Company Quick10K Filing
Sterling Construction
Price13.18 EPS1
Shares27 P/E19
MCap351 P/FCF41
Net Debt3 EBIT20
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-04
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10-K 2012-12-31 Filed 2013-03-18
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10-K 2011-12-31 Filed 2012-03-15
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10-K 2009-12-31 Filed 2010-03-15
8-K 2020-11-02
8-K 2020-09-01
8-K 2020-08-04
8-K 2020-08-03
8-K 2020-06-02
8-K 2020-05-06
8-K 2020-05-05
8-K 2020-05-05
8-K 2020-05-04
8-K 2020-04-01
8-K 2020-03-03
8-K 2020-03-03
8-K 2020-03-02
8-K 2019-12-08
8-K 2019-11-05
8-K 2019-11-04
8-K 2019-10-02
8-K 2019-09-06
8-K 2019-08-13
8-K 2019-08-13
8-K 2019-08-06
8-K 2019-08-05
8-K 2019-05-29
8-K 2019-05-08
8-K 2019-05-07
8-K 2019-05-06
8-K 2019-03-18
8-K 2019-03-06
8-K 2018-12-18
8-K 2018-12-18
8-K 2018-12-18
8-K 2018-11-14
8-K 2018-11-05
8-K 2018-08-09
8-K 2018-08-06
8-K 2018-05-31
8-K 2018-05-08
8-K 2018-05-07
8-K 2018-05-02
8-K 2018-03-08
8-K 2018-03-05

STRL 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
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. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 a2021033110-qexhibit311.htm
EX-31.2 a2021033110-qexhibit312.htm
EX-32.1 a2021033110-qexhibit321.htm
EX-32.2 a2021033110-qexhibit322.htm

Sterling Construction Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin

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Washington, D.C. 20549
For the quarterly period ended March 31, 2021
For the transition period from ___ to ___ 
Commission File Number1-31993
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation
or organization)
(I.R.S. Employer
Identification No.)
1800 Hughes Landing Blvd.
The Woodlands, Texas
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code:  (281) 214-0800
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.01 par value per shareSTRLThe NASDAQ Stock Market LLC
(Title of each class)(Trading Symbol)(Name of each exchange on which registered)
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 for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. þYes ¨ 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). þ 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 filerþ
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 Exchange Act). Yes þ No
The number of shares outstanding of the registrant’s common stock as of April 30, 2021 – 28,606,443



Item 1. Condensed Consolidated Financial Statements
(In thousands, except per share data)
 Three Months Ended March 31,
Revenues$315,316 $296,688 
Cost of revenues(270,284)(261,443)
Gross profit45,032 35,245 
General and administrative expense(17,099)(17,604)
Intangible asset amortization(2,866)(2,837)
Acquisition related costs (473)
Other operating expense, net(2,312)(2,228)
Operating income22,755 12,103 
Interest income14 99 
Interest expense(6,004)(7,803)
Loss on extinguishment of debt(337) 
Income before income taxes16,428 4,399 
Income tax expense(4,760)(1,184)
Net income 11,668 3,215 
Less: Net income attributable to noncontrolling interests(1,113)(100)
Net income attributable to Sterling common stockholders$10,555 $3,115 
Net income per share attributable to Sterling common stockholders: 
Basic$0.37 $0.11 
Diluted$0.37 $0.11 
Weighted average common shares outstanding:
Basic28,279 27,736 
Diluted28,763 27,992 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.


