QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | o | x | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Contract assets | |||||||||||
Notes receivable - officers, employees, affiliates, current portion | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Non-Current Assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease, right-of-use assets | |||||||||||
Goodwill | |||||||||||
Notes receivable | |||||||||||
Notes receivable - officers, employees, affiliates, less current portion | |||||||||||
Other intangible assets, net | |||||||||||
Deferred tax asset, net | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities | |||||||||||
Revolving Credit Facility | $ | $ | |||||||||
Accounts payable and accrued liabilities | |||||||||||
Contract liabilities | |||||||||||
Notes payable, current portion | |||||||||||
Operating lease obligation, current portion | |||||||||||
Finance lease obligation, current portion | |||||||||||
Total current liabilities | |||||||||||
Non-Current Liabilities | |||||||||||
Other non-current obligations | |||||||||||
Notes payable, less current portion | |||||||||||
Operating lease obligation, less current portion | |||||||||||
Finance lease obligation, less current portion | |||||||||||
Pension and post-retirement obligation, less current portion | |||||||||||
Total liabilities | $ | $ | |||||||||
Shareholders' Equity | |||||||||||
Preferred Stock, $ | $ | $ | |||||||||
Common stock, $ | |||||||||||
Additional paid-in-capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Stock subscription notes receivable | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total shareholders' equity | $ | $ | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Gross Contract Revenue | $ | $ | $ | $ | |||||||||||||||||||
Contract costs: (exclusive of depreciation and amortization below) | |||||||||||||||||||||||
Direct payroll costs | |||||||||||||||||||||||
Sub-consultants and expenses | |||||||||||||||||||||||
Total contract costs | |||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
(Gain) on sale | ( | ( | ( | ( | |||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other expense | |||||||||||||||||||||||
Income (loss) before tax expense | ( | ||||||||||||||||||||||
Income tax (benefit) expense | ( | ( | ( | ( | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings allocated to non-vested shares | $ | $ | |||||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Pension and post-retirement adjustments | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Income tax provision related to items of other comprehensive income (loss) | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income, net of tax | $ | $ |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Stock Subscription Notes Receivable | Accumulated Deficit | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares in common stock offering | — | — | — | – | – | – | – | – | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | – | – | – | — | — | – | – | – | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | ( | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Collection on stock subscription notes receivable | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Net Income | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | – | – | – | ( | ( | – | – | – | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | – | — | – | – | – | – | – | — | |||||||||||||||||||||||||||||||||||||||||||||
Cancellation of common shares under stock compensation plan | ( | – | — | – | – | – | – | – | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Collections on stock subscription notes receivable | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Exercises of conversion feature of convertible note | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | – | – | – | – | – | ( | – | – | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net Income | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Stock Subscription Notes Receivable | Accumulated Deficit | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares in common stock offering | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | – | – | – | ( | ( | – | – | – | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | ( | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Collection on stock subscription notes receivable | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Conversion of redeemable common stock to permanent equity | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | – | – | – | ( | ( | – | – | – | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | ( | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of common shares under stock compensation plan | ( | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Collections on stock subscription notes receivable | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Exercises of conversion feature of convertible note | – | – | — | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | – | – | – | – | – | ( | – | – | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net Income | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ |
For the Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net Income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of intangible assets | |||||||||||
Gain on sale of assets | ( | ( | |||||||||
Bad debt | |||||||||||
Stock based compensation | |||||||||||
Accretion of discounts on notes payable | |||||||||||
Deferred taxes | ( | ( | |||||||||
Deferred rent | ( | ||||||||||
Changes in operating assets and liabilities, net of acquisition of businesses | |||||||||||
Accounts receivable | ( | ( | |||||||||
Contract assets | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | |||||||||||
Contract liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Fixed assets converted to lease financing | |||||||||||
Proceeds from sale of assets and disposal of leases | |||||||||||
Payments received under loans to shareholders | |||||||||||
Acquisitions of businesses, net of cash acquired | ( | ( | |||||||||
Collections under stock subscription notes receivable | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities: | |||||||||||
Proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs | |||||||||||
Borrowings under revolving credit facility | |||||||||||
Repayments under fixed line of credit | ( | ( | |||||||||
Repayment under notes payable | ( | ( | |||||||||
Payments on finance leases | ( | ( | |||||||||
Payments for purchase of treasury stock | ( | ( | |||||||||
Proceeds from issuance of common stock | |||||||||||
Net cash provided by financing activities | |||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | ||||||||||
Non-cash investing and financing activities: | |||||||||||
Property and equipment acquired under finance lease | $ | ( | $ | ( | |||||||
Note payable converted to common shares | $ | ( | $ | ||||||||
Issuance of notes payable for acquisitions | $ | ( | $ | ( |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings allocated to non-vested shares | |||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | |||||||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Effect of dilutive nominal options | |||||||||||||||||||||||
Effect of dilutive contingently earned shares | |||||||||||||||||||||||
Dilutive average shares outstanding | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Dilutive earnings per share | $ | $ | $ | $ |
Total Purchase Price | $ | ||||
Purchase Price Allocation: | |||||
Accounts receivable | |||||
Contract assets | |||||
Prepaid and other current assets | |||||
Property and equipment, net | |||||
Intangible assets | |||||
Accounts payable and accrued liabilities, current portion | ( | ||||
Contract liabilities | ( | ||||
Other non-current obligations | ( | ||||
Finance leases - non-current | |||||
Total identifiable assets | $ | ||||
Goodwill | |||||
Net assets acquired | $ |
For the Three Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2023 | |||||||
Gross Contract Revenue | $ | $ | ||||||
Pre-tax Net Income | $ | $ |
For the Three Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2023 | |||||||
Gross Contract Revenue1 | $ | $ | ||||||
Pre-tax Net Income | $ | $ |
For the Three Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2023 | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Gross Contract Revenue2 | $ | $ | $ | $ | |||||||||||||
Pre-tax Net Income | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed fee | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Time-and-materials | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Gross contract revenue | $ | % | $ | % | $ | % | $ | % |
September 30, 2023 | December 31, 2022 | ||||||||||
Costs incurred on uncompleted contracts | $ | $ | |||||||||
Estimated contract earnings in excess of costs incurred | |||||||||||
Estimated contract earnings to date | |||||||||||
Less: billed to date | ( | ( | |||||||||
Net contract assets | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Officers, employees and affiliated entities - Interest accrues annually at rates ranging from | $ | $ | |||||||||
Unrelated third party - Currently | |||||||||||
Total: | |||||||||||
Less: current portion | |||||||||||
Officers, employees and affiliates | ( | ( | |||||||||
Noncurrent portion | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Computer equipment | $ | $ | |||||||||
Survey equipment | |||||||||||
Vehicles | |||||||||||
Furniture and fixtures | |||||||||||
Leasehold improvements | |||||||||||
Software | |||||||||||
Fixed assets pending lease financing 1 | |||||||||||
Total: | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and Equipment, net of finance leased assets | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Equipment | $ | $ | |||||||||
Vehicles | |||||||||||
Total: | |||||||||||
Less: accumulated amortization on leased assets | ( | ( | |||||||||
Finance Leased Assets, net | $ | $ |
Goodwill | |||||
Balance as of December 31, 2022 | $ | ||||
Goodwill Acquired | |||||
Balance as of September 30, 2023 | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Amount | Accumulated Amortization | Net Balance | Gross Amount | Accumulated Amortization | Net Balance | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Contract rights | ( | ( | |||||||||||||||||||||||||||||||||
Leasehold | ( | ( | |||||||||||||||||||||||||||||||||
Domain name | – | – | |||||||||||||||||||||||||||||||||
Licensing rights | – | – | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Customer relationships | |||||||||||
Contract rights | |||||||||||
Leasehold |
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Related parties: | |||||||||||
1Shareholders and Owners of Acquired Entities - Interest accrues annually at rates ranging from | |||||||||||
Convertible Notes Payable - Interest accrues annually at rates ranging from | |||||||||||
Unrelated third parties: | |||||||||||
Note payable for purchase of software and vehicles | |||||||||||
Note payable for purchase of intangible asset | |||||||||||
Fixed line notes payable - see note 11 | |||||||||||
Discounts on notes payable issued as consideration in acquisitions: | |||||||||||
1Shareholders and Owners of acquired entities | ( | ( | |||||||||
Total | |||||||||||
Less: current portion | ( | ( | |||||||||
Noncurrent portion | $ | $ |
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
(Amounts in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||||||
Service (income) costs | $ | ( | $ | $ | $ | ||||||||||||||||||
Amortization of net gain | ( | ( | |||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ |
September 30, 2023 | |||||
Total purchase price paid by employees for shares sold | $ | ||||
Number of shares sold |
Number of shares | Weighted Average Exercise Price | ||||||||||
Outstanding at December 31, 2022 | $ | ||||||||||
Granted | |||||||||||
Exercised | ( | ||||||||||
Expired or cancelled | |||||||||||
Outstanding at September 30, 2023 | $ |
Options Outstanding and Exercisable | |||||||||||||||||||||||||||||
Exercise Price | Total Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Total Exercisable | |||||||||||||||||||||||||
December 31, 2022 | $ | $ | |||||||||||||||||||||||||||
September 30, 2023 | $ | $ |
Number of shares | Weighted Average Grant Price | ||||||||||
Outstanding at January 1, 2023 | |||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Cancelled | ( | ||||||||||
Outstanding at September 30, 2023 |
Number of shares | Weighted Average Grant Price | ||||||||||
Outstanding at January 1, 2023 | |||||||||||
Granted | |||||||||||
Vested | |||||||||||
Cancelled | |||||||||||
Outstanding at September 30, 2023 |
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
As of | As of | |||||||||||||||||||
(Amounts in thousands) | Balance Sheet Classification | September 30, 2023 | December 31, 2022 | |||||||||||||||||
Assets: | ||||||||||||||||||||
Operating lease assets | Operating lease, right-of-use assets | $ | $ | |||||||||||||||||
Finance lease assets | $ | $ | ||||||||||||||||||
Total lease assets | $ | $ | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease obligation, current portion | $ | ( | $ | ( | |||||||||||||||
Finance lease liabilities | Finance lease obligation, current portion | $ | ( | $ | ( | |||||||||||||||
Total current lease liabilities | $ | ( | $ | ( | ||||||||||||||||
Non-current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease obligation, less current portion | $ | ( | $ | ( | |||||||||||||||
Finance lease liabilities | Finance lease obligation, less current portion | $ | ( | $ | ( | |||||||||||||||
Total non-current lease liabilities | $ | ( | $ | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(Amounts in thousands) | September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||
Operating lease cost | |||||||||||||||||||||||
Amortization of right-of-use assets | $ | $ | $ | $ | |||||||||||||||||||
Finance lease cost: | |||||||||||||||||||||||
Amortization of right-of-use assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Sublease Income | ( | ( | |||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
Nine Months Ended | |||||||||||
(Amounts in thousands) | September 30, 2023 | September 30, 2022 | |||||||||
Cash paid for amounts included in the measurements of lease liabilities | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
Right-of-use assets obtained in exchange for new operating leases | |||||||||||
Right-of-use assets obtained in exchange for new finance leases |
As of | As of | ||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Weighted average remaining lease term (in years): | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted average discount rates: | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
(Amounts in thousands) | |||||||||||
Year ending December 31, | Operating Lease | Finance Lease | |||||||||
2023 (three months remaining) | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total lease payments | $ | $ | |||||||||
Less: Amounts representing interest | $ | ( | $ | ( | |||||||
Total lease liabilities | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Gross contract revenue | $ | 94,434 | $ | 71,246 | $ | 253,290 | $ | 186,105 | |||||||||||||||
Contract costs (exclusive of depreciation and amortization) | 45,693 | 33,984 | 124,098 | 90,439 | |||||||||||||||||||
Operating expense | 46,125 | 35,043 | 126,155 | 91,125 | |||||||||||||||||||
Income from operations | 2,616 | 2,219 | 3,037 | 4,541 | |||||||||||||||||||
Other expense | 1,495 | 595 | 3,852 | 2,086 | |||||||||||||||||||
Income tax expense (benefit) | (62) | (1,773) | (1,901) | (2,079) | |||||||||||||||||||
Net income | $ | 1,183 | $ | 3,397 | $ | 1,086 | $ | 4,534 | |||||||||||||||
Net margin | 1.3 | % | 4.8 | % | 0.4 | % | 2.4 | % | |||||||||||||||
Other financial information 1 | |||||||||||||||||||||||
Net service billing | $ | 82,124 | $ | 64,903 | $ | 223,479 | $ | 169,019 | |||||||||||||||
Adjusted EBITDA | 15,057 | 9,624 | 35,783 | 24,606 | |||||||||||||||||||
Adjusted EBITDA margin, net | 18.3 | % | 14.8 | % | 16.0 | % | 14.6 | % |
For the Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Consolidated Gross Contract Revenue | 2023 | %GCR | 2022 | %GCR | Change | % Change | |||||||||||||||||||||||||||||
Building Infrastructure | $ | 51,909 | 55.0 | % | $ | 44,765 | 62.8 | % | $ | 7,144 | 16.0 | % | |||||||||||||||||||||||
Transportation | 19,769 | 20.9 | % | 13,218 | 18.6 | % | 6,551 | 49.6 | % | ||||||||||||||||||||||||||
Power & Utilities | 18,586 | 19.7 | % | 8,809 | 12.4 | % | 9,777 | 111.0 | % | ||||||||||||||||||||||||||
