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Revenue Receivables and Contract Assets and Liabilities | 9 Months Ended
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Sep. 27, 2024
Revenue from Contract with Customer [Abstract] |
Revenue Receivables and Contract Assets and Liabilities | Note 3. Revenue, Receivables and Contract Assets and Liabilities The following table presents the Company’s revenue disaggregated by contract types:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 27, |  |  | September 29, |  |  | September 27, |  |  | September 29, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Fixed-price |  | $ | 153,802 |  |  | $ | 153,178 |  |  | $ | 349,182 |  |  | $ | 440,015 |
Cost reimbursable |  |  | 11,602 |  |  |  | 19,864 |  |  |  | 25,983 |  |  |  | 48,757 |
Equipment and labor revenue |  |  | 631 |  |  |  | 2,406 |  |  |  | 1,519 |  |  |  | 5,972 |
Total revenue |  | $ | 166,035 |  |  | $ | 175,448 |  |  | $ | 376,684 |  |  | $ | 494,744 |
Projects started after the AECOM Sale Transactions ("Shimmick Projects") have focused on water infrastructure and other critical infrastructure. Projects that focus on foundation drilling are referred to as "Foundations Projects". Projects that started prior to consummation of the AECOM Sale Transactions are referred to as "Legacy Projects". The following table presents the Company’s revenue disaggregated by Shimmick Projects, Foundations Projects and Legacy Projects:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 27, |  |  | September 29, |  |  | September 27, |  |  | September 29, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Shimmick Projects |  | $ | 101,475 |  |  | $ | 109,884 |  |  | $ | 275,457 |  |  | $ | 301,475 |
Foundations Projects |  |  | 10,837 |  |  |  | 11,523 |  |  |  | 25,931 |  |  |  | 40,615 |
Legacy Projects(1) |  |  | 53,723 |  |  |  | 54,041 |  |  |  | 75,296 |  |  |  | 152,654 |
Total revenue |  | $ | 166,035 |  |  | $ | 175,448 |  |  | $ | 376,684 |  |  | $ | 494,744 |
(1) Legacy Projects revenue for the three and nine months ended September 27, 2024 reflects a $31 million increase to revenue as a result of the GGB Project settlement in which the Company will receive $97 million in cash and a contract change order for reduced scope of work of $6 million. See Note 12 – Subsequent Events for additional details. Legacy Projects revenue for the nine months ended September 27, 2024 also reflects a reduction to revenue of $23 million recorded during the three months ended June 28, 2024 to write off previously recorded contract assets as a result of a settlement of a claim with the United States Army Corps of Engineers. Remaining performance obligations The Company had $777 million of remaining performance obligations yet to be satisfied as of September 27, 2024. Our remaining performance obligations have a weighted average life of 2.0 years as of September 27, 2024. Contract Balances The following table provides information about contract assets (also referred to as costs and estimated earnings in excess of billings on uncompleted contracts and retainage receivable) and contract liabilities (also referred to as billings on uncompleted contracts in excess of costs and estimated earnings and forward loss reserve), which include assets and liabilities that are dependent upon future activity:
|  | September 27, |  |  | December 29, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Change |
(In thousands) |  |  |  |  |  |  |  |  |
Contract assets, current and non-current: |  |  |  |  |  |  |  |  |
Costs and estimated earnings in excess of billings on uncompleted contracts |  | $ | 127,518 |  |  | $ | 125,943 |  |  | $ | 1,575 |
Retainage receivable |  |  | 49,159 |  |  |  | 48,316 |  |  |  | 843 |
Total contract assets |  |  | 176,677 |  |  |  | 174,259 |  |  |  | 2,418 |
Contract liabilities, current and non-current: |  |  |  |  |  |  |  |  |
Billings on uncompleted contracts in excess of costs and estimated earnings |  |  | (42,998 | ) |  |  | (48,841 | ) |  |  | 5,843 |
Forward loss reserve |  |  | (54,629 | ) |  |  | (70,159 | ) |  |  | 15,530 |
Total contract liabilities |  |  | (97,627 | ) |  |  | (119,000 | ) |  |  | 21,373 |
Net |  | $ | 79,050 |  |  | $ | 55,259 |  |  | $ | 23,791 |
