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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	Apr. 22, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	1-13011
Entity Registrant Name	COMFORT SYSTEMS USA, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0526487
Entity Address, Address Line One	675 Bering Drive
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77057
City Area Code	713
Local Phone Number	830-9600
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	FIX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,471,001
Entity Central Index Key	0001035983
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 133,264	$ 50,788
Billed accounts receivable, less allowance for credit losses of $10,337 and $6,907, respectively	643,748	619,037
Unbilled accounts receivable, less allowance for credit losses of $785 and $0, respectively	51,058	55,542
Other receivables, less allowance for credit losses of $875 and $0, respectively	17,908	37,632
Inventories	10,312	10,053
Prepaid expenses and other	14,612	14,396
Costs and estimated earnings in excess of billings, less allowance for credit losses of $25 and $0, respectively	7,541	2,736
Total current assets	878,443	790,184
PROPERTY AND EQUIPMENT, NET	113,974	109,796
LEASE RIGHT-OF-USE ASSET	82,301	84,073
GOODWILL	347,391	332,447
IDENTIFIABLE INTANGIBLE ASSETS, NET	167,675	159,974
DEFERRED TAX ASSETS	21,803	21,923
OTHER NONCURRENT ASSETS	6,480	6,615
Total assets	1,618,067	1,505,012
CURRENT LIABILITIES:
Current maturities of long-term debt	850	20,817
Accounts payable	184,627	196,195
Accrued compensation and benefits	81,305	102,891
Billings in excess of costs and estimated earnings	215,106	166,918
Accrued self-insurance	42,027	39,546
Other current liabilities	75,710	81,630
Total current liabilities	599,625	607,997
LONG-TERM DEBT, NET	333,113	205,318
LEASE LIABILITIES	70,410	72,697
DEFERRED TAX LIABILITIES	1,425	1,425
OTHER LONG-TERM LIABILITIES	20,451	32,271
Total liabilities	1,025,024	919,708
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par, 5,000,000 shares authorized, none issued and outstanding
Common stock, $.01 par, 102,969,912 shares authorized, 41,123,365 and 41,123,365 shares issued, respectively	411	411
Treasury stock, at cost, 4,673,627 and 4,465,448 shares, respectively	(112,513)	(103,960)
Additional paid-in capital	323,103	320,168
Retained earnings	382,042	368,685
Total stockholders' equity	593,043	585,304
Total liabilities and stockholders' equity	$ 1,618,067	$ 1,505,012

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)		$ 6,907
Billed accounts receivable, allowance for credit losses (in dollars)	$ 10,337
Unbilled accounts receivable, allowance for credit losses (in dollars)	785	0
Other receivables, allowance for credit losses (In dollars)	875	0
Costs and estimated earnings in excess of billings, allowance for credit losses	$ 25	$ 0
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	102,969,912	102,969,912
Common stock, shares issued	41,123,365	41,123,365
Treasury stock, shares	4,673,627	4,465,448

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUE	$ 700,131	$ 538,473
COST OF SERVICES	583,038	431,808
Gross profit	117,093	106,665
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	92,924	78,905
GAIN ON SALE OF ASSETS	(554)	(219)
Operating income	24,723	27,979
OTHER INCOME (EXPENSE):
Interest income	64	25
Interest expense	(2,617)	(1,062)
Changes in the fair value of contingent earn-out obligations	2,272	(158)
Other	25	15
Other income (expense)	(256)	(1,180)
INCOME BEFORE INCOME TAXES	24,467	26,799
PROVISION FOR INCOME TAXES	6,751	6,933
NET INCOME	$ 17,716	$ 19,866
INCOME PER SHARE:
Basic (in shares)	$ 0.48	$ 0.54
Diluted (in shares)	$ 0.48	$ 0.53
SHARES USED IN COMPUTING INCOME PER SHARE:
Basic (in shares)	36,674	36,923
Diluted (in shares)	36,905	37,234
DIVIDENDS PER SHARE (in dollars per share)	$ 0.105	$ 0.095

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Total
BALANCE at Dec. 31, 2018	$ 411	$ (87,747)	$ 316,479	$ 268,904	$ 498,047
BALANCE (in shares) at Dec. 31, 2018	41,123,365
BALANCE (in shares) at Dec. 31, 2018		(4,229,653)
Increase (Decrease) in Stockholders' Equity
Net income				19,866	19,866
Issuance of Stock:
Issuance of shares for options exercised		$ 861	(61)		800
Issuance of shares for options exercised (in shares)		41,103
Issuance of restricted stock & performance stock		$ 817	1,189		2,006
Issuance of restricted stock & performance stock (in shares)		38,539
Shares received in lieu of tax withholding payment on vested restricted stock		$ (781)			(781)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(15,013)
Stock-based compensation			2,084		2,084
Dividends				(3,506)	(3,506)
Share repurchase		$ (3,321)			(3,321)
Share repurchase (in shares)		(67,394)
BALANCE at Mar. 31, 2019	$ 411	$ (90,171)	319,691	285,264	515,195
BALANCE (in shares) at Mar. 31, 2019	41,123,365
BALANCE (in shares) at Mar. 31, 2019		(4,232,418)
BALANCE at Dec. 31, 2019	$ 411	$ (103,960)	320,168	368,685	$ 585,304
BALANCE (in shares) at Dec. 31, 2019	41,123,365				41,123,365
BALANCE (in shares) at Dec. 31, 2019		(4,465,448)			4,465,448
Increase (Decrease) in Stockholders' Equity
Net income				17,716	$ 17,716
Issuance of Stock:
Issuance of restricted stock & performance stock		$ 1,054	801		1,855
Issuance of restricted stock & performance stock (in shares)		43,902
Shares received in lieu of tax withholding payment on vested restricted stock		$ (622)			(622)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(14,722)
Stock-based compensation			2,134		2,134
Dividends				(3,844)	(3,844)
Share repurchase		$ (8,985)			(8,985)
Share repurchase (in shares)		(237,359)
BALANCE at Mar. 31, 2020	$ 411	$ (112,513)	$ 323,103	382,042	$ 593,043
BALANCE (in shares) at Mar. 31, 2020	41,123,365				41,123,365
BALANCE (in shares) at Mar. 31, 2020		(4,673,627)			4,673,627
Increase (Decrease) in Stockholders' Equity
Cumulative-effect adjustment				$ (515)	$ (515)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 17,716	$ 19,866
Adjustments to reconcile net income to net cash provided by operating activities-
Amortization of identifiable intangible assets	6,230	4,891
Depreciation expense	6,461	5,833
Change in right-of-use assets	8,182	3,254
Bad debt expense	4,551	235
Deferred tax provision	300	149
Amortization of debt financing costs	135	96
Gain on sale of assets	(554)	(219)
Changes in the fair value of contingent earn-out obligations	(2,272)	158
Stock-based compensation	3,631	3,176
(Increase) decrease in-
Receivables, net	(7,894)	38,272
Inventories	(256)	(492)
Prepaid expenses and other current assets	5,392	(2,083)
Costs and estimated earnings in excess of billings and unbilled accounts receivable	(695)	671
Other noncurrent assets	225	(193)
Increase (decrease) in-
Accounts payable and accrued liabilities	(45,799)	(59,331)
Billings in excess of costs and estimated earnings	35,337	(10,740)
Other long-term liabilities	(8,770)	(2,552)
Net cash provided by operating activities	21,920	991
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(7,497)	(8,844)
Proceeds from sales of property and equipment	690	357
Cash paid for acquisitions, net of cash acquired	(8,729)	(1,313)
Net cash used in investing activities	(15,536)	(9,800)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from senior credit facility	150,000	54,000
Payments on senior credit facility	(37,375)	(53,000)
Payments on other debt	(12,817)	(1,030)
Payments of dividends to stockholders	(3,844)	(3,506)
Share repurchase	(8,985)	(3,321)
Shares received in lieu of tax withholding	(622)	(781)
Proceeds from exercise of options		800
Deferred acquisition payments	(400)	(250)
Payments for contingent consideration arrangements	(9,865)	(593)
Net cash provided by (used in) financing activities	76,092	(7,681)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	82,476	(16,490)
CASH AND CASH EQUIVALENTS, beginning of period	50,788	45,620
CASH AND CASH EQUIVALENTS, end of period	$ 133,264	$ 29,130

Business and Organization

3 Months Ended

Mar. 31, 2020

Business and Organization

Business and Organization

1. Business and Organization

Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive mechanical and electrical contracting services, which principally includes heating, ventilation and air conditioning (“HVAC”), plumbing, electrical, piping and controls, as well as off-site construction, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. The terms “Comfort Systems,” “we,” “us,” or the “Company,” refer to Comfort Systems USA, Inc. or Comfort Systems USA, Inc. and its consolidated subsidiaries, as appropriate in the context.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

These interim statements should be read in conjunction with the historical Consolidated Financial Statements and related notes of Comfort Systems included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2019 (the “Form 10-K”).