(In thousands)
Three Months Ended March 31,
Net income$11,668 $3,215 
Other comprehensive income, net of tax
Change in interest rate swap, net of tax (Note 9)
895 (7,061)
Total comprehensive income (loss)12,563 (3,846)
Less: Comprehensive income attributable to noncontrolling interests(1,113)(100)
Comprehensive income (loss) attributable to Sterling common stockholders$11,450 $(3,946)
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

(In thousands, except per share data)
 March 31,
December 31,
Current assets:
Cash and cash equivalents ($20,270 and $26,122 related to variable interest entities (“VIEs”))
$61,402 $66,185 
Accounts receivable ($19,567 and $25,789 related to VIEs)
170,186 177,424 
Contract assets ($10,404 and $8,370 related to VIEs)
90,109 84,975 
Receivables from and equity in construction joint ventures ($9,312 and $9,708 related to VIEs)
18,166 16,653 
Other current assets ($2,829 and $1,493 related to VIEs)
15,366 16,306 
Total current assets355,229 361,543 
Property and equipment, net ($8,999 and $6,010 related to VIEs)
135,428 126,668 
Operating lease right-of-use assets, net ($4,060 and $4,213 related to VIEs)
15,804 16,515 
Goodwill ($1,501 and $1,501 related to VIEs)
192,014 192,014 
Other intangibles, net242,021 244,887 
Deferred tax asset, net3,410 7,817 
Other non-current assets, net3,310 3,250 
Total assets$947,216 $952,694 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable ($17,608 and $19,505 related to VIEs)
$111,131 $95,201 
Contract liabilities ($13,287 and $17,678 related to VIEs)
111,232 114,019 
Current maturities of long-term debt ($6,793 and $6,793 related to VIEs)
59,962 77,434 
Current portion of long-term lease obligations ($1,929 and $1,801 related to VIEs)
7,627 7,588 
Income taxes payable260  
Accrued compensation ($2,817 and $2,141 related to VIEs)
22,124 18,013 
Other current liabilities ($1,295 and $1,374 related to VIEs)
9,910 9,629 
Total current liabilities322,246 321,884 
Long-term debt ($62 and $53 related to VIEs)
279,175 291,249 
Long-term lease obligations ($2,131 and $2,412 related to VIEs)
8,202 8,958 
Members’ interest subject to mandatory redemption and undistributed earnings51,615 51,290 
Other long-term liabilities ($1,063 and $722 related to VIEs)
10,285 10,584 
Total liabilities671,523 683,965 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, par value $0.01 per share; 38,000 shares authorized, 28,606 and 28,279 shares issued, 28,606 and 28,184 shares outstanding
286 283 
Additional paid in capital251,335 256,423 
Treasury stock, at cost: 0 and 95 shares
Retained earnings27,828 17,273 
Accumulated other comprehensive loss(4,369)(5,264)
Total Sterling stockholders’ equity275,080 267,270 
Noncontrolling interests613 1,459 
Total stockholders’ equity275,693 268,729 
Total liabilities and stockholders’ equity$947,216 $952,694 
 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

(In thousands)
Three Months Ended March 31,
Cash flows from operating activities:
Net income$11,668 $3,215 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization8,305 8,285 
Amortization of debt issuance costs and non-cash interest660 1,022 
Gain on disposal of property and equipment(68)(393)
Loss on debt extinguishment337  
Deferred taxes4,142 913 
Stock-based compensation expense1,835 2,234 
Change in interest rate swap(22)171 
Changes in operating assets and liabilities (Note 15)
11,863 (4,676)
Net cash provided by operating activities38,720 10,771 
Cash flows from investing activities:
Capital expenditures(11,209)(7,354)
Proceeds from sale of property and equipment208 512 
Net cash used in investing activities(11,001)(6,842)
Cash flows from financing activities:
Cash received from credit facility 30,000 
Repayments of debt(30,543)(5,082)
Distributions to noncontrolling interest owners(1,959) 
Other (675)
Net cash (used in) provided by financing activities(32,502)24,243 
Net change in cash and cash equivalents(4,783)28,172 
Cash and cash equivalents at beginning of period66,185 45,733 
Cash and cash equivalents at end of period$61,402 $73,905 
Supplemental disclosures of cash flow information:
Non-cash items:
Capital expenditures$3,131 $ 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

