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REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 12 Months Ended
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Dec. 31, 2023
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 and duration, for 2023 and 2022 (in thousands):
|  | Year ended December 31, 2023 |
|  | Services |  |  | Fabrication |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate |  | $ | 1,618 |  |  | $ | 51,015 |  |  | $ | (30,417 | ) |  | $ | (33 | ) |  | $ | 22,183 |
T&M and cost-reimbursable |  |  | 87,914 |  |  |  | 38,031 |  |  |  | — |  |  |  | — |  |  |  | 125,945 |
Other |  |  | 4,016 |  |  |  | — |  |  |  | — |  |  |  | (1,077 | ) |  |  | 2,939 |
Total |  | $ | 93,548 |  |  | $ | 89,046 |  |  | $ | (30,417 | ) |  | $ | (1,110 | ) |  | $ | 151,067 |
Long-term |  | $ | 1,618 |  |  | $ | 82,535 |  |  | $ | (30,417 | ) |  | $ | (33 | ) |  | $ | 53,703 |
Short-term |  |  | 91,930 |  |  |  | 6,511 |  |  |  | — |  |  |  | (1,077 | ) |  |  | 97,364 |
Total |  | $ | 93,548 |  |  | $ | 89,046 |  |  | $ | (30,417 | ) |  | $ | (1,110 | ) |  | $ | 151,067 |
|  | Year ended December 31, 2022 |
|  | Services |  |  | Fabrication |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate |  | $ | 5,035 |  |  | $ | 36,127 |  |  | $ | 7,671 |  |  | $ | (7 | ) |  | $ | 48,826 |
T&M and cost-reimbursable |  |  | 79,426 |  |  |  | 9,526 |  |  |  | — |  |  |  | — |  |  |  | 88,952 |
Other |  |  | 2,561 |  |  |  | 2,646 |  |  |  | — |  |  |  | (665 | ) |  |  | 4,542 |
Total |  | $ | 87,022 |  |  | $ | 48,299 |  |  | $ | 7,671 |  |  | $ | (672 | ) |  | $ | 142,320 |
Long-term |  | $ | 5,035 |  |  | $ | 43,037 |  |  | $ | 7,671 |  |  | $ | — |  |  | $ | 55,743 |
Short-term |  |  | 81,987 |  |  |  | 5,262 |  |  |  | — |  |  |  | (672 | ) |  |  | 86,577 |
Total |  | $ | 87,022 |  |  | $ | 48,299 |  |  | $ | 7,671 |  |  | $ | (672 | ) |  | $ | 142,320 |
Future Performance Obligations The following table summarizes remaining performance obligations for each of our operating segments, disaggregated by contract type, at December 31, 2023 (in thousands):
| December 31, 2023 |
| Services |  |  | Fabrication |  |  | Shipyard |  |  | Total |
Fixed-price and unit-rate | $ | 502 |  |  | $ | 11,446 |  |  | $ | 709 |  |  | $ | 12,657 |
T&M and cost-reimbursable |  | — |  |  |  | 293 |  |  |  | — |  |  |  | 293 |
Total (1) | $ | 502 |  |  | $ | 11,739 |  |  | $ | 709 |  |  | $ | 12,950 |
(1) We expect all of our performance obligations at December 31, 2023, to be recognized as revenue during 2024. C ertain factors and circumstances could result in changes in the timing of recognition of our performance obligations as revenue and the amounts ultimately recognized. Contracts Assets and Liabilities The timing of customer invoicing and recognition of revenue using the POC method may occur at different times. Customer invoicing is generally dependent upon contractual 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, 2023 and 2022, is as follows (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Costs incurred to date |  | $ | 117,274 |  |  | $ | 112,693 |
Estimated losses incurred to date |  |  | (12,735 | ) |  |  | (12,610 | )
Sub-total |  |  | 104,539 |  |  |  | 100,083 |
Billings to date |  |  | (107,270 | ) |  |  | (103,440 | )
Total |  | $ | (2,731 | ) |  | $ | (3,357 | )
The above amounts are included within the following captions on our Balance Sheet at December 31, 2023 and 2022 (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Contract assets (1), (2) |  | $ | 2,739 |  |  | $ | 4,839 |
Contract liabilities (3), (4), (5) |  |  | (5,470 | ) |  |  | (8,196 | )
Total |  | $ | (2,731 | ) |  | $ | (3,357 | )
(1) The decrease in contract assets from December 31, 2022 to December 31, 2023, was primarily due to decreased unbilled positions on our forty-vehicle ferry projects for our Shipyard Division. (2) Contract assets at December 31, 2023 and 2022, excluded $6.0 million and $3.6 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. The increase from December 31, 2022 to December 31, 2023, was primarily due to a customer for our Services Division. (3) The decrease in contract liabilities from December 31, 2022 to December 31, 2023, was primarily due to a decrease in advance billings on our cancelled offshore jackets project for our Fabrication Division and accrued contract losses for our Shipyard Division, offset partially by an increase in advance billings on various other projects for our Fabrication Division. (4) Revenue recognized during 2023 and 2022, related to amounts included in our contract liabilities balance at December 31, 2022 and 2021, was $6.6 million and $2.7 million, respectively. (5) Contract liabilities at December 31, 2023 and 2022, included accrued contract losses of $0.4 million and $1.6 million, respectively, primarily related to projects for our Shipyard Division. 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 2023 and 2022 (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |
Customer A |  | $ | 70,497 |  |  | $ | 54,257 |
Customer B |  |  | 26,956 |  |  | * |
Customer C (1) |  |  | 16,498 |  |  |  | 14,635 |
Customer D (1) |  |  | 15,481 |  |  | * |
