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REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 12 Months Ended
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Dec. 31, 2021
Revenue From Contract With Customer [Abstract] |
REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 2. REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS As discussed in Note 1, we recognize revenue for our contracts in accordance with Topic 606. Summarized below are required disclosures under Topic 606 and other relevant guidance. Disaggregation of Revenue The following tables summarize revenue for each of our operating segments, disaggregated by contract type, for 2021 and 2020 thousands):
|  | Year ended December 31, 2021 |
|  | F&S |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate (1) |  | $ | 40,480 |  |  | $ | 12,778 |  |  | $ | (8 | ) |  | $ | 53,250 |
T&M (2) |  |  | 36,555 |  |  |  | 100 |  |  |  | — |  |  |  | 36,655 |
Other |  |  | 4,048 |  |  |  | — |  |  |  | (501 | ) |  |  | 3,547 |
Total |  | $ | 81,083 |  |  | $ | 12,878 |  |  | $ | (509 | ) |  | $ | 93,452 |
|  | Year Ended December 31, 2020 |
|  | F&S |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate (1) |  | $ | 66,790 |  |  | $ | 20,468 |  |  | $ | (148 | ) |  | $ | 87,110 |
T&M (2) |  |  | 25,294 |  |  |  | — |  |  |  | (388 | ) |  |  | 24,906 |
Other |  |  | 7,401 |  |  |  | — |  |  |  | (1,688 | ) |  |  | 5,713 |
Total |  | $ | 99,485 |  |  | $ | 20,468 |  |  | $ | (2,224 | ) |  | $ | 117,729 |
| (1) | Revenue is recognized as the contract is progressed over time.
| (2) | Revenue is recognized at contracted rates when the work is performed and costs are incurred.
Future Performance Obligations The following table summarizes our remaining performance obligations by operating segment at December 31, 2021 (in thousands):
|  | Performance Obligations |
F&S |  | $ | 6,847 |
Shipyard |  |  | 10,223 |
Total (1) |  | $ | 17,070 |
| (1) | We expect to recognize all of our performance obligations at December 31, 2021, as revenue in 2022.
Contracts Assets and Liabilities Revenue recognition and customer invoicing for our fixed-price and unit-rate contracts may occur at different times. Revenue recognition is based upon our estimated percentage-of-completion as discussed in Note 1; however, customer invoicing is generally dependent upon predetermined billing terms, which could provide for customer payments in advance of performing the work, milestone billings based on the completion of certain phases of the work, or billings when services are provided. Revenue recognized in excess of amounts billed is reflected as contract assets on our Balance Sheet, or to the extent we have an unconditional right to the consideration, is reflected as contract receivables on our Balance Sheet. Amounts billed in excess of revenue recognized, and accrued contract losses, are reflected as contract liabilities on our Balance Sheet. Information with respect to contracts that were incomplete at December 31, 2021 and 2020, is as follows (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Costs incurred on uncompleted contracts |  | $ | 103,315 |  |  | $ | 71,198 |
Estimated loss incurred to date |  |  | (7,807 | ) |  |  | (10,290 | )
Sub-total |  |  | 95,508 |  |  |  | 60,908 |
Billings to date |  |  | (97,397 | ) |  |  | (66,072 | )
Total |  | $ | (1,889 | ) |  | $ | (5,164 | )
The above amounts are included within the following captions on our Balance Sheet at December 31, 2021 and 2020 (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Contract assets (1), (2) |  | $ | 4,759 |  |  | $ | 5,098 |
Contract liabilities (3), (4), (5) |  |  | (6,648 | ) |  |  | (10,262 | )
Total |  | $ | (1,889 | ) |  | $ | (5,164 | )
| (1) | The decrease in contract assets compared to December 31, 2020, was primarily due to decreased unbilled position on our seventy-vehicle ferry project within our Shipyard Division, offset partially by increased unbilled positions for various projects within our Fabrication & Services Division.
| (2) | Contract assets at December 31, 2021 and 2020, excludes $1.1 million and $2.3 million, respectively, associated with revenue recognized in excess of amounts billed for which we have an unconditional right to the consideration. Such amounts are reflected within contract receivables.
| (3) | The decrease in contract liabilities compared to December 31, 2020, was primarily due to the unwind of advance payments on our two forty-vehicle ferry projects and decrease in accrued contract losses on our seventy-vehicle ferry and two forty-vehicle ferry projects within our Shipyard Division.
| (4) | Revenue recognized during 2021 and 2020 related to amounts included in our contract liabilities balance at December 31, 2020 and 2019, was $3.7 million and $9.9 million, respectively.
| (5) | Contract liabilities at December 31, 2021 and 2020, includes accrued contract losses of $3.9 million and $5.4 million, respectively. See “Changes in Project Estimates” below for further discussion of our accrued contract losses.
