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Leases
 12 Months Ended
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,
20242023
(in thousands)
Operating lease expense
Operating lease right of use assets$13,256 $12,524 
Operating lease non right of use assets2,856 6,810 
Total operating lease expense$16,112 $19,334 
Finance lease expense
Depreciation of right of use assets$26 $89 
Interest on lease obligations27 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,
20242023
Operating leases
Weighted average remaining lease term3.64.3
Weighted average discount rate6.0%5.8%
Finance leases
Weighted average remaining lease term0.70.7
Weighted average discount rate91.7%25.1%
Supplemental balance sheet information related to leases was as follows as of December 31, 2024 and 2023:
December 31,
20242023
(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 obligations26,710 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 ObligationsFinance LeasesTotal
(in thousands)
2025$13,110 $28 $13,138 
202611,419 — 11,419 
20278,469 — 8,469 
20286,570 — 6,570 
20292,185 — 2,185 
Thereafter356 — 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,
20242023
(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,
20242023
(in thousands)
Operating lease expense
Operating lease right of use assets$13,256 $12,524 
Operating lease non right of use assets2,856 6,810 
Total operating lease expense$16,112 $19,334 
Finance lease expense
Depreciation of right of use assets$26 $89 
Interest on lease obligations27 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,
20242023
Operating leases
Weighted average remaining lease term3.64.3
Weighted average discount rate6.0%5.8%
Finance leases
Weighted average remaining lease term0.70.7
Weighted average discount rate91.7%25.1%
Supplemental balance sheet information related to leases was as follows as of December 31, 2024 and 2023:
December 31,
20242023
(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 obligations26,710 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 ObligationsFinance LeasesTotal
(in thousands)
2025$13,110 $28 $13,138 
202611,419 — 11,419 
20278,469 — 8,469 
20286,570 — 6,570 
20292,185 — 2,185 
Thereafter356 — 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,
20242023
(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