Other Emerging Markets 1 | 4,170 | 4.4 | % | 4,454 | 6.2 | % | (284) | (6.4) | % | ||||||||||||||||||||||||||
Total: | $ | 94,434 | 100.0 | % | $ | 71,246 | 100.0 | % | $ | 23,188 | 32.5 | % | |||||||||||||||||||||||
Organic | $ | 79,003 | 83.7 | % | $ | 71,078 | 99.8 | % | $ | 7,925 | 11.1 | % | |||||||||||||||||||||||
Acquired 2 | 15,431 | 16.3 | % | 168 | 0.2 | % | 15,263 | n/a | |||||||||||||||||||||||||||
Total: | $ | 94,434 | 100.0 | % | $ | 71,246 | 100.0 | % | $ | 23,188 | 32.5 | % |
For the Three Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Gross contract revenue | $ | 94,434 | $ | 71,246 | |||||||
Less: sub-consultants and other direct expenses | 12,310 | 6,343 | |||||||||
Net service billing | $ | 82,124 | $ | 64,903 |
For the Three Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
Net Service Billing | $ | 82,124 | $ | 64,903 | $ | 17,221 | 26.5 | % | |||||||||||||||
Net Income | $ | 1,183 | $ | 3,397 | $ | (2,214) | (65.2) | % | |||||||||||||||
+ interest expense | 1,538 | 538 | 1,000 | 185.9 | % | ||||||||||||||||||
+ depreciation & amortization | 4,500 | 3,138 | 1,362 | 43.4 | % | ||||||||||||||||||
+ tax expense | (62) | (1,773) | 1,711 | (96.5) | % | ||||||||||||||||||
EBITDA | $ | 7,159 | $ | 5,300 | $ | 1,859 | 35.1 | % | |||||||||||||||
+ non-cash stock compensation | 7,158 | 4,214 | 2,944 | 69.9 | % | ||||||||||||||||||
+ transaction related expenses | 63 | – | 63 | 100.0 | % | ||||||||||||||||||
+ settlements and other non-core expenses | 560 | – | 560 | 100.0 | % | ||||||||||||||||||
+ acquisition expenses | 117 | 110 | 7 | 6.4 | % | ||||||||||||||||||
Adjusted EBITDA | $ | 15,057 | $ | 9,624 | $ | 5,433 | 56.5 | % | |||||||||||||||
Adjusted EBITDA margin, net | 18.3 | % | 14.8 | % |
For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Consolidated Gross Contract Revenue | 2023 | %GCR | 2022 | %GCR | Change | % Change | |||||||||||||||||||||||||||||
Building Infrastructure | $ | 144,862 | 57.2 | % | $ | 126,093 | 67.8 | % | $ | 18,769 | 14.9 | % | |||||||||||||||||||||||
Transportation | 51,658 | 20.4 | % | 26,464 | 14.2 | % | 25,194 | 95.2 | % | ||||||||||||||||||||||||||
Power & Utilities | 47,481 | 18.7 | % | 24,370 | 13.1 | % | 23,111 | 94.8 | % | ||||||||||||||||||||||||||
Other Emerging Markets 1 | 9,289 | 3.7 | % | 9,178 | 4.9 | % | 111 | 1.2 | % | ||||||||||||||||||||||||||
Total: | $ | 253,290 | 100.0 | % | $ | 186,105 | 100.0 | % | $ | 67,185 | 36.1 | % | |||||||||||||||||||||||
Organic | $ | 226,240 | 89.3 | % | $ | 185,937 | 99.9 | % | $ | 40,303 | 21.7 | % | |||||||||||||||||||||||
Acquired 2 | 27,050 | 10.7 | % | 168 | 0.1 | % | 26,882 | n/a | |||||||||||||||||||||||||||
Total: | $ | 253,290 | 100.0 | % | $ | 186,105 | 100.0 | % | $ | 67,185 | 36.1 | % |
For the Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Gross contract revenue | $ | 253,290 | $ | 186,105 | |||||||
Less: sub-consultants and other direct expenses | 29,811 | 17,086 | |||||||||
Net service billing | $ | 223,479 | $ | 169,019 |
For the Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
Net Service Billing | $ | 223,479 | $ | 169,019 | $ | 54,460 | 32.2 | % | |||||||||||||||
Net Income | $ | 1,086 | $ | 4,534 | $ | (3,448) | (76.0) | % | |||||||||||||||
+ interest expense | 3,545 | 1,223 | 2,322 | 189.9 | % | ||||||||||||||||||
+ depreciation & amortization | 12,785 | 8,350 | 4,435 | 53.1 | % | ||||||||||||||||||
+ tax expense | (1,901) | (2,079) | 178 | (8.6) | % | ||||||||||||||||||
EBITDA | $ | 15,515 | $ | 12,028 | $ | 3,487 | 29.0 | % | |||||||||||||||
+ non-cash stock compensation | 18,480 | 11,487 | 6,993 | 60.9 | % | ||||||||||||||||||
+ transaction related expenses | 186 | – | 186 | 100.0 | % | ||||||||||||||||||
+ settlements and other non-core expenses | 674 | 215 | 459 | 213.5 | % | ||||||||||||||||||
+ acquisition expenses | 928 | 876 | 52 | 5.9 | % | ||||||||||||||||||
Adjusted EBITDA | $ | 35,783 | $ | 24,606 | $ | 11,177 | 45.4 | % | |||||||||||||||
Adjusted EBITDA margin, net | 16.0 | % | 14.6 | % |
September 30, 2023 | December 31, 2022 | ||||||||||
Building Infrastructure | 54 | % | 51 | % | |||||||
Transportation | 25 | % | 31 | % | |||||||
Power & Utilities | 19 | % | 13 | % | |||||||
Other Emerging Markets | 2 | % | 5 | % |
For the Nine Months Ended September 30, | |||||||||||
Condensed Consolidated Statements of Cash Flows (amounts in thousands) | 2023 | 2022 | |||||||||
Net cash provided by operating activities | $ | 12,271 | $ | 12,170 | |||||||
Net cash used in investing activities | (16,999) | (15,231) | |||||||||
Net cash provided by financing activities | 5,877 | 6,286 | |||||||||
Change in cash, cash equivalents and restricted cash | 1,149 | 3,225 | |||||||||
Cash and cash equivalents, end of period | 14,431 | 23,844 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||||
07/1/23 - 07/31/23 | - | - | - | 10,000,000 | ||||||||||||||||||||||
08/1/23 - 08/31/23 | - | - | - | 10,000,000 | ||||||||||||||||||||||
09/1/23 - 09/30/23 | - | 25.89 | 300 | 9,992,233 | ||||||||||||||||||||||
Total | - | 25.89 | 300 | 9,992,233 |
Exhibit Number | Description | |||||||
31.1* | ||||||||
31.2* | ||||||||
32.1*+ | ||||||||
32.2*+ | ||||||||
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101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
BOWMAN CONSULTING GROUP LTD. | ||||||||
Date: November 7, 2023 | By: | /s/ Gary Bowman | ||||||
Gary Bowman | ||||||||
President, CEO and Chairman (Principal Executive Officer) | ||||||||
Date: November 7, 2023 | By: | /s/ Bruce Labovitz | ||||||
Bruce Labovitz | ||||||||
Chief Financial Officer (Principal Financial Officer) |
Date: November 7, 2023 | By: /s/ Gary Bowman | ||||
Gary Bowman | |||||
President, CEO and Chairman | |||||
(Principal Executive Officer) |
Date: November 7, 2023 | By: /s/ Bruce Labovitz | ||||
Bruce Labovitz | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
Date: November 7, 2023 | By: /s/ Gary Bowman | ||||
Gary Bowman | |||||
President, CEO and Chairman | |||||
(Principal Executive Officer) |
Date: November 7, 2023 | By: /s/ Bruce Labovitz | ||||
Bruce Labovitz | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 17,164,788 | 15,949,805 |
Common stock, shares outstanding (in shares) | 14,634,602 | 13,556,550 |
Treasury stock, at cost shares (in shares) | 2,530,186 | 2,393,255 |
Condensed Consolidated Income Statements - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Gross Contract Revenue | $ 94,434 | $ 71,246 | $ 253,290 | $ 186,105 |
Contract costs: (exclusive of depreciation and amortization below) | ||||
Direct payroll costs | 33,383 | 27,641 | 94,287 | 73,353 |
Sub-consultants and expenses | 12,310 | 6,343 | 29,811 | 17,086 |
Total contract costs | 45,693 | 33,984 | 124,098 | 90,439 |
Operating Expenses: | ||||
Selling, general and administrative | 41,735 | 31,916 | 113,717 | 82,819 |
Depreciation and amortization | 4,500 | 3,138 | 12,785 | 8,350 |
(Gain) on sale | (110) | (11) | (347) | (44) |
Total operating expenses | 46,125 | 35,043 | 126,155 | 91,125 |
Income from operations | 2,616 | 2,219 | 3,037 | 4,541 |
Other expense | 1,495 | 595 | 3,852 | 2,086 |
Income (loss) before tax expense | 1,121 | 1,624 | (815) | 2,455 |
Income tax (benefit) expense | (62) | (1,773) | (1,901) | (2,079) |
Net income | 1,183 | 3,397 | 1,086 | 4,534 |
Earnings allocated to non-vested shares | 146 | 504 | 140 | 731 |
Net income attributable to common shareholders | $ 1,037 | $ 2,893 | $ 946 | $ 3,803 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.08 | $ 0.26 | $ 0.08 | $ 0.36 |
Diluted (in dollars per share) | $ 0.08 | $ 0.25 | $ 0.07 | $ 0.34 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 12,814,971 | 11,304,946 | 12,304,751 | 10,669,221 |
Diluted (in shares) | 13,793,120 | 11,768,411 | 13,437,841 | 11,129,478 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,183 | $ 3,397 | $ 1,086 | $ 4,534 |
Other comprehensive income | ||||
Pension and post-retirement adjustments | (11) | 0 | (32) | 0 |
Other comprehensive income (loss) | (11) | 0 | (32) | 0 |
Income tax provision related to items of other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | (11) | 0 | (32) | 0 |
Comprehensive income, net of tax | $ 1,172 | $ 3,397 | $ 1,054 | $ 4,534 |
Nature of Business and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Nature Of Business And Basis Of Presentation [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Nature of Business Bowman Consulting Group Ltd. (along with its consolidated subsidiaries, “Bowman” or “we” or the “Company”) incorporated in the Commonwealth of Virginia on June 5, 1995 and reincorporated in the State of Delaware on November 13, 2020. Bowman is a professional services firm delivering innovative solutions to the marketplace of customers who own, develop and maintain the built environment. Within that arena, we provide planning, design, engineering, geospatial, survey, construction management, environmental consulting and land procurement services to markets that encompass the buildings in which people live, work and learn in; as well as the systems that provide water, electricity and other vital services, and the roads, bridges, and transportation systems used to get from place to place. We provide services to customers through fixed-price and time-and-material based contracts containing multiple milestones and independently priced deliverables. Typically, contract awards are on a negotiated basis, ranging in value from a few thousand dollars to multiple millions of dollars and can have varying durations depending on the size, scope, and complexity of the project. The Company’s workforce typically provides the full scope of engineering and other contract services. However, with respect to certain specialty services or other compliance requirements within a particular contract, we may engage third-party sub-consultants. The Company’s headquarters is located in Reston, VA and the Company has over 80 offices throughout the United States and one office in Mexico. Common Stock Offering On February 11, 2022, the Company closed on an offering of common stock in which it issued and sold 900,000 shares at an offering price of $16.00 per share, resulting in net proceeds of $13.7 million after deducting underwriting discounts and commissions, but before expenses of the offering. On February 28, 2022, the underwriters exercised their option to purchase an additional 157,500 shares of the Company’s common stock at an offering price of $16.00 per share, resulting in additional gross proceeds of approximately $2.5 million. After giving effect to this exercise of the overallotment option, the total number of shares sold by the Company in this common stock offering increased to 1,057,500 shares with total gross proceeds of approximately $16.9 million. The exercise of the over-allotment option closed on March 2, 2022, at which time the Company received net proceeds of $2.4 million after underwriting discounts and commissions. Deferred offering costs consist primarily of accounting, legal and other fees related to the common stock offering. Prior to the offering, all deferred offering costs were capitalized within prepaid and other current assets in the consolidated balance sheet. No deferred offering costs were capitalized in the consolidated balance sheet as of September 30, 2023. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in shareholders’ equity and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 15, 2023. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
|
Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The following is a summary of the significant accounting policies and principles used in the preparation of the condensed consolidated financial statements: Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act (“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 Securities Exchange Act of 1934 (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 that is either not an emerging growth company or, an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. Revenue Recognition As discussed in Note 1, the Company provides a variety of engineering and related professional services to customers located throughout the United States. The Company enters into agreements with clients that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services transfer to the customer. It is customary practice for the Company to have written agreements with its customers and revenue on oral or implied arrangements is generally not recognized. The Company recognizes revenue based on the consideration specified in the applicable agreement. Excluded from the transaction price are amounts collected on behalf of third parties for sales and similar taxes. Long-term contracts typically contain billing terms that provide for invoicing once a month and payment on a net 30-day basis. Exceptions to monthly billing terms are to ensure that the Company performs satisfactorily rather than representing a significant financing component. For example, fixed price contracts may provide for milestone billings based upon the attainment of specific project objectives to ensure the Company meets its contractual requirements rather than having billing monthly. Additionally, contracts may include retentions or holdbacks paid at the end of a project to ensure that Company meets the contract requirements. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between payment by the customer and the transfer of promised services to the customer will be less than one year. As a professional services engineering firm, the Company generally recognizes revenue over time as control transfers to a customer based upon the extent of progress towards satisfaction of the performance obligation. For services delivered under fixed price contracts, the Company uses the ratio of actual costs incurred to total estimated costs since costs incurred (an input method) which represents a reasonable measure of progress towards the satisfaction of a performance in order to estimate the portion of revenue earned. This method faithfully depicts the transfer of value to the customer when the Company is satisfying a performance obligation that entails a number of interrelated tasks or activities for a combined output that requires the Company to coordinate the work of employees and sub-consultants. Contract costs typically include direct labor, subcontract and consultant costs, materials and indirect costs related to contract performance. Changes in estimated costs to complete these obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates to be recognized in the current period. Changes in estimates can routinely occur over the contract term for a variety of reasons including, changes in scope, unanticipated costs, delays or favorable or unfavorable progress than original expectations. In situations where the estimated costs to perform exceeds the consideration to be received, the Company accrues the entire estimated loss during the period the loss becomes known. When a performance obligation is billed using a time-and-material type contract, the Company measures its progress to complete based upon the hours incurred for the period times contractually agreed upon billing rates plus any materials delivered or consumed in the project. When applicable, the Company will recognize revenue under these contracts as invoiced under the practical expedient. In certain situations, it is possible that two or more contracts should be combined and accounted for as a single contract, or a single contract should be accounted for as multiple performance obligations. This requires significant judgment and could impact the amount and timing of revenue recognition. Such determinations are made using management’s best estimate and knowledge of contracts and related performance obligations. The Company’s contracts may contain variable consideration in the form of unpriced or pending change orders or claims that either increase or decrease the contract price. Variable consideration is generally estimated using the expected value method but may from time to time be estimated using the most likely amount method depending on the circumstance. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are based upon historical experience and known trends. The Company recognizes claims against vendors, sub-consultants, and others as a reduction in costs when the contract establishes enforceability, and the amounts of recovery are reasonably estimable and probable. Reduction in costs are recognized at the lesser of the amount management expects to recover or costs incurred. Contract related assets and liabilities are classified as current assets and current liabilities. Significant balance sheet accounts related to the revenue cycle are as follows: Accounts receivables, net: Accounts receivable, net (contract receivables) includes amounts billed under the contract terms. The amounts are stated at their net realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated number of receivables that will not be collected. The Company considers several factors in its estimate of the allowance, including knowledge of a client’s financial condition, its historical collection experience, and other factors relevant to assessing the collectability of such receivables. Contract Assets: Contract Assets are recorded when progress to completion revenue earned on contracts exceeds amounts billed under the contract. It may also include contract retainages that can be billed once contract stipulations are satisfied. Contract Liabilities: Contract Liabilities are recorded when amounts billed under a contract exceeds the progress to completion revenue earned under the contract. Use of Estimates The preparation of financial statements in conformity with U.S. 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 vary from the estimates and assumptions that were used. Concentration of Credit Risk and other Concentrations The Company’s financial instruments that are exposed to concentrations of credit risk consist of cash and accounts receivable. Cash balances at various times during the year may exceed the amount insured by the Federal Deposit Insurance Corporation. The Company’s cash deposits are held in institutions whose credit ratings are monitored by management, and the Company has not incurred any losses related to such deposits. The Company can, at times, be subject to a concentration of credit risk with respect to outstanding accounts receivable. However, the Company believes no such concentration existed during the nine months ended September 30, 2023, or the year ended December 31, 2022. The Company’s customers are located throughout the United States. Although the Company generally grants credit without collateral, management believes that its contract acceptance, billing, and collection policies are adequate to minimize material credit risk. Also, for non-governmental customers, the Company can often place mechanics liens against the real property associated with the contract in the event of non-payment. Fair Value Measurements Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides the framework for measuring and reporting financial assets and liabilities at fair value. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The codification establishes a three-level disclosure hierarchy to indicate the level of judgment used to estimate fair value measurements: Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date; Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices (such as interest rate and yield curves); Level 3: Uses inputs that are unobservable, supported by little or no market activity and reflect significant management judgment. As of September 30, 2023 and December 31, 2022: •The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short duration of these instruments; •The carrying amounts of debt obligations approximate their fair values as the terms are comparable to terms currently offered by local financial institutions for arrangements with similar terms to industry peers with comparable credit characteristics. Accordingly, the debt obligations involve Level 2 fair value inputs; •The liability related to shares subject to repurchase was recognized at fair value using Level 1 inputs as there is an active market for the Company’s publicly traded stock. There was no remaining liability as of December 31, 2022. For further discussion, see Note 15, Employee Stock Purchase and Stock Incentive Plans. Fair value measurements relating to our business combinations are made primarily using Level 3 inputs including discounted cash flow and to the extent applicable, Monte Carlo simulation techniques. Fair value for the identified intangible assets is generally estimated using inputs primarily for the income approach using the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rates and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as property, plant and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. The fair value of the contingent consideration is estimated using published treasury rates in the Wall St. Journal and discounting the present value along with other significant assumptions which include projections of revenue, and probabilities of meeting those projections. Income Taxes The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events recognized in the consolidated financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when the differences settle or become realized. Valuation allowances are provided when it is more likely than not that a deferred tax asset is not realizable or recoverable in the future. As of September 30, 2023, no valuation allowances are required, and all deferred tax assets are realizable. The Company assesses uncertain tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service or other taxing authorities. If the Company cannot reach a more-likely-than-not determination, no benefit is recorded. If the Company determines that the tax position is more likely than not to be sustained, the Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Beginning January 1, 2022, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the option to deduct research and development expenditures in the current year and now requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. As a result of this provision of the TCJA, we have established a $24.2 million uncertain tax position related to capitalized and amortizable research and development ("R&D") costs as of the nine-month period ended September 30, 2023. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company’s effective tax rate for the nine months ended September 30, 2023 and 2022 was 233.4% and (84.7)%, respectively. Historically, the Company calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective rate for the full fiscal year to the year-to-date ordinary income or loss, excluding unusual or infrequently occurring discrete items. During the quarter ended September 30, 2023, the Company incurred unanticipated, non-reocurring current period expenses resulting in a quarterly loss while still anticipating annual projected income. Coupled with significant favorable R&D tax credits in both the quarter and projected for the year, the Company determined that utilizing the actual year-to-date financials resulted in a more reliable effective tax rate for quarter ending September 30, 2023. Furthermore, the Company also recognized net discrete benefits of $1.5 million for the nine months ended September 30, 2023, as compared to net discrete benefit of $2.1 million for the nine months ended September 30, 2022. The discrete benefits are predominantly the result of a windfall tax benefit for restricted stock awards and other non-recurring adjustments. More specifically, the windfall tax adjustment for restricted stock awards recognized at a value higher than the grant date fair value is $2.1 million for the nine months ended September 30, 2023, and $0.5 million for the nine months ended September 30, 2022. In addition, the Company recognized a one-time adjustment to the state income taxes payable, resulting in $0.2 million net discrete expense. These factors increased the rate by 186.6% and reduced the rate by 85.3% for the quarters ended September 30, 2023, and September 30, 2022, respectively. For year ended December 31, 2022, the Company filed Form 3115, Application for Change in Accounting Method, with the Internal Revenue Service requesting to change its method of deducting stock-based compensation expense from an impermissible method to a permissible method; on July 27, 2022, the Form 3115 was approved by the Internal Revenue Service, which resulted in a reversal of a $1.9 million uncertain tax position to a deferred tax liability. In addition, the Company recorded a $0.4 million uncertain tax position during the year ended December 31, 2022, related to the annual limitation on the deductibility of executive compensation claimed on a prior period U.S. federal income tax return. The Company files income tax returns in the U.S. federal jurisdiction and certain states in which it operates. Based on the timing of the filing of certain tax returns, the Company’s federal income tax returns for tax years 2019 and thereafter remain subject to examination by the U.S. Internal Revenue Service. The statute of limitations on the Company’s state income tax returns generally conforms to the federal three-year statute of limitations. Segments The Company operates in one segment based upon the financial information used by its chief operating decision maker in evaluating the financial performance of its business and allocating resources. The single segment represents the Company’s core business of providing engineering and related professional services to its customers. Recently Issued Accounting Guidance Accounting guidance recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be incurred before it is recognized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard applies to accounts receivable, notes, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. Adoption of ASU 2016-13 has been applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted the new guidance starting January 1, 2023. The impact of this ASU is reflected in the consolidated financial statements and was not material. The Company does not believe that any recently issued standards other than those noted above as material would have a material effect on its consolidated financial statements.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing net income attributable to the Company available to common stockholders by the weighted average number of common shares outstanding for the three and nine months ended September 30, 2023 and 2022. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were either exercised or converted into common stock or resulted in the issuance of common stock that would share in the earnings of the Company. The dilutive effect of options is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of shares to be purchased under the Company’s Employee Stock Purchase Plan is reflected in diluted earnings per share by the weighted-average number of shares outstanding that would have been outstanding during the period. The dilutive effect of convertible debt is reflected in diluted earnings per share by application of the if-converted method. The Company uses the two-class method to determine earnings per share. For calculating basic earnings per share, for the three and nine months ended September 30, 2023, the weighted average number of shares outstanding exclude 1,795,553 and 1,806,070 non-vested restricted shares and 7,273 and 8,501 unexercised substantive options. The computation of diluted earnings per share for the three and nine months ended September 30, 2023 did not assume the effect of restricted shares or substantive options because the effects were antidilutive. For calculating basic earnings per share, for the three and nine months ended September 30, 2022, the weighted average number of shares outstanding exclude 1,959,714 and 2,037,620 non-vested restricted shares and 12,316 and 13,442 unexercised substantive options. The computation of diluted earnings per share for the three and nine months ended September 30, 2022 did not assume the effect of restricted shares or substantive options because the effects were antidilutive. The following table represents a reconciliation of the net income and weighted average shares outstanding for the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except share data):
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Business Combinations Project Design Consultants, LLC. The Company signed a purchase agreement to acquire Project Design Consultants, LLC (“PDC”), with an effective date of July 15, 2022. PDC is a civil engineering and land surveying firm based in San Diego, CA. The Company paid total consideration of $14.2 million, which was comprised of cash, two promissory notes, a convertible note and assumed liabilities. The two promissory notes bear a simple interest rate fixed at 4.75%. The first promissory note is payable in equal quarterly payments of principal and interest beginning on October 15, 2022 and ending July 15, 2025 .The second promissory note is payable in two installments of principal and interest due on March 15, 2023 and on the first anniversary of the closing date. The convertible note bears simple interest fixed at 4.75% and is convertible into shares of common stock at any time, at a conversion price of $14.00 per share. Subject to the exercise of the conversion, the convertible note will have quarterly payments of principal, interest or both beginning October 2022 and ending April 2027. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The following summarizes the final calculations of the fair values of PDC assets acquired and liabilities assumed as of the acquisition date (in thousands):
For the three months ended September 30, 2023, the Company recorded no measurement period adjustments. The purchase price allocation consists primarily of intangible assets. Identified intangible assets are comprised of customer relationships and contract rights of $7.5 million and $2.8 million, respectively, to be amortized over estimated useful lives of 10 years and 3 years, respectively. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The purchase price allocation has been completed and the amounts are deemed final. The consolidated financial statements of the Company include the results of operations since the date the business was acquired. The following table presents the results of operations of the acquired business from the date of acquisition for the three and nine months ended September 30, 2023 (in thousands):