The accompanying unaudited consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the SEC. Accordingly, these financial statements do not include all the footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Form 10-K. We believe all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. The results of operations for interim periods are not necessarily indicative of the results for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for credit losses, self-insurance accruals, deferred tax assets, warranty accruals, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The standard requires companies to consider historical experiences, current market conditions and reasonable and supportable forecasts in the measurement of expected credit losses. The standard requires us to accrue higher credit losses on financial assets compared to the legacy guidance on various items, such as contract assets and current receivables. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. We adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)”, on January 1, 2020, and the impact was not material to our overall financial statements. The adoption of ASU No. 2016-13 resulted in an increase in Allowance for Credit Losses of $0.7 million, an increase to Deferred Tax Assets of $0.2 million and an impact of $0.5 million to Retained Earnings.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removes certain disclosure requirements including the valuation processes for Level 3 fair value measurements, the policy for timing of transfers between levels and the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The standard requires certain additional disclosures for public entities, including disclosure of the changes in unrealized gains and losses included in Other Comprehensive Income for Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Certain amendments, including the amendment on changes in unrealized gains and losses and the range and weighted average of significant unobservable inputs, should be applied prospectively while other amendments should be applied retrospectively to all periods presented upon their effective date. We have modified our fair value disclosures to conform with the requirements of ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, which we adopted on January 1, 2020.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within that year. Early adoption is permitted. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Sales-based taxes are excluded from revenue.

We provide mechanical and electrical contracting services. Our mechanical segment principally includes HVAC, plumbing, piping and controls, as well as off-site construction, monitoring and fire protection. Our electrical segment includes installation and servicing of electrical systems. We install, maintain, repair and replace products and systems throughout the United States. All of our revenue is recognized over time as we deliver goods and services to our customers. Revenue can be earned based on an agreed upon fixed price or based on actual costs incurred marked up at an agreed upon percentage.

We account for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. We consider the start of a project to be when the above criteria have been met and we either have written authorization from the customer to proceed or an executed contract.

We generally do not incur significant incremental costs related to obtaining or fulfilling a contract prior to the start of a project. On rare occasions, when significant pre-contract costs are incurred, they are capitalized and amortized on a percentage of completion basis over the life of the contract. We do not currently have any capitalized obtainment or fulfillment costs on our Balance Sheet and did not incur any impairment loss on such costs in the current year.

Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion (the process described below in more detail) is complex, subject to many variables and requires significant judgment. The consideration to which we are entitled on our long-term contracts may include both fixed and variable amounts. Variable amounts can either increase or decrease the transaction price. A common example of variable amounts that can either increase or decrease contract value are pending change orders that represent contract modifications for which a change in scope has been authorized or acknowledged by our customer, but the final adjustment to contract price is yet to be negotiated. Other examples of positive variable revenue include amounts awarded upon achievement of certain performance metrics, program milestones or cost of completion date

targets and can be based upon customer discretion. Variable amounts can result in a deduction from contract revenue if we fail to meet stated performance requirements, such as complying with the construction schedule.

Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing performance obligation(s). The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis.

We have a Company-wide policy requiring periodic review of the Estimate at Completion in which management reviews the progress and execution of our performance obligations and estimated remaining obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include management's judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables.

Based on this analysis, any adjustments to revenue, cost of services, and the related impact to operating income are recognized as necessary in the quarter when they become known. These adjustments may result from positive program performance if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities and may result in an increase in operating income during the performance of individual performance obligations. Likewise, if we determine we will not be successful in mitigating these risks or realizing related opportunities, these adjustments may result in a decrease in operating income. Changes in estimates of revenue, cost of services and the related impact to operating income are recognized quarterly on a cumulative catchup basis, meaning we recognize in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For projects in which estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

In the first three months of 2020 and 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue

Our consolidated 2020 revenue was derived from contracts to provide service activities in the mechanical and electrical services segments we serve. Refer to Note 9 – Segment Information for additional information on our reportable segments. We disaggregate our revenue from contracts with customers by activity, customer type and contract type, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the following tables (dollars in thousands):


	Three Months Ended March 31,
Revenue by Service Provided	2020				2019
Mechanical Services	$	565,464	80.8	%	$	534,585	99.3	%
Electrical Services		134,667	19.2	%		3,888	0.7	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Type of Customer	2020				2019
Industrial	$	275,198	39.3	%	$	168,660	31.3	%
Education		109,584	15.7	%		66,743	12.4	%
Office Buildings		75,572	10.8	%		66,212	12.3	%
Healthcare		99,259	14.2	%		92,023	17.1	%
Government		38,981	5.6	%		32,279	6.0	%
Retail, Restaurants and Entertainment		61,203	8.7	%		59,391	11.0	%
Multi-Family and Residential		18,731	2.7	%		30,235	5.6	%
Other		21,603	3.0	%		22,930	4.3	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Activity Type	2020				2019
New Construction	$	347,400	49.6	%	$	223,960	41.6	%
Existing Building Construction		207,166	29.6	%		182,296	33.8	%
Service Projects		51,648	7.4	%		50,384	9.4	%
Service Calls, Maintenance and Monitoring		93,917	13.4	%		81,833	15.2	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

Allowance for Credit Losses

We are required to estimate and record the expected credit losses over the contractual life of our financial assets measured at amortized cost including billed and unbilled accounts receivable, other receivables and costs and estimated earnings in excess of billings. Accounts receivable include amounts from work completed in which we have billed or have an unconditional right to bill our customers. Our trade receivables are contractually due in less than a year.

We estimate our credit losses using a loss-rate method for each of our identified portfolio segments. Our portfolio segments are construction, service and other. While our construction and service financial assets are often with the same subset of customers and industries, our construction financial assets will generally have a lower loss-rate than service financial assets due to lien rights, which we are more likely to have on construction jobs. These lien rights result in lower credit loss expenses on average compared to receivables that do not have lien rights. Financial assets classified as Other include receivables that are not related to our core revenue producing activities such as receivables related to our acquisition activity from former owners, our vendor rebate program or receivables for estimated losses in excess of our insurance deductible, which are accrued with a corresponding receivable from our insurance carrier.

Loss rates for our portfolios are based on numerous factors including our history of credit loss expense by portfolio, the financial strength of our customers and counterparties in each portfolio, the aging of our receivables, our expectation of likelihood of payment, macroeconomic trends in the U.S. and the current and forecasted non-residential construction market trends in the U.S.

In addition to the loss-rate calculations discussed above, we also record allowance for credit losses for specific receivables that are deemed to have a higher risk profile than the rest of the respective pool of receivables, such as concerns about a specific customer going bankrupt and no longer being able to pay the receivables due to us.

During the last two weeks of March this year, we experienced negative impacts to our business due to the business disruption caused by Coronavirus Disease 2019 (“COVID-19”). In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. At this time, it is difficult to quantify the impact COVID-19 will have on the rest of 2020, but we currently expect it to negatively impact us more in the second quarter than we experienced in the first quarter. The Company considered the impact of COVID-19 on the assumptions and estimates used to determine the results reported and asset valuations as of March 31, 2020.

During the first quarter of 2020, we increased our loss rates and increased our specific reserves primarily due to the economic disruption caused by COVID-19 which is reflected in our bad debt expense in the current year. This

increase was primarily, but not exclusively, due to concern over collectability of receivables from customers more directly impacted by COVID-19.

