Company Quick10K Filing
Infrastructure & Energy Alternatives
Price4.54 EPS-0
Shares35 P/E-39
MCap161 P/FCF-3
Net Debt238 EBIT38
TEV399 TEV/EBIT10
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-09
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-12
S-1 2019-11-26 Public Filing
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-03-14
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-06
10-Q 2017-09-30 Filed 2017-11-13
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-05-12
10-K 2016-12-31 Filed 2017-03-30
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-22
8-K 2020-11-19
8-K 2020-11-09
8-K 2020-10-30
8-K 2020-08-14
8-K 2020-08-10
8-K 2020-07-22
8-K 2020-05-29
8-K 2020-05-14
8-K 2020-05-07
8-K 2020-03-10
8-K 2020-03-03
8-K 2020-02-20
8-K 2020-01-21
8-K 2019-11-14
8-K 2019-11-12
8-K 2019-10-29
8-K 2019-10-09
8-K 2019-08-30
8-K 2019-08-14
8-K 2019-08-14
8-K 2019-08-13
8-K 2019-08-08
8-K 2019-05-28
8-K 2019-05-20
8-K 2019-05-16
8-K 2019-05-10
8-K 2019-04-15
8-K 2019-03-12
8-K 2019-02-19
8-K 2018-12-14
8-K 2018-11-16
8-K 2018-11-08
8-K 2018-10-31
8-K 2018-10-12
8-K 2018-10-12
8-K 2018-09-25
8-K 2018-09-24
8-K 2018-09-14
8-K 2018-09-12
8-K 2018-08-27
8-K 2018-08-09
8-K 2018-06-22
8-K 2018-06-06
8-K 2018-06-05
8-K 2018-05-24
8-K 2018-05-10
8-K 2018-04-19
8-K 2018-03-26
8-K 2018-03-21
8-K 2018-03-20
8-K 2018-03-07
8-K 2018-03-02
8-K 2018-02-23
8-K 2018-02-07
8-K 2018-02-07
8-K 2018-01-09
8-K 2017-12-29
8-K 2017-12-27

IEA 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1. Business, Basis of Presentation and Significant Accounting Policies
Note 2. Contract Assets and Liabilities
Note 3. Property, Plant and Equipment, Net
Note 4. Goodwill and Intangible Assets, Net
Note 5. Fair Value of Financial Instruments
Note 6. Debt and Series B Preferred Stock
Note 7. Commitments and Contingencies
Note 8. Earnings per Share
Note 9. Income Taxes
Note 10. Segments
Note 11. Related Party Transactions
Note 12. Subsequent Event
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Control and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 5. Other Information
Item 6. Exhibits
EX-3.1 compositeamendedandres.htm
EX-10.2 amendedemploymentagreementa.htm
EX-10.3 amendedemploymentagree.htm
EX-10.4 amendedemploymentagreement.htm
EX-31.1 ceocertificationsectio.htm
EX-31.2 cfocertificationsectio.htm
EX-32.1 ceocertsection906321-9.htm
EX-32.2 cfocertsection906322-9.htm

Infrastructure & Energy Alternatives Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
67050534017510-1552015201620182020
Assets, Equity
42533524515565-252016201720182020
Rev, G Profit, Net Income
15510249-4-57-1102015201620182020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2020

OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 001-37796

Infrastructure & Energy Alternatives, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware  47-4787177
(State or Other Jurisdiction
of Incorporation)
  (IRS Employer
Identification No.)
 
6325 Digital Way
Suite 460
IndianapolisIndiana
 46278
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (765) 828-2580

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbols(s)Name of exchange on which registered
Common Stock, $0.0001 par valueIEAThe NASDAQ Stock Market LLC
Warrants for Common StockIEAWWThe NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

Number of shares of Common Stock outstanding as of the close of business on November 9, 2020: 22,789,262.