Anchor Consultants, LLC. The Company signed a purchase agreement to acquire Anchor Consultants, LLC (“Anchor”), with an effective date of August 26, 2022. Anchor is an engineering firm based in Chadds Ford, PA specializing in the planning, permitting, design and construction management of infrastructure that forms the waterfront of the nation’s inland waterways. The Company paid total consideration of $4.0 million, which was comprised of cash, promissory notes, a convertible note and assumed liabilities. The promissory note bears a simple interest rate fixed at 5.50% with equal quarterly payments beginning on November 26, 2022 and ending on August 26, 2025. The convertible note bears a simple interest rate fixed at 5.50% and is convertible into shares of common stock at any time at a conversion price of $18.00 per share. Subject to the exercise of the conversion, the convertible note has quarterly payments of principal, interest or both beginning November 2022 and ending May 2027. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase price allocation consists primarily of goodwill and intangible assets, in the amount of $4.0 million. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The purchase price allocation has been completed and the amounts are deemed final. SEI Engineering, LLC In the fourth quarter of 2022, the Company signed a purchase agreement to acquire SEI Engineering, LLC (“SEI”), with an effective date of November 2, 2022. SEI is a professional firm based in Paonia, CO. The Company paid total consideration of $0.8 million, which was comprised of $0.4 million in cash, two promissory notes, and assumed liabilities. The two promissory notes bears a simple interest rate fixed at 6.25%. The first promissory note is payable in equal quarterly payments of principal and interest beginning on February 4, 2023 and ending November 4, 2025. The second promissory note was payable in one installment of principal and interest due on March 15, 2023. For tax purposes, the acquisition will be treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase price allocation consists primarily of goodwill, and is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of SEI’s assets acquired and liabilities assumed. The Company is still in the process of finalizing the valuation of intangible assets. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill. Spatial Acuity, LLC In the fourth quarter of 2022, the Company signed a purchase agreement to acquire Spatial Acuity, LLC (“Spatial”), with an effective date of November 2, 2022. Spatial is a professional firm based in Austin, TX. The Company paid total consideration of $4.1 million, which was comprised of 134,042 shares of common stock, at $15.15 per share, for a total of $2.0 million, plus $2.1 million in cash, two promissory notes, and assumed liabilities. The shares are subject to a six-month lock-up. The two promissory notes bears a simple interest rate fixed at 6.25%. The first promissory note is payable in equal quarterly payments of principal and interest beginning on February 4, 2023 and ending November 4, 2025. The second promissory note was payable in one installment of principal and interest due on March 15, 2023. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional consideration up to $3.0 million in the form of the Company's common stock, cash and a non-negotiable promissory note, based on certain financial performance thresholds measured quarterly from January 1, 2023 through June 30, 2025. The fair value of $0.5 million was recorded for the contingent liability as of September 30, 2023. The Company will continue to evaluate its estimated liability to the contingent consideration and adjust the balance as necessary. The purchase price allocation consists primarily of goodwill and is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of assets acquired and liabilities assumed. The Company is still in the process of finalizing the valuation of intangible assets. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill. H2H Geoscience Engineering, PLLC In the fourth quarter of 2022, the Company signed a purchase agreement to acquire H2H Geoscience Engineering, PLLC (“H2H”), with an effective date of December 2, 2022. H2H is a professional firm based in Troy, NY. The Company paid total consideration of $3.7 million, which was comprised of $1.4 million in cash, a promissory note, a convertible note and assumed liabilities. The promissory note bears a simple interest rate fixed at 7.00%. The promissory note is payable in equal quarterly payments of principal and interest beginning on March 2, 2023 and ending December 2, 2024. The convertible note bears simple interest fixed at 7.00% and is convertible into shares of common stock at any time, at a conversion price of $18.00 per share. Subject to the exercise of the conversion, the convertible note has quarterly payments of principal, interest or both beginning December 2, 2024 and ending September 2, 2027. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. For the three months ended September 30, 2023, the Company recorded no measurement period adjustments. The purchase price allocation consists primarily of goodwill, and is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of H2H’s assets acquired and liabilities assumed. The Company is still in the process of finalizing the valuation of intangible assets. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill. Richter & Associates, Inc. In the second quarter of 2023, the Company signed a purchase agreement to acquire Richter & Associates, Inc. (“Richter”), with an effective date of April 3, 2023. Richter is a professional firm based in Rockville, MD. The Company paid total consideration of $5.2 million which was comprised of 75,784 shares of common stock, at $29.00 per share, for a total of $2.2 million, plus $3.0 million in cash, promissory note and assumed liabilities. The shares are subject to a six-month lock-up. The promissory note bears a simple interest rate fixed at 11.00%. The promissory note is payable in equal quarterly payments of principal and interest beginning on July 3, 2023 and ending April 3, 2025. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. For the three months ended September 30, 2023, the Company recorded measurement period adjustments of $0.6 million in contract liabilities, $0.3 million in intangible assets, with a corresponding reduction in the purchase price of $0.2 million and a $0.7 million adjustment to goodwill. The purchase price allocation consists primarily of goodwill and intangible assets in the amount of $3.6 million. This is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of Richter’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill and intangible assets. Fisher Engineering, Inc. In the second quarter of 2023, the Company signed a purchase agreement to acquire Fisher Engineering, Inc. (“Fisher”), with an effective date of May 12, 2023. Fisher is a professional firm with offices throughout the United States. The Company paid total consideration of $5.0 million which was comprised of 31,521 shares of common stock, at $27.66 per share, for a total of $0.9 million, plus $4.1 million in cash, promissory note and assumed liabilities. The shares are subject to a six-month lock-up. The promissory note bears a simple interest rate fixed at 8.25%. The promissory note is payable in equal quarterly payments of principal and interest beginning on August 12, 2023 and ending May 12, 2026. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional consideration up to $2.0 million in the form of cash and a promissory note, based on certain financial performance thresholds measured yearly from May 1, 2023 through April 30, 2026. The fair value of $1.8 million was recorded for the contingent liability as of September 30, 2023. The Company will continue to evaluate its estimated liability to the contingent consideration and adjust the balance as necessary. For the three months ended September 30, 2023, the Company recorded measurement period adjustment of $0.5 million in intangibles assets with a corresponding reduction in the purchase price of $0.2 million and an increase in goodwill of $0.3 million. The change did not result in a change to operating income. The purchase price allocation consists primarily of goodwill and intangible assets of $6.2 million. This is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of Fisher’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill and intangible assets. Hole Montes, Inc. In the second quarter of 2023, the Company signed a purchase agreement to acquire Hole Montes, Inc. (“Hole Montes”), with an effective date of May 16, 2023. Hole Montes is a professional firm based in Naples and Fort Myers, FL. The Company paid total consideration of $7.3 million, which was comprised of 129,221 shares of common stock, at $27.60 per share, for a total of $3.6 million, plus $3.7 million in cash, two promissory notes, and assumed liabilities. The shares are subject to a six-month lock-up. The two promissory notes bears a simple interest rate fixed at 8.25%. The first promissory note is payable in equal quarterly payments of principal and interest beginning on August 16, 2023 and ending November 16, 2025. The second promissory note will be payable in one installment of principal and interest due on March 1, 2024. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional consideration up to $0.9 million in the form of the Company's common stock, cash and a non-negotiable promissory note, based on certain financial performance thresholds measured quarterly from April 1, 2023 through September 30, 2024. The fair value of $0.9 million was recorded for the contingent liability as of September 30, 2023. The Company will continue to evaluate its estimated liability to the contingent consideration and adjust the balance as necessary. For the three months ended September 30, 2023, the Company recorded measurement period adjustment of $0.4 million in intangibles assets with a corresponding reduction in the purchase price of $0.1 million and an increase in goodwill of $0.5 million. The change did not result in a change to operating income. The purchase price allocation consists primarily of goodwill and intangible assets of $7.1 million. This is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of Hole Montes’ assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill and intangible assets. MTX Surveying, LLC In the second quarter of 2023, the Company signed a purchase agreement to acquire MTX Surveying, LLC (“MTX”), with an effective date of June 2, 2023. MTX is a professional firm based in Marshall, TX. The Company paid total consideration of $11.1 million, which was comprised of 143,333 shares of common stock, at $28.09 per share, for a total of $4.0 million, plus $7.1 million in cash, promissory note, and assumed liabilities. The shares are subject to a six-month lock-up. The promissory note bears a simple interest rate fixed at 5.00%. The promissory note is payable in equal quarterly payments of principal and interest beginning on September 2, 2023 and ending June 2, 2026. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional consideration up to $3.0 million in the form of the Company's common stock, cash and a non-negotiable promissory note, based on certain financial performance thresholds measured quarterly from July 1, 2023 through December 31, 2024. The fair value of $3.0 million was recorded for the contingent liability as of September 30, 2023. The Company will continue to evaluate its estimated liability to the contingent consideration and adjust the balance as necessary. For the three months ended September 30, 2023, the Company recorded measurement period adjustment of $1.3 million in intangibles assets, with a corresponding reduction in the purchase price of $0.7 million and a $0.6 million increase in goodwill. The change did not result in a change to operating income. The purchase price allocation consists primarily of goodwill and intangible assets of $12.1 million. This is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of MTX’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill and intangible assets. Advanced Applied Engineering, Inc. dba Infrastructure Engineers In the second quarter of 2023, the Company signed a purchase agreement to acquire Advanced Applied Engineering, Inc. (“Infrastructure”), with an effective date of June 12, 2023. Infrastructure is a professional firm based in Brea, CA. The Company paid total consideration of $8.1 million, which was comprised of 141,794 shares of common stock, at $29.81 per share, for a total of $4.2 million, plus $3.9 million in cash, promissory note, and assumed liabilities. The shares are subject to a six-month lock-up. The promissory note bears a simple interest rate fixed at 8.25%. The promissory note is payable in equal quarterly payments of principal and interest beginning on September 12, 2023 and ending December 12, 2024. For tax purposes, the acquisition was treated as an asset acquisition, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional consideration up to $1.5 million in the form of the Company's common stock and a non-negotiable promissory note, based on certain financial performance thresholds measured quarterly from July 1, 2023 through December 31, 2024. The fair value of $1.5 million was recorded for the contingent liability as of September 30, 2023. The Company will continue to evaluate its estimated liability to the contingent consideration and adjust the balance as necessary. For the three months ended September 30, 2023, the Company recorded measurement period adjustment of $0.4 million in goodwill and intangibles assets, $0.1 million in accounts payable and other current liabilities with a corresponding decrease in the purchase price of $0.4 million. The change did not result in a change to operating income. The purchase price allocation consists primarily of goodwill and intangible assets of $9.5 million. This is based upon preliminary information that is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of MTX’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill and intangible assets. Results from Acquisitions The condensed consolidated financial statements of the Company include the results of operations from any business acquired from their respective dates of acquisition. The following table presents the results of operations of companies acquired during 2023 from their respective dates of acquisition for the three and nine months ended September 30, 2023 (in thousands):
1 Gross contract revenue includes adjustments as required by ASC 606, Revenue from Contracts with Customers based on opening balance sheet provided by the acquired companies. There is no assurance these adjustments will be consistent in future periods. Opening balance sheet balances are subject to adjustment prior to being finalized. The following table presents the unaudited, pro forma condensed consolidated results of operations for the three and nine months ended September 30, 2023 and September 30, 2022 assuming that the companies acquired in the second quarter of 2023, described above, occurred on January 1, 2022. The unaudited pro forma results are presented for informational purposes only and are not meant to represent actual operating results that would have been achieved had the related events occurred on such date (in thousands):
2 Gross contract revenue in these pro forma financials does not conform to GAAP as required by ASC 606, Revenue from Contract with Customers, as it is impracticable to obtain the historical information necessary to apply this accounting standard. The historical estimates required to be able to accurately determine the percent complete accounting on the contracts that comprise the revenue is not available for the required periods. The pro forma information provided is compiled from the pre-acquisition financial information and includes pro forma adjustments to reflect additional depreciation and amortization that would have been expensed assuming the respective assets had been acquired as of January 1, 2022. These results also include additional non-cash stock compensation expense assuming acquired employees who received stock grants received those grants on January 1, 2022.
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Disaggregation of Revenue and Contract Balances |
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue and Contract Balances | Disaggregation of Revenue and Contract BalancesThe Company disaggregates revenues by contract type, see Revenue Recognition in Note 2 for further details. For the three and nine months ended September 30, 2023, the Company derived 87.9% and 88.7% of its revenue from contracts classified as lump sum, and 12.1% and 11.3% of its revenue from time and material contracts, respectively. The Company had approximately $220.4 million in remaining performance obligations as of September 30, 2023 of which it expects to recognize approximately 91.6% within the next twelve months and the remaining 8.4% in the next twelve to twenty-four months. Disaggregated revenues by contract type were as follows (in thousands):
The Company recognized $0.2 million and $2.9 million of revenue for the three and nine months ended September 30, 2023, respectively, which was included in the contract liabilities balance as of December 31, 2022, and $1.1 million and $2.5 million of revenue for the three and nine months ended September 30, 2022, respectively, which was included in the contract liabilities balance as of December 31, 2021.
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Contracts in Progress |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contracts in Progress | Contracts in Progress The following table reflects the calculation of the net balance of contract assets and contract liabilities. Costs and estimated earnings on contracts in progress consist of the following (in thousands):
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Notes Receivable |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Receivable | Notes Receivable The Company has unsecured notes receivable from related parties, certain non-executive officers of the Company and an unrelated third party. The following is a summary of these notes receivable (in thousands):
1Notes initiated prior to the Company's initial public offering. Each borrower may prepay all or part of the outstanding balance at any time prior to the date of maturity. During the nine months ended September 30, 2023, interest accrued on the notes receivable at the stipulated rates between 0.0% and 5.50%.
