (170,784) |
Shares Outstanding at April 1, 2022 | 3,333,893 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of (loss) per share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Numerator: | ||
Net (loss) post Atlas Business Combination | $ (4,418) | $ (14,790) |
Provision for non-controlling interest | 396 | 12,169 |
Redeemable preferred stock dividends | (5,899) | |
Net (loss) attributable to Class A common shares - basic and diluted | $ (4,022) | $ (8,520) |
Denominator: | ||
Weighted average shares outstanding - basic and diluted (in Shares) | 34,039,775 | 14,256,484 |
Net (loss) per Class A common share, basic and diluted (in Dollars per share) | $ (0.12) | $ (0.6) |
Equity Based Compensation (Deta
Equity Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 03, 2021 | Dec. 31, 2022 | Mar. 18, 2022 | Dec. 31, 2020 | Apr. 01, 2022 | Oct. 01, 2021 | Jul. 02, 2021 | Apr. 02, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Equity Based Compensation (Details) [Line Items] | |||||||||||
Equity based compensation | $ 1.1 | $ 0.4 | |||||||||
Number of restricted stock units (in Shares) | 75,000 | ||||||||||
Fair market value issuance | $ 1.6 | $ 1.2 | $ 4.3 | $ 4.6 | |||||||
Vesting terms description | The vesting period for these RSUs is equal annual tranches, pro-ratably over three years, and there is no performance requirement attached to the RSUs other than continued service to the Company. | ||||||||||
Shares granted (in Dollars per share) | $ 158,977 | ||||||||||
Vested shares (in Shares) | 11,602 | ||||||||||
Share based compensation, description | the Company granted to its Board of Directors 54,053 RSUs with a one-year vesting period and a grant date fair market value of $9.00 per share. There are no performance requirements to these RSUs other than continued service to the Company throughout the one-year vesting period. The value of this grant was $0.5 million.During the second quarter of 2021, the Company also awarded 182,763 performance share units (“PSUs”) to its leadership team. The PSUs have both performance and market conditions that are required to be met for the shares to vest. The split between performance and market conditions is approximately 66.7% and 33.3%, respectively. If the conditions are met, the shares will cliff vest on the third anniversary of the award date. The Company has accounted for the portion of the award tied to the achievement of performance conditions based upon share price of $11.38 on the date of issuance and the probable number of shares anticipated to vest and accounted for the shares tied to market conditions based upon the fair market value as calculated in a Monte Carlo simulation. The Company will assess the probability of the performance conditions being achieved each quarter and adjust recorded stock compensation expense as appropriate. The fair market value as of the grant date was $1.4 million and $1.2 million for the performance and market based share units, respectively. On March 18, 2022, the Company granted to its Board of Directors 54,053 RSUs with a one-year vesting period and a grant date fair market value of $12.21 per share. There are no performance requirements to these RSUs other than continued service to the Company throughout the one-year vesting period. | the Company granted to its Board of Directors 54,053 RSUs with a one-year vesting period and a grant date fair market value of $12.21 per share. There are no performance requirements to these RSUs other than continued service to the Company throughout the one-year vesting period. | |||||||||
Grant value | $ 0.5 | $ 0.7 | |||||||||
Performance share units (in Shares) | 547,943 | 182,763 | |||||||||
Performance conditions based upon share price (in Dollars per share) | $ 11.38 | ||||||||||
Percentage of estimates forfeitures | 3.00% | ||||||||||
Strike price of tranche (in Dollars per share) | $ 10.5 | ||||||||||
Maximum [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Market conditions percentage | 66.70% | ||||||||||
Compensation cost for tranche | 5 years 11 months 4 days | ||||||||||
Option ranging per value (in Dollars per share) | $ 3.55 | ||||||||||
Minimum [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Market conditions percentage | 33.30% | ||||||||||
Compensation cost for tranche | 5 years 2 months 1 day | ||||||||||
Option ranging per value (in Dollars per share) | $ 2.29 | ||||||||||