Infrastructure and Energy Alternatives, Inc.
Table of Contents
PART I. FINANCIAL INFORMATION
Part II. OTHER INFORMATION




PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Condensed Consolidated Balance Sheets
($ in thousands, except per share data)
(Unaudited)
September 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$57,298 $147,259 
Accounts receivable, net186,302 203,645 
Contract assets216,513 179,303 
Prepaid expenses and other current assets20,298 16,855 
        Total current assets480,411 547,062 
Property, plant and equipment, net131,558 140,488 
Operating lease assets38,460 43,431 
Intangible assets, net27,280 37,272 
Goodwill37,373 37,373 
Company-owned life insurance3,905 4,752 
Deferred income taxes3,178 12,992 
Other assets278 1,551 
        Total assets$722,443 $824,921 
Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Accounts payable$117,320 $177,783 
Accrued liabilities156,467 158,103 
Contract liabilities73,999 115,634 
Current portion of finance lease obligations23,766 23,183 
Current portion of operating lease obligations9,110 9,628 
Current portion of long-term debt2,661 1,946 
          Total current liabilities383,323 486,277 
Finance lease obligations, less current portion33,205 41,055 
Operating lease obligations, less current portion30,896 34,572 
Long-term debt, less current portion159,150 162,901 
Debt - Series B Preferred Stock171,878 166,141 
Series B Preferred Stock - warrant obligations8,200 17,591 
Deferred compensation7,865 8,004 
         Total liabilities$794,517 $916,541 
Commitments and contingencies:
Series A Preferred Stock, par value, $0.0001 per share; 1,000,000 shares authorized; 17,483 shares and 17,483 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
17,483 17,483 
Stockholders' equity (deficit):
Common stock, par value, $0.0001 per share; 150,000,000 and 100,000,000 shares authorized; 20,983,584 and 20,460,533 shares issued and 20,983,584 and 20,446,811 outstanding at September 30, 2020 and December 31, 2019, respectively
2 2 
Treasury stock, 13,722 shares at cost at December 31, 2019.
 (76)
Additional paid in capital34,517 17,167 
Accumulated deficit(124,076)(126,196)
           Total stockholders' equity (deficit)(89,557)(109,103)
           Total liabilities and stockholders' equity (deficit)$722,443 $824,921 
See accompanying notes to condensed consolidated financial statements.
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INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Condensed Consolidated Statements of Operations
($ in thousands, except per share data)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2020201920202019
Revenue$522,232 $422,022 $1,360,999 $939,764 
Cost of revenue463,343 369,152 1,214,828 849,728 
Gross profit58,889 52,870 146,171 90,036 
Selling, general and administrative expenses29,656 31,313 87,214 84,945 
Income from operations29,233 21,557 58,957 5,091 
Other income (expense), net:
Interest expense(14,975)(13,959)(47,240)(35,822)
Other (expense) income3,161 4,455 428 22,557 
Income (loss) before benefit for income taxes17,419 12,053 12,145 (8,174)
(Provision) benefit for income taxes(6,153)556 (10,025)3,352 
Net income (loss)$11,266 $12,609 $2,120 $(4,822)
Less: Convertible Preferred Stock dividends(619)(759)(1,991)(2,202)
Less: Contingent consideration fair value adjustment (4,247) (23,082)
Less: Net income allocated to participating securities(2,854) (35) 
Net income (loss) available for common stockholders$7,793 $7,603 $94 $(30,106)
Net income (loss) per common share - basic0.37 0.37  (1.47)
Net income (loss) per common share - diluted0.32 0.24  (1.47)
Weighted average shares - basic20,968,271 20,446,811 20,748,193 20,425,801 
Weighted average shares - diluted35,336,064 35,419,432 20,748,193 20,425,801 

See accompanying notes to condensed consolidated financial statements.