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment for fixed assets are as follows (in thousands):
1assets acquired which will be re-financed under the Company's finance lease facilities Depreciation expense for fixed assets for the three and nine months ended September 30, 2023 was $0.7 million and $1.9 million, respectively. Depreciation expense for fixed assets for the three and nine months ended September 30, 2022 was $0.5 million and $1.1 million, respectively. Property and equipment for finance leased assets are as follows (in thousands):
Amortization expense for finance leased assets for the three and nine months ended September 30, 2023 was $1.8 million and $5.3 million, respectively. Amortization expense for finance leased assets for the three and nine months ended September 30, 2022 was $1.9 million and $5.3 million, respectively.
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Goodwill |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Goodwill | Goodwill Changes in the carrying amount of goodwill were as follows (in thousands):
There were no impairments of goodwill during the periods presented.
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Intangible Assets |
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Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Total intangible assets consisted of the following at September 30, 2023 and December 31, 2022 (in thousands):
The domain name and licensing rights acquired for a total of $1.7 million, have indefinite useful lives. The following table summarizes the weighted average useful lives of intangible assets by asset class used for straight-line expense purposes:
Amortization expense for the three and nine months ended September 30, 2023 was $1.9 million and $5.6 million, respectively. Amortization expense for the three and nine months ended September 30, 2022 was $0.7 million and $2.0 million, respectively. Future amortization for the remainder of 2023 and for the succeeding years is as follows (in thousands):
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Revolving Credit Facility and Fixed Credit Facilities |
9 Months Ended |
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Sep. 30, 2023 | |
Line of Credit Facility [Abstract] | |
Revolving Credit Facility and Fixed Credit Facilities | Revolving Credit Facility and Fixed Credit Facilities The Company has one revolving credit facility (the “Revolving Credit Facility”) and three non-revolving credit facilities (“Fixed Line #1”, " Fixed Line #2” and “Fixed Line #4” collectively, the “Fixed Lines”) with Bank of America, N.A. On September 30, 2023 and September 30, 2022, the interest rate on the Revolving Credit Facility was 9.60% and 2.11%, respectively. All outstanding principal on the Revolving Credit Facility is due on September 30, 2024. On September 30, 2023 and December 31, 2022, there was $22.4 million and no outstanding balance on the Revolving Credit Facility, respectively. On November 11, 2022, the Company and certain of its subsidiaries, as guarantors, entered into an Amended and Restated Credit Agreement with Bank of America, N.A. (the "Amended and Restated Agreement") as well as an Amended and Restated Pledge and Security Agreement. The Amended and Restated Agreement increased the maximum principal amount of the Revolving Credit Facility to $50 million, is secured by all the assets of the Company and the subsidiary guarantors and has a maturity date of September 30, 2024. Under the Amended and Restated Agreement, the Company is required to comply with certain covenants, including covenant on indebtedness, investments, liens and restricted payments, as well as maintain certain financial covenants, including a fixed charge coverage ratio and leverage ratio of debt to EBITDA (as defined in the Amended and Restated Agreement). On August 2, 2023, the Company entered into a First Amendment to the Amended and Restated Credit Agreement whereby the maximum principal amount of the Revolving Credit Facility was increased to $70 million, the term was extended to July 31, 2025, and certain provisions relating to interest rate spreads and used fees were modified. Fixed Line #1 had a maximum advance of $1.0 million and does not allow for re-borrowings and is included in Notes Payable (see Note 12). The Company pays interest on a monthly basis at a rate equal to SOFR Simple APR plus 2.0%. On September 30, 2023 and 2022, the interest rate was 7.06% and 4.96%, respectively. Commencing the earlier of i) the date no remaining amount is available under the Fixed Line or, ii) August 31, 2018, the Company was obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in August 2023. As of September 30, 2023, Fixed Line #1 was paid in full and there was no outstanding balance. As of December 31, 2022, the outstanding balance on Fixed Line #1 was $0.1 million. Fixed Line #2 had a maximum advance of $1.0 million, and does not allow for re-borrowings and is included in Notes Payable (see Note 12). Commencing the earlier of i) the date no remaining amount is available under the Fixed Line or, ii) August 31, 2020, the Company was obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in September 2025. On each of September 30, 2023 and December 31, 2022, the outstanding balance on Fixed Line #2 was $0.4 million and $0.5 million, respectively. Facility #4 is a term loan with a principal loan amount of $1.0 million and is included in Notes Payable (see Note 12). The loan was to be repaid over thirty-six equal monthly installments beginning April 13, 2020, through maturity on March 13, 2023. The interest rate on this loan was 3.49%. As of September 30, 2023, Facility #4 was paid in full and there was no outstanding balance. As of December 31, 2022, the outstanding balance on Facility #4 was $0.1 million. The Company secures its obligations under the Amended and Restated Agreement with substantially all assets of the Company. Obligations of the Company to certain other shareholders of the Company are subordinated to the Company’s obligations under the Amended and Restated Agreement and Fixed Line loans. The Company must maintain, on a combined basis certain financial covenants defined in the Amended and Restated Agreement. Interest expense on the Revolving Credit Facility and Fixed Lines totaled $0.5 million and $0.7 million during the three and nine months ended September 30, 2023, respectively. Interest expense on the Revolving Credit Facility and Fixed Lines totaled $11,000 and $31,000 during the three and nine months ended September 30, 2022, respectively.
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Notes Payable |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | Notes Payable Notes payable consist of the following (in thousands):
1Includes notes payable to all owners irrespective of current relationship with the Company The Company’s Chairman and Chief Executive Officer guarantees certain of the notes payable, and certain of the notes payable are subordinate to the terms of the Credit Agreement disclosed in Note 11. Interest expense attributable to the notes payable totaled $0.5 million and $1.5 million for the three and nine months ended September 30, 2023, respectively. Interest expense attributable to the notes payable totaled $0.2 million and $0.4 million for the three and nine months ended September 30, 2022, respectively. Future principal payments on notes payable for remainder of 2023 and succeeding years are as follows (in thousands):
Convertible Notes Payable In July 2022, the Company issued a $4.0 million 4.75% unsubordinated convertible note with a maturity date in July 2027 as partial consideration for the acquisition of PDC (Note 4). The convertible note is convertible into shares of common stock at the option of the holders, at any time, at a conversion price of $14.00 per share upon proper notice. Subject to the exercise of the conversion, the convertible note is payable in quarterly payments of principal, interest or both beginning in October 2022 and ending in April 2027. At any time, upon business days’ notice to the Company, the holders may request that a prepayment of the principal or all or part of a regularly scheduled quarterly payment of the principal be made in the form of common stock of the Company, with the number of shares of common stock equal to the amount of the requested prepayment divided by the stock conversion price. If the request is made with respect to a regularly scheduled quarterly payment of principal, then the accrued interest shall be paid in cash. Elections were made by the holders, and as of September 30, 2023, $0.7 million of the note was converted to 48,002 shares of common stock at $14.00 per share. In August 2022, the Company issued a $1.1 million 5.50% unsubordinated convertible note with a maturity date in May 2027 as partial consideration for the acquisition of Anchor (Note 4). The convertible note is convertible into shares of common stock at the option of the holders, at any time, at a conversion price of $18.00 per share upon proper notice. Subject to the exercise of the conversion, the convertible note has quarterly payments of principal, interest or both beginning in November 2022 and ending in May 2027. At any time, upon business days’ notice to the Company, the holders may request that a prepayment of the principal or all or part of a regularly scheduled quarterly payment of the principal be made in the form of common stock of the Company, with the number of shares of common stock equal to the amount of the requested prepayment divided by the stock conversion price. If the request is made with respect to a regularly scheduled quarterly payment of principal, then the accrued interest shall be paid in cash. As of September 30, 2023, there has been no election by the holders to convert any portions of the convertible note to common stock. In December 2022, the Company issued a $1.6 million 7.00% unsubordinated convertible note with a maturity date in September 2027 as partial consideration for the acquisition of H2H (Note 4). The convertible note will be convertible into shares of common stock at the option of the holders, at any time, at a conversion price of $18.00 per share upon proper notice. Subject to the exercise of the conversion, the convertible note has quarterly payments of principal, interest or both beginning in December 2024 and ending in September 2027. At any time, upon business days’ notice to the Company, the holders may request that a prepayment of the principal or all or part of a regularly scheduled quarterly payment of the principal be made in the form of common stock of the Company, with the number of shares of common stock equal to the amount of the requested prepayment divided by the stock conversion price. If the request is made with respect to a regularly scheduled quarterly payment of principal, then the accrued interest shall be paid in cash. As of September 30, 2023, there has been no election by the holders to convert any portions of the convertible note to common stock.
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Pension and Post-retirement Benefit Obligations |
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Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Post-retirement Benefit Obligations | Pension and Post-retirement Benefit Obligations The Company sponsors various non-qualified defined benefit pension plans in the U.S. (the "Plan"). Individual benefits under the Plan generally are based on the employee’s years of creditable service and compliance with non-competes. The plan is unfunded and there are no plan assets. The following table details the components of net periodic benefit costs for the Company's pension plan for the three and nine months ended September 30, 2023 and 2022:
There are no required minimum contributions for the pension plans.
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company leases commercial office space from BCG Chantilly, LLC (BCC), an entity in which Mr. Bowman, Mr. Bruen and Mr. Hickey collectively own a 63.6% interest. As of September 30, 2023 and December 31, 2022 there were no amounts due to or receivables due from BCC. Rent expense for each of the three and nine months ended September 30, 2023 was $21,000 and $0.1 million, respectively. Rent expense for each of the three and nine months ended September 30, 2022 was $21,000 and $0.1 million, respectively. Bowman Lansdowne Development, LLC (BLD) is an entity in which Mr. Bowman has an ownership interest. On each of September 30, 2023 and December 31, 2022, the Company’s notes receivable included $0.5 million from BLD, with a maturity date of January 31, 2024. Lansdowne Development Group, LLC (LDG) is an entity in which BLD has a minority ownership interest. On each of September 30, 2023 and December 31, 2022, our accounts receivable included $0.1 million, due from LDG. On September 30, 2023 and December 31, 2022, notes receivable included $0.4 million and $0.4 million, respectively from LDG, with a maturity date of January 31, 2024. Bowman Realty Investments 2010, LLC (BR10) is an entity in which Mr. Bowman has an ownership interest. On each of September 30, 2023 and December 31, 2022, the Company’s notes receivable included $0.2 million, from BR10, with a maturity date of January 31, 2024. Alwington Farm Developers, LLC (AFD) is an entity in which BR10 has a minority ownership interest. On each of September 30, 2023 and December 31, 2022, notes receivable included $1.2 million, from AFD, with a maturity date of December 31, 2024. MREC Shenandoah VA, LLC (“MREC Shenandoah”) is an entity in which Lake Frederick Holdings, LLC (“Lake Frederick Holdings”) owns a 92% interest and Shenandoah Station Partners LLC, an entity owned in part by BLD and in part by Bowman Realty Investments 2013 LLC "Bowman Realty" (BR13), owns an 8% interest. Mr. Bowman owns a 100% interest in, and is the manager of, Lake Frederick Holdings. Mr. Bowman is the sole member of Bowman Realty 2013 (BR13). Since 2020, the Company has provided engineering services to MREC Shenandoah in exchange for cash payments. During the three and nine months ended September 30, 2023, and 2022 the Company invoiced $0.1 million and $0.2 million, respectively, and received payments of $38,000 and $0.2 million, respectively. During the nine months ended September 30, 2023 and 2022, the Company provided administrative, accounting and project management services to certain of the related party entities. The cost of these services was $42,000 and $0.1 million, respectively. These entities were billed $44,000 and $0.1 million, respectively. Gregory Bowman, the son of Mr. Bowman, is a full-time employee of the Company. Gregory Bowman was paid $0.1 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively. On each of September 30, 2023 and December 31, 2022, the Company was due $0.1 million and $0.2 million, respectively, from shareholders under the terms of stock subscription notes receivable. On September 30, 2023 and December 31, 2022, the Company owed $0.1 million and $0.2 million, respectively, to a retired shareholder and former director in connection with a 2015 acquisition. On September 30, 2023 and December 31, 2022, the Company owed certain of our current and former shareholders $13.5 million and $11.5 million, respectively. The notes result from repurchases of stock from shareholders upon termination of employment and promissory notes issued in connection with acquisitions. In August 2022, the Company agreed to reimburse Mr. Bowman at a fixed hourly rate for the business use of an aircraft owned by Sunrise Asset Management, a company owned 100% by Mr. Bowman. The Company paid $0.1 million for the nine months ended September 30, 2023.
