Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.19.3
Operating Segments
9 Months Ended
Sep. 30, 2019
Operating Segments  
Operating Segments

Note 13 – Operating Segments

The Company determined its operating segments on the same basis that it assesses performance and makes operating decisions. The Company manages and measures the performance of its business in two distinct operating segments: Construction and Service. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company’s CODM is comprised of its Chief Executive Officer, Chief Financial Officer and Chief Operating Officers.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on income from operations of the respective segments after the allocation of Corporate office operating expenses. In accordance with ASC Topic 280 – Segment Reporting, the Company has elected to aggregate all of the construction branches into one Construction reportable segment and all of the service branches into one Service reportable segment. All transactions between segments are eliminated in consolidation. Our Corporate departments provide general and administrative support services to our two operating segments. The CODM allocates costs between segments for selling, general and administrative expenses and depreciation expense.

All of the Company’s identifiable assets are located in the United States, which is where the Company is domiciled. The Company does not have sales outside the United States. The Company does not identify capital expenditures and total assets by segment in its internal financial reports due in part to the shared use of a centralized fleet of vehicles and specialized equipment. Interest expense is not allocated to segments because of the corporate management of debt service including interest.

Condensed consolidated segment information for the periods presented is as follows:

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

(in thousands)

    

2019

    

2018

Statement of Operations Data:

 

 

  

 

 

  

Revenue:

 

 

  

 

 

  

Construction

 

$

118,076

 

$

109,389

Service

 

 

29,692

 

 

25,673

Total revenue

 

 

147,768

 

 

135,062

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

Construction

 

 

10,602

 

 

4,967

Service

 

 

7,189

 

 

5,723

Total gross profit

 

 

17,791

 

 

10,690

 

 

 

 

 

 

 

Selling, general and administrative expenses:

 

 

 

 

 

 

Construction

 

 

8,439

 

 

7,770

Service

 

 

4,622

 

 

3,680

Corporate

 

 

3,507

 

 

1,875

Total selling, general and administrative expenses

 

 

16,568

 

 

13,325

Amortization of intangibles

 

 

149

 

 

304

Operating income (loss)

 

$

1,074

 

$

(2,939)

 

 

 

 

 

 

 

Operating income (loss) for reportable segments

 

$

1,074

 

$

(2,939)

Other expenses:

 

 

 

 

 

 

Impairment of goodwill (Construction)

 

 

(4,359)

 

 

 —

 

 

 

 

 

 

 

Less unallocated amounts:

 

 

 

 

 

 

Interest expense, net

 

 

(1,759)

 

 

(787)

Gain on disposition of property and equipment

 

 

17

 

 

36

Gain on change in fair value of warrant liability

 

 

525

 

 

 —

Total unallocated amounts

 

 

(1,217)

 

 

(751)

Loss before income taxes

 

$

(4,502)

 

$

(3,690)

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

Construction

 

$

783

 

$

710

Service

 

 

207

 

 

185

Corporate

 

 

371

 

 

523

Total other data

 

$

1,361

 

$

1,418

 

 

 

 

 

 

 

 

 

    

Nine months ended September 30,

(in thousands)

 

2019

 

2018

Statement of Operations Data:

 

  

 

 

  

 

Revenue:

 

 

  

 

 

  

Construction

 

$

327,675

 

$

319,934

Service

 

 

86,797

 

 

75,208

Total revenue

 

 

414,472

 

 

395,142

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

Construction

 

 

34,337

 

 

23,738

Service

 

 

20,888

 

 

16,037

Total gross profit

 

 

55,225

 

 

39,775

 

 

 

 

 

 

 

Selling, general and administrative expenses:

 

 

 

 

 

 

Construction

 

 

24,280

 

 

22,780

Service

 

 

13,393

 

 

11,516

Corporate

 

 

12,018

 

 

8,380

Total selling, general and administrative expenses

 

 

49,691

 

 

42,676

Amortization of intangibles

 

 

499

 

 

975

Operating income (loss)

 

$

5,035

 

$

(3,876)

 

 

 

 

 

 

 

Operating income (loss) for reportable segments

 

$

5,035

 

$

(3,876)

Other expenses:

 

 

 

 

 

 

Impairment of goodwill (Construction)

 

 

(4,359)

 

 

 —

 

 

 

 

 

 

 

Less unallocated amounts:

 

 

 

 

 

 

Interest expense, net

 

 

(4,190)

 

 

(2,355)

Gain on disposition of property and equipment

 

 

38

 

 

76

Loss on debt extinguishment

 

 

(513)

 

 

 —

Gain on change in fair value of warrant liability

 

 

422

 

 

 —

Total unallocated amounts

 

 

(4,243)

 

 

(2,279)

Loss before income taxes

 

$

(3,567)

 

$

(6,155)

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

Construction

 

$

2,373

 

$

2,080

Service

 

 

636

 

 

557

Corporate

 

 

1,225

 

 

1,579

Total other data

 

$

4,234

 

$

4,216