Segment and Geographic Location Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment and Geographic Location Information

18. SEGMENT AND GEOGRAPHIC LOCATION INFORMATION

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

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

During the first quarter of 2023, the Company determined to discontinue one of its specialty service lines within the lab testing business (the "Discontinued Specialty Lab"). On December 29, 2023, the Company sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million, of which $0.5 million was received in cash and $4.3 million was issued as a promissory note receivable. The promissory note receivable is subject to an annual 9.0% interest rate and will be repaid in 60 monthly installments with the remaining balance payable in full on December 29, 2028. The promissory note receivable balance, net of expected loss and payment, was $2.1 million as of March 31, 2024 and December 31, 2023, respectively. The discontinuation of this specialty service line, which was part of the Company's Measurement and Analysis segment, did not represent a strategic shift that had a major effect on the Company’s operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations.

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

Segment revenues and Adjusted EBITDA consisted of the following:

	Three Months Ended March 31,
	2024					2023
			Segment					Segment
	Segment		Adjusted			Segment		Adjusted
	Revenues		EBITDA			Revenues		EBITDA
Assessment, Permitting and Response	$	58,580	$	16,280		$	52,214	$	14,266
Measurement and Analysis		45,494		6,504			42,527		6,387
Remediation and Reuse		51,251		5,012			36,687		5,278
Total Operating Segments		155,325		27,795			131,428		25,931
Corporate and Other		—		(10,873	)		—		(9,328	)
Total	$	155,325	$	16,922		$	131,428	$	16,603

Presented below is a reconciliation of the Company’s segment measure of profit and loss to net loss:

	For the Three Months Ended March 31,
	2024				2023
Total	$	16,922			$	16,603
Interest expense, net		(3,306	)			(1,541	)
Income tax expense		(493	)			(1,367	)
Depreciation and amortization		(11,653	)			(10,555	)
Stock-based compensation		(11,272	)			(13,035	)
Acquisition costs		(2,525	)			(775	)
Fair value changes in financial instruments		297				(1,873	)
Fair value changes in business acquisition contingencies		(106	)			398
Expenses related to financing transactions		(144	)			(4	)
Discontinued Specialty Lab		(596	)	(1)		(2,436	)	(1)
Other losses and expenses		(481	)	(2)		(134	)
Net loss	$	(13,357	)		$	(14,719	)

_______________________________

(1) Amounts consist of operating losses before depreciation related to the Discontinued Specialty Lab.

(2) Amount consists of costs associated with a lease abandonment.

The following table presents revenues by geographic location:

	For the Three Months Ended March 31,
	2024		2023
United States	$	128,842	$	126,801
Canada		21,281		3,880
Other international		5,202		747
Total revenue	$	155,325	$	131,428