(In thousands)
Three Months Ended March 31, 2021
Common StockAdditional Paid in CapitalTreasury StockRetained Earnings (Deficit)Accumulated Other Comprehensive LossTotal Sterling Stockholders’ EquityNon-controlling InterestsTotal Stockholders’ Equity
Balance at December 31, 202028,184 $283 $256,423 95 $(1,445)$17,273 $(5,264)$267,270 $1,459 $268,729 
Net income— — — — — 10,555 — 10,555 1,113 11,668 
Change in interest rate swap— — — — — — 895 895 — 895 
Stock-based compensation— — 1,835 — — — — 1,835 — 1,835 
Distributions to owners— — — — — — —  (1,959)(1,959)
Issuance of stock668 5 (1,602)(111)1,741 — — 144 — 144 
Shares withheld for taxes(246)(2)(5,321)16 (296)— — (5,619)— (5,619)
Balance at March 31, 202128,606 $286 $251,335  $ $27,828 $(4,369)$275,080 $613 $275,693 
Three Months Ended March 31, 2020
Common StockAdditional Paid in CapitalTreasury StockRetained Earnings (Deficit)Accumulated Other Comprehensive LossTotal Sterling Stockholders’ EquityNon-controlling InterestsTotal Stockholders’ Equity
Balance at December 31, 201927,772 $283 $251,019 518 $(6,142)$(25,033)$(209)$219,918 $1,293 $221,211 
Net income— — — — — 3,115 — 3,115 100 3,215 
Change in interest rate swap— — — — — — (7,061)(7,061)— (7,061)
Stock-based compensation— — 2,234 — — — — 2,234 — 2,234 
Issuance of stock248 — (2,460)(248)2,563 — — 103 — 103 
Shares withheld for taxes(54)— (104)46 (668)— — (772)— (772)
Balance at March 31, 202027,966 $283 $250,689 316 $(4,247)$(21,918)$(7,270)$217,537 $1,393 $218,930 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

March 31, 2021
($ and share values in thousands, except per share data)
Business Summary
Sterling Construction Company, Inc., (“Sterling,” “the Company,” “we,” “our” or “us”), a Delaware corporation, operates through a variety of subsidiaries within three segments specializing in Heavy Civil, Specialty Services and Residential projects in the United States (the “U.S.”), primarily across the southern U.S., the Rocky Mountain States, California and Hawaii, as well as other areas with strategic construction opportunities. Heavy Civil includes infrastructure and rehabilitation projects for highways, roads, bridges, airfields, ports, light rail, water, wastewater and storm drainage systems. Specialty Services projects include land development activities (including site excavation and drainage, drilling and blasting for excavation), foundations for multi-family homes, parking structures and other commercial concrete projects. Residential projects include concrete foundations for single-family homes.
Basis of Presentation
Presentation Basis—The accompanying Condensed Consolidated Financial Statements are presented in accordance with accounting policies generally accepted in the United States (“GAAP”) and reflect all wholly owned subsidiaries and those entities the Company is required to consolidate. See Note 4 - Consolidated 50% Owned Subsidiaries and Note 5 - Construction Joint Ventures for further discussion of the Company’s consolidation policy for those entities that are not wholly owned. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Values presented within tables (excluding per share data) are in thousands. Reclassifications have been made to historical financial data in the Condensed Consolidated Financial Statements to conform to the current year presentation.
Estimates and Judgments—The preparation of the accompanying Condensed Consolidated Financial Statements in conformance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the 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. Certain accounting estimates of the Company require a higher degree of judgment than others in their application. These include the recognition of revenue and earnings from construction contracts over time, the valuation of long-lived assets, goodwill and purchase accounting estimates. Management continually evaluates all of its estimates and judgments based on available information and experience; however, actual results could differ from these estimates.
Significant Accounting Policies
Consistent with Regulation S-X Rule 10-1(a), the Company has omitted significant accounting policies in this quarterly report that would duplicate the disclosures contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020 under “Part II, Item 8. - Notes to Consolidated Financial Statements.” This quarterly report should be read in conjunction with the Company’s most recent annual report on Form 10-K.
Accounts Receivable—Receivables are generally based on amounts billed to the customer in accordance with contractual provisions. Receivables are written off based on the individual credit evaluation and specific circumstances of the customer, when such treatment is warranted. The Company performs a review of outstanding receivables, historical collection information and existing economic conditions to determine if there are potential uncollectible receivables. At March 31, 2021 and December 31, 2020, our allowance for our estimate of expected credit losses was zero.
As is customary, we have agreed to indemnify our bonding company for all losses incurred by it in connection with bonds that are issued, and we have granted our bonding company a security interest in certain assets, including accounts receivable, as collateral for such obligation.