Activity in our allowance for credit losses consisted of the following (in thousands):


	Service		Construction		Other		Total
Balance at beginning of year	$	3,192	$	3,400	$	315	$	6,907
Impact of new accounting standard		310		331		54		695
Bad debt expense (benefit)		2,754		1,797		—		4,551
Deductions for uncollectible receivables written off, net of recoveries		(234)		(6)		—		(240)
Credit allowance of acquired companies on the acquisition date		—		352		—		352
Purchase accounting adjustments		—		72		—		72
Reclass to other current liabilities		—		—		(315)		(315)
Balance at March 31, 2020	$	6,022	$	5,946	$	54	$	12,022

Contract Assets and Liabilities

Project contracts typically provide for a schedule of billings or invoices to the customer based on our job-to-date percentage of completion of specific tasks inherent in the fulfillment of our performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. Contract assets include unbilled amounts typically resulting from sales under long term contracts when the cost to cost method of revenue recognition is used, revenue recognized exceeds the amount billed to the customer and right to payment is conditional, subject to completing a milestone, such as a phase of the project. Contract assets are generally classified as current.

Contract liabilities consist of advance payments and billings in excess of revenue recognized. Our contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period. We classify advance payments and billings in excess of revenue recognized as current. It is very unusual for us to have advanced payments with a term of greater than one year; therefore, our contract assets and liabilities are usually all current. If we have advanced payments with a term greater than one year, the noncurrent portion of advanced payments would be included in other long-term liabilities in our consolidated Balance Sheets.

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Three Months Ended March 31,					Year Ended December 31,
	2020				2019
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	2,736	$	166,918	$	10,213	$	130,986
Change due to acquisitions / disposals		436		12,851		6,573		31,556
Change due to conditional versus unconditional		4,394		—		(14,050)		—
Change in timing for performance obligation to be satisfied		—		35,337		—		4,376
Change related to credit allowance		(25)		—		—		—
Balance at end of period	$	7,541	$	215,106	$	2,736	$	166,918

In the first three months of 2020 and 2019, we recognized revenue of $126.8 million and $105.6 million related to our contract liabilities at January 1, 2020 and January 1, 2019, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first three months of 2020 and 2019.

Remaining Performance Obligations

Remaining construction performance obligations represent the remaining transaction price of firm orders for which work has not been performed and excludes unexercised contract options. As of March 31, 2020, the aggregate

amount of the transaction price allocated to remaining performance obligations was $1.62 billion. The Company expects to recognize revenue on approximately 80-85% of the remaining performance obligations over the next 12 months, with the remaining recognized thereafter. Our service maintenance agreements are generally one-year renewable agreements. We have adopted the practical expedient that allows us to not include service maintenance contracts less than one year, therefore we do not report unfulfilled performance obligations for service maintenance agreements.

Leases

We lease certain facilities, vehicles and equipment under noncancelable operating leases. The most significant portion of these noncancelable operating leases are for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. We account for lease components separately from the non-lease components. We have certain leases with variable payments based on an index as well as some short-term leases on equipment and facilities. Variable lease expense and short-term lease expense were not material to our financial statements and aggregated to $1.9 million in the first three months of both 2020 and 2019. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate as of both March 31, 2020 and December 31, 2019 was 3.9%. We recognize lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Lease expense for the three months ended March 31, 2020 and 2019 was $6.4 million and $5.6 million, respectively.

The lease terms generally range from three to ten years. Some leases include one or more options to renew, which may be exercised to extend the lease term. We include the exercise of lease renewal options in the lease term when it is reasonably certain that we will exercise the option and such exercise is at our sole discretion. The weighted average remaining lease term was 7.8 years at March 31, 2020 and 8.1 years at December 31, 2019.

A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the three months ended March 31, 2020 and 2019 was approximately $0.9 million and $1.2 million, respectively.

If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions we rent or sublease certain real estate assets that we no longer use to third parties.

The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	March 31, 2020		December 31, 2019
Lease right-of-use assets	$	82,301	$	84,073
Lease liabilities:
Other current liabilities		14,515		14,016
Long-term lease liabilities		70,410		72,697
Total lease liabilities	$	84,925	$	86,713

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2020 (excluding the three months ended March 31, 2020)	$	13,376
2021		15,511
2022		13,261
2023		10,945
2024		9,436
Thereafter		36,982
Total Lease Payments		99,511
Less—Present Value Discount		(14,586)
Present Value of Lease Liabilities	$	84,925

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities	$	4,473	$	3,778
Lease right-of-use assets obtained in exchange for lease liabilities	$	2,278	$	174

Income Taxes

We conduct business throughout the United States in virtually all fifty states. Our effective tax rate changes based upon our relative profitability, or lack thereof, in states with varying tax rates and rules. In addition, discrete items, such as tax law changes, judgments and legal structures, can impact our effective tax rate. These items can also include the tax treatment for impairment of goodwill and other intangible assets, changes in fair value of acquisition-related assets and liabilities, tax reserves for uncertain tax positions, accounting for losses associated with underperforming operations and noncontrolling interests.

In the third quarter of 2019, we filed an amended federal return for 2015 to claim the credit for increasing research activities (“R&D tax credits”) and recorded a $4.6 million tax benefit that was fully offset by an increase in unrecognized tax benefits. We previously filed an amended federal return for 2014 to claim R&D tax credits during 2018 and recorded a $2.7 million tax benefit that was also fully offset by an increase in unrecognized tax benefits. These tax benefits were fully offset by increases in unrecognized tax benefits due to the uncertainty of the outcome from examinations opened by the Internal Revenue Service (the “IRS”). As a result, the R&D tax credits claimed have had no impact on our effective tax rates.

For the year ended December 31, 2019, our provision for income taxes was reduced by $2.2 million due to benefits from the filing, and expected filing, of amended returns to claim the energy efficient commercial buildings deduction (the “179D deduction”) allocated to us.

Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, life insurance policies, notes to former owners, a revolving credit facility and a term loan. We believe that the carrying values of these instruments on the accompanying Balance Sheets approximate their fair values.

Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

We classify and disclose assets and liabilities carried at fair value in one of the following three categories:

●

Level 1—quoted prices in active markets for identical assets and liabilities;

●

Level 2—observable market-based inputs or unobservable inputs that are corroborated by market data; and

●

Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands):


	Fair Value Measurements at March 31, 2020
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	133,264	$	—	$	—	$	133,264
Life insurance—cash surrender value	$	—	$	3,898	$	—	$	3,898
Contingent earn-out obligations	$	—	$	—	$	16,414	$	16,414

	Fair Value Measurements at December 31, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	50,788	$	—	$	—	$	50,788
Life insurance—cash surrender value	$	—	$	3,905	$	—	$	3,905
Contingent earn-out obligations	$	—	$	—	$	28,497	$	28,497

Cash and cash equivalents consist primarily of highly rated money market funds at a variety of well-known institutions with original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity. The Company’s outstanding term loan held by third-party financial institutions is carried at cost, adjusted for debt issuance costs. The Company’s term loan is not publicly traded and the carrying amount approximates fair value as the loan accrues interest at a variable rate. The carrying value of our borrowings associated with the Revolving Credit Facility approximate its fair value due to the variable rate on such debt.

We have life insurance policies covering 74 employees with a combined face value of $54.2 million. The policies are invested in several investment vehicles, and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance. The cash surrender value of these policies was $3.9 million as of March 31, 2020 and December 31, 2019. These assets are included in “Other Noncurrent Assets” in our consolidated Balance Sheets.

We value contingent earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. Significant unobservable inputs that could impact the fair value measurement include our weighted average cost of capital and the forecasted level of operating income for each earn-out measurement. As of March 31, 2020, cash flows were discounted using a weighted average cost of capital ranging from 9.5% - 14.0%.

The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands):


Balance at beginning of year	$	28,497
Issuances		55
Settlements		(9,866)
Adjustments to fair value		(2,272)
Balance at March 31, 2020	$	16,414

We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. We did not recognize any impairments in the current quarter on those assets required to be measured at fair value on a nonrecurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisitions

3 Months Ended

Mar. 31, 2020

Acquisitions

Acquisitions

4. Acquisitions

Walker Acquisition

On April 1, 2019, we acquired all of the issued and outstanding equity interests of Walker TX Holding Company, LLC and each of its wholly owned subsidiaries (collectively “Walker”). Walker is a full-service electrical contracting and network infrastructure engineering business serving commercial and industrial clients with headquarters in Irving, Texas and operations throughout the state of Texas. As a result of the acquisition, Walker is a wholly owned subsidiary of the Company reported in our electrical services segment.