2


INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Condensed Consolidated Statements of Stockholders' Equity (Deficit)
($ in thousands)
(Unaudited)
Common StockAdditional Paid-in CapitalTreasury StockAccumulated DeficitTotal Equity (Deficit)
SharesPar ValueSharesCost
Balance at December 31, 201822,155 2 4,751   (135,931)(131,178)
Net loss— — — — — (23,639)(23,639)
Share-based compensation— — 1,040 — — — 1,040 
Share-based payment transaction111  235 (14)(76)— 159 
Merger recapitalization transaction— — — — — 2,754 2,754 
Cumulative effect from adoption of new accounting standard, net of tax— — — — — 750 750 
Series A Preferred dividends— — (525)— — — (525)
Balance at March 31, 201922,266 $2 $5,501 (14)$(76)$(156,066)$(150,639)
Net income— — — — — 6,208 6,208 
Share-based compensation— — 720 — — — 720 
Series B Preferred Stock - Warrants at close— — 9,422 — — — 9,422 
Series A Preferred dividends— — (918)— — — (918)
Balance at June 30, 201922,266 $2 $14,725 (14)$(76)$(149,858)$(135,207)
Net income12,609 12,609 
Removal of Earnout Shares (See Note 1)(1,805)— — — — —  
Share-based compensation— — 1,052 — — — 1,052 
Series B Preferred Stock - Warrants at close— — 3,000 — — — 3,000 
Series A Preferred dividends— — (759)— — — (759)
Balance at September 30, 201920,461 $2 $18,018 (14)$(76)$(137,249)$(119,305)
Balance at December 31, 201920,461 $2 $17,167 (14)$(76)$(126,196)$(109,103)
Net loss— — — — — (12,743)(12,743)
Share-based compensation— — 1,113 — — — 1,113 
Share-based payment transactions240  280 (38)(84)— 196 
Series B Preferred Stock - Warrants at close— — 15,631 — — — 15,631 
Series A Preferred dividends— — (766)— — — (766)
Balance at March 31, 202020,701 $2 $33,425 (52)$(160)$(138,939)$(105,672)
Net income— — — — — 3,597 3,597 
Share-based compensation— — 844 — — — 844 
Share-based payment transactions441  800 (129)(235)— 565 
Series A Preferred dividends— — (606)— — — (606)
Balance at June 30, 202021,142 $2 $34,463 (181)$(395)$(135,342)$(101,272)
Net income— — — — — 11,266 11,266 
Share-based compensation— — 1,110 — — — 1,110 
Share-based payment transactions23 — (42)— — — (42)
Retirement of treasury shares(181)— (395)181 395 — — 
Series A Preferred dividends— — (619)— — — (619)
Balance at September 30, 202020,984 $2 $34,517  $ $(124,076)$(89,557)

See accompanying notes to condensed consolidated financial statements.
3


INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
Nine Months Ended September 30,
20202019
Cash flows from operating activities:
Net income (loss)$2,120 $(4,822)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization36,566 36,373 
   Contingent consideration fair value adjustment (23,082)
   Warrant liability fair value adjustment(171) 
   Amortization of debt discounts and issuance costs9,343 3,765 
   Share-based compensation expense3,067 2,812 
   Loss on sale of equipment1,251 743 
   Deferred compensation(139)1,494 
   Accrued dividends on Series B Preferred Stock7,959 4,135 
   Deferred income taxes9,814 (2,323)
   Other, net287  
   Change in operating assets and liabilities:
       Accounts receivable17,327 (19,108)
       Contract assets(37,210)(62,419)
       Prepaid expenses and other assets(3,288)(5,938)
       Accounts payable and accrued liabilities(64,089)3,317 
       Contract liabilities(41,635)9,580 
       Net cash used in operating activities(58,798)(55,473)
Cash flow from investing activities:
   Company-owned life insurance847 (81)
   Purchases of property, plant and equipment(6,727)(5,599)
   Proceeds from sale of property, plant and equipment4,151 7,266 
       Net cash (used in) provided by investing activities(1,729)1,586 
Cash flows from financing activities:
   Proceeds from long-term debt72,000 50,400 
   Payments on long-term debt(83,201)(121,215)
   Debt financing fees (14,738)
   Payments on finance lease obligations(19,301)(15,953)
   Sale-leaseback transaction 24,343 
   Proceeds from issuance of Series B Preferred Stock350 100,000 
   Proceeds from stock-based awards, net718 159 
   Merger recapitalization transaction 2,754 
       Net cash (used in) provided by financing activities(29,434)25,750 
Net change in cash and cash equivalents(89,961)(28,137)
Cash and cash equivalents, beginning of the period147,259 71,311 
Cash and cash equivalents, end of the period$57,298 $43,174 

