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Leases | 12 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
Leases | Leases Under ASC 842, the Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded in the Company’s Consolidated Balance Sheets. Leases with an initial term greater than 12 months are recognized in the Company’s Consolidated Balance Sheets based on lease classification as either operating or financing. Some of the Company’s lease agreements include lease and non-lease components for which the Company has elected to not separate for all classes of underlying assets. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company may sublease its real estate to third parties, subject to certain provisions of the lease, when it has no future use for the property. Operating Leases As a lessee, the Company’s operating lease portfolio primarily consists of operating leases for equipment, vehicles, office space, yard facilities, and employee housing. Operating lease ROU assets and operating lease obligations are recognized based on the present value of the future minimum lease payments at commencement date. As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate based on the lease information available at the commencement date in determining the present value of future payments. The incremental borrowing rate utilized is based upon the interest rate associated with the Company’s ABL Credit Facility (as defined and described in Note 9 – Debt Obligations) which is utilized to fund its working capital needs and planned capital expenditures. The Company’s leases have remaining terms of one to ten years and may include options to extend or terminate the lease. The operating lease ROU assets also include any upfront lease payments made and exclude lease incentives and initial direct costs incurred. The Company leases most of these properties under long-term (greater than one year) non-cancelable term leases many of which contain renewal options that can extend the lease term from one to five years and some of which contain escalation clauses. The Company may also enter into short-term or month-to-month operating leases. Options to renew these leases are generally not considered reasonably certain to be exercised due to the nature of the Company’s operations and the markets it serves. Therefore, the periods covered by such optional periods are not included in the determination of the term of the lease. The Company also leases supplemental equipment, typically under cancellable short-term contracts which are less than 30 days. This equipment is typically required for a specific project and for a short duration. Due to the nature of the Company’s operations, any option to renew these short-term leases is generally not considered reasonably certain to be exercised. Therefore, the periods covered by such optional periods are not included in the determination of the term of the lease, and the lease payments during these periods are similarly excluded from the calculation of operating lease asset and lease obligation balances. Operating lease expense consists of rent expense related to leases that were included in ROU assets under ASC 842. The Company recognizes operating lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable operating lease payments typically include charges for property taxes and insurance, and some leases contain variable payments related to non-lease components, including common area maintenance and usage of facilities or office equipment (for example, copiers). The Company does not have variable expenses. Additional Information The following table summarizes the components of the Company’s lease expense recognized for the years ended December 31, 2024 and 2023:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Operating lease expense |  |  |
Operating lease right of use assets | $ | 13,256 |  |  | $ | 12,524 |
Operating lease non right of use assets | 2,856 |  |  | 6,810 |
Total operating lease expense | $ | 16,112 |  |  | $ | 19,334 |
Finance lease expense |  |  |
Depreciation of right of use assets | $ | 26 |  |  | $ | 89 |
Interest on lease obligations | 27 |  |  | 69 |
Total finance lease expense | $ | 53 |  |  | $ | 158 |
Operating lease expense is included in the line items “Cost of revenues” and “General and administrative expenses”, depending on the nature of the lease, in the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023. Supplemental information related to leases was as follows as of December 31, 2024 and 2023:
| December 31,
| 2024 |  | 2023
Operating leases |  |  |
Weighted average remaining lease term | 3.6 |  | 4.3
Weighted average discount rate | 6.0% |  | 5.8%
Finance leases |  |  |
Weighted average remaining lease term | 0.7 |  | 0.7