Contract terms with customers include the timing of billing and payment, which usually differs from the timing of revenue recognition. As a result, the Company carries contract assets and liabilities within the condensed consolidated balance sheets. These contract assets and liabilities are calculated on a contract-by-contract basis and reported on a net basis at the end of each period and are classified as current or non-current. 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. These assets and liabilities are reported in the condensed consolidated balance sheets within “Contract assets, current,” “Contract assets, non-current,” “Contract liabilities, current" and “Contract liabilities, non-current." Costs and estimated earnings in excess of billings on uncompleted contracts consists of revenue recognized in excess of billings. Billings on uncompleted contracts in excess of costs and estimated earnings consists of billings in excess of revenue recognized. The Company recognized revenue of $41 million during the nine months ended September 27, 2024 that was included in contract liabilities as of December 29, 2023. The Company’s timing of revenue recognition may not be consistent with its rights to bill and collect cash from its clients. Those rights are generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of work or when services are performed. The Company’s accounts receivable represents amounts billed to clients that have yet to be collected and represent an unconditional right to cash from its clients as presented below.
|  | September 27, |  |  | December 29, |
|  | 2024 |  |  | 2023 |
(In thousands) |  |  |  |  |  |
Total accounts receivable, gross |  | $ | 54,470 |  |  | $ | 55,202 |
Allowance for credit losses |  |  | (954 | ) |  |  | (1,024 | )
Accounts receivable, net |  | $ | 53,516 |  |  | $ | 54,178 |
Substantially all contract assets as of September 27, 2024 and December 29, 2023 are expected to be collected within the Company’s estimated operating cycle, except for retainage and claims pertaining to certain contracts. The Company’s operating cycle may extend beyond one year. The Company is in the process of negotiating or awaiting 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. The Company may take legal action if it and the customer cannot reach a mutually acceptable resolution. Information about significant customers
Significant Customers as a Percentage of Accounts Receivable, Net |  |  |
As of September 27, 2024 |  |  |
Customer one |  | 32.8% |
Customer two |  | 18.6% |
As of December 29, 2023 |  |  |
Customer one |  | 32.5% |
Customer two |  | 21.7% |
Significant Customers as a Percentage of Revenue |  |  |
Three Months Ended September 27, 2024 |  |  |
Customer one |  | 22.8% |
Customer two |  | 11.9% |
Customer three |  | 11.8% |
Customer four |  | 10.8% |
Three Months Ended September 29, 2023 |  |  |
Customer one |  | 15.3% |
Customer two |  | 13.9% |
Customer three |  | 13.1% |
Significant Customers as a Percentage of Revenue |  |  |
Nine Months Ended September 27, 2024 |  |  |
Customer one |  | 17.3% |
Customer two |  | 14.6% |
Customer three |  | 12.1% |
Nine Months Ended September 29, 2023 |  |  |
Customer one |  | 15.5% |
Customer two |  | 14.2% |
Customer three |  | 12.5% |
Revisions in Estimates Changes in contract estimates resulted in net increases in gross margin of $7 million for the three months ended September 27, 2024, primarily due to the favorable GGB Project settlement described in Note 12 - Subsequent Events, partially offset by increased forecasted cost to complete loss jobs. Changes in contract estimates resulted in net decreases in gross margin of $44 million for the nine months ended September 27, 2024, primarily due to the United States Army Corps of Engineers settlement and increased forecasted cost to complete loss jobs, partially offset by the GGB Project settlement. Changes in contract estimates resulted in net increases in gross margin of $5 million for the three months ended September 29, 2023, primarily due to a change in an outstanding claim. Changes in contract estimates resulted in net decreases in gross margin of $10 million for the nine months ended September 29, 2023, primarily due to increased forecasted costs to complete and an agreed upon contract settlement lower than previously estimated, partially offset by increases in gross margin on an outstanding claim.

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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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