See accompanying notes to condensed consolidated financial statements.
4



INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
(Continued)
Nine Months Ended September 30,
20202019
Supplemental disclosures:
  Cash paid for interest30,149 28,240 
  Cash paid (received) for income taxes(955)250 
Schedule of non-cash activities:
   Acquisition of assets/liabilities through finance lease11,691 1,992 
   Acquisition of assets/liabilities through operating lease6,028  
   Series A Preferred dividends declared1,991 2,202 

See accompanying notes to condensed consolidated financial statements.

5


INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)

Note 1. Business, Basis of Presentation and Significant Accounting Policies

Organization and Reportable Segments

    Infrastructure and Energy Alternatives, Inc., a Delaware corporation, is a holding company organized on August 4, 2015 (together with its wholly-owned subsidiaries, “IEA” or the “Company”). On March 26, 2018, we became a public company by consummating a merger (the “Merger”) pursuant to an Agreement and Plan of Merger, dated November 3, 2017, with M III Acquisition Corporation (“M III”).

    As of December 31, 2019, the Company's total annual gross revenues exceeded $1.07 billion and thus we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).

We segregate our business into two reportable segments: the Renewables segment and the Specialty Civil segment. See Note 10. Segments for a description of the reportable segments and their operations.

COVID-19 Pandemic

    During March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The COVID-19 pandemic has significantly affected economic conditions in the United States and internationally as national, state and local governments reacted to the public health crisis by requiring mitigation measures that have disrupted business activities for an uncertain period of time. The effects of the COVID-19 pandemic could affect the Company’s future business activities and financial results, including; new contract awards, reduced crew productivity, contract amendments/cancellations, higher operating costs and/or delayed project start dates or project shutdowns that may be requested or mandated by governmental authorities or others.

The Company believes that the COVID-19 pandemic has not had a material adverse impact on the Company’s financial results for the period ended September 30, 2020. Most of the Company’s construction services are currently deemed essential under governmental mitigation orders and all of our business segments continue to operate. The Company has issued several notices of force majeure for the purpose of recognizing delays in construction schedules due to COVID-19 outbreaks on certain of its teams and has also received notices of force majeure from the owners of certain projects and certain subcontractors. Management does not believe that any delays on projects related to these events of force majeure will have a material impact on its results of operations.

Management’s top priority has been to take appropriate actions to protect the health and safety of the Company's employees, customers and business partners, including adjusting the Company's standard operating procedures to respond to evolving health guidelines. Management believes that it is taking appropriate steps to mitigate any potential impact to the Company; however, given the uncertainty regarding the potential effects of the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity.

Principles of Consolidation

    The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions for Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Adjustments necessary to arrive at net income (loss) available for common stockholders, previously disclosed in Note 8. Earnings Per Share, have been added to the prior period presentation of the consolidated statements of operations to be comparable with the current period presentation.
    The unaudited condensed consolidated financial statements include the accounts of IEA and its wholly-owned domestic and foreign subsidiaries and in the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary to present fairly the results of operations for the interim periods presented. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These financial statements should be read in conjunction with the
6


Company’s audited consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s 2019 Annual Report on Form 10-K.