Significant Customers The following table summarizes revenue for customers that accounted for 10% or more of our consolidated revenue for 2021 and 2020 (in thousands):
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |
Customer A |  | $ | 41,057 |  |  | $ | 22,793 |
Customer B |  |  | 9,576 |  |  |  | 14,559 |
Customer C |  | * |  |  |  | 22,463 |
| * | The customer revenue was less than 10% of consolidated revenue for the year.
Allowance for Doubtful Accounts Our provision for bad debts is included in other (income) expense, net on our Statement of Operations. Our provision for bad debts for 2021 and 2020, and our allowance for doubtful accounts at December 31, 2021 and 2020, were not significant. Variable Consideration For 2021 and 2020, we had no material amounts in revenue related to unapproved change orders, claims or incentives. However, at December 31, 2021 and 2020, certain projects reflected a reduction to our estimated contract price for liquidated damages of $1.2 million and $0.6 million, respectively. Changes in Project Estimates We determine the impact of changes in estimated margins on projects for a given period by calculating the amount of revenue recognized in the period that would have been recognized in a prior period had such estimated margins been forecasted in the prior period. The total impact of changes in estimated margins for a project as disclosed on a quarterly basis may be different from the applicable year-to-date impact due to the application of the percentage-of-completion method and the changing progress of the project at each period end. Such impacts may also be different when a project is commenced and completed within the applicable year-to-date period but spans multiple quarters. Changes in Estimates for 2021 – For 2021, significant changes in estimated margins on projects positively impacted operating results for our Fabrication & Services Division by $3.3 million and negatively impacted operating results for our Shipyard Division by $3.8 million. The changes in estimates were associated with the following: Fabrication & Services Division
| • | Marine Docking Structures, Offshore Modules and Material Supply Projects – Positive impact for 2021 of $3.3 million for our marine docking structures, offshore modules and material supply projects, resulting from increased contract price and reduced forecast costs, primarily associated with reduced craft labor and subcontracted services costs and reduced contingency associated with schedule-related liquidated damages. The impacts were primarily due to better than anticipated labor productivity and progress on the projects and favorable resolution of change orders with the customers. At December 31, 2021, the projects were complete.
Shipyard Division
| • | Seventy-Vehicle Ferry Project – Negative impact for 2021 of $4.1 million for our seventy-vehicle ferry project, resulting from increased forecast costs and forecast liquidated damages, primarily associated with increased craft labor, materials and subcontracted services costs, and extensions of schedule and associated duration related costs. The impacts were primarily due to customer-directed changes, higher forecast costs to launch the vessel, higher quantities of materials as production engineering has progressed, higher subcontractor cost estimates, and engineering delays and lower than anticipated craft labor productivity and progress on the project, due in part to COVID-19 and Hurricane Ida. We have submitted claims to our customer to extend our project schedule and recover the increased forecast costs associated with the impacts of the customer-directed changes, COVID-19 and Hurricane Ida; however, we can provide no assurances that we will be successful recovering these costs. Our forecast at December 31, 2021 does not reflect potential future benefits, if any, from the favorable resolution of the claims.
At December 31, 2021, the vessel was approximately 82% complete and is forecast to be completed in the third quarter 2022. The project was in a loss position at December 31, 2021 and our reserve for estimated losses was $0.9 million. If future craft labor productivity and subcontractor costs differ from our current estimates, construction activities are determined to be more complex than anticipated upon finalization of production engineering, we are unable to achieve our progress estimates, our schedule is further extended or we incur additional schedule liquidated damages, the project would experience further losses.
| • | Forty-Vehicle Ferry Projects – Positive impact for 2021 of $0.3 million for our two forty-vehicle ferry projects, resulting from reduced forecast costs, primarily associated with reduced subcontracted services and material costs. The impacts were primarily due to progress achieved on the first vessel and favorable resolution of insurance claims associated with damage to the vessel hull that occurred in 2020.
