XML 28 R16.htm IDEA: XBRL DOCUMENT v3.23.1
Operating Segments
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Operating Segments Operating Segments
As discussed in Note 1, the Company operates in two segments, (i) GCR, in which the Company generally manages new construction or renovation projects that involve primarily HVAC, plumbing, or electrical services awarded to the Company by general contractors or construction managers, and (ii) ODR, in which the Company provides maintenance or service primarily on HVAC, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company's CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer.
In accordance with ASC Topic 280 – Segment Reporting, the Company has elected to aggregate all of the GCR work performed at branches into one GCR reportable segment and all of the ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation.
On January 17, 2023, the Company announced its planned transition succession, pursuant to which Charles A. Bacon III stepped down as President and Chief Executive Officer on March 28, 2023, and Michael M. McCann, the Company’s former Executive Vice President and Chief Operating Officer, was appointed President and Chief Executive Officer. Following the transition, the Company revised its segment presentation to align with how Mr. McCann assesses performance and makes resource allocation decisions for its operating segments, which is based on segment revenue and segment gross profit. Selling, general and administrative ("SG&A") expenses are no longer reported on a segment basis as the Company's current CODM does not review discrete segment financial information for SG&A in order to assess performance. Interest expense is not allocated to segments because of the corporate management of debt service.
The Company restated segment information for the historical periods presented herein to conform to the current presentation. This change in segment presentation does not affect the Company’s unaudited condensed consolidated statements of operations, balance sheets or statements of cash flows.
All of the Company’s identifiable assets are located in the United States, which is where the Company is domiciled.
Condensed consolidated segment information for the three months ended March 31, 2023 and 2022 were as follows:
 Three Months Ended
March 31,
(in thousands)20232022
Statement of Operations Data:  
Revenue:  
GCR$62,291 $71,932 
ODR58,718 42,890 
Total revenue121,009 114,822 
Gross profit:
GCR10,318 8,358 
ODR15,909 9,982 
Total gross profit26,227 18,340 
Selling, general and administrative(1)
21,050 18,734 
Change in fair value of contingent consideration141 — 
Amortization of intangibles383 399 
Operating income (loss)$4,653 $(793)
Less unallocated amounts:
Interest expense, net
(667)(486)
Loss on disposition of property and equipment(215)(36)
Loss on early termination of operating lease— (817)
Loss on change in fair value of interest rate swap(156)— 
Total unallocated amounts
(1,038)(1,339)
Income (loss) before income taxes$3,615 $(2,132)
(1)    Included within selling, general and administrative expenses was $1.1 million and $0.6 million of stock based compensation expense for the three months ended March 31, 2023 and 2022, respectively.
The Company does not identify capital expenditures and total assets by segment in its internal financial reports due in part to the shared use of a centralized fleet of vehicles and specialized equipment. Interest expense is also not allocated to segments because of the Company’s corporate management of debt service, including interest.