Basis of Accounting and Use of Estimates
    
    The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of the condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Key estimates include: the recognition of revenue and project profit or loss; fair value estimates; valuations of goodwill and intangible assets; asset lives used in computing depreciation and amortization; accrued self-insured claims; other reserves and accruals; accounting for income taxes; and the estimated impact of contingencies and ongoing litigation. While management believes that its estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations, actual results could differ materially from those estimates.

Revenue Recognition

    The Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which is also referred to as Accounting Standards Codification (“ASC”) Topic 606, under the modified retrospective transition approach effective January 1, 2019, with application to all existing contracts that were not substantially completed as of January 1, 2019. The Company adopted this standard for interim periods beginning after December 31, 2019, and recorded adjustments to the previously issued quarterly financial statements for the nine months ended September 30, 2019. The impacts of adoption on the Company’s retained earnings on January 1, 2019 was primarily related to variable consideration on unapproved change orders. The cumulative impact of adopting Topic 606 required net adjustments of $750,000 to the statement of operations among revenue, cost of revenue and income taxes, thereby reducing income for the nine months ended September 30, 2019 and reducing the December 31, 2019 accumulated deficit. The Company also adjusted the September 30, 2019, statement of cash flows to reflect the impact of adoption.
    Under Topic 606, revenue is recognized when control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. Revenue is recognized by the Company primarily over time utilizing the cost-to-cost measure of progress for fixed price contracts and is based on costs for time and materials and other service contracts, consistent with the Company’s previous revenue recognition practices.
Contracts
    The Company derives revenue primarily from construction projects performed under contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system. Contracts contain multiple pricing options, such as fixed price, time and materials, or unit price. Generally, renewable energy projects are performed for private customers while Specialty Civil projects are performed for various governmental entities.
    Revenue derived from projects billed on a fixed-price basis totaled 98.4% and 98.5% of consolidated revenue from operations for the three months ended September 30, 2020 and 2019, respectively, and totaled 97.6% and 94.1% for the nine months ended September 30, 2020 and 2019, respectively. Revenue and related costs for contracts billed on a time and materials basis are recognized as the services are rendered. Revenue derived from projects billed on a time and materials basis totaled 1.6% and 1.5% of consolidated revenue from operations for the three months ended September 30, 2020 and 2019, respectively, and totaled 2.4% and 5.9% for the nine months ended September 30, 2020 and 2019, respectively.

    Construction contract revenue is recognized over time using the cost-to-cost measure of progress for fixed price contracts. The cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer. The contractual terms provide that the customer compensates the Company for services rendered.

    Contract costs include all direct materials, labor and subcontracted costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and the costs of capital equipment. The cost estimation and review process for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and profit recognition. Changes in these factors could result in revisions to revenue and costs of revenue in the period in which the revisions are determined on a prospective basis, which could materially affect the
7


Company’s results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined.
Performance Obligations
    A performance obligation is a contractual promise to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price of a contract is allocated to distinct performance obligations and recognized as revenue when or as the performance obligations are satisfied. The Company’s contracts often require significant integrated services and, even when delivering multiple distinct services, are generally accounted for as a single performance obligation. Contract amendments and change orders are generally not distinct from the existing contract due to the significant integrated service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. With the exception of certain Specialty Civil service contracts, the majority of the Company’s performance obligations are generally completed within one year.
    When more than one contract is entered into with a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single contract as well as whether those contracts should be accounted for as more than one performance obligation. This evaluation requires significant judgment and is based on the facts and circumstances of the various contracts, which could change the amount of revenue and profit recognition in a given period depending upon the outcome of the evaluation.
    Remaining performance obligations represent the amount of unearned transaction prices for contracts, including approved and unapproved change orders. As of September 30, 2020, the amount of the Company’s remaining performance obligations was $886.2 million. The Company expects to recognize approximately 37.3% of its remaining performance obligations as revenue during 2020. Revenue recognized from performance obligations satisfied in previous periods was $(0.8) million and $4.1 million for the three months ended September 30, 2020 and 2019, respectively, and $(4.4) million and $8.0 million for the nine months ended September 30, 2020 and 2019, respectively.
Variable Consideration
    Transaction pricing for the Company’s contracts may include variable consideration, such as unapproved change orders, claims, incentives and liquidated damages. Management estimates variable consideration for a performance obligation utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Management’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based on legal opinions, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available. The effect of a change in variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders, claims and liquidated damages reflected in transaction price are not resolved in the Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue.
    As of September 30, 2020 and year ended December 31, 2019, the Company included approximately $67.1 million and $73.3 million, respectively, of unapproved change orders and/or claims in the transaction price for certain contracts that were in the process of being resolved in the normal course of business, including through negotiation, arbitration and other proceedings. These transaction price adjustments are included within Contract Assets or Contract Liabilities as appropriate. The Company actively engages with its customers to complete the final change order approval process, and generally expects these processes to be completed within one year. Amounts ultimately realized upon final acceptance by customers could be higher or lower than such estimated amounts.