Contracts in Progress—For performance obligations satisfied over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Typically, Sterling bills for advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. However, the Company occasionally bills subsequent to revenue recognition, resulting in contract assets.
Many of the contracts under which the Company performs work also contain retainage provisions. Retainage refers to that portion of our billings held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained by customers under such provisions are fully collectible. At March 31, 2021 and December 31, 2020, contract assets included $43,824 and $44,412 of retainage, respectively, and contract liabilities included $35,832 and $33,856 of retainage, respectively. Retainage on active contracts is classified as current regardless of the term of the contract and is generally collected within one year of the completion of a contract. We anticipate collecting approximately 69% of our March 31, 2021 retainage during the next twelve months. These assets and liabilities are reported on the Condensed Consolidated Balance Sheet within “Contract assets” and “Contract liabilities” on a contract-by-contract basis at the end of each reporting period.
Revenue recognized for the three months ended March 31, 2021 that was included in the contract liability balance on December 31, 2020 was $155,558. Revenue recognized for the three months ended March 31, 2020 that was included in the contract liability balance on December 31, 2019 was $146,266.
Cash and Restricted Cash—Our cash is comprised of highly liquid investments with maturities of three months or less. Restricted cash of approximately $5,800 and $6,500 is included in “Other current assets” on the Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively. This primarily represents cash deposited by the Company into separate accounts and designated as collateral for standby letters of credit in the same amount in accordance with contractual agreements.
BacklogThe following table presents the Company’s backlog, by segment:
March 31,
December 31,
Heavy Civil Backlog$1,261,461 $898,183 
Specialty Services Backlog377,761 277,205 
Total Heavy Civil and Specialty Services Backlog$1,639,222 $1,175,388 
The Company expects to recognize approximately 52% of its backlog as revenue during the next twelve months, and the balance thereafter.

Revenue DisaggregationThe following tables present the Company’s revenue disaggregated by major end market and contract type:
Three Months Ended March 31,
Revenues by major end market20212020
Heavy Highway$99,516 $96,374 
Aviation27,222 28,457 
Water Containment and Treatment14,219 21,809 
Other6,097 8,975 
Heavy Civil Revenues147,054 155,615 
Land Development96,572 76,245 
Commercial27,516 28,478 
Specialty Services Revenues124,088 104,723 
Residential Revenues44,174 36,350 
Total Revenues$315,316 $296,688 
Revenues by contract type
Fixed-Unit Price$177,547 $141,739 
Lump Sum91,155 114,252 
Residential and Other46,614 40,697 
Total Revenues$315,316 $296,688 
Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with lump-sum contracts. However, these types of contracts offer additional profits if the work is completed for less than originally estimated. Under fixed-unit price contracts, the Company’s profit may vary if actual labor-hour costs vary significantly from the negotiated rates. Also, because some contracts can provide little or no fee for managing material costs, the components of contract cost can impact profitability.
Variable Consideration
The Company has projects that it is in the process of negotiating, or awaiting final approval of, unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work. Unapproved change order and claim information has been provided to the Company’s customers and negotiations with the customers are ongoing. If additional progress with an acceptable resolution is not reached, legal action will be taken. Based upon the Company’s review of the provisions of its contracts, specific costs incurred and other related evidence supporting the unapproved change orders and claims, together in some cases as necessary with the views of the Company’s outside claim consultants, the Company concluded it was appropriate to include in project price amounts of $7,142, at March 31, 2021 and December 31, 2020, relating to unapproved change orders and claims. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.
Contract Estimates
Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes such profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials and the performance of subcontractors. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated revenues and gross margin resulted in a net increase of approximately $8,305 for the three months ended March 31, 2021, and net increase of approximately $95 for the three months ended March 31, 2020, included in “Operating income” on the Condensed Consolidated Statements of Operations.