The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands):


Consideration transferred:
Cash paid at closing	$	178,000
Advance to former owners		20,500
Working capital adjustment		(7,809)
Notes issued to former owners		25,000
Tax equalization payment		202
Estimated fair value of contingent earn-out payments		19,500
	$	235,393
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	4,850
Billed and unbilled accounts receivable		92,309
Other current assets		8,225
Other long-term assets		53
Property and equipment		4,970
Goodwill		96,786
Identifiable intangible assets		90,200
Lease right-of-use asset		9,195
Accounts payable		(20,220)
Accrued compensation and benefits		(974)
Billings in excess of costs and estimated earnings		(31,553)
Other current liabilities		(11,305)
Long-term lease liabilities		(7,143)
	$	235,393

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. All of the goodwill recognized as a result of this transaction is tax deductible.

In estimating the fair value of the acquired intangible assets, we utilized the valuation methodology determined to be the most appropriate for the individual intangible asset. In order to estimate the fair value of the backlog and customer relationships, we utilized an excess earnings methodology, which consisted of the projected cash flows attributable to these assets discounted to present value using a risk-adjusted discount rate that represented the required rate of return. The trade name value was determined based on the relief-from-royalty method, which applies a royalty rate to the revenue stream attributable to this asset, and the resulting royalty payment is tax effected and discounted to present value. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The primary assumptions used were generally based upon the present value of anticipated cash flows discounted at rates ranging from 8.5%-11.5%. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class.

The acquired intangible assets include the following (dollars in thousands):


	Valuation Method	Estimated Useful Life		Estimated Fair Value
Backlog	Excess earnings	2 years	$	4,600
Trade Names	Relief-from-royalty	25 years		32,600
Customer Relationships	Excess earnings	10 years		53,000
Total			$	90,200

The contingent earn-out obligation is associated with the achievement of specified earnings milestones over a five year period, and the range of estimated milestone payments is from $1 million to $11 million (undiscounted). We determined the initial fair value of the contingent earn-out obligation based on the Monte Carlo Simulation method, which represents a Level 3 measurement. Cash flows were discounted using a 10.2% discount rate, which we believe is appropriate and representative of a market participant assumption. Subsequent to the acquisition date, the contingent earn-out obligation is remeasured at fair value each reporting period. Changes in the estimated fair value of the contingent payments subsequent to the acquisition date are recognized immediately in earnings.

Pro Forma Impact of the Acquisition

The following unaudited pro forma information presents the consolidated results of the Company and Walker for the three months ended March 31, 2019, with adjustments to give effect to pro forma events that are directly attributable to the acquisition and have a continuing impact. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations of future periods or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any operating efficiencies that may be associated with the acquisition.

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2018, are as follows (in thousands):


	Three Months Ended March 31,
	2019
Revenue	$	626,834
Pre-tax income	$	23,927

Other Acquisitions

We completed one acquisition in the first quarter of 2020 with a total preliminary purchase price of $41.1 million. This acquisition is reported in our electrical services segment. In 2019, in addition to the Walker acquisition, we completed one acquisition in the first quarter of 2019 with a total purchase price of $1.6 million.

The results of operations of acquisitions are included in our consolidated financial statements from their respective acquisition dates. Our consolidated Balance Sheet includes preliminary allocations of the purchase price to the assets acquired and liabilities assumed for the applicable acquisitions pending the completion of the final valuation of intangible assets and accrued liabilities. Excluding the Walker acquisition, the acquisitions completed in the current and prior year were not material, individually or in the aggregate. Additional contingent purchase price (“earn-out”) has been or will be paid if certain acquisitions achieve predetermined profitability targets. Such earn-outs, when they are not subject to the continued employment of the sellers, are estimated as of the purchase date and included as part of the consideration paid for the acquisition. If we have an earn-out under which continued employment is a condition to receive payment, then the earn-out is recorded as compensation expense over the period earned.

Goodwill

3 Months Ended

Mar. 31, 2020

Goodwill

Goodwill

5. Goodwill

Goodwill

The changes in the carrying amount of goodwill are as follows (in thousands):


	Mechanical Services		Electrical Services
	Segment		Segment		Total
Balance at December 31, 2018	$	235,182	$	—	$	235,182
Acquisitions and purchase price adjustments (See Note 4)		579		96,686		97,265
Impact of segment reorganization		(1,101)		1,101		—
Balance at December 31, 2019		234,660		97,787		332,447
Acquisitions and purchase price adjustments (See Note 4)		—		14,944		14,944
Balance at March 31, 2020	$	234,660	$	112,731	$	347,391

During the fourth quarter of 2019, the Company performed its annual goodwill impairment test resulting in no impairment charges, as the calculated fair values for the majority of the Company’s reporting units that have goodwill were significantly in excess (all greater than 80%) of the respective reporting unit’s carrying value, while two reporting units that were recently acquired had calculated fair values in excess of carrying value of at least 27%. During the first quarter of 2020, we considered the economic impacts of COVID-19 to be a triggering event for review of goodwill impairment at each of our reporting units. After performing a qualitative goodwill impairment assessment as of March 31, 2020, we determined that we did not have a goodwill impairment as of that date. However, one reporting unit’s (Walker) fair value exceeded carrying value by approximately 21%, a reduction from the excess of 27% from our 2019 annual impairment test. Walker’s forecast for the current year is lower than previously estimated, primarily due to the impact of COVID-19 on its business. As a result, this reporting unit is more susceptible to impairment risk from additional adverse changes in its operating environment including micro and macroeconomic environment conditions that could negatively impact them. Such adverse changes could include worsening economic conditions in the locations or markets they primarily serve whether due to COVID-19 or other events and conditions. As of March 31, 2020, Walker had a goodwill balance of $96.8 million.

Debt Obligations

3 Months Ended

Mar. 31, 2020

Debt Obligations

Debt Obligations

6. Debt Obligations

Debt obligations consist of the following (in thousands):


	March 31,		December 31,
	2020		2019
Revolving credit facility	$	150,000	$	28,000
Term loan		140,625		150,000
Notes to former owners		43,667		48,483
Total principal amount		334,292		226,483
Less—unamortized debt issuance costs		(329)		(348)
Total debt, net of unamortized debt issuance costs		333,963		226,135
Less—current portion		(850)		(20,817)
Total long-term portion of debt, net	$	333,113	$	205,318

Revolving Credit Facility and Term Loan

In December 2019, we amended our senior credit facility (the “Facility”) provided by a syndicate of banks, increasing our borrowing capacity from $400.0 million to $600.0 million. As amended, the Facility is composed of a revolving credit line in the amount of $450.0 million and a $150.0 million term loan, and the Facility provides for a $150.0 million accordion or increase option for the revolving portion of the Facility. The amended Facility also includes a sublimit of up to $160.0 million issuable in the form of letters of credit. The Facility expires in January 2025 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. In connection with the amendment in December

2019, we incurred approximately $1.4 million in financing and professional costs which are being amortized over the remaining term of the Facility. Of this amount, $0.4 million is attributable to the term loan and is being amortized using the effective interest method. The remaining $1.0 million is attributable to the revolving credit line, which combined with the previous unamortized costs of $1.3 million, is being amortized over the remaining term of the Facility on a straight-line basis as a non-cash charge to interest expense. For the term loan, we are required to make quarterly payments increasing over time from 1.25% to 3.75% of the original aggregate principal amount of the term loan, with the balance due in January 2025. As of March 31, 2020, we had $150.0 million of outstanding borrowings on the revolving credit facility, $55.6 million in letters of credit outstanding and $244.4 million of credit available.

There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates.

The following is a summary of the additional margins:


	Consolidated Total Indebtedness to
	Credit Facility Adjusted EBITDA
	Less than 1.00		1.00 to 1.75		1.75 to 2.50		2.50 or greater
Additional Per Annum Interest Margin Added Under:
Base Rate Loan Option	0.25	%	0.50	%	0.75	%	1.00	%
Eurodollar Rate Loan Option	1.25	%	1.50	%	1.75	%	2.00	%

The weighted average interest rate applicable to the borrowings under the revolving credit facility was approximately 2.5% as of March 31, 2020. The weighted average interest rate applicable to the term loan was approximately 2.5% as of March 31, 2020.

Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs. We have also occasionally used letters of credit to guarantee performance under our contracts and to ensure payment to our subcontractors and vendors under those contracts. Our lenders issue such letters of credit through the Facility. We have never had a claim made against a letter of credit that resulted in payments by a lender or by us and believe such a claim is unlikely in the foreseeable future. The letter of credit fees range from 1.25% to 2.00% per annum, based on the ratio of Consolidated Total Indebtedness to “Credit Facility Adjusted EBITDA,” which shall mean Consolidated EBITDA as such term is defined in the credit agreement.

Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. These fees range from 0.20% to 0.35% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement.

The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply. Covenant compliance is assessed as of each quarter end.

The Facility’s principal financial covenants include:

Total Leverage Ratio—The Facility requires that the ratio of our Consolidated Total Indebtedness to our Credit Facility Adjusted EBITDA not exceed 3.00 to 1.00 as of the end of each fiscal quarter. The leverage ratio as of March 31, 2020 was 1.5.

Fixed Charge Coverage Ratio—The Facility requires that the ratio of (a) Credit Facility Adjusted EBITDA, less non-financed capital expenditures, provision for income taxes, dividends and amounts used to repurchase stock when the Company’s Total Leverage Ratio exceeds 2.00 to 1.00 to (b) the sum of interest expense and scheduled principal payments of indebtedness be at least 1.50 to 1.00. Credit Facility Adjusted EBITDA, capital expenditures, provision for income taxes, dividends, stock repurchase payments, interest expense, and scheduled principal payments are defined under the Facility for purposes of this covenant, to be amounts for the four quarters ending as of any given quarterly covenant compliance measurement date. The fixed charge coverage ratio as of March 31, 2020 was 10.7.

Other Restrictions—The Facility permits acquisitions of up to $5.0 million per transaction, provided that the aggregate purchase price of such an acquisition and of acquisitions in the same fiscal year does not exceed $10.0 million. However, these limitations only apply when the Company’s Total Leverage Ratio is greater than 2.50 to 1.00.

While the Facility’s financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility’s leverage ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted by the lenders.

We were in compliance with all of our financial covenants as of March 31, 2020.

Notes to Former Owners

As part of the consideration used to acquire six companies, we have outstanding notes to the former owners. These notes had an outstanding balance of $43.7 million as of March 31, 2020. In conjunction with the acquisition of the electrical contractor in North Carolina in the first quarter of 2020, we issued a promissory note to former owners with an outstanding balance of $8.0 million as of March 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 3.0%. The principal is due in equal installments in February 2023 and February 2024. In conjunction with the Walker acquisition in the second quarter of 2019, we issued a promissory note to former owners with an outstanding balance of $25.0 million as of March 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 4.0%. The principal is due in equal installments in April 2022 and April 2023. In conjunction with the BCH acquisition in the second quarter of 2017, we issued a promissory note to former owners with an outstanding balance of $7.2 million as of March 31, 2020 that bears interest, payable quarterly, at a stated interest rate of 3.0%. The principal is due in April 2021. In conjunction with three immaterial acquisitions in 2018 and 2019, we issued notes to former owners with an outstanding balance of $3.5 million as of March 31, 2020 that bear interest, payable quarterly, at stated interest rates ranging from 3.0% - 3.5%. The principal amounts are due between May 2020 – July 2021.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Claims and Lawsuits

We are subject to certain legal and regulatory claims, including lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in the accompanying consolidated financial statements. While we cannot predict the outcome of these proceedings, in management’s opinion and based on reports of counsel, any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results, cash flows or financial condition, after giving effect to provisions already recorded.

Surety

Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay subcontractors and vendors who provided goods or services under a contract, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the surety for any expenses or outlays it incurs. To date, we are not aware of any losses to our sureties in connection with bonds the sureties have posted on our behalf and do not expect such losses to be incurred in the foreseeable future.

Current market conditions for surety markets and bonding capacity are adequate, with acceptable terms and conditions. Historically, approximately 15% to 25% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or changes in the sureties’ assessment of our operating and financial risk could cause the sureties to decline to issue bonds for our work. If that were to occur, the alternatives include doing more business that does not require bonds, posting other forms of collateral for project performance, such as letters of credit or cash, and seeking bonding capacity from other sureties. We would likely also

encounter concerns from customers, suppliers and other market participants as to our creditworthiness. While we believe our general operating and financial characteristics would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term.

Self-Insurance

We are substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer-developing risks, such as workers’ compensation, auto liability and general liability, are reviewed by a third-party actuary quarterly.

Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity

Stockholders' Equity.

8. Stockholders’ Equity

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed considering the dilutive effect of stock options, restricted stock, restricted stock units and performance stock units. The vesting of unvested, contingently issuable performance stock units is based on the achievement of certain earnings per share targets and total shareholder return. These shares are considered contingently issuable shares for purposes of calculating diluted earnings per share. These shares are not included in the diluted earnings per share denominator until the performance criteria are met, if it is assumed that the end of the reporting period was the end of the contingency period.

Unvested restricted stock, restricted stock units and performance stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock, restricted stock units and performance stock units are included in basic earnings per share weighted outstanding from the vesting date.

There were less than 0.1 million anti-dilutive stock options excluded from the calculation of diluted EPS for the three months ended March 31, 2020 and 2019, respectively.

The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands):


	Three Months Ended
	March 31,
	2020	2019
Common shares outstanding, end of period	36,450	36,891
Effect of using weighted average common shares outstanding	224	32
Shares used in computing earnings per share—basic	36,674	36,923
Effect of shares issuable under stock option plans based on the treasury stock method	148	230
Effect of restricted and contingently issuable shares	83	81
Shares used in computing earnings per share—diluted	36,905	37,234

Share Repurchase Program

On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On November 19, 2019, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.8 million shares. Since the inception of the repurchase program, the Board has approved 9.5 million shares to be repurchased. As

of March 31, 2020, we have repurchased a cumulative total of 8.9 million shares at an average price of $18.24 per share under the repurchase program.

The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. In an exercise of such discretion, commencing on March 27, 2020, we have temporarily suspended share repurchases in response to the uncertainty surrounding the current COVID-19 pandemic, as more fully described in “Item 1A. Risk Factors” herein. The Board may modify, suspend, extend or terminate the program at any time. During the three months ended March 31, 2020, we repurchased 0.2 million shares for approximately $9.0 million at an average price of $37.85 per share.

Segment Information

3 Months Ended

Mar. 31, 2020

Segment Information

Segment Information

9. Segment Information

Our activities are within the mechanical services industry and the electrical services industry, which represent our two reportable segments. We aggregate our operating segments into two reportable segments, as the operating segments meet all of the aggregation criteria. The following table presents information about our reportable segments (in thousands):


	Three Months Ended March 31, 2020
	Mechanical Services		Electrical Services		Corporate		Consolidated
Revenue	$	565,464	$	134,667	$	—	$	700,131
Gross Profit	$	108,922	$	8,171	$	—	$	117,093

	Three Months Ended March 31, 2019
	Mechanical Services		Electrical Services		Corporate		Consolidated
Revenue	$	534,585	$	3,888	$	—	$	538,473
Gross Profit	$	105,852	$	813	$	—	$	106,665

Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events

Subsequent Events

10. Subsequent Events

Effective as of April 1, 2020, we consummated a merger through which TAS Energy Inc. (“TAS Energy”) became a wholly owned subsidiary of the Company. TAS Energy is headquartered in Houston, Texas and is a leading engineering, design and construction provider of modular construction systems serving the technology, power and industrial sectors. We expect TAS Energy to initially contribute annualized revenues of approximately $170 million to $190 million. We borrowed under our Facility the majority of the cash purchase price in late March 2020, which resulted in our cash balances as of March 31, 2020 being higher than normal.

In April 2020, we entered into interest rate swap agreements to reduce our exposure to variable interest rates on our Facility. The notional amount covered by these interest rate swaps is initially $225.0 million, which gradually decreases to $80.0 million by November 30, 2021 until the termination date of September 30, 2022.