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Employee Stock Purchase and Stock Incentive Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Stock Purchase and Stock Incentive Plans | Employee Stock Purchase and Stock Incentive Plans Employee Stock Purchase Plan Effective April 30, 2021, the Company established the Bowman Consulting Group Ltd. 2021 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, eligible employees who elect to participate are granted the right to purchase shares of common stock at a 15% discount of the weighted average selling price of the Company stock for the 30 days prior to the last day of the offering period. The following table summarizes the stock issuance activity under the ESPP for the nine months ended September 30, 2023 (in thousands, except share data):
Stock Options Effective May 11, 2021 the Company established the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Plan (“the Plan”). The plan is administered by the board of directors (the “Board”), who on its own action or through its designee may make grants of restricted stock options, including Incentive Stock Options (“ISO”), and non-qualified stock options (“NQSO”). The purpose of the Plan is to grant equity incentive awards to eligible participants to attract, motivate and retain key personnel. The Plan supersedes and replaces any prior plan for stock options except that the prior plan shall remain in effect with respect to options granted under such prior plan until such options have been exercised, expired or canceled. The number of shares for which each option shall be granted, whether the option is an ISO or NQSO, the option price, the exercisability of the option, and all other terms and conditions of the option are determined by the Board at the time the option is granted. The options generally vest over a period between and five years. For the nine months ended September 30, 2023, no new options were granted. A summary of the status of stock options exercised, including the substantive options discussed in Note 3, is as follows:
The following summarizes information about options outstanding and exercisable at January 1, 2023 and September 30, 2023:
The intrinsic value of these options on September 30, 2023 and December 31, 2022 was $21.75 and $15.57, respectively. The Company received cash payments of $21,341 from the exercise of options under the Stock Option Plan in the nine months ended September 30, 2023. The Company did not record any compensation costs related to stock options during the three and nine months ended September 30, 2023. As of September 30, 2023, there is no unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Stock Option Plan. The remaining unexercised shares are from substantive options in which the non-recourse notes may be pre-paid, therefore the Company recognized the total calculated compensation expense at the time of issuance. Restricted Stock Effective May 11, 2021, the Company established the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Plan (“the Plan”). The Plan is administered by the Board through which they can issue restricted stock awards. As of September 30, 2023, 4,128,557 shares of common stock are authorized and reserved for issuance under the Plan. This reserve automatically increases on each January 1, for the duration of the Plan, in an amount equal to 5% of the total number of shares outstanding on December 31st of the preceding calendar year. The Plan supersedes and replaces any prior plan for stock bonus grants to employees of the Company except that the prior plan shall remain in effect with respect to awards granted under such prior plan until such awards have been forfeited or fully vested. During the nine months ended September 30, 2023, the Board granted 646,488 shares of restricted stock under the Plan. The shares have a vesting period of up to four years during which there are certain restrictions as described in the Plan and Stock Bonus Agreements. The grant date fair value of the award is the closing price of the shares on such date, or if there are no sales on such date, on the next preceding day on which there were sales. Effective April 2003, the Company adopted the Bowman Consulting Group Ltd. Stock Bonus Plan (“the Stock Bonus Plan”), which allowed for the awarding of restricted stock to employees. The Stock Bonus Plan was superseded by the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Plan except that the Stock Bonus Plan shall remain in effect with respect to awards granted under it until such awards have been forfeited or fully vested. During the nine months ended September 30, 2023 no new restricted stock awards were granted under the Stock Bonus Plan. The following table summarizes the activity of restricted shares subject to forfeiture:
On November 10, 2021 the Company’s Board adopted the 2021 Executive Officers Long Term Incentive Plan (the “Officers LTIP”). The Officers LTIP is established under the Plan and is subject to the terms and conditions thereof. The purpose of this plan is to attract, retain and motivate key officers and employees through the grant of equity-based awards that reward Company performance over a period greater than one year and align their interests with long-term stockholder value. During the nine months ended September 30, 2023, the compensation committee approved the grants of 245,710 performance-based stock units to certain executive officers of the Company under the Officers LTIP. The performance based restricted stock units are subject to a market condition, with a vesting period of 2.91 years. The number of units earned is based on total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the components of a custom peer group during the performance period from February 10, 2023 to December 31, 2025. The performance stock units are valued using a Monte Carlo simulation with model inputs of opening average share value, valuation date stock price, expected volatilities, correlation coefficient, risk-free interest rate, and expected dividend yield for the Company and the custom peer group. The following table summarizes the activity of performance stock units subject to forfeiture:
The Company recognizes forfeitures as they occur. As of September 30, 2023, the Company had 2,482,200 shares underlying unvested stock awards that vest between October 1, 2023 and December 31, 2027. The future expense of the unvested awards for the remainder of 2023 and succeeding years is as follows (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We lease certain office space, equipment and vehicles. These leases are either non-cancelable, cancellable only by the payment of penalties or cancellable upon notice provided. All lease payments are based on the lapse of time and certain leases are subject to annual escalations for increases in base rents. The Company's lease terms includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company recognizes a right-of-use asset and lease liability for its operating leases at the commencement date equal to the present value of the contractual minimum lease payments over the lease term. The present value is calculated using the rate implicit in the lease, if known, or the Company's incremental borrowing rate. The discount rate used for operating leases is primarily determined based on an analysis of the Company's borrowing rate, while the discount rate used for finance leases is primarily determined by the rate specified in the lease. Operating and Finance Leases The Company's operating leases primarily include material leases of buildings (consisting primarily of office lease commitments) and equipment. These leases are classified as operating leases and are recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets. The Company's finance leases primarily include equipment and vehicles in certain contracts with payment terms on the lease agreements that range between 30 and 50 months. The following tables present our balance sheet information related to leases:
The following tables present selected financial information:
Future minimum commitments under leases for the succeeding years are as follows (in thousands):
The above table is exclusive of the $2.8 million bargain purchase price associated with the $21.3 million total liability to finance leases as presented on the consolidated balance sheet.
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Leases | Leases We lease certain office space, equipment and vehicles. These leases are either non-cancelable, cancellable only by the payment of penalties or cancellable upon notice provided. All lease payments are based on the lapse of time and certain leases are subject to annual escalations for increases in base rents. The Company's lease terms includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company recognizes a right-of-use asset and lease liability for its operating leases at the commencement date equal to the present value of the contractual minimum lease payments over the lease term. The present value is calculated using the rate implicit in the lease, if known, or the Company's incremental borrowing rate. The discount rate used for operating leases is primarily determined based on an analysis of the Company's borrowing rate, while the discount rate used for finance leases is primarily determined by the rate specified in the lease. Operating and Finance Leases The Company's operating leases primarily include material leases of buildings (consisting primarily of office lease commitments) and equipment. These leases are classified as operating leases and are recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets. The Company's finance leases primarily include equipment and vehicles in certain contracts with payment terms on the lease agreements that range between 30 and 50 months. The following tables present our balance sheet information related to leases:
The following tables present selected financial information:
Future minimum commitments under leases for the succeeding years are as follows (in thousands):
The above table is exclusive of the $2.8 million bargain purchase price associated with the $21.3 million total liability to finance leases as presented on the consolidated balance sheet.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 2, 2023, the Company completed the acquisition of substantially all of the assets of Excellence Engineering, LLC pursuant to the Asset Purchase Agreement, dated September 22, 2023 (the “Agreement”), among the Company, Excellence Engineering, LLC, and a key member. The aggregate consideration was approximately $1.1 million which consisted of cash, common stock and promissory note, subject to adjustment. The Agreement includes a contingent consideration feature, which affords the sellers the opportunity to earn additional purchase price consideration on certain financial performance thresholds. On October 12, 2023, the Company completed the acquisition of substantially all of the assets of Dennis Corporation pursuant to the Asset Purchase Agreement, dated October 12, 2023 (the “Agreement”), among the Company, Dennis Corporation, and shareholders. The aggregate consideration was approximately $3.7 million which consisted of cash, common stock and promissory note, subject to adjustment. During the month of October 2023, under the "Stock Repurchase Program" the Company repurchased 28,404 shares of common stock at an average price of $25.94 bringing the total shares purchased under this program to 28,704. As of November 7, 2023, the Company has spent a total of $0.7 million and is authorized to spend up to an additional $9.3 million under this program.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
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Pay vs Performance Disclosure | ||||
Net income | $ 1,183 | $ 3,397 | $ 1,086 | $ 4,534 |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended |
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Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Bruce Labovitz [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 11, 2023, Bruce Labovitz, the Company’s Chief Financial Officer, terminated a 10b5-1 Plan that he had previously adopted on May 17, 2023. Mr. Labovitz’s former plan related to the sales of up to 38,000 shares of the Company’s common stock pursuant to the terms of the 10b5-1 Plan from August 2023 through March 2024. On September 15, 2023, Mr. Labovitz adopted a new 10b5-1 Plan that provides for the sale of up to 19,000 shares of the Company’s common stock pursuant to the terms of the 10b5-1 Plan from December 2023 through January 2024. | |
Name | Bruce Labovitz | |
Title | Chief Financial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 15, 2023, Gary Bowman, the Company’s Chief Executive Officer and Director, terminated trading arrangements that were entered into prior to the amendments to Rule 10b5-1. These were (i) a trading plan previously entered into on November 24, 2021 that related to sales of up to 80,000 shares of the Company’s common stock pursuant to the terms of the plan from September 2022 through August 2024, and (ii) a trading plan previously entered into on May 31, 2022 and amended on December 16, 2022 that related to sales of up to 80,000 shares of the Company’s common stock pursuant to the terms of the plan from September 2022 through December 2023. In addition, Mr. Bowman terminated the trading plan of Bowman Family Asset Management LLC (“BFAM”), an estate planning vehicle established to manage the investments of Mr. Bowman and his family and of which Mr. Bowman is manager. BFAM’s former plan was entered into on November 24, 2021 and related to the sale of up to 80,000 shares of the Company’s common stock pursuant to the terms of the plan from September 2022 through August 2024. Subsequent to the termination, Mr. Bowman, individually and as manager of BFAM, adopted a new 10b5-1 Plan which provides for (i) with respect to Mr. Bowman, the sale of up to 80,000 shares the Company’s common stock pursuant to the terms of the 10b5-1 Plan from December 2023 through October 2024, and (ii) with respect to BFAM, the sale of up to 40,000 shares of Company common stock owned by BFAM pursuant to the terms of the 10b5-1 Plan from December 2023 through October 2024. | |
Name | Gary Bowman | |
Title | Chief Executive Officer and Director | |
Rule 10b5-1 Arrangement Adopted | true | |
May 2023 Plan [Member] | Bruce Labovitz [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 11, 2023 | |
Aggregate Available | 38,000 | 38,000 |
Bruce Labovitz New Rule Trading Arrangement, Common Stock [Member] | Bruce Labovitz [Member] | ||
Trading Arrangements, by Individual | ||
Adoption Date | September 15, 2023 | |
Arrangement Duration | 61 days | |
Aggregate Available | 19,000 | 19,000 |
May 2022 Plan [Member] | Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 15, 2023 | |
Aggregate Available | 80,000 | 80,000 |
BFAM November 2021 Plan [Member] | Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 15, 2023 | |
Aggregate Available | 80,000 | 80,000 |
November 2021 Plan [Member] | Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 15, 2023 | |
Aggregate Available | 80,000 | 80,000 |
Gary Bowman New Rule Trading Arrangement, Common Stock [Member] | Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Arrangement Duration | 335 days | |
Aggregate Available | 80,000 | 80,000 |
Gary Bowman BFAM New Rule Trading Arrangement, Common Stock [Member] | Gary Bowman [Member] | ||
Trading Arrangements, by Individual | ||
Arrangement Duration | 335 days | |
Aggregate Available | 40,000 | 40,000 |
Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in shareholders’ equity and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 15, 2023. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
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Emerging Growth Company | Emerging Growth CompanySection 102(b)(1) of the Jumpstart Our Business Startups Act (“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 Securities Exchange Act of 1934 (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 that is either not an emerging growth company or, an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. |
Revenue Recognition | Revenue Recognition As discussed in Note 1, the Company provides a variety of engineering and related professional services to customers located throughout the United States. The Company enters into agreements with clients that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services transfer to the customer. It is customary practice for the Company to have written agreements with its customers and revenue on oral or implied arrangements is generally not recognized. The Company recognizes revenue based on the consideration specified in the applicable agreement. Excluded from the transaction price are amounts collected on behalf of third parties for sales and similar taxes. Long-term contracts typically contain billing terms that provide for invoicing once a month and payment on a net 30-day basis. Exceptions to monthly billing terms are to ensure that the Company performs satisfactorily rather than representing a significant financing component. For example, fixed price contracts may provide for milestone billings based upon the attainment of specific project objectives to ensure the Company meets its contractual requirements rather than having billing monthly. Additionally, contracts may include retentions or holdbacks paid at the end of a project to ensure that Company meets the contract requirements. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between payment by the customer and the transfer of promised services to the customer will be less than one year. As a professional services engineering firm, the Company generally recognizes revenue over time as control transfers to a customer based upon the extent of progress towards satisfaction of the performance obligation. For services delivered under fixed price contracts, the Company uses the ratio of actual costs incurred to total estimated costs since costs incurred (an input method) which represents a reasonable measure of progress towards the satisfaction of a performance in order to estimate the portion of revenue earned. This method faithfully depicts the transfer of value to the customer when the Company is satisfying a performance obligation that entails a number of interrelated tasks or activities for a combined output that requires the Company to coordinate the work of employees and sub-consultants. Contract costs typically include direct labor, subcontract and consultant costs, materials and indirect costs related to contract performance. Changes in estimated costs to complete these obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates to be recognized in the current period. Changes in estimates can routinely occur over the contract term for a variety of reasons including, changes in scope, unanticipated costs, delays or favorable or unfavorable progress than original expectations. In situations where the estimated costs to perform exceeds the consideration to be received, the Company accrues the entire estimated loss during the period the loss becomes known. When a performance obligation is billed using a time-and-material type contract, the Company measures its progress to complete based upon the hours incurred for the period times contractually agreed upon billing rates plus any materials delivered or consumed in the project. When applicable, the Company will recognize revenue under these contracts as invoiced under the practical expedient. In certain situations, it is possible that two or more contracts should be combined and accounted for as a single contract, or a single contract should be accounted for as multiple performance obligations. This requires significant judgment and could impact the amount and timing of revenue recognition. Such determinations are made using management’s best estimate and knowledge of contracts and related performance obligations. The Company’s contracts may contain variable consideration in the form of unpriced or pending change orders or claims that either increase or decrease the contract price. Variable consideration is generally estimated using the expected value method but may from time to time be estimated using the most likely amount method depending on the circumstance. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are based upon historical experience and known trends. The Company recognizes claims against vendors, sub-consultants, and others as a reduction in costs when the contract establishes enforceability, and the amounts of recovery are reasonably estimable and probable. Reduction in costs are recognized at the lesser of the amount management expects to recover or costs incurred. Contract related assets and liabilities are classified as current assets and current liabilities. Significant balance sheet accounts related to the revenue cycle are as follows: Accounts receivables, net: Accounts receivable, net (contract receivables) includes amounts billed under the contract terms. The amounts are stated at their net realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated number of receivables that will not be collected. The Company considers several factors in its estimate of the allowance, including knowledge of a client’s financial condition, its historical collection experience, and other factors relevant to assessing the collectability of such receivables. Contract Assets: Contract Assets are recorded when progress to completion revenue earned on contracts exceeds amounts billed under the contract. It may also include contract retainages that can be billed once contract stipulations are satisfied. Contract Liabilities: Contract Liabilities are recorded when amounts billed under a contract exceeds the progress to completion revenue earned under the contract.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. 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 vary from the estimates and assumptions that were used. |
Concentration of Credit Risk and other Concentrations | Concentration of Credit Risk and other Concentrations The Company’s financial instruments that are exposed to concentrations of credit risk consist of cash and accounts receivable. Cash balances at various times during the year may exceed the amount insured by the Federal Deposit Insurance Corporation. The Company’s cash deposits are held in institutions whose credit ratings are monitored by management, and the Company has not incurred any losses related to such deposits. The Company can, at times, be subject to a concentration of credit risk with respect to outstanding accounts receivable. However, the Company believes no such concentration existed during the nine months ended September 30, 2023, or the year ended December 31, 2022. The Company’s customers are located throughout the United States. Although the Company generally grants credit without collateral, management believes that its contract acceptance, billing, and collection policies are adequate to minimize material credit risk. Also, for non-governmental customers, the Company can often place mechanics liens against the real property associated with the contract in the event of non-payment.