As discussed further below under “Changes in Estimates for 2020,” during 2020 we experienced rework and construction challenges on the vessels, including the need to fabricate a new hull for the first vessel. We believe these impacts are the result of deficiencies in design of the vessels. Further, we believe the impacts of the design deficiencies are the responsibility of the customer, and accordingly, during 2021 we submitted claims to our customer, and subsequently filed a lawsuit, to extend our project schedules and recover the previous forecast cost increases associated with the impacts of the design deficiencies. However, we can provide no assurances that we will be successful recovering these costs. Our forecasts at December 31, 2021 do not reflect potential future benefits, if any, from the favorable resolution of the claims. During sea trials in January 2022 for the second vessel, one of the propulsion systems unexpectedly shutdown, causing the vessel to veer off course and run aground, causing damage to the hull. Our current estimate of the costs to repair the damage is $0.4 million to $0.9 million; however, the deductible associated with our insurance coverage for such an incident is $0.1 million. Further, we are working with the customer to determine the corrective actions required associated with the propulsion system. While such actions and associated costs are currently unknown, we believe the propulsion system shutdown was due to the aforementioned design deficiencies and are the responsibility of the customer. At December 31, 2021, the second vessel was approximately 96% complete and is forecast to be completed in the second quarter 2022 and the first vessel was approximately 66% complete and is forecast to be completed in the third quarter 2022. The projects were in a loss position at December 31, 2021 and our reserve for estimated losses was $3.0 million. Our forecast costs and schedule completion dates for the vessels are based on the current vessel design and reflect our best estimates; however, such estimates may be impacted by future challenges with, and resolution of, the vessel design deficiencies. While we continue to believe such impacts are the responsibility of the customer, we can provide no assurances that we will be successful recovering any future costs incurred associated with the design deficiencies. If future craft labor productivity and subcontractor costs differ from our current estimates, we are unable to achieve our progress estimates, our schedules are further extended or we incur additional schedule liquidated damages, we incur costs on the second vessel related to the damage caused during sea trials, we experience further challenges during sea trials or commissioning of either vessel or other challenges associated with the design deficiencies and are unable to recover associated costs from our customer, the projects would experience further losses. Changes in Estimates for 2020 – For 2020, significant changes in estimated margins on projects positively impacted operating results for our Fabrication & Services Division by $2.7 million and negatively impacted operating results for our Shipyard Division by $8.3 million. The changes in estimates were associated with the following: Fabrication & Services Division
| • | Paddle Wheel Riverboat and Subsea Components Projects – Positive impact for 2020 of $1.5 million for our paddle wheel riverboat and subsea components projects, resulting from reduced forecast costs and increased contract price, primarily associated with reduced craft labor and subcontracted services costs and change orders. The impacts were primarily due to better than anticipated labor productivity and favorable resolution of subcontractor and customer change orders. At December 31, 2021, the projects were complete.
| • | Jacket and Deck Project – Positive impact for 2020 of $1.2 million for our jacket and deck project, resulting from reduced forecast costs and increased contract price, primarily associated with reduced subcontracted services costs, change orders and incentives. The impacts were primarily due to favorable resolution of subcontractor and customer change orders and realization of project incentives. At December 31, 2021, the project was complete.
Shipyard Division
| • | Forty-Vehicle Ferry Projects – Negative impact for 2020 of $7.2 million for our two forty-vehicle ferry projects ($6.2 million for the first vessel and $1.0 million for the second vessel), resulting from increased forecast costs and forecast liquidated damages, primarily associated with increased craft labor and material costs and extensions of schedule and associated duration related costs. The impacts were primarily due to lower than anticipated craft labor productivity and progress on the projects resulting from the impacts of COVID-19 and additional factors specific to each vessel as described further below:
| - | Second Forty-Vehicle Ferry Project (see discussion of first vessel below) – The impacts for the second vessel were due to construction rework and disruptions caused by structural design deficiencies for the vessel, which resulted in deflection issues within the plating of the vessel.
| - | First Forty-Vehicle Ferry Project – The impacts for the first vessel were due to construction rework and anticipated fabrication of a new hull, resulting from the determination that portions of the vessel structure and hull were outside of acceptable tolerance levels. During 2020, the hull was damaged by an overhead crane, which disengaged from its tracks, and landed on the hull that was under construction. As a result of this damage, coupled with prior rework on the vessel, and associated concerns regarding the acceptable tolerance levels of the hull, our customer issued a rejection letter indicating they would not accept a reconstructed hull, and requested the fabrication of a new hull. We determined that fabrication of a new hull was the most appropriate course of action due to, among other things, quality and cost uncertainties associated with repairing the hull. We also determined that the structural design deficiencies identified for the second vessel were applicable to the first vessel, which contributed to the rework and construction challenges experienced on the first vessel.