During the last two weeks of March this year, we experienced negative impacts to our business due to the business disruption caused by COVID-19. In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. At this time, it is difficult to quantify the impact COVID-19 will have on the rest of 2020, but we currently expect it to negatively impact us more in the second quarter than we experienced in the first quarter. The Company considered the impact of COVID-19 on the assumptions and estimates used to determine our results and asset valuations as of March 31, 2020, and the Company has determined that there were no material or systematic adverse impacts on the Company’s first quarter 2020 balance sheet and results of operations except for diminished revenue, operational inefficiency, and an increase in bad debt expense due to the potential for nonpayment by customers in industries more directly impacted by COVID-19.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Recent Accounting Pronouncements

Revenue Recognition

In the first three months of 2020 and 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue


	Three Months Ended March 31,
Revenue by Service Provided	2020				2019
Mechanical Services	$	565,464	80.8	%	$	534,585	99.3	%
Electrical Services		134,667	19.2	%		3,888	0.7	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Type of Customer	2020				2019
Industrial	$	275,198	39.3	%	$	168,660	31.3	%
Education		109,584	15.7	%		66,743	12.4	%
Office Buildings		75,572	10.8	%		66,212	12.3	%
Healthcare		99,259	14.2	%		92,023	17.1	%
Government		38,981	5.6	%		32,279	6.0	%
Retail, Restaurants and Entertainment		61,203	8.7	%		59,391	11.0	%
Multi-Family and Residential		18,731	2.7	%		30,235	5.6	%
Other		21,603	3.0	%		22,930	4.3	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Activity Type	2020				2019
New Construction	$	347,400	49.6	%	$	223,960	41.6	%
Existing Building Construction		207,166	29.6	%		182,296	33.8	%
Service Projects		51,648	7.4	%		50,384	9.4	%
Service Calls, Maintenance and Monitoring		93,917	13.4	%		81,833	15.2	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

Contract Assets and Liabilities

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Three Months Ended March 31,					Year Ended December 31,
	2020				2019
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	2,736	$	166,918	$	10,213	$	130,986
Change due to acquisitions / disposals		436		12,851		6,573		31,556
Change due to conditional versus unconditional		4,394		—		(14,050)		—
Change in timing for performance obligation to be satisfied		—		35,337		—		4,376
Change related to credit allowance		(25)		—		—		—
Balance at end of period	$	7,541	$	215,106	$	2,736	$	166,918

In the first three months of 2020 and 2019, we recognized revenue of $126.8 million and $105.6 million related to our contract liabilities at January 1, 2020 and January 1, 2019, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first three months of 2020 and 2019.

Remaining Performance Obligations

Allowance for Credit Losses

increase was primarily, but not exclusively, due to concern over collectability of receivables from customers more directly impacted by COVID-19.

Activity in our allowance for credit losses consisted of the following (in thousands):


	Service		Construction		Other		Total
Balance at beginning of year	$	3,192	$	3,400	$	315	$	6,907
Impact of new accounting standard		310		331		54		695
Bad debt expense (benefit)		2,754		1,797		—		4,551
Deductions for uncollectible receivables written off, net of recoveries		(234)		(6)		—		(240)
Credit allowance of acquired companies on the acquisition date		—		352		—		352
Purchase accounting adjustments		—		72		—		72
Reclass to other current liabilities		—		—		(315)		(315)
Balance at March 31, 2020	$	6,022	$	5,946	$	54	$	12,022

Leases

The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	March 31, 2020		December 31, 2019
Lease right-of-use assets	$	82,301	$	84,073
Lease liabilities:
Other current liabilities		14,515		14,016
Long-term lease liabilities		70,410		72,697
Total lease liabilities	$	84,925	$	86,713

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2020 (excluding the three months ended March 31, 2020)	$	13,376
2021		15,511
2022		13,261
2023		10,945
2024		9,436
Thereafter		36,982
Total Lease Payments		99,511
Less—Present Value Discount		(14,586)
Present Value of Lease Liabilities	$	84,925

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities	$	4,473	$	3,778
Lease right-of-use assets obtained in exchange for lease liabilities	$	2,278	$	174

Income Taxes

Financial Instruments

Goodwill

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Schedule of disaggregation of revenue


	Three Months Ended March 31,
Revenue by Service Provided	2020				2019
Mechanical Services	$	565,464	80.8	%	$	534,585	99.3	%
Electrical Services		134,667	19.2	%		3,888	0.7	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Type of Customer	2020				2019
Industrial	$	275,198	39.3	%	$	168,660	31.3	%
Education		109,584	15.7	%		66,743	12.4	%
Office Buildings		75,572	10.8	%		66,212	12.3	%
Healthcare		99,259	14.2	%		92,023	17.1	%
Government		38,981	5.6	%		32,279	6.0	%
Retail, Restaurants and Entertainment		61,203	8.7	%		59,391	11.0	%
Multi-Family and Residential		18,731	2.7	%		30,235	5.6	%
Other		21,603	3.0	%		22,930	4.3	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

	Three Months Ended March 31,
Revenue by Activity Type	2020				2019
New Construction	$	347,400	49.6	%	$	223,960	41.6	%
Existing Building Construction		207,166	29.6	%		182,296	33.8	%
Service Projects		51,648	7.4	%		50,384	9.4	%
Service Calls, Maintenance and Monitoring		93,917	13.4	%		81,833	15.2	%
Total	$	700,131	100.0	%	$	538,473	100.0	%

Schedule of activity in allowance for credit losses

Activity in our allowance for credit losses consisted of the following (in thousands):


	Service		Construction		Other		Total
Balance at beginning of year	$	3,192	$	3,400	$	315	$	6,907
Impact of new accounting standard		310		331		54		695
Bad debt expense (benefit)		2,754		1,797		—		4,551
Deductions for uncollectible receivables written off, net of recoveries		(234)		(6)		—		(240)
Credit allowance of acquired companies on the acquisition date		—		352		—		352
Purchase accounting adjustments		—		72		—		72
Reclass to other current liabilities		—		—		(315)		(315)
Balance at March 31, 2020	$	6,022	$	5,946	$	54	$	12,022

Schedule of contract assets and liabilities

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Three Months Ended March 31,					Year Ended December 31,
	2020				2019
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	2,736	$	166,918	$	10,213	$	130,986
Change due to acquisitions / disposals		436		12,851		6,573		31,556
Change due to conditional versus unconditional		4,394		—		(14,050)		—
Change in timing for performance obligation to be satisfied		—		35,337		—		4,376
Change related to credit allowance		(25)		—		—		—
Balance at end of period	$	7,541	$	215,106	$	2,736	$	166,918

Schedule of lease assets and liabilities

The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	March 31, 2020		December 31, 2019
Lease right-of-use assets	$	82,301	$	84,073
Lease liabilities:
Other current liabilities		14,515		14,016
Long-term lease liabilities		70,410		72,697
Total lease liabilities	$	84,925	$	86,713

Schedule of maturities of lease liabilities

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2020 (excluding the three months ended March 31, 2020)	$	13,376
2021		15,511
2022		13,261
2023		10,945
2024		9,436
Thereafter		36,982
Total Lease Payments		99,511
Less—Present Value Discount		(14,586)
Present Value of Lease Liabilities	$	84,925

Schedule of supplemental information related to leases

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities	$	4,473	$	3,778
Lease right-of-use assets obtained in exchange for lease liabilities	$	2,278	$	174

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Measurements

Summary of fair values and levels within the fair value hierarchy in which the fair value measurements fall for assets and liabilities measured on a recurring basis


	Fair Value Measurements at March 31, 2020
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	133,264	$	—	$	—	$	133,264
Life insurance—cash surrender value	$	—	$	3,898	$	—	$	3,898
Contingent earn-out obligations	$	—	$	—	$	16,414	$	16,414

	Fair Value Measurements at December 31, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	50,788	$	—	$	—	$	50,788
Life insurance—cash surrender value	$	—	$	3,905	$	—	$	3,905
Contingent earn-out obligations	$	—	$	—	$	28,497	$	28,497

Schedule of reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)

The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands):


Balance at beginning of year	$	28,497
Issuances		55
Settlements		(9,866)
Adjustments to fair value		(2,272)
Balance at March 31, 2020	$	16,414

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2020

Acquisitions

Schedule of acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill


Consideration transferred:
Cash paid at closing	$	178,000
Advance to former owners		20,500
Working capital adjustment		(7,809)
Notes issued to former owners		25,000
Tax equalization payment		202
Estimated fair value of contingent earn-out payments		19,500
	$	235,393
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	4,850
Billed and unbilled accounts receivable		92,309
Other current assets		8,225
Other long-term assets		53
Property and equipment		4,970
Goodwill		96,786
Identifiable intangible assets		90,200
Lease right-of-use asset		9,195
Accounts payable		(20,220)
Accrued compensation and benefits		(974)
Billings in excess of costs and estimated earnings		(31,553)
Other current liabilities		(11,305)
Long-term lease liabilities		(7,143)
	$	235,393

Schedule of acquired intangible assets

The acquired intangible assets include the following (dollars in thousands):


