Segment Information and Geographic Location Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information and Geographic Location Information

19. SEGMENT INFORMATION AND GEOGRAPHIC LOCATION INFORMATION

The Company has three operating and reportable segments: Assessment, Permitting and Response, Measurement and Analysis, and Remediation and Reuse. These segments are monitored separately by management for performance against budget and prior year and are consistent with internal financial reporting. The Company’s operating segments are organized based upon primary services provided, the nature of the production process, their type of customers, methods used to distribute the products, and the nature of the regulatory environment.

Segment Adjusted EBITDA is the primary measure of operating performance for all three operating segments. Segment Adjusted EBITDA is the calculated Company’s Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”), adjusted to exclude certain transactions such as stock-based compensation, acquisition costs, and fair value changes in financial instruments, amongst others. Beginning in the first quarter of 2023, the calculation of Segment adjusted EBITDA no longer adjusts for start-up losses and investment in new services as the CODM no longer reviews the Segment Adjusted EBITDA measure without these costs. The CODM does not review segment assets as a measure of segment performance.

During the first quarter of 2023, the Company determined to discontinue one of its specialty service lines within the lab testing business (the "Discontinued Specialty Lab"). On December 29, 2023, the Company sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million, of which $0.5 million was received in cash and $4.3 million was issued as a promissory note receivable. The Company recorded a gain on the sale of $1.8 million, which is included in selling, general and administrative expense on the consolidated statements of operations and comprehensive loss. The promissory note receivable is subject to an annual 9.0% interest rate and will be repaid to the Company in 60 monthly installments with the remaining balance payable in full on December 29, 2028. Further, due to the buyers' limited credit history, the Company recorded a current expected loss of $2.2 million, which is included as part of selling, general, and administrative expense on the consolidated statements of operations and comprehensive loss. The $2.1 million promissory note receivable, net of current expected losses, is included in other assets on the consolidated statement of financial position. Additionally, the Company received $1.0 million as a security deposit for office space subleased to the buyer. Such security deposit has been placed in a separate interest-bearing account (strictly for the benefit of the buyer) and has been recorded as restricted cash and is included in other non-current liabilities on the consolidated statement of financial position. The security deposit will be released to the buyer in 2028 upon termination of the lease term. The Discontinued Specialty Lab performance was sporadic and its service offering was non-core to the Company’s business. The discontinuation of this specialty service line, which was part of

the Company's Measurement and Analysis segment, did not represent a strategic shift that had a major effect on the Company’s operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations.

Corporate and Other includes costs associated with general corporate overhead (including executive, legal, finance, safety, human resources, marketing and IT related costs) that are not directly related to supporting operations. Overhead costs that are directly related to supporting operations (such as insurance, software, licenses, shared services and payroll processing costs) are allocated to the operating segments on a basis that reasonably approximates an estimate of the use of these services.

Segment revenues and Segment Adjusted EBITDA for the years ended December 31, consisted of the following:

	2023						2022							2021
	Segment Revenues			Segment Adjusted  EBITDA			Segment Revenues			Segment Adjusted  EBITDA (3)				Segment Revenues			Segment Adjusted  EBITDA (3)
Assessment, Permitting and Response	$	220,727		$	52,148		$	187,234		$	37,458			$	261,865		$	57,128
Measurement and Analysis		197,095	(1)		37,217			172,432	(1)		31,588		(2)		153,208	(1)		31,270		(2)
Remediation and Reuse		206,386			27,087			184,750			30,616				131,340			19,326
Total Operating Segments		624,208			116,452			544,416			99,662				546,413			107,724
Corporate and Other		—			(37,876	)		—			(31,212	)			—			(30,082	)
Total	$	624,208		$	78,576		$	544,416		$	68,450			$	546,413		$	77,642

(1)Includes revenue of $8.8 million, $17.0 million and $23.9 million from the Discontinued Specialty Lab for the year ended December 31, 2023, 2022 and 2021, respectively.

(2)Includes Adjusted EBITDA of $2.1 million and $6.4 million from the Discontinued Specialty Lab for the year ended December 31, 2022 and 2021, respectively.

(3)Includes the add back of start-up losses and investment in new services of $2.3 million and $4.4 million for the year ended December 31, 2022 and 2021, respectively.

Presented below is a reconciliation of the Company’s segment measure to net loss for the years ended December 31:

	2023				2022				2021
Total	$	78,576			$	68,450			$	77,642
Interest expense, net		(7,793	)			(5,239	)			(11,615	)
Income tax benefit (expense)		980				(2,250	)			(1,709	)
Depreciation and amortization		(45,780	)			(47,479	)			(44,810	)
Stock-based compensation		(47,267	)			(43,290	)			(10,321	)
Start-up losses and investment in new services		—				(2,277	)			(4,407	)
Acquisition costs		(6,930	)			(1,891	)			(2,088	)
Fair value changes in financial instruments		4,129				3,396				(2,195	)
Fair value changes in business acquisition    contingencies		(84	)			3,227				(24,372	)
Discontinued Specialty Lab		(6,112	)	(1)		—				—
Expenses related to financing transactions		(35	)			(7	)			(50	)
Other losses or expenses, net		(543	)	(2)		(4,459	)	(3)		(1,400	)	(4)
Net loss	$	(30,859	)		$	(31,819	)		$	(25,325	)

(1)Amounts consist of operating losses before depreciation related to the Discontinued Specialty Lab, which include $2.2 million in current expected credit losses on the promissory note receivable issued upon the sale and a $1.8 million gain on the sale of its assets.

(2)Amounts are primarily comprised of lease abandonment charges and expenses related to an aircraft accident, partially offset by a gain on the surrender of a lease and an aircraft insurance gain.

(3)Amounts include costs associated with the exiting of the legacy water treatment and biogas operations and maintenance contracts and the Company's start-up lab in Berkley, California, as well as an impairment charge for certain operating lease right-of-use assets (Note 7) and severance costs related to the restructuring within the Company’s soil remediation business.

(4)Amounts include non-operational charges incurred due to the remeasurement of finance leases as a result of the adoption of ASC 842 and costs related to the implementation of a new ERP.

The following table presents revenues by geographic location for the year ended December 31:

	2023		2022		2021
United States	$	539,578	$	523,189	$	526,672
Canada		72,608		12,002		10,358
Other international		12,022		9,225		9,383
Total Revenue	$	624,208	$	544,416	$	546,413