Weighted average discount rate | 91.7% |  | 25.1%
Supplemental balance sheet information related to leases was as follows as of December 31, 2024 and 2023:
| December 31,
| 2024 |  | 2023
| (in thousands)
Operating lease right of use assets |  |  |
Operating lease right of use assets, gross | $ | 70,226 |  |  | $ | 65,026 |
Less: Accumulated amortization | (32,974) |  |  | (22,970) |
Operating lease right of use assets, net | $ | 37,252 |  |  | $ | 42,056 |
Operating lease obligations |  |  |
Current portion of operating lease obligations | $ | 11,216 |  |  | $ | 10,314 |
Long-term operating lease obligations | 26,710 |  |  | 32,594 |
Total operating lease obligations | $ | 37,926 |  |  | $ | 42,908 |
Finance lease right of use assets |  |  |
Finance lease right of use assets, gross | $ | 39 |  |  | $ | 70 |
Less: Accumulated depreciation | (10) |  |  | (19) |
Finance lease right of use assets, net | $ | 29 |  |  | $ | 51 |
Finance lease obligations |  |  |
Current portion of finance lease obligations | $ | 21 |  |  | $ | 31 |
Long-term finance lease obligations | — |  |  | — |
Total finance lease obligations | $ | 21 |  |  | $ | 31 |
Future annual minimum lease payments as of December 31, 2024 were as follows:
| Operating Lease Right of Use Obligations |  | Finance Leases |  | Total
| (in thousands)
2025 | $ | 13,110 |  |  | $ | 28 |  |  | $ | 13,138 |
2026 | 11,419 |  |  | — |  |  | 11,419 |
2027 | 8,469 |  |  | — |  |  | 8,469 |
2028 | 6,570 |  |  | — |  |  | 6,570 |
2029 | 2,185 |  |  | — |  |  | 2,185 |
Thereafter | 356 |  |  | — |  |  | 356 |
Total lease payments | $ | 42,109 |  |  | $ | 28 |  |  | $ | 42,137 |
Less: present value discount | (4,183) |  |  | (7) |  |  | (4,190) |
Present value of lease obligations | $ | 37,926 |  |  | $ | 21 |  |  | $ | 37,947 |
Supplemental cash flow information related to leases for the years ended December 31, 2024 and 2023 were as follows:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Cash paid for amounts included in the measurement of lease obligations: |  |  |
Operating cash flows from operating leases | $ | 13,080 |  |  | $ | 12,344 |
Operating cash flows from finance leases | $ | 26 |  |  | $ | 89 |
Financing cash flows from finance leases | $ | 49 |  |  | $ | 217 |
Right of use assets obtained in exchange for lease obligations: |  |  |
Operating leases | $ | 6,307 |  |  | $ | 15,955 |
Finance leases | $ | 39 |  |  | $ | 70 |
Leases | Leases Under ASC 842, the Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded in the Company’s Consolidated Balance Sheets. Leases with an initial term greater than 12 months are recognized in the Company’s Consolidated Balance Sheets based on lease classification as either operating or financing. Some of the Company’s lease agreements include lease and non-lease components for which the Company has elected to not separate for all classes of underlying assets. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company may sublease its real estate to third parties, subject to certain provisions of the lease, when it has no future use for the property. Operating Leases As a lessee, the Company’s operating lease portfolio primarily consists of operating leases for equipment, vehicles, office space, yard facilities, and employee housing. Operating lease ROU assets and operating lease obligations are recognized based on the present value of the future minimum lease payments at commencement date. As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate based on the lease information available at the commencement date in determining the present value of future payments. The incremental borrowing rate utilized is based upon the interest rate associated with the Company’s ABL Credit Facility (as defined and described in Note 9 – Debt Obligations) which is utilized to fund its working capital needs and planned capital expenditures. The Company’s leases have remaining terms of one to ten years and may include options to extend or terminate the lease. The operating lease ROU assets also include any upfront lease payments made and exclude lease incentives and initial direct costs incurred. The Company leases most of these properties under long-term (greater than one year) non-cancelable term leases many of which contain renewal options that can extend the lease term from one to five years and some of which contain escalation clauses. The Company may also enter into short-term or month-to-month operating leases. Options to renew these leases are generally not considered reasonably certain to be exercised due to the nature of the Company’s operations and the markets it serves. Therefore, the periods covered by such optional periods are not included in the determination of the term of the lease. The Company also leases supplemental equipment, typically