Revenue (Notes)

9 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue

Remaining Performance Obligations

We had $542.7 million of remaining performance obligations yet to be satisfied as of March 31, 2023. We expect to recognize $432.7 million of our remaining performance obligations as revenue within the next twelve months.

Contract Balances

Contract terms with customers include the timing of billing and payments, which usually differs from the timing of revenue recognition. As a result, we carry contract assets and liabilities in our balance sheet. These contract assets and liabilities are calculated on a contract-by-contract basis and are classified as current. We present our contract assets in the balance sheet as Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts ("CIE"). CIE consists of revenue recognized in excess of billings. We present our contract liabilities in the balance sheet as Billings on Uncompleted Contracts in Excess of Costs and Estimated Earnings ("BIE"). BIE consists of billings in excess of revenue recognized. The following table provides information about CIE and BIE:

	March 31, 2023		June 30, 2022		Change
	(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	53,398	$	44,752	$	8,646
Billings on uncompleted contracts in excess of costs and estimated earnings	(114,729)		(65,106)		(49,623)
Net contract liabilities	$	(61,331)	$	(20,354)	$	(40,977)

The difference between the beginning and ending balances of our CIE and BIE primarily results from the timing of revenue recognized relative to the billings on the associated contract. The amount of revenue recognized during the nine months ended March 31, 2023 that was included in the June 30, 2022 BIE balance was $57.0 million. This revenue consists primarily of work performed during the period on contracts with customers that had advance billings.

Progress billings in accounts receivable at March 31, 2023 and June 30, 2022 included retentions to be collected within one year of $18.9 million and $16.1 million, respectively. Contract retentions collectible beyond one year are included in other assets, non-current in the Condensed Consolidated Balance Sheets and totaled $7.8 million as of March 31, 2023 and $4.0 million as of June 30, 2022.

Disaggregated Revenue

Revenue disaggregated by reportable segment is presented in Note 9 - Segment Information. The following tables presents revenue disaggregated by geographic area where the work was performed and by contract type:

Geographic Disaggregation:

	Three Months Ended				Nine Months Ended
	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
	(In thousands)
United States	$	178,261	$	160,453	$	524,731	$	459,654
Canada	6,932		16,268		52,742		45,038
Other international	1,702		282		11,693		2,369
Total Revenue	$	186,895	$	177,003	$	589,166	$	507,061

Contract Type Disaggregation:

	Three Months Ended				Nine Months Ended
	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
	(In thousands)
Fixed-price contracts	$	96,755	$	100,602	$	311,511	$	303,508
Time and materials and other cost reimbursable contracts	90,140		76,401		277,655		203,553
Total Revenue	$	186,895	$	177,003	$	589,166	$	507,061

Typically, we assume more risk with fixed-price contracts since increases in costs to perform the work may not be recoverable. However, these types of contracts typically offer higher profits than time and materials and other cost reimbursable contracts when completed at or below the costs originally estimated. The profitability of time and materials and other cost reimbursable contracts is typically lower than fixed-price contracts and is usually less volatile than fixed-price contracts since the profit component is factored into the rates charged for labor, equipment and materials, or is expressed in the contract as a percentage of the reimbursable costs incurred.

Revisions in Estimates

During the third quarter of fiscal 2023, unfavorable changes in the estimated recovery of change orders and increased forecasted costs to complete certain midstream gas processing capital projects in the Process and Industrial Facilities segment resulted in the projects reducing gross profit by $3.3 million. Together with prior unfavorable changes in the estimated recovery of change orders and increased costs, the projects reduced gross profit by $12.7 million during the nine months ended March 31, 2023. These charges were primarily the result of the client not approving adequate compensation to us for the impact that excessive scope changes had on our ability to progress work on the project according to forecast and for the impact that global supply chain issues and inflation had on the projects. We have accrued the full expected loss for these projects, which we expect to be mechanically complete in July 2023.

During the three and nine months ended March 31, 2022, our results of operations were materially impacted by an increase in the forecasted costs to complete a midstream gas processing project in the Process and Industrial Facilities segment, which resulted in a decrease in gross profit of $4.8 million. The increase in forecasted costs was primarily due to performance of a now-terminated subcontractor, which required rework in order to meet our client's expectations.

During fiscal 2022, our results of operations were materially impacted by changes in the forecasted costs to complete a large capital project in the Utility and Power Infrastructure segment. Improved project execution resulted in an increase in gross profit of $0.8 million during the three months ended March 31, 2022. However, increases in the forecasted costs to complete the project during the first half of fiscal 2022 resulted in the project reducing gross profit by $5.1 million during the nine months ended March 31, 2022. The increase in forecasted costs during the first half of the fiscal year was principally due to unexpected equipment repairs during commissioning that delayed the scheduled completion and increased the estimated costs to complete. The project was completed in fiscal 2022.

During fiscal 2022, our results of operations were materially impacted by an increase in the costs required to complete a thermal energy storage tank repair and maintenance project in the Storage and Terminal Solutions segment, which resulted in a decrease in gross profit of $5.5 million in the first half of fiscal 2022. The increase in costs was primarily due to changes in repair scope, expanded client weld testing and associated schedule delays. We completed these repairs in the first quarter of fiscal 2023.