The Company has 50% ownership interests in two subsidiaries (“Myers” and “RHB”) that it fully consolidates as a result of its exercise of control over the entities. The earnings attributable to the 50% portions the Company does not own were approximately $1,800 and $1,700 for the three months ended March 31, 2021 and 2020, respectively, and are eliminated within “Other operating expense, net” in the Condensed Consolidated Statements of Operations. Any undistributed earnings for partners are included in “Members’ interest subject to mandatory redemption and undistributed earnings” within the Condensed Consolidated Balance Sheets and are mandatorily payable at the time of the noncontrolling owners’ death or permanent disability.
These two subsidiaries have individual mandatory redemption provisions which, under circumstances outlined in the partner agreements, are certain to occur and obligate the Company to purchase each partner’s remaining 50% interests for $20,000 ($40,000 in the aggregate). The Company has purchased two separate $20,000 death and permanent total disability insurance policies to mitigate the Company’s cash draw if such events were to occur. These purchase obligations are also recorded in “Members’ interest subject to mandatory redemption and undistributed earnings” on the Condensed Consolidated Balance Sheets.
The liability consists of the following:
March 31,
December 31,
Members’ interest subject to mandatory redemption$40,000 $40,000 
Net accumulated earnings11,615 11,290 
Total liability$51,615 $51,290 
The Company must determine whether any of its entities, including these two 50% owned subsidiaries, in which it participates, is a VIE. The Company determined that Myers is a VIE and that the Company is the primary beneficiary because pursuant to the terms of the Myers Operating Agreement, the Company is exposed to the majority of potential losses of the partnership.
Summary financial information for Myers is as follows:
Three Months Ended March 31,
Revenues$27,957 $44,362 
Operating income$718 $155 
Net income$352 $79 
Joint Ventures with a Controlling Interest—We consolidate any venture that is determined to be a VIE for which we are the primary beneficiary, or which we otherwise effectively control. The equity held by the remaining owners and their portions of net income (loss) are reflected in stockholders’ equity on the Condensed Consolidated Balance Sheets line item “Noncontrolling interests” and in the Condensed Consolidated Statements of Operations line item “Net income attributable to noncontrolling interests,” respectively. The Company determined that a joint venture in which the Company’s Ralph L. Wadsworth Construction subsidiary is a 51% owner is a VIE and the Company is the primary beneficiary. Summary financial information for this construction joint venture is as follows:
Three Months Ended March 31,
Revenues$8,242 $4,064 
Operating income$2,527 $296 
Net income$2,528 $299 

Joint Ventures with a Noncontrolling Interest—The Company accounts for unconsolidated joint ventures using a pro-rata basis in the Condensed Consolidated Statements of Operations and as a single line item (“Receivables from and equity in construction joint ventures”) in the Condensed Consolidated Balance Sheets. This method is a permissible modification of the equity method of accounting which is a common practice in the construction industry. Combined financial amounts of joint ventures in which the Company has a noncontrolling interest and the Company’s share of such amounts which are included in the Company’s Condensed Consolidated Financial Statements are shown below:
March 31,
December 31,
Current assets$141,199 $143,608 
Current liabilities$(100,730)$(141,295)
Sterling’s receivables from and equity in construction joint ventures$18,166 $16,653 
Three Months Ended March 31,
Revenues$49,417 $26,846 
Income before tax$4,635 $2,157 
Sterling’s noncontrolling interest:
Revenues$21,944 $13,082 
Income before tax$2,135 $1,049 
The caption “Receivables from and equity in construction joint ventures” includes undistributed earnings and receivables owed to the Company. Undistributed earnings are typically released to the joint venture partners after the customer accepts the project as completed and the warranty period, if any, has passed.
Other—The use of joint ventures exposes us to a number of risks, including the risk that our partners may be unable or unwilling to provide their share of capital investment to fund the operations of the venture or complete their obligations to us, the venture, or ultimately, the customer. Differences in opinions or views among joint venture partners could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of the joint venture. In addition, agreement terms may subject us to joint and several liability for our venture partners, and the failure of our venture partners to perform their obligations could impose additional performance and financial obligations on us. The aforementioned factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes, including claims against our partners.
Property and equipment are summarized as follows:
March 31,
December 31,
Construction and transportation equipment$244,416 $231,799 
Buildings and improvements21,895 21,025 
Land3,891 3,891 
Office equipment3,033 3,012 
Total property and equipment273,235 259,727 
Less accumulated depreciation(137,807)(133,059)
Total property and equipment, net$135,428 $126,668 
Depreciation Expense—Depreciation expense is primarily included within cost of revenues and was $5,439 and $5,448 for the three months ended March 31, 2021 and 2020, respectively.