	Valuation Method	Estimated Useful Life		Estimated Fair Value
Backlog	Excess earnings	2 years	$	4,600
Trade Names	Relief-from-royalty	25 years		32,600
Customer Relationships	Excess earnings	10 years		53,000
Total			$	90,200

Schedule of unaudited pro forma consolidated results of operations

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2018, are as follows (in thousands):


	Three Months Ended March 31,
	2019
Revenue	$	626,834
Pre-tax income	$	23,927

Goodwill (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill

Schedule of changes in the carrying amount of goodwill

The changes in the carrying amount of goodwill are as follows (in thousands):


	Mechanical Services		Electrical Services
	Segment		Segment		Total
Balance at December 31, 2018	$	235,182	$	—	$	235,182
Acquisitions and purchase price adjustments (See Note 4)		579		96,686		97,265
Impact of segment reorganization		(1,101)		1,101		—
Balance at December 31, 2019		234,660		97,787		332,447
Acquisitions and purchase price adjustments (See Note 4)		—		14,944		14,944
Balance at March 31, 2020	$	234,660	$	112,731	$	347,391

Debt Obligations (Tables)

3 Months Ended

Mar. 31, 2020

Debt Obligations

Schedule of components of debt obligations

Debt obligations consist of the following (in thousands):


	March 31,		December 31,
	2020		2019
Revolving credit facility	$	150,000	$	28,000
Term loan		140,625		150,000
Notes to former owners		43,667		48,483
Total principal amount		334,292		226,483
Less—unamortized debt issuance costs		(329)		(348)
Total debt, net of unamortized debt issuance costs		333,963		226,135
Less—current portion		(850)		(20,817)
Total long-term portion of debt, net	$	333,113	$	205,318

Summary of additional margins


	Consolidated Total Indebtedness to
	Credit Facility Adjusted EBITDA
	Less than 1.00		1.00 to 1.75		1.75 to 2.50		2.50 or greater
Additional Per Annum Interest Margin Added Under:
Base Rate Loan Option	0.25	%	0.50	%	0.75	%	1.00	%
Eurodollar Rate Loan Option	1.25	%	1.50	%	1.75	%	2.00	%

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity

Reconciliation of number of shares outstanding with the number of shares used in computing basic and diluted earnings per share

The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands):


	Three Months Ended
	March 31,
	2020	2019
Common shares outstanding, end of period	36,450	36,891
Effect of using weighted average common shares outstanding	224	32
Shares used in computing earnings per share—basic	36,674	36,923
Effect of shares issuable under stock option plans based on the treasury stock method	148	230
Effect of restricted and contingently issuable shares	83	81
Shares used in computing earnings per share—diluted	36,905	37,234

Segment Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Information

Summary of information about reportable segments


	Three Months Ended March 31, 2020
	Mechanical Services		Electrical Services		Corporate		Consolidated
Revenue	$	565,464	$	134,667	$	—	$	700,131
Gross Profit	$	108,922	$	8,171	$	—	$	117,093

	Three Months Ended March 31, 2019
	Mechanical Services		Electrical Services		Corporate		Consolidated
Revenue	$	534,585	$	3,888	$	—	$	538,473
Gross Profit	$	105,852	$	813	$	—	$	106,665

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2020	Mar. 31, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle
Impact to Retained Earnings		$ (515)
Lease right-of-use assets		82,301	$ 84,073
Operating lease liability		$ 84,925	$ 86,713
Adjustments \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle
Increase in allowance for doubtful accounts	$ 700
Increase to Deferred Tax Assets	200
Impact to Retained Earnings	$ 500

Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue
Revenue	$ 700,131	$ 538,473
Percentage of revenue from contract with customer (as a percent)	100.00%	100.00%
Industrial
Disaggregation of Revenue
Revenue	$ 275,198	$ 168,660
Percentage of revenue from contract with customer (as a percent)	39.30%	31.30%
Education
Disaggregation of Revenue
Revenue	$ 109,584	$ 66,743
Percentage of revenue from contract with customer (as a percent)	15.70%	12.40%
Office Buildings
Disaggregation of Revenue
Revenue	$ 75,572	$ 66,212
Percentage of revenue from contract with customer (as a percent)	10.80%	12.30%
Healthcare
Disaggregation of Revenue
Revenue	$ 99,259	$ 92,023
Percentage of revenue from contract with customer (as a percent)	14.20%	17.10%
Government
Disaggregation of Revenue
Revenue	$ 38,981	$ 32,279
Percentage of revenue from contract with customer (as a percent)	5.60%	6.00%
Retail, Restaurants and Entertainment
Disaggregation of Revenue
Revenue	$ 61,203	$ 59,391
Percentage of revenue from contract with customer (as a percent)	8.70%	11.00%
Multi-Family and Residential
Disaggregation of Revenue
Revenue	$ 18,731	$ 30,235
Percentage of revenue from contract with customer (as a percent)	2.70%	5.60%
Other
Disaggregation of Revenue
Revenue	$ 21,603	$ 22,930
Percentage of revenue from contract with customer (as a percent)	3.00%	4.30%
New Construction
Disaggregation of Revenue
Revenue	$ 347,400	$ 223,960
Percentage of revenue from contract with customer (as a percent)	49.60%	41.60%
Existing Building Construction
Disaggregation of Revenue
Revenue	$ 207,166	$ 182,296
Percentage of revenue from contract with customer (as a percent)	29.60%	33.80%
Service Projects
Disaggregation of Revenue
Revenue	$ 51,648	$ 50,384
Percentage of revenue from contract with customer (as a percent)	7.40%	9.40%
Service Calls, Maintenance and Monitoring
Disaggregation of Revenue
Revenue	$ 93,917	$ 81,833
Percentage of revenue from contract with customer (as a percent)	13.40%	15.20%
Mechanical Services
Disaggregation of Revenue
Revenue	$ 565,464	$ 534,585
Percentage of revenue from contract with customer (as a percent)	80.80%	99.30%
Electrical Services
Disaggregation of Revenue
Revenue	$ 134,667	$ 3,888
Percentage of revenue from contract with customer (as a percent)	19.20%	0.70%

Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of year	$ 6,907
Impact of new accounting standard	695
Bad debt expense (benefit)	4,551	$ 235
Deductions for uncollectible receivables written off, net of recoveries	(240)
Credit allowance of acquired companies on the acquisition date	352
Purchase accounting adjustments	72
Reclass to other current liabilities	(315)
Balance at March 31, 2020	12,022
Service
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of year	3,192
Impact of new accounting standard	310
Bad debt expense (benefit)	2,754
Deductions for uncollectible receivables written off, net of recoveries	(234)
Balance at March 31, 2020	6,022
Construction
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of year	3,400
Impact of new accounting standard	331
Bad debt expense (benefit)	1,797
Deductions for uncollectible receivables written off, net of recoveries	(6)
Credit allowance of acquired companies on the acquisition date	352
Purchase accounting adjustments	72
Balance at March 31, 2020	5,946
Other.
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of year	315
Impact of new accounting standard	54
Reclass to other current liabilities	(315)
Balance at March 31, 2020	$ 54

Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Contract Assets
Balance at beginning of period	$ 2,736	$ 10,213	$ 10,213
Change due to acquisitions / disposals	436		6,573
Change due to conditional versus unconditional	4,394		(14,050)
Change related to credit allowance	(25)
Balance at end of period	7,541		2,736
Contract Liabilities
Balance at beginning of period	166,918	130,986	130,986
Change due to acquisitions / disposals	12,851		31,556
Change in timing for performance obligation to be satisfied	35,337		4,376
Balance at end of period	215,106		$ 166,918
Revenue related to our contract liabilities	$ 126,800
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Contract Liabilities
Revenue related to our contract liabilities		$ 105,600

Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Remaining Performance Obligations
The term of the renewable service maintenance agreements (in years)	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01
Remaining Performance Obligations
Remaining performance obligations	$ 1,620
Expected timing of performance obligations	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 \| Minimum
Remaining Performance Obligations
Expected percentage of remaining performance obligations	80.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 \| Maximum
Remaining Performance Obligations
Expected percentage of remaining performance obligations	85.00%

Summary of Significant Accounting Policies - Service Maintenance Agreements (Details)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
The term of the renewable service maintenance agreements (in years)	1 year

