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REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 3 Months Ended
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Mar. 31, 2024
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 from 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 the three months ended March 31, 2024 and 2023 (in thousands):
|  | Three Months Ended March 31, 2024 |
|  | Services |  |  | Fabrication |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate |  | $ | 249 |  |  | $ | 15,875 |  |  | $ | 409 |  |  | $ | — |  |  | $ | 16,533 |
T&M and cost-reimbursable |  |  | 24,727 |  |  |  | 1,263 |  |  |  | — |  |  |  | — |  |  |  | 25,990 |
Other |  |  | 558 |  |  |  | — |  |  |  | — |  |  |  | (200 | ) |  |  | 358 |
Total |  | $ | 25,534 |  |  | $ | 17,138 |  |  | $ | 409 |  |  | $ | (200 | ) |  | $ | 42,881 |
Long-term |  | $ | 249 |  |  | $ | 15,958 |  |  | $ | 409 |  |  | $ | — |  |  | $ | 16,616 |
Short-term |  |  | 25,285 |  |  |  | 1,180 |  |  |  | — |  |  |  | (200 | ) |  |  | 26,265 |
Total |  | $ | 25,534 |  |  | $ | 17,138 |  |  | $ | 409 |  |  | $ | (200 | ) |  | $ | 42,881 |
|  | Three Months Ended March 31, 2023 |
|  | Services |  |  | Fabrication |  |  | Shipyard |  |  | Eliminations |  |  | Total |
Fixed-price and unit-rate |  | $ | 172 |  |  | $ | 12,189 |  |  | $ | 1,347 |  |  | $ | (8 | ) |  | $ | 13,700 |
T&M and cost-reimbursable |  |  | 20,542 |  |  |  | 27,473 |  |  |  | — |  |  |  | — |  |  |  | 48,015 |
Other |  |  | 873 |  |  |  | — |  |  |  | — |  |  |  | (420 | ) |  |  | 453 |
Total |  | $ | 21,587 |  |  | $ | 39,662 |  |  | $ | 1,347 |  |  | $ | (428 | ) |  | $ | 62,168 |
Long-term |  | $ | 172 |  |  | $ | 38,708 |  |  | $ | 1,347 |  |  | $ | (8 | ) |  | $ | 40,219 |
Short-term |  |  | 21,415 |  |  |  | 954 |  |  |  | — |  |  |  | (420 | ) |  |  | 21,949 |
Total |  | $ | 21,587 |  |  | $ | 39,662 |  |  | $ | 1,347 |  |  | $ | (428 | ) |  | $ | 62,168 |
Future Performance Obligations The following table summarizes our remaining performance obligations, disaggregated by operating segment and contract type, at March 31, 2024 (in thousands):
|  | March 31, 2024 |
|  | Services |  |  | Fabrication |  |  | Shipyard(1) |  |  | Total |
Fixed-price and unit-rate |  | $ | 437 |  |  | $ | 12,873 |  |  | $ | 577 |  |  | $ | 13,887 |
T&M and cost-reimbursable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total(2) |  | $ | 437 |  |  | $ | 12,873 |  |  | $ | 577 |  |  | $ | 13,887 |
(1) Future performance obligations for our Shipyard Division relate to potential repairs and rework during the warranty periods for the Ferry Projects. See “Changes in Project Estimates” below for further discussion of the warranty periods for the Ferry Projects. (2) We expect all of our performance obligations at March 31, 2024, to be recognized as revenue during 2024. Certain 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 March 31, 2024 and December 31, 2023, is as follows (in thousands):
|  | March 31, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Contract assets(1), (2) |  | $ | 4,905 |  |  | $ | 2,739 |
Contract liabilities(3), (4), (5) |  |  | (1,740 | ) |  |  | (5,470 | )
Contracts in progress, net |  | $ | 3,165 |  |  | $ | (2,731 | )
(1) The increase in contract assets from December 31, 2023 to March 31, 2024, was primarily due to increased unbilled positions on various projects for our Fabrication Division. (2) Contract assets at March 31, 2024 and December 31, 2023, excluded $5.8 million and $6.0 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 decrease from December 31, 2023 to March 31, 2024, was primarily due to the net impact of various customers for our Services Division. (3) The decrease in contract liabilities from December 31, 2023 to March 31, 2024, was primarily due to a decrease in advance billings on various projects for our Fabrication Division. (4) Revenue recognized during the three months ended March 31, 2024 and 2023, related to amounts included in our contract liabilities balance at December 31, 2023 and 2022 was $4.2 million and $6.0 million, respectively. (5) Contract liabilities at March 31, 2024 and December 31, 2023, includes accrued contract losses of $0.3 million and $0.4 million, respectively, primarily related to projects for our Shipyard Division. See “Changes in Project Estimates” below for further discussion of our accrued contract losses. 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, and for the three months ended March 31, 2024 and 2023, was not significant. Our allowance for doubtful accounts and credit losses at March 31, 2024 and December 31, 2023, was $0.2 million and $0.2 million, respectively. We had no significant write-offs or recoveries of previously recorded bad debts during the three months ended March 31, 2024 or 2023. See “New Accounting Standards” in Note 1 for discussion of our adoption of ASU 2016-13. Variable Consideration For the three months ended March 31, 2024 and 2023, we had no material amounts in revenue related to unapproved change orders, claims or incentives. However, at December 31, 2023, certain active projects for our Shipyard Division reflected a reduction to our estimated contract price for liquidated damages of $1.4 million. 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. For the three months ended March 31, 2024 and 2023, individual projects with significant changes in estimated margins did not have a material net impact on our operating results. The status of projects in backlog at March 31, 2024, which have previously experienced material changes in estimates, is as follows: • Seventy-Vehicle Ferry Project – As discussed in our 2023 Financial Statements, as of December 31, 2023, we had completed, delivered and received final customer acceptance of our seventy-vehicle ferry. 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 – As discussed in our 2023 Financial Statements, as of December 31, 2023, we had completed, delivered and received final customer acceptance of the first of two forty-vehicle ferries, and had substantially completed and delivered our second forty-vehicle ferry. During the first quarter 2024, we received final customer acceptance of the second ferry. The warranty periods for the first vessel ends in the second quarter 2024 and the warranty period for the second vessel ends in the first quarter 2025. The projects would experience further losses if we incur unanticipated warranty costs on the vessels. As discussed in our 2023 Financial Statements, as a result of design deficiencies, we experienced rework, construction and commissioning challenges on the two ferries, resulting in previous 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 intend to pursue a lawsuit, to extend our project schedules and recover the cost impacts of the design deficiencies. The customer denied all liability. Our forecasts at March 31, 2024 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 in recovering previously incurred costs. 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. Fabrication Division Impacts – As of December 31, 2023, we had finalized all claims associated with our property and equipment insurance coverages, and at December 31, 2023, we had total insurance receivables on our Balance Sheet of $2.0 million. During the three months ended March 31, 2024 and 2023, we received insurance payments of $2.0 million and $0.7 million, respectively, from our insurance carriers associated with interruptions to our operations and damage to buildings and equipment. 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. During the three months ended March 31, 2023, we recorded gains of $0.2 million (associated with our business interruption coverage) 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 previous MPSV Litigation, and certain bulkheads where the vessels were moored. During the three months ended March 31, 2023, we recorded charges of $0.1 million 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 4 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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