(*) The customer revenue was less than 10% of consolidated revenue for the year. (1) For 2023, these customers accounted for 10% or more of our consolidated revenue due to lower revenue for the period associated with a charge of $32.5 million for our Shipyard Division, resulting from the resolution of our MPSV Litigation. See “Changes in Project Estimates” below and Note 7 for further discussion of the charge and resolution of our MPSV Litigation. Allowance for Doubtful Accounts and Credit Losses Our provision for bad debts and credit losses is included in other (income) expense, net on our Statement of Operations. For 2023, we recognized income of $0.4 m illion associated with revisions to our allowance for doubtful accounts and credit losses, and for 2022, changes were not significant. Our allowance for doubtful accounts and credit losses at December 31, 2023 was $0.2 million, and it was not significant at December 31, 2022. We recorded a $0.6 million increase to beginning accumulated deficit as of January 1, 2023, in connection with our adoption of ASU 2016-13. We had no significant write-offs or recoveries of previously recorded bad debts during 2023 or 2022. See “New Accounting Standards” in Note 1 for further discussion of our adoption of ASU 2016-13. Variable Consideration For 2023 and 2022, we had no material amounts in revenue related to unapproved change orders, claims or incentives, other than amounts related to the resolution of our MPSV Litigation discussed further below. However, at December 31, 2023 and 2022, certain active projects within our Shipyard Division reflected a reduction to our estimated contract price for liquidated damages of $1.4 million and $1.4 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 POC 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 2023 – During 2023, we recorded a charge of $32.5 million for our Shipyard Division, reflected as a reduction to revenue, resulting from the resolution of our MPSV Litigation. See Note 7 for further discussion of the charge and resolution of our MPSV Litigation. In addition, during 2023, significant changes in estimated margins on projects negatively impacted operating results for our Shipyard Division by $2.7 million. The changes in estimates were associated with the following: • Seventy-Vehicle Ferry Project – During 2023, we completed, delivered and received final customer acceptance of our seventy-vehicle ferry. D uring 2023, our operating results were negatively impacted by $1.3 million from changes in estimates on the project, associated primarily with increased materials and subcontracted services costs, duration related costs due to extensions of schedule and net reductions to contract price. The cost impacts were primarily due to delays in the receipt of certain equipment that required replacement and subcontractor delays. The contract price impacts were primarily due to a price reduction resulting from the required replacement of the vessel’s propeller blades (discussed further below), offset partially by price increases due to favorable resolution of customer change orders and the customer’s agreement to forego a portion of previously forecasted liquidated damages. As discussed in our previous quarterly filings, in connection with the delivery and commissioning of the vessel in the second quarter 2023, corrosion on the propeller blades was identified and the customer determined that replacement of the propeller blades will be required. The customer has agreed to directly procure the new propeller blades and take responsibility for future installation of the blades once received. Further, the customer agreed to bear a portion of the cost of the new propeller blades, with the remainder borne by us through the aforementioned contract price reduction. At December 31, 2023, the project was in a loss position and the warranty period for the vessel ends in the third quarter 2024. The project would experience further losses if we incur unanticipated warranty costs on the vessel. • Forty-Vehicle Ferry Projects – During 2022, we substantially completed and delivered the first of two forty-vehicle ferries, and during 2023, we received final customer acceptance of the ferry. Further, during 2023, we substantially completed and delivered our second forty-vehicle ferry, and we anticipate final customer acceptance of the ferry in March 2024. During 2023, our operating results were negatively impacted by $1.4 million from changes in estimates on the projects, associated primarily with (i) warranty costs on the first vessel, and (ii) increased materials and subcontracted services costs and duration related costs due to extensions of schedule, including forecast liquidated damages, on the second vessel. The impacts for the second vessel were primarily due to delays in the receipt of certain equipment that required replacement and subcontractor delays. As discussed in our 2022 Financial Statements and subsequent quarterly filings, as a result of design deficiencies, we experienced rework, construction and commissioning challenges on the two ferries, resulting in forecast cost increases and liquidated damages, and the previous need to fabricate a new hull for the second vessel. Accordingly, during 2021, we submitted claims to our customer, and subsequently filed a lawsuit, to extend our project schedules and recover the cost impacts of the design deficiencies. The customer denied all liability. Our forecasts at December 31, 2023 do not reflect potential future benefits, if any, from the favorable resolution of the lawsuit and we can provide no assurance that we