The following table presents our acquired finite-lived intangible assets, including the weighted-average useful lives for each major intangible asset category and in total:
March 31, 2021December 31, 2020
Life (Years)
Customer relationships25$232,623 $(18,730)$232,623 $(16,360)
Trade name2330,107 (3,588)30,107 (3,209)
Non-compete agreements52,487 (878)2,487 (761)
Total24$265,217 $(23,196)$265,217 $(20,330)
    The Company's intangible amortization expense was $2,866 and $2,837 for the three months ended March 31, 2021 and 2020, respectively.
The Company’s outstanding debt was as follows:
March 31,
December 31,
Term Loan Facility$324,500 $355,000 
Revolving Credit Facility  
Credit Facility324,500 355,000 
Note payable to seller, Plateau Acquisition10,000 10,000 
Other debt10,354 10,397 
Total debt$344,854 $375,397 
Less - Current maturities of long-term debt(59,962)(77,434)
Less - Unamortized debt issuance costs(5,717)(6,714)
Total long-term debt$279,175 $291,249 
Credit Facility—Our amended credit agreement (“Credit Agreement”) provides the Company with senior secured debt financing in an amount up to $475,000 in the aggregate, consisting of (i) a senior secured first lien term loan facility (the “Term Loan Facility”) in the amount of $400,000 (collectively, the “Credit Facility”) and (ii) a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $75,000 (with a $75,000 limit for the issuance of letters of credit and a $15,000 sublimit for swing line loans). The obligations under the Credit Facility are secured by substantially all assets of the Company and the subsidiary guarantors, subject to certain permitted liens and interests of other parties. The Credit Facility will mature on October 2, 2024.
The Term Loan Facility bears interest at either the base rate plus a margin, or at a one-, two-, three-, six- or, if available, twelve-month LIBOR rate plus a margin, at the Company’s election. At March 31, 2021, the Company calculated interest using a one-month LIBOR rate and an applicable margin of 0.15% and 4.50% per annum, respectively. We continue to utilize an interest rate swap to hedge against $275,000 of the outstanding Term Loan Facility, which resulted in a weighted average interest rate of approximately 5.62% per annum during the three months ended March 31, 2021. Scheduled principal payments on the Term Loan Facility total $50,000, $50,000, $50,000 and $15,000 for each of the years ending 2021, 2022, 2023, and 2024, respectively, and the Company is required to make payments quarterly. The Company is required to make mandatory prepayments on the Credit Facility with proceeds received from issuances of debt, events of loss and certain dispositions. The Company also is required to prepay the Credit Facility with its excess cash flow within 5 days after receipt of its annual audited financial statements. For the three months ended March 31, 2021, the company made a scheduled term loan payment of $12,500 and an excess cash flow payment of $18,000. A final payment of all principal and interest then outstanding on the Term Loan Facility is due on October 2, 2024.
The Revolving Credit Facility bears interest at the same rate options as the Term Loan Facility. In addition to interest on debt borrowings, we are assessed quarterly commitment fees on the unutilized portion of the facility as well as letter of credit fees on outstanding instruments. At March 31, 2021, we had no outstanding borrowings under the Revolving Credit Facility, providing $75,000 of available capacity.

