Quarterly report pursuant to Section 13 or 15(d)

REVENUE

v3.21.2
REVENUE
9 Months Ended
Sep. 30, 2021
REVENUE.  
REVENUE

NOTE 5—REVENUE

Disaggregation of Revenue

The Company’s contracts generally include a single performance obligation for which revenue is recognized over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. For cost-plus contracts, the Company recognizes revenue when services are performed and contractually billable based upon the hours incurred and agreed-upon hourly rates. Revenue on fixed-price contracts is recognized and invoiced over time using the cost-to-cost percentage-of-completion method. To the extent a contract is deemed to have multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The Company does not adjust the price of the contract for the effects of a significant financing component. Change orders are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. The Company believes these methods of revenue recognition most accurately reflect the economics of the transactions with its customers.

The Company’s contracts may include several types of variable consideration, including change orders, rate true-up provisions, retainage, claims, incentives, penalties, and liquidated damages. The Company estimates the amount of revenue to be recognized on variable consideration using estimation methods that best predict the amount of consideration to which the Company expects to be entitled. The Company includes variable consideration in the estimated 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. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available. The Company updates its estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. In circumstances where the Company cannot reasonably determine the outcome of a contract, it recognizes revenue over time as the work is performed, but only to the extent of recoverable costs incurred (i.e. zero margin). A loss provision is recorded for the amount of any estimated unrecoverable costs in excess of total estimated revenue on a contract as soon as the Company becomes aware. The Company generally provides a limited warranty for a term of two years or less following completion of services performed under its contracts. Historically, warranty claims have not resulted in material costs incurred.

Disaggregated revenue by type of contract was as follows:  

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Cost-plus reimbursement contracts

$

63,363

$

57,123

$

201,027

$

182,689

Fixed-price contracts

9,988

9,117

24,746

22,247

Total

$

73,351

$

66,240

$

225,773

$

204,936

Disaggregated revenue by the geographic area where the work was performed was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

United States

$

64,379

$

57,984

$

197,287

$

178,447

Canada

8,972

8,256

28,486

26,489

Total

$

73,351

$

66,240

$

225,773

$

204,936

Contract Balances

The Company enters into contracts that allow for periodic billings over the contract term that are dependent upon specific advance billing terms, as services are provided, or as milestone billings based on completion of certain phases of work. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported in the Company’s unaudited condensed consolidated balance sheets as contract assets. Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date are reported in the Company’s unaudited condensed consolidated balance sheets as contract liabilities. At any point in time, each project in process could have either contract assets or contract liabilities.

The following table provides information about contract assets and contract liabilities from contracts with customers:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Costs incurred on uncompleted contracts

$

66,590

$

57,582

$

203,561

$

180,014

Earnings recognized on uncompleted contracts

 

6,761

 

8,658

 

22,212

 

24,922

Total

73,351

 

66,240

225,773

 

204,936

Less—billings to date

(63,034)

 

(60,850)

(215,456)

 

(199,546)

Net

$

10,317

$

5,390

$

10,317

$

5,390

Contract assets

$

12,811

$

8,795

$

12,811

$

8,795

Contract liabilities

(2,494)

 

(3,405)

(2,494)

 

(3,405)

Net

$

10,317

$

5,390

$

10,317

$

5,390

For the three and nine months ended September 30, 2021, the Company recognized revenue of approximately $1.1 million and $2.2 million, respectively, on approximately $2.5 million that was included in the corresponding contract liability balance on December 31, 2020.

Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of September 30, 2021:

(in thousands)

Remainder of 2021

2022

2023

Thereafter

Total

Remaining performance obligations

$

73,416

$

133,826

$

95,098

$

370,166

$

672,506