8



Disaggregation of Revenue
    The following tables disaggregate revenue by customers and services performed, which the Company believes best depicts how the nature, amount, timing and uncertainty of its revenue:
(in thousands)Three Months EndedNine Months Ended
September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Renewables Segment
   Wind$261,754 $242,586 827,442 $493,689 
   Solar65,297 68 72,617 2,145 
$327,051 $242,654 $900,059 $495,834 
Specialty Civil Segment
   Heavy civil$119,713 $113,829 264,656 $250,114 
   Rail52,955 40,725 132,333 121,113 
   Environmental22,513 24,814 63,951 72,703 
$195,181 $179,368 $460,940 $443,930 
Concentrations
    The Company had the following approximate revenue and accounts receivable concentrations, net of allowances, for the periods ended:
Revenue %Revenue %
Three Months EndedNine Months EndedAccounts Receivable %
September 30, 2020September 30, 2019September 30, 2020September 30, 2019September 30, 2020December 31, 2019
Company A (Specialty Civil Segment)***11.7 %**
* Amount was not above 10% threshold

Recently Adopted Accounting Standards - Guidance Adopted in 2020

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which eliminates certain disclosure requirements for recurring and non-recurring fair value measurements, such as the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. ASU 2018-13 was effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Certain disclosures per ASU 2018-13 were applied on a retrospective basis and others on a prospective basis. We adopted the standard on January 1, 2020, and it did not have an impact on our disclosures for fair value measurements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842), which is effective for annual reporting periods beginning after December 15, 2018. Under Topic 842, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Topic 842 requires entities to adopt the new lease standard using a modified retrospective method and initially apply the related guidance at the beginning of the earliest period presented in the financial statements. 

    The Company adopted Topic 842 using the modified retrospective method as of January 1, 2019 and for interim periods beginning after December 31, 2019, without adjusting comparative periods in the financial statements. The most significant effect of the new guidance was the recognition of operating lease right-of-use assets and a liability for operating
9


leases as of December 31, 2019. The accounting for finance leases (capital leases) was substantially unchanged. The Company elected to utilize permissible practical expedients that allowed entities to: (1) not reassess whether any expired or existing contracts were or contained leases; (2) retain the existing classification of lease contracts as of the date of adoption; (3) not reassess initial direct costs for any existing leases; and (4) not separate non-lease components for all classes of leased assets.
Recently Issued Accounting Standards Not Yet Adopted
    
    In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial assets, including trade accounts receivables. The expected credit loss methodology under ASU 2016-13 is based on historical experience, current conditions and reasonable and supportable forecasts, and replaces the probable/incurred loss model for measuring and recognizing expected losses under current GAAP. The ASU also requires disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. The ASU and its related clarifying updates are effective for smaller reporting companies for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. We are still evaluating the new standard but do not expect it to have a material impact on our estimate of the allowance for uncollectable accounts.

    In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective, or prospective basis. We are currently evaluating the potential effects of adopting the provisions of ASU No. 2019-12.