Debt Issuance Costs—The costs associated with the Term Loan Facility and Revolving Credit Facility are reflected on the Condensed Consolidated Balance Sheets as a direct reduction from the related debt liability and amortized over the terms of the respective facilities. Amortization of debt issuance costs was $660 and $752 for the three months ended March 31, 2021 and 2020, respectively, and was recorded as interest expense. Additionally, due to an early payment of $18,000 on the Term Loan Facility in the first quarter of 2021, we recorded a loss on debt extinguishment of $337 related to debt issuance costs.
Compliance and Other—The Credit Agreement contains various affirmative and negative covenants that may, subject to certain exceptions, restrict the ability of us and our subsidiaries to, among other things, grant liens, incur additional indebtedness, make loans, advances or other investments, make non-ordinary course asset sales, declare or pay dividends or make other distributions with respect to equity interests, purchase, redeem or otherwise acquire or retire capital stock or other equity interests, or merge or consolidate with any other person, among various other things. In addition, the Company is required to maintain certain financial covenants. As of March 31, 2021, we were in compliance with all of our restrictive and financial covenants. The Company’s debt is recorded at its carrying amount in the Condensed Consolidated Balance Sheets. At March 31, 2021 and December 31, 2020, the carrying values of our debt outstanding approximated the fair values.
    Interest Rate Derivative—We continue to utilize a swap arrangement to hedge against interest rate variability associated with $275,000 of the $324,500 outstanding under the Term Loan Facility. The Company has designated its interest rate swap agreement as a cash flow hedging derivative. To the extent the derivative instrument is effective and the documentation requirements have been met, changes in fair value are recognized in other comprehensive income (loss) (“OCI”) until the underlying hedged item is recognized in earnings. At March 31, 2021 the fair value of the swap recorded in accumulated other comprehensive income (loss) (“AOCI”) was a net loss of $5,662.
Derivatives Disclosures
    Fair Value—Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows:
Level 1—Fair value is based on quoted prices in active markets.
Level 2—Fair value is based on internally developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based on current market expectations and adjusts for credit risk.
Level 3—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. The Company did not have any level 3 classifications at March 31, 2021 or December 31, 2020.
    The following table presents the fair value of the interest rate derivative by valuation hierarchy and balance sheet classification:
March 31, 2021December 31, 2020
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Derivative Liabilities
Other current liabilities$ $(4,076)$ $(4,076)$ $(4,427)$ $(4,427)
Other non-current liabilities (1,799) (1,799) (2,629) (2629)
Total liabilities at fair value$ $(5,875)$ $(5,875)$ $(7,056)$ $(7,056)
    OCIThe following table presents the total value recognized in OCI and reclassified from AOCI into earnings during the three months ended March 31, 2021 and 2020 for derivatives designated as cash flow hedges:
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Before Tax AmountTax
Net of Tax
Before Tax AmountTax
Net of Tax
Net gain (loss) recognized in OCI$126 $(29)$97 $(9,174)$2,064 $(7,110)
Net amount reclassified from AOCI into earnings(1)
1,034 (236)798 63 (14)49 
Change in other comprehensive income$1,160 $(265)$895 $(9,111)$2,050 $(7,061)
(1) Net unrealized losses totaling $3,863 are anticipated to be reclassified from AOCI into earnings during the next 12 months due to settlement of the associated underlying obligations.

    The Company has operating and finance leases primarily for construction and transportation equipment, as well as office space. The Company’s leases have remaining lease terms of one month to seven years, some of which include options to extend the leases for up to ten years.
    The components of lease expense are as follows:
Three Months Ended March 31,
Operating lease cost$1,512 $2,159 
Short-term lease cost$2,124 $3,281 
Finance lease cost:
Amortization of right-of-use assets$50 $56 
Interest on lease liabilities6 8 
Total finance lease cost