under cancellable short-term contracts which are less than 30 days. This equipment is typically required for a specific project and for a short duration. Due to the nature of the Company’s operations, any option to renew these short-term leases is generally not considered reasonably certain to be exercised. Therefore, the periods covered by such optional periods are not included in the determination of the term of the lease, and the lease payments during these periods are similarly excluded from the calculation of operating lease asset and lease obligation balances. Operating lease expense consists of rent expense related to leases that were included in ROU assets under ASC 842. The Company recognizes operating lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable operating lease payments typically include charges for property taxes and insurance, and some leases contain variable payments related to non-lease components, including common area maintenance and usage of facilities or office equipment (for example, copiers). The Company does not have variable expenses. Additional Information The following table summarizes the components of the Company’s lease expense recognized for the years ended December 31, 2024 and 2023:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Operating lease expense |  |  |
Operating lease right of use assets | $ | 13,256 |  |  | $ | 12,524 |
Operating lease non right of use assets | 2,856 |  |  | 6,810 |
Total operating lease expense | $ | 16,112 |  |  | $ | 19,334 |
Finance lease expense |  |  |
Depreciation of right of use assets | $ | 26 |  |  | $ | 89 |
Interest on lease obligations | 27 |  |  | 69 |
Total finance lease expense | $ | 53 |  |  | $ | 158 |
Operating lease expense is included in the line items “Cost of revenues” and “General and administrative expenses”, depending on the nature of the lease, in the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023. Supplemental information related to leases was as follows as of December 31, 2024 and 2023:
| December 31,
| 2024 |  | 2023
Operating leases |  |  |
Weighted average remaining lease term | 3.6 |  | 4.3
Weighted average discount rate | 6.0% |  | 5.8%
Finance leases |  |  |
Weighted average remaining lease term | 0.7 |  | 0.7
Weighted average discount rate | 91.7% |  | 25.1%
Supplemental balance sheet information related to leases was as follows as of December 31, 2024 and 2023:
| December 31,
| 2024 |  | 2023
| (in thousands)
Operating lease right of use assets |  |  |
Operating lease right of use assets, gross | $ | 70,226 |  |  | $ | 65,026 |
Less: Accumulated amortization | (32,974) |  |  | (22,970) |
Operating lease right of use assets, net | $ | 37,252 |  |  | $ | 42,056 |
Operating lease obligations |  |  |
Current portion of operating lease obligations | $ | 11,216 |  |  | $ | 10,314 |
Long-term operating lease obligations | 26,710 |  |  | 32,594 |
Total operating lease obligations | $ | 37,926 |  |  | $ | 42,908 |
Finance lease right of use assets |  |  |
Finance lease right of use assets, gross | $ | 39 |  |  | $ | 70 |
Less: Accumulated depreciation | (10) |  |  | (19) |
Finance lease right of use assets, net | $ | 29 |  |  | $ | 51 |
Finance lease obligations |  |  |
Current portion of finance lease obligations | $ | 21 |  |  | $ | 31 |
Long-term finance lease obligations | — |  |  | — |
Total finance lease obligations | $ | 21 |  |  | $ | 31 |
Future annual minimum lease payments as of December 31, 2024 were as follows:
| Operating Lease Right of Use Obligations |  | Finance Leases |  | Total
| (in thousands)
2025 | $ | 13,110 |  |  | $ | 28 |  |  | $ | 13,138 |
2026 | 11,419 |  |  | — |  |  | 11,419 |
2027 | 8,469 |  |  | — |  |  | 8,469 |
2028 | 6,570 |  |  | — |  |  | 6,570 |
2029 | 2,185 |  |  | — |  |  | 2,185 |
Thereafter | 356 |  |  | — |  |  | 356 |
Total lease payments | $ | 42,109 |  |  | $ | 28 |  |  | $ | 42,137 |
Less: present value discount | (4,183) |  |  | (7) |  |  | (4,190) |
Present value of lease obligations | $ | 37,926 |  |  | $ | 21 |  |  | $ | 37,947 |
Supplemental cash flow information related to leases for the years ended December 31, 2024 and 2023 were as follows:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Cash paid for amounts included in the measurement of lease obligations: |  |  |
Operating cash flows from operating leases | $ | 13,080 |  |  | $ | 12,344 |
Operating cash flows from finance leases | $ | 26 |  |  | $ | 89 |
Financing cash flows from finance leases | $ | 49 |  |  | $ | 217 |
Right of use assets obtained in exchange for lease obligations: |  |  |
Operating leases | $ | 6,307 |  |  | $ | 15,955 |
Finance leases | $ | 39 |  |  | $ | 70 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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