will be successful recovering previously incurred costs. At December 31, 2023, the projects were in a loss position and the warranty period for the first vessel ends in the second quarter 2024 and the warranty period for the second vessel is anticipated to end in the first quarter 2025. The projects would experience further losses if we incur unanticipated warranty costs on the vessels. Changes in Estimates for 2022 – During 2022, significant changes in estimated margins on projects negatively impacted operating results for our Shipyard Division by $2.0 million. The changes in estimates were associated with the following: • Seventy-Vehicle Ferry Project – During 2022, our operating results were negatively impacted by $0.9 million from changes in estimates on our seventy-vehicle ferry project, associated primarily with increased materials and subcontracted services costs and duration related costs due to extensions of schedule, including forecast liquidated damages. The impacts were primarily due to equipment issues identified during testing, subcontractor delays and the U.S. Coast Guard’s determination that the vessel’s wood consoles, contractually specified by the customer, were required to be replaced or modified with metal consoles. • Forty-Vehicle Ferry Projects – During 2022, our operating results were negatively impacted by $1.1 million from changes in estimates on our second forty-vehicle ferry project, associated primarily with increased subcontracted services and craft labor costs and duration related costs due to extensions of schedule, including forecast liquidated damages. The impacts were primarily due to structural design deficiencies for the vessel (discussed further above), which resulted in deflection issues within the plating of the vessel. Other Operating and Project Matters During 2021, our operations were impacted by Hurricane Ida, which made landfall near Houma, Louisiana as a high-end Category 4 hurricane, causing debris and damage to our buildings and equipment at our Houma Facilities. Our insurance coverages in effect at the time of the storm generally specified coverage amounts for each of our buildings (including contents) and major equipment. Fabrication Division Impacts – During 2023 and 2022, we received insurance payments of $2.2 million and $13.1 million, respectively, from our insurance carriers associated with interruptions to our operations and damage to buildings and equipment. Further, in the fourth quarter 2023, we finalized all claims associated with our insurance coverages, and at December 31, 2023, we had total insurance receivables on our Balance Sheet of $2.0 million, all of which was collected in January 2024. The classification of insurance proceeds within our Statement of Cash Flows is based on our use or intended use of the proceeds. Proceeds used or intended to be used for repairs that are not deemed to be capital in nature, and proceeds associated with interruptions to our operations, are reflected within operating activities. Proceeds used or intended to be used for repairs that are deemed capital in nature, or proceeds in excess of repair costs, are reflected within investing activities. The timing of payments from our insurance carriers often differed from when we incurred the applicable repair and cleanup costs, and accordingly, we accounted for such differences in timing as follows: • To the extent we incurred repair costs in excess of insurance proceeds received to date, we recorded an insurance receivable when we believed such amounts were probable of recovery under our insurance policies. • To the extent proceeds received exceeded repair costs incurred to date, we recorded an insurance gain as we did not have an obligation to perform further repair activities. Charges were recorded in subsequent periods to the extent such proceeds received were used for repair activities that were not deemed to be capital in nature. • Insurance deductibles, clean-up costs and uninsured losses were expensed. Based on the above, during 2023 and 2022, we recorded gains of $2.0 million (including $0.6 million related to our business interruption coverage) and $7.5 million (including $3.7 million related to our business interruption coverage), respectively, related to the net impact of insurance recoveries and costs associated with damage previously caused by Hurricane Ida. The gains are included in other (income) expense, net on our Statement of Operations and are reflected within our Fabrication Division. Shipyard Division Impacts – In addition to damage to our Houma Facilities, the storm resulted in damage to one of our forty-vehicle ferry projects, the multi-purpose supply vessels (“MPSV(s)”) and associated equipment that were previously in our possession and subject to our MPSV Litigation, and certain bulkheads where the vessels were moored. During 2023 and 2022, we recorded charges of $0.5 million and $0.2 million, respectively, related to actual costs incurred. The charges are included in other (income) expense, net on our Statement of Operations and are reflected within our Shipyard Division. See Note 7 for further discussion of the resolution of our MPSV Litigation.

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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 -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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