Class A Common Stock [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Restricted Share Units (RSUs) [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Number of restricted stock units (in Shares) | 378,353 | 510,136 | |||||||||
Grant day fair market value (in Dollars per share) | $ 11.42 | $ 8.95 | |||||||||
Restricted Share Units (RSUs) [Member] | Forecast [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Value of RSUs | $ 0.5 | ||||||||||
Performance Share Units [Member] | |||||||||||
Equity Based Compensation (Details) [Line Items] | |||||||||||
Fair market value issuance | $ 1.4 |
Equity Based Compensation (De_2
Equity Based Compensation (Details) - Schedule of RSU and PSU activity - $ / shares | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
RSU [Member] | ||
Equity Based Compensation (Details) - Schedule of RSU and PSU activity [Line Items] | ||
Number of Shares, nonvested beginning balance | 819,000 | 585,000 |
Weighted-Average Grant Date Fair Value Per Share, nonvested beginning balance | $ 9.88 | $ 8.7 |
Number of Shares, Granted | 53,000 | |
Weighted-Average Grant Date Fair Value Per Share, Granted | $ 12.21 | |
Number of Shares, Vested | (54,000) | |
Weighted-Average Grant Date Fair Value Per Share, Vested | $ 9 | |
Number of Shares, Forfeited | ||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | ||
Number of Shares, Estimated Forfeiture | ||
Weighted-Average Grant Date Fair Value Per Share, Estimated Forfeiture | ||
Number of Shares, nonvested ending balance | 818,000 | 585,000 |
Weighted-Average Grant Date Fair Value Per Share, nonvested ending balance | $ 10.13 | $ 8.7 |
PSU [Member] | ||
Equity Based Compensation (Details) - Schedule of RSU and PSU activity [Line Items] | ||
Number of Shares, nonvested beginning balance | 183,000 | |
Weighted-Average Grant Date Fair Value Per Share, nonvested beginning balance | $ 14.06 | |
Number of Shares, Vested | ||
Weighted-Average Grant Date Fair Value Per Share, Vested | ||
Number of Shares, Forfeited | ||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | ||
Number of Shares, Estimated Forfeiture | ||
Weighted-Average Grant Date Fair Value Per Share, Estimated Forfeiture | ||
Number of Shares, nonvested ending balance | 183,000 | |
Weighted-Average Grant Date Fair Value Per Share, nonvested ending balance | $ 14.06 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Related Party Transactions [Abstract] | ||
Lease expenses | $ 0.2 | $ 0.2 |
Service fees | $ 0 | $ 0.1 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Employee Benefit Plan [Abstract] | ||
Total contributions | $ 2.1 | $ 1.8 |
Covid-19 Pandemic (Details)
Covid-19 Pandemic (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Dec. 31, 2021 |
Unusual or Infrequent Items, or Both [Abstract] | ||
Deferred payments | $ 4 | $ 8.1 |
Other long-term liabilities | $ 4 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate from continuing operations | 3.40% | 0.20% |
U.S. federal income tax rate | 21.00% |
Leases (Details)
Leases (Details) | Apr. 01, 2022 |
Minimum [Member] | |
Leases (Details) [Line Items] | |
Lease term | 5 years |
Maximum [Member] | |
Leases (Details) [Line Items] | |
Lease term | 10 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of components of lease cost $ in Thousands | 3 Months Ended |
Apr. 01, 2022USD ($) | |
Schedule of components of lease cost [Abstract] | |
Operating lease cost | $ 3,796 |
Short-term lease cost | 211 |
Total lease cost | $ 4,007 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of provides other key information related $ in Thousands | 3 Months Ended |
Apr. 01, 2022USD ($) | |
Schedule of provides other key information related [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | 3,717 |
Right-of-use asset obtained in exchange for new operating lease liabilities | $ 3,717 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of future minimum rental payments for operating leases $ in Thousands | Apr. 01, 2021USD ($) |
Schedule of future minimum rental payments for operating leases [Abstract] | |
2022 | $ 3,377 |
2023 | 11,982 |
2024 | 7,846 |
2025 | 3,841 |
2026 | 2,455 |
Thereafter | 3,176 |
Total | $ 32,677 |
Weighted-average discount rate | 5.37% |
Weighted-average remaining lease term (in years) | 3 years 8 months 15 days |
Current lease liabilities | $ 12,162 |
Non-current lease liabilities | 23,709 |
Right-of-use assets | $ 34,408 |