Summary of Significant Accounting Policies - Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) Option	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Variable lease expense and short-term lease expenses	$ 1,900	$ 1,900
Weighted average discount rate	3.90%		3.90%
Lease expense	$ 6,400	5,600
Weighted average remaining lease term	7 years 9 months 18 days		8 years 1 month 6 days
Rent paid to related parties	$ 900	$ 1,200
Existence of option to extend	true
Summary of lease asset and liabilities
Lease right-of-use assets	$ 82,301		$ 84,073
Lease Liabilities
Other current liabilities	$ 14,515		14,016
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current
Long-term lease liabilities	$ 70,410		72,697
Present Value of Lease Liabilities	$ 84,925		$ 86,713
Minimum
Lessee, Lease, Description [Line Items]
Lease term	3 years
Number of options to renew \| Option	1
Maximum
Lessee, Lease, Description [Line Items]
Lease term	10 years

Summary of Significant Accounting Policies - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Maturities of lease liabilities:
2020 (excluding the three months ended March 31, 2020)	$ 13,376
2021	15,511
2022	13,261
2023	10,945
2024	9,436
Thereafter	36,982
Total Lease Payments	99,511
Less-Present Value Discount	(14,586)
Present Value of Lease Liabilities	84,925		$ 86,713
Supplemental information related to leases:
Cash paid for amounts included in the measurement of lease liabilities	4,473	$ 3,778
Lease right-of-use assets obtained in exchange for lease liabilities	$ 2,278	$ 174

Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Provision for income taxes		$ 2.2
Additions based on tax positions related to prior years	$ 4.6		$ 2.7

Fair Value Measurements (Details) $ in Thousands	3 Months Ended
Fair Value Measurements (Details) $ in Thousands	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Fair Value Measurements
Number of employees covered under life insurance policies \| item	74
Combined face value of life insurance policies	$ 54,200
Cash surrender value	$ 3,900
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)
Impairment charges		$ 0
Minimum
Fair Value Measurements
Weighted average cost of capital	9.50%
Maximum
Fair Value Measurements
Weighted average cost of capital	14.00%
Contingent earn-out obligations
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)
Balance at beginning of year	$ 28,497
Issuances	55
Settlements	(9,866)
Adjustments to fair value	(2,272)
Balance at end of period	16,414	28,497
Recurring basis \| Total
Fair Value Measurements
Cash and cash equivalents	133,264	50,788
Life insurance-cash surrender value	3,898	3,905
Contingent earn-out obligations	16,414	28,497
Recurring basis \| Quoted Market Prices In Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Cash and cash equivalents	133,264	50,788
Recurring basis \| Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Life insurance-cash surrender value	3,898	3,905
Recurring basis \| Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Contingent earn-out obligations	$ 16,414	$ 28,497

Acquisitions (Details) - USD ($) $ in Thousands		3 Months Ended
Acquisitions (Details) - USD ($) $ in Thousands	Apr. 01, 2019	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consideration transferred:
Total consideration transferred		$ 1,600
Recognized amounts of identifiable assets acquired and liabilities assumed:
Goodwill		$ 347,391	$ 332,447	$ 235,182
Walker
Consideration transferred:
Cash paid at closing	$ 178,000
Advance to former owners	20,500
Working capital adjustment	(7,809)
Notes issued to former owners	25,000
Tax equalization payment	202
Estimated fair value of contingent earn-out payments	19,500
Total consideration transferred	235,393
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	4,850
Billed and unbilled accounts receivable	92,309
Other current assets	8,225
Other long-term assets	53
Property and equipment	4,970
Goodwill	96,786
Identifiable intangible assets	90,200
Lease right-of-use asset	9,195
Accounts payable	(20,220)
Accrued compensation and benefits	(974)
Billings in excess of costs and estimated earnings	(31,553)
Other current liabilities	(11,305)
Long-term lease liabilities	(7,143)
Total assets acquired and liabilities assumed	$ 235,393
Cash flow discount rate	10.20%
Walker \| Minimum
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash flow discount rate	8.50%
Walker \| Maximum
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash flow discount rate	11.50%

Acquisitions - Acquired Intangible Assets (Details) - Walker $ in Thousands	Apr. 01, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 90,200
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	2 years
Estimated Fair Value	$ 4,600
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	25 years
Estimated Fair Value	$ 32,600
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years
Estimated Fair Value	$ 53,000

Acquisitions - Contingent Earn-out Obligation (Details) - Walker $ in Millions	Apr. 01, 2019 USD ($)
Business Acquisition [Line Items]
Contingent earn-out period	5 years
Contingent earn-out estimated milestone payment, minimum	$ 1
Contingent earn-out estimated milestone payment, maximum	$ 11
Cash flow discount rate	10.20%

Acquisitions - Pro Forma (Details) $ in Thousands	3 Months Ended
Acquisitions - Pro Forma (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Acquisitions
Revenue	$ 626,834
Pre-tax income	$ 23,927

Acquisitions - Other Acquisitions (Details) $ in Thousands		3 Months Ended
Acquisitions - Other Acquisitions (Details) $ in Thousands	Apr. 01, 2019 USD ($)	Mar. 31, 2020 USD ($) item	Mar. 31, 2019 item
Acquisitions
Number of acquisitions \| item			1
Total purchase price		$ 1,600
Walker
Acquisitions
Total purchase price	$ 235,393
Starr
Acquisitions
Number of acquisitions \| item		1
Total purchase price		$ 41,100

Goodwill - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2019
Changes in the carrying amount of goodwill
Balance at beginning of year	$ 332,447		$ 235,182
Acquisitions and purchase price adjustments (See Note 4)	14,944		97,265
Impairment adjustment		$ 0
Balance at end of period	347,391	332,447	332,447
Mechanical Services Segment
Changes in the carrying amount of goodwill
Balance at beginning of year	234,660		235,182
Acquisitions and purchase price adjustments (See Note 4)			579
Impact of segment reorganization	(1,101)
Balance at end of period	234,660	234,660	234,660
Electrical Services
Changes in the carrying amount of goodwill
Balance at beginning of year	97,787
Acquisitions and purchase price adjustments (See Note 4)	14,944		96,686
Impact of segment reorganization	1,101
Balance at end of period	$ 112,731	$ 97,787	$ 97,787

Goodwill - Additional Information (Details) $ in Thousands	3 Months Ended
Goodwill - Additional Information (Details) $ in Thousands	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Goodwill
Impairment charges		$ 0
Number of reporting units acquired with fair value in excess of carrying value below 80%		2.00%
Number of reporting units in which percentage is reduced \| item	1
Goodwill	$ 347,391	$ 332,447	$ 235,182
Walker
Goodwill
Percentage of fair values in excess of carrying value of two acquired reporting units		27.00%
Percentage of fair values in excess of carrying value for Walker reporting unit	21.00%
Goodwill	$ 96,800
Minimum
Goodwill
Threshold percentage of goodwill		80.00%
Percentage of fair values in excess of carrying value of two acquired reporting units		27.00%

Debt Obligations (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Obligations
Total principal amount	$ 334,292	$ 226,483
Less-unamortized debt issuance costs	(329)	(348)
Total long-term portion of debt	333,963	226,135
Less-current portion	850	20,817
Total long-term portion of debt, net	333,113	205,318
Revolving credit facility
Debt Obligations
Total principal amount	150,000	28,000
Term loan
Debt Obligations
Total principal amount	140,625	150,000
Notes to former owners
Debt Obligations
Outstanding balance	$ 43,667	$ 48,483

Debt Obligations - Other (Details) $ in Thousands				3 Months Ended
Debt Obligations - Other (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 20, 2019	Dec. 19, 2019 USD ($)	Mar. 31, 2020 USD ($) item	Mar. 31, 2019 USD ($)
Debt Obligations
Outstanding balance	$ 226,483			$ 334,292
Reconciliation of Credit Facility Adjusted EBITDA to net income
Net income				17,716	$ 19,866
Provision for income taxes				6,751	6,933
Stock-based compensation				$ 3,631	$ 3,176
Principal financial covenants
Fixed charge coverage ratio				2.00
Revolving credit facility
Debt Obligations
Borrowing capacity	450,000
Payments of financing costs line of credit arrangements	1,000
Outstanding borrowings				$ 150,000
Outstanding balance	28,000			150,000
Letters of credit amount outstanding				55,600
Credit available				$ 244,400
Principal financial covenants
Number of interest rate options \| item				2
Leverage ratio				1.5
Fixed charge coverage ratio				10.7