Management has evaluated other recently issued accounting pronouncements and does not believe that they will have a significant impact on the financial statements and related disclosures.

Note 2. Contract Assets and Liabilities

    The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is accounted for as a contract asset. Sometimes we receive advance payments or deposits from our customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability.

    Contract assets in the Condensed Consolidated Balance Sheets represent the following:

costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount has not been billed; and

retainage amounts for the portion of the contract price billed by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project.

    Contract assets consist of the following:
(in thousands)September 30, 2020December 31, 2019
Costs and estimated earnings in excess of billings on uncompleted contracts$79,801 $91,543 
Retainage receivable136,712 87,760 
216,513 179,303 

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    Contract liabilities consist of the following:
(in thousands)September 30, 2020December 31, 2019
Billings in excess of costs and estimated earnings on uncompleted contracts$73,495 $115,570 
Loss on contracts in progress504 64 
$73,999 $115,634 
    
The contract receivables amount as of December 31, 2019 included unapproved change orders of approximately $9.2 million for which the Company was pursuing settlement through dispute resolution. The Company agreed to settle the unapproved change order dispute in the second quarter.

    Revenue recognized for the three and nine months ended September 30, 2020, that was included in the contract liability balance at December 31, 2019 was approximately $5.8 million and $114.5 million, respectively, and revenue recognized for the three and nine months ended September 30, 2019, that was included in the contract liability balance at December 31, 2018 was approximately $3.3 million and $53.3 million, respectively.
    
    Activity in the allowance for doubtful accounts for the periods indicated is as follows:
Three Months EndedNine Months Ended
September 30,September 30,
(in thousands)2020201920202019
Allowance for doubtful accounts at beginning of period$89 $102 $75 $42 
    Plus: provision for (reduction in) allowance 30 14 90 
    Less: write-offs, net of recoveries (81) (81)
Allowance for doubtful accounts at period end$89 $51 $89 $51 

Note 3. Property, Plant and Equipment, Net

    Property, plant and equipment consisted of the following:
(in thousands)September 30, 2020December 31, 2019
Buildings and leasehold improvements$3,420 $2,919 
Land17,600 17,600 
Construction equipment180,570 173,434 
Office equipment, furniture and fixtures3,618 3,487 
Vehicles12,921 6,087 
218,129 203,527 
Accumulated depreciation(86,571)(63,039)
    Property, plant and equipment, net$131,558 $140,488 

    Depreciation expense of property, plant and equipment was $9,282 and $9,219 for the three months ended September 30, 2020 and 2019, respectively, and was $26,575 and $26,125 for the nine months ended September 30, 2020 and 2019, respectively.



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Note 4. Goodwill and Intangible Assets, Net

    The following table provides the changes in the carrying amount of goodwill, by segment:
(in thousands)RenewablesSpecialty CivilTotal
January 1, 2019$3,020 $37,237 $40,257 
   Acquisition adjustments (2,884)(2,884)
December 31, 2019$3,020 $34,353 $37,373 
   Adjustments   
September 30, 2020$3,020 $34,353 $37,373 

    

Intangible assets consisted of the following as of the dates indicated:
September 30, 2020December 31, 2019
($ in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining LifeGross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining Life
Customer relationships$26,500 $(7,534)$18,966 5.25 years$26,500 $(4,695)$21,805 6 years
Trade name13,400 (5,315)8,085 3.25 years13,400 (3,305)10,095 4 years
Backlog13,900 (13,671)229 3 months13,900 (8,528)5,372 1 year
$53,800 $(26,520)$27,280 $53,800 $(16,528)$37,272 
    
Amortization expense associated with intangible assets for the three months ended September 30, 2020 and 2019, totaled $3.3 million and $3.4 million, respectively, and $10.0 million and $10.3 million for the nine months ended September 30, 2020 and 2019, respectively.

    The following table provides the annual intangible amortization expense currently expected to be recognized for the years 2020 through 2024:
(in thousands)Remainder of 20202021202220232024