Note 4 - Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4. Accounts Receivable, Transit Accounts Receivable and Transit Accounts Payable

The Company’s accounts receivable are comprised as follows:

	June 30, 2018			December 30, 2017
Billed	$	37,934		$	31,448
Accrued and unbilled		9,891			10,573
Work-in-progress		5,173			5,026
Allowance for sales discounts and doubtful accounts		(1,257	)		(967	)
Accounts receivable, net	$	51,741		$	46,080

Unbilled receivables primarily represent revenues earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-progress primarily represents revenues earned under contracts which the Company contractually invoices at future dates.

From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services.  Pursuant to these agreements, the Company a)

may

engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes

no

ownership or risks of inventory.  Under the terms of the agreements, the Company is typically

not

required to pay the subcontractor until after the corresponding payment from the Company’s end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does

not

pay a given transit account payable until the related transit account receivable is collected. The Company’s transit accounts payable generally exceeds the Company’s transit accounts receivable but absolute amounts and spreads fluctuate significantly from quarter to quarter in the normal course of business. The transit accounts receivable was

$1.2

million and related transit accounts payable was

$1.8

million, for a net payable of

$0.6

million, as of

June 30, 2018.

The transit accounts receivable was

$3.0

million and related transit accounts payable was

$4.7

million, a net payable of

$1.7

million, as of

December 30, 2017.

The Company has a dispute with a customer that is a major utility in the United States. Essentially, the customer has

not

paid the balance of accounts receivable the Company believes are owed to the Company for certain disputed projects. The Company recently compelled arbitration with this customer. As of

June 30, 2018

the total amount of outstanding receivables from this customer is

$6.4

million, subject to an upward adjustment following disclosures by the customer in the arbitration. Additionally, as part of the arbitration process, the customer has asserted counter claims of

$9.3

million. The Company also believes these counter claims were retaliatory in nature. Prior to the arbitration, the customer had

not

asserted any claims. The Company believes these asserted claims have

no

merit and were merely asserted as a strategy to reduce the Company’s claims in any arbitration award or potential settlement agreement. The Company believes that its accounts receivable balance, subject to reserves, is fully collectible. Furthermore, the Company believes that this arbitration will conclude sometime late in fiscal year

2018

or early fiscal

2019.

While the Company believes the customer’s counter claims to be frivolous and without merit, it can give

no

assurances that it will ultimately

not

have to pay all or a portion of such claims. The Company is continuing work on

one

of the engagements that have given rise to this dispute and also on several engagements from the same client that are

not

currently part of the arbitration.