As discussed further above under “Changes in Estimates for 2021,” we believe the impacts of the design deficiencies are the responsibility of the customer and have filed a lawsuit against the customer. The projects were in a loss position at December 31, 2020 and our reserve for estimated losses was $4.8 million.
| • | Seventy-Vehicle Ferry Project – Negative impact for 2020 of $1.1 million for our seventy-vehicle ferry project, resulting from increased forecast costs, primarily associated with increased craft labor and subcontracted services costs and extensions of schedule and associated duration related costs. The impacts were primarily due to lower than anticipated craft labor productivity and progress on the project resulting from the impacts of COVID-19 and our inability to achieve previously anticipated improvements in productivity. The impacts were also due to additional anticipated craft labor associated with more complex piping and other construction activities identified as we achieved further completion of production engineering. The project was in a loss position at December 31, 2020 and our reserve for estimated losses was $0.5 million.
Other Operating and Project Matters Hurricane Ida – On August 29, 2021, Hurricane Ida made landfall near Houma, Louisiana as a high-end Category 4 hurricane, with high winds, heavy rains and storm surge causing significant damage and power outages throughout the region. Our F&S Facility did not experience significant flood damage; however, the high winds and heavy rain damaged multiple buildings and equipment and resulted in significant debris throughout the facility. As a result of the power outages, damage to buildings and debris, the operations at our F&S Facility were temporarily suspended and we immediately commenced cleanup and restoration efforts. While cleanup and restoration efforts are ongoing, we recommenced our operations before the end of the third quarter 2021. As a result of the storm, certain buildings and equipment were damaged and were determined to be complete losses. Accordingly, during 2021, we recorded impairments of $0.5 million associated with the damaged assets. The impairments were offset by corresponding insurance recoveries, as we have determined it is probable that we will receive insurance proceeds to replace the damaged assets up to the amount of impairments recognized. In addition, multiple other buildings and equipment were partially damaged by the storm. We expect to incur future repair costs in excess of our deductibles for such assets; however, we believe that recovery of insurance proceeds for such costs is probable, and accordingly, we have not accrued for any future repair costs related to the partially damaged assets at December 31, 2021. We continue to work with our insurance providers and advisors to assess the full extent of damage to buildings and equipment and applicable insurance coverage amounts. During 2021, we incurred actual costs of $4.8 million associated with clean-up, expediting and restoration activities. We recorded charges of $3.2 million associated with such amounts attributable to deductibles and estimated unrecoverable amounts, and recorded insurance recoveries of $1.6 million for the remaining amounts as we believe such costs are covered under our insurance policies and we have determined recovery of such amounts is probable. During 2021, we received a $1.0 million advance payment from our insurance carriers associated with our insurance policies. The charges are included in other (income) expense, net on our Statement of Operations. The insurance receivable amounts, net of the advance payment, are included in prepaid expenses and other assets on our Balance Sheet at December 31, 2021. In addition to damage to our F&S Facility, the storm resulted in damage to our second forty-vehicle ferry project, the MPSVs (and associated equipment) that are in our possession and subject to dispute, and certain bulkheads where the vessels were moored. We have retained advisors to evaluate the extent to which any damage was the result of third-party vessels that broke free from their mooring during the storm and struck the ferry, MPSVs and bulkheads. During 2021, we recorded charges of $0.6 million related to actual costs incurred and anticipated contract costs associated with our insurance coverages, without giving consideration to potential recoveries from the third-parties associated with damage caused by their vessels, as we expect these deductibles to be met absent such recoveries. The charges are included in other (income) expense, net on our Statement of Operations. We are working with our insurance providers and advisors to assess the full extent of damage to the MPSVs and bulkheads and applicable insurance coverage amounts, which may be subject to further deductibles associated with our insurance coverages that range from $0.5 million to $1.0 million. See Note 10 for further discussion of our MPSV dispute. Hurricane Laura – On August 27, 2020, Hurricane Laura made landfall near Lake Charles, Louisiana as a high-end Category 4 hurricane, with high winds and flooding causing significant damage throughout the region. At our Lake Charles Facility the storm damaged warehouses and bulkheads, resulting in charges of $0.8 million related to deductibles associated with our insurance coverages and our estimates of costs associated with uninsurable damage, primarily for bulkheads. The charges are included in other (income) expense, net on our Statement of Operations.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 + Details
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