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Fair Value Measurements | Fair Value Measurements Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides the framework for measuring and reporting financial assets and liabilities at fair value. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The codification establishes a three-level disclosure hierarchy to indicate the level of judgment used to estimate fair value measurements: Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date; Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices (such as interest rate and yield curves); Level 3: Uses inputs that are unobservable, supported by little or no market activity and reflect significant management judgment. As of September 30, 2023 and December 31, 2022: •The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short duration of these instruments; •The carrying amounts of debt obligations approximate their fair values as the terms are comparable to terms currently offered by local financial institutions for arrangements with similar terms to industry peers with comparable credit characteristics. Accordingly, the debt obligations involve Level 2 fair value inputs; •The liability related to shares subject to repurchase was recognized at fair value using Level 1 inputs as there is an active market for the Company’s publicly traded stock. There was no remaining liability as of December 31, 2022. For further discussion, see Note 15, Employee Stock Purchase and Stock Incentive Plans. Fair value measurements relating to our business combinations are made primarily using Level 3 inputs including discounted cash flow and to the extent applicable, Monte Carlo simulation techniques. Fair value for the identified intangible assets is generally estimated using inputs primarily for the income approach using the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rates and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as property, plant and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. The fair value of the contingent consideration is estimated using published treasury rates in the Wall St. Journal and discounting the present value along with other significant assumptions which include projections of revenue, and probabilities of meeting those projections.
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Income Taxes | Income Taxes The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events recognized in the consolidated financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when the differences settle or become realized. Valuation allowances are provided when it is more likely than not that a deferred tax asset is not realizable or recoverable in the future. As of September 30, 2023, no valuation allowances are required, and all deferred tax assets are realizable. The Company assesses uncertain tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service or other taxing authorities. If the Company cannot reach a more-likely-than-not determination, no benefit is recorded. If the Company determines that the tax position is more likely than not to be sustained, the Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Beginning January 1, 2022, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the option to deduct research and development expenditures in the current year and now requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. As a result of this provision of the TCJA, we have established a $24.2 million uncertain tax position related to capitalized and amortizable research and development ("R&D") costs as of the nine-month period ended September 30, 2023. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company’s effective tax rate for the nine months ended September 30, 2023 and 2022 was 233.4% and (84.7)%, respectively. Historically, the Company calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective rate for the full fiscal year to the year-to-date ordinary income or loss, excluding unusual or infrequently occurring discrete items. During the quarter ended September 30, 2023, the Company incurred unanticipated, non-reocurring current period expenses resulting in a quarterly loss while still anticipating annual projected income. Coupled with significant favorable R&D tax credits in both the quarter and projected for the year, the Company determined that utilizing the actual year-to-date financials resulted in a more reliable effective tax rate for quarter ending September 30, 2023. Furthermore, the Company also recognized net discrete benefits of $1.5 million for the nine months ended September 30, 2023, as compared to net discrete benefit of $2.1 million for the nine months ended September 30, 2022. The discrete benefits are predominantly the result of a windfall tax benefit for restricted stock awards and other non-recurring adjustments. More specifically, the windfall tax adjustment for restricted stock awards recognized at a value higher than the grant date fair value is $2.1 million for the nine months ended September 30, 2023, and $0.5 million for the nine months ended September 30, 2022. In addition, the Company recognized a one-time adjustment to the state income taxes payable, resulting in $0.2 million net discrete expense. These factors increased the rate by 186.6% and reduced the rate by 85.3% for the quarters ended September 30, 2023, and September 30, 2022, respectively. For year ended December 31, 2022, the Company filed Form 3115, Application for Change in Accounting Method, with the Internal Revenue Service requesting to change its method of deducting stock-based compensation expense from an impermissible method to a permissible method; on July 27, 2022, the Form 3115 was approved by the Internal Revenue Service, which resulted in a reversal of a $1.9 million uncertain tax position to a deferred tax liability. In addition, the Company recorded a $0.4 million uncertain tax position during the year ended December 31, 2022, related to the annual limitation on the deductibility of executive compensation claimed on a prior period U.S. federal income tax return. The Company files income tax returns in the U.S. federal jurisdiction and certain states in which it operates. Based on the timing of the filing of certain tax returns, the Company’s federal income tax returns for tax years 2019 and thereafter remain subject to examination by the U.S. Internal Revenue Service. The statute of limitations on the Company’s state income tax returns generally conforms to the federal three-year statute of limitations.
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Segments | SegmentsThe Company operates in one segment based upon the financial information used by its chief operating decision maker in evaluating the financial performance of its business and allocating resources. The single segment represents the Company’s core business of providing engineering and related professional services to its customers. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance Accounting guidance recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be incurred before it is recognized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard applies to accounts receivable, notes, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. Adoption of ASU 2016-13 has been applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted the new guidance starting January 1, 2023. The impact of this ASU is reflected in the consolidated financial statements and was not material. The Company does not believe that any recently issued standards other than those noted above as material would have a material effect on its consolidated financial statements.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reconciliation of Net Income and Weighted Average Shares Outstanding for Calculation of Basic and Diluted Earnings per Share | The following table represents a reconciliation of the net income and weighted average shares outstanding for the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except share data):
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Preliminary Calculations of the Fair Values of Assets Acquired and Liabilities Assumed | The following summarizes the final calculations of the fair values of PDC assets acquired and liabilities assumed as of the acquisition date (in thousands):
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Summary of Results of Operations of Businesses Acquired From Dates of Acquisitions | The following table presents the results of operations of the acquired business from the date of acquisition for the three and nine months ended September 30, 2023 (in thousands):
1 Gross contract revenue includes adjustments as required by ASC 606, Revenue from Contracts with Customers based on opening balance sheet provided by the acquired companies. There is no assurance these adjustments will be consistent in future periods. Opening balance sheet balances are subject to adjustment prior to being finalized.
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Summary of Unaudited Proforma Results | The following table presents the unaudited, pro forma condensed consolidated results of operations for the three and nine months ended September 30, 2023 and September 30, 2022 assuming that the companies acquired in the second quarter of 2023, described above, occurred on January 1, 2022. The unaudited pro forma results are presented for informational purposes only and are not meant to represent actual operating results that would have been achieved had the related events occurred on such date (in thousands):
2 Gross contract revenue in these pro forma financials does not conform to GAAP as required by ASC 606, Revenue from Contract with Customers, as it is impracticable to obtain the historical information necessary to apply this accounting standard. The historical estimates required to be able to accurately determine the percent complete accounting on the contracts that comprise the revenue is not available for the required periods.
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Disaggregation of Revenue and Contract Balances (Tables) |
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Disaggregated Revenues by Contract Type | Disaggregated revenues by contract type were as follows (in thousands):
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Contracts in Progress (Tables) |
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Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Costs and Estimated Earnings on Contracts | The following table reflects the calculation of the net balance of contract assets and contract liabilities. Costs and estimated earnings on contracts in progress consist of the following (in thousands):
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Notes Receivable (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notes Receivable | The Company has unsecured notes receivable from related parties, certain non-executive officers of the Company and an unrelated third party. The following is a summary of these notes receivable (in thousands):
1Notes initiated prior to the Company's initial public offering.
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Property and Equipment, Net (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property and Equipment for Fixed Assets | Property and equipment for fixed assets are as follows (in thousands):
1assets acquired which will be re-financed under the Company's finance lease facilities Property and equipment for finance leased assets are as follows (in thousands):
|
Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Summary of Goodwill Resulting From Business Acquisitions | Changes in the carrying amount of goodwill were as follows (in thousands):
|
Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Intangible Assets | Total intangible assets consisted of the following at September 30, 2023 and December 31, 2022 (in thousands):
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Summary of Weighted Average Useful Lives of Intangible Assets by Asset Class Used for Straight-line Expense Purposes | The following table summarizes the weighted average useful lives of intangible assets by asset class used for straight-line expense purposes:
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Summary of Future amortization | Future amortization for the remainder of 2023 and for the succeeding years is as follows (in thousands):
|
Notes Payable (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable | Notes payable consist of the following (in thousands):
1Includes notes payable to all owners irrespective of current relationship with the Company
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Schedule of Future Principal Payments on Notes Payable | Future principal payments on notes payable for remainder of 2023 and succeeding years are as follows (in thousands):
|
Pension and Post-retirement Benefit Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Costs | The following table details the components of net periodic benefit costs for the Company's pension plan for the three and nine months ended September 30, 2023 and 2022:
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Employee Stock Purchase and Stock Incentive Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Issuance Activity Under Employee Stock Purchase Plan | The following table summarizes the stock issuance activity under the ESPP for the nine months ended September 30, 2023 (in thousands, except share data):
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Summary of Status of Stock Options Exercised, Including Substantive Options and Information about Options Outstanding and Exercisable | A summary of the status of stock options exercised, including the substantive options discussed in Note 3, is as follows:
The following summarizes information about options outstanding and exercisable at January 1, 2023 and September 30, 2023:
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Summary of Activity of Restricted Shares Subject to Forfeiture | The following table summarizes the activity of restricted shares subject to forfeiture:
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Summary of Activity of Performance Stock Units Subject to Forfeiture | The following table summarizes the activity of performance stock units subject to forfeiture:
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Summary of Future Expense of Unvested Awards | The future expense of the unvested awards for the remainder of 2023 and succeeding years is as follows (in thousands):
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | The following tables present our balance sheet information related to leases:
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Schedule of Selected Financial Information | The following tables present selected financial information:
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Summary of Future Minimum Lease Payments | Future minimum commitments under leases for the succeeding years are as follows (in thousands):
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Summary of Future Minimum Lease Payments | Future minimum commitments under leases for the succeeding years are as follows (in thousands):
|
Significant Accounting Policies - Additional Information (Details) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022 |
Sep. 30, 2023
USD ($)
segment
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
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Accounting Policies [Abstract] | |||||
Long term contract billing term | 30 days | ||||
Uncertain tax position | $ 24.2 | ||||
Effective tax rate | 233.40% | (84.70%) | |||
Net discrete benefits | $ 1.5 | $ 2.1 | |||
Windfall tax adjustment for restricted stock awards | $ 2.1 | $ 0.5 | |||
One-time adjustment to state tax payables | $ 0.2 | ||||
Income tax rate reduction | 186.60% | 85.30% | |||
Reversal in uncertain tax position | $ 1.9 | ||||
Uncertain tax position | $ 0.4 | ||||
Number of operating segment | segment | 1 |
Earnings Per Share - Additional Information (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Non-vested restricted shares (in shares) | 1,795,553 | 1,959,714 | 1,806,070 | 2,037,620 |
Substantive options shares (in shares) | 7,273 | 12,316 | 8,501 | 13,442 |
Earnings Per Share - Summary of Reconciliation of Net Income and Weighted Average Shares Outstanding for Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 1,183 | $ 3,397 | $ 1,086 | $ 4,534 |
Earnings allocated to non-vested shares | 146 | 504 | 140 | 731 |
Subtotal | $ 1,037 | $ 2,893 | $ 946 | $ 3,803 |
Weighted average common shares outstanding (in shares) | 12,814,971 | 11,304,946 | 12,304,751 | 10,669,221 |
Effect of dilutive nominal options (in shares) | 0 | 0 | 0 | 0 |
Effect of dilutive contingently earned shares (in shares) | 978,149 | 463,465 | 1,133,090 | 460,257 |
Dilutive average shares outstanding (in shares) | 13,793,120 | 11,768,411 | 13,437,841 | 11,129,478 |
Basic (in dollars per share) | $ 0.08 | $ 0.26 | $ 0.08 | $ 0.36 |
Diluted (in dollars per share) | $ 0.08 | $ 0.25 | $ 0.07 | $ 0.34 |
Acquisitions - Summary of Changes in Preliminary Calculations of the Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jul. 15, 2022 |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Purchase Price Allocation: | |||
Goodwill | $ 75,731 | $ 53,210 | |
Project Design Consultants, LLC (“PDC”) | |||
Business Acquisition [Line Items] | |||
Total Purchase Price | $ 14,178 | ||
Purchase Price Allocation: | |||
Accounts receivable | 2,199 | ||
Contract assets | 926 | ||
Prepaid and other current assets | 161 | ||
Property and equipment, net | 489 | ||
Intangible assets | 10,344 | ||
Accounts payable and accrued liabilities, current portion | (1,118) | ||
Contract liabilities | (1,362) | ||
Other non-current obligations | (273) | ||
Finance leases - non-current | 36 | ||
Total identifiable assets | 11,402 | ||
Goodwill | 2,776 | ||
Net assets acquired | $ 14,178 |
Acquisitions - Summary of Results of Operations of Businesses Acquired From Dates of Acquisitions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Business Acquisition [Line Items] | ||||
Gross Contract Revenue | $ 94,434 | $ 71,246 | $ 253,290 | $ 186,105 |
Pre-tax Net Income | 1,121 | $ 1,624 | (815) | $ 2,455 |
Project Design Consultants, LLC (“PDC”) | ||||
Business Acquisition [Line Items] | ||||
Gross Contract Revenue | 3,776 | 10,779 | ||
Pre-tax Net Income | 1,100 | 3,217 | ||
Business Acquired | ||||
Business Acquisition [Line Items] | ||||
Gross Contract Revenue | 10,737 | 16,505 | ||
Pre-tax Net Income | $ 1,476 | $ 3,416 |
Acquisitions - Summary of Unaudited Proforma Results (Details) - Business Acquired - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Business Acquisition [Line Items] | ||||
Gross Contract Revenue | $ 105,172 | $ 81,649 | $ 287,828 | $ 217,318 |
Pre-tax Net Income | $ 1,533 | $ 5,357 | $ 4,935 | $ 5,263 |
Disaggregation of Revenue and Contract Balances - Summary of Disaggregated Revenues by Contract Type (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Disaggregation Of Revenue [Line Items] | ||||
Gross Contract Revenue | $ 94,434 | $ 71,246 | $ 253,290 | $ 186,105 |
Gross contract revenue, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Fixed fee | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross Contract Revenue | $ 82,997 | $ 66,518 | $ 224,751 | $ 174,590 |
Gross contract revenue, Percentage | 87.90% | 93.40% | 88.70% | 93.80% |
Time-and-materials | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross Contract Revenue | $ 11,437 | $ 4,728 | $ 28,539 | $ 11,515 |
Gross contract revenue, Percentage | 12.10% | 6.60% | 11.30% | 6.20% |
Contracts in Progress - Summary of Costs and Estimated Earnings on Contracts (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Costs incurred on uncompleted contracts | $ 308,777 | $ 279,173 |
Estimated contract earnings in excess of costs incurred | 458,947 | 398,791 |
Estimated contract earnings to date | 767,724 | 677,964 |
Less: billed to date | (746,731) | (668,013) |
Net contract assets | $ 20,993 | $ 9,951 |
Notes Receivable - Additional Information (Details) - Unsecured Notes Receivable |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Minimum | |
Accounts Notes And Loans Receivable [Line Items] | |
Notes receivable, interest | 0.00% |
Maximum | |
Accounts Notes And Loans Receivable [Line Items] | |
Notes receivable, interest | 5.50% |
Property and Equipment, Net - Summary of Property and Equipment for Fixed Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property Plant And Equipment [Line Items] | ||
Total: | $ 22,318 | $ 18,843 |
Less: accumulated depreciation | (14,190) | (12,319) |
Property and Equipment, net of finance leased assets | 8,128 | 6,524 |
Computer equipment | ||
Property Plant And Equipment [Line Items] | ||
Total: | 2,224 | 2,101 |
Survey equipment | ||
Property Plant And Equipment [Line Items] | ||
Total: | 5,409 | 5,088 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Total: | 1,852 | 1,032 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total: | 2,448 | 2,398 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total: | 8,723 | 7,727 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Total: | 387 | 316 |
Fixed assets pending lease financing | ||
Property Plant And Equipment [Line Items] | ||
Total: | $ 1,275 | $ 181 |
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense for fixed assets | $ 700 | $ 500 | $ 1,900 | $ 1,100 |
Amortization of right-of-use assets | $ 1,826 | $ 1,895 | $ 5,273 | $ 5,296 |
Property and Equipment, Net - Summary of Property and Equipment for Capital Leased Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property Plant And Equipment [Line Items] | ||
Total: | $ 28,389 | $ 23,043 |
Less: accumulated amortization on leased assets | (8,429) | (4,463) |
Finance lease assets | 19,960 | 18,580 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total: | 19,359 | 16,256 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Total: | $ 9,030 | $ 6,787 |
Goodwill - Summary of Goodwill Resulting From Business Acquisitions (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 53,210 |
Goodwill Acquired | 22,521 |
Ending balance | $ 75,731 |
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 1,900 | $ 700 | $ 5,613 | $ 1,984 |
Domain name | ||||
Intangible Assets [Line Items] | ||||
Intangible assets acquired | 1,700 | |||
Licensing rights | ||||
Intangible Assets [Line Items] | ||||
Intangible assets acquired | $ 1,700 |
Intangible Assets - Summary of Weighted Average Useful Lives of Intangible Assets by Asset Class Used for Straight-line Expense Purposes (Details) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average useful lives | 10 years 6 months | 11 years 11 months 19 days |
Contract rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average useful lives | 1 year 3 days | 2 years 5 months 19 days |
Leasehold | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average useful lives | 4 years 10 months 20 days | 8 years 18 days |
Intangible Assets - Summary of Future amortization (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Intangible Assets [Abstract] | |
2023 | $ 2,287 |
2024 | 6,923 |
2025 | 3,620 |
2026 | 3,116 |
2027 | 3,030 |
Thereafter | 17,546 |
Net Balance | $ 36,522 |
Notes Payable - Schedule of Future Principal Payments on Notes Payable (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Debt Instruments [Abstract] | |
2023 | $ 2,633 |
2024 | 10,929 |
2025 | 6,901 |
2026 | 2,700 |
2027 | 1,136 |
Thereafter | 0 |
Total | $ 24,299 |
Pension and Post-retirement Benefit Obligations - Net Periodic Benefit Costs (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Postemployment Benefits [Abstract] | ||||
Service (income) costs | $ (33,000) | $ 0 | $ 31,000 | $ 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement Of Income Or Comprehensive Income Extensible List Not Disclosed Flag | true | |||
Interest costs | 112,000 | 0 | $ 205,000 | 0 |
Amortization of net gain | (11,000) | 0 | (32,000) | 0 |
Net periodic benefit cost | 68,000 | $ 0 | 204,000 | $ 0 |
Required minimum contributions for the pension plans | $ 0 | $ 0 |
Employee Stock Purchase and Stock Incentive Plans - Schedule of Stock Issuance Activity Under Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Total purchase price paid by employees for shares sold | $ 393 | $ 405 | $ 1,155 | $ 1,000 |
Number of shares sold (in shares) | 47,488 |
Employee Stock Purchase and Stock Incentive Plans - Summary of Status of Stock Options Exercised, Including Substantive Options (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Number of shares | |
Outstanding, beginning balance (in shares) | shares | 10,030 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (3,570) |
Expired or cancelled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 6,460 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 5.99 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 5.97 |
Expired or cancelled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 6.01 |
Employee Stock Purchase and Stock Incentive Plans - Summary of Information about Options Outstanding and Exercisable (Details) - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||
Exercise Price (in dollars per share) | $ 6.28 | $ 6.28 |
Total Outstanding (in shares) | 6,460 | 10,030 |
Weighted Average Remaining Life (Years) | 5 years | 5 years |
Weighted Average Exercise Price (in dollars per share) | $ 6.01 | $ 5.99 |
Total Exercisable (in shares) | 6,460 | 10,030 |
Employee Stock Purchase and Stock Incentive Plans - Summary of Activity of Restricted Shares Subject to Forfeiture (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Number of shares | |
Vested (in shares) | (2,482,200) |
Restricted Shares | |
Number of shares | |
Beginning balance (in shares) | 1,837,309 |
Granted (in shares) | 646,488 |
Vested (in shares) | (663,104) |
Cancelled (in shares) | (31,632) |
Ending balance (in shares) | 1,789,061 |
Weighted Average Grant Price | |
Beginning balance (in dollars per share) | $ / shares | $ 14.33 |
Granted (in dollars per share) | $ / shares | 28.83 |
Vested (in dollars per share) | $ / shares | 12.24 |
Cancelled (in dollars per share) | $ / shares | 19.94 |
Ending balance (in dollars per share) | $ / shares | $ 17.79 |
Employee Stock Purchase and Stock Incentive Plans - Summary of Activity of Performance Stock Units Subject to Forfeiture (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Number of shares | |
Vested (in shares) | (2,482,200) |
Performance Based Stock Units | |
Number of shares | |
Beginning balance (in shares) | 447,429 |
Granted (in shares) | 245,710 |
Vested (in shares) | 0 |
Cancelled (in shares) | 0 |
Ending balance (in shares) | 693,139 |
Weighted Average Grant Price | |
Beginning balance (in dollars per share) | $ / shares | $ 12.95 |
Granted (in dollars per share) | $ / shares | 22.94 |
Vested (in dollars per share) | $ / shares | 0 |
Cancelled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 16.49 |
Employee Stock Purchase and Stock Incentive Plans - Summary of Future expense of Unvested Awards (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Share-Based Payment Arrangement [Abstract] | |
2023 | $ 5,993 |
2024 | 15,682 |
2025 | 7,215 |
2026 | 753 |
Thereafter | 21 |
Total | $ 29,664 |
Leases - Additional Information (Details) $ in Millions |
Sep. 30, 2023
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
Bargain purchase price | $ 2.8 |
Finance lease liability | $ 21.3 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Capital leases payment terms on lease agreements | 30 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Capital leases payment terms on lease agreements | 50 months |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets: | ||
Operating lease assets | $ 38,205 | $ 30,264 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Finance lease assets | $ 19,960 | $ 18,580 |
Total lease assets | 58,165 | 48,844 |
Current: | ||
Operating lease liabilities | (8,289) | (6,949) |
Finance lease liabilities | (6,396) | (5,297) |
Total current lease liabilities | (14,685) | (12,246) |
Non-current: | ||
Operating lease liabilities | (35,670) | (28,087) |
Finance lease liabilities | (14,880) | (14,254) |
Total non-current lease liabilities | $ (50,550) | $ (42,341) |
Leases - Schedule of Future Minimum Commitments Under Leases (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Operating Lease | |
2023 (three months remaining) | $ 2,786 |
2024 | 10,738 |
2025 | 10,050 |
2026 | 8,471 |
2027 | 7,383 |
Thereafter | 13,572 |
Total lease payments | 53,000 |
Less: Amounts representing interest | (9,041) |
Total lease liabilities | 43,959 |
Finance Lease | |
2023 (three months remaining) | 2,076 |
2024 | 7,456 |
2025 | 7,189 |
2026 | 3,748 |
2027 | 616 |
Thereafter | 0 |
Total lease payments | 21,085 |
Less: Amounts representing interest | (2,562) |
Total lease liabilities | $ 18,523 |
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
Nov. 07, 2023 |
Oct. 12, 2023 |
Oct. 03, 2023 |
Oct. 02, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|---|---|
Subsequent Event [Line Items] | ||||||
Amount spent in repurchase | $ 24,425 | $ 20,831 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Total shares repurchased (in shares) | 28,704 | 28,404 | ||||
Average price paid per share (in dollars per share) | $ 25.94 | |||||
Amount spent in repurchase | $ 700 | |||||
Remaining amount authorized | $ 9,300 | |||||
Excellence Engineering, LLC | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Total consideration paid | $ 1,100 | |||||
Dennis Corporation | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Total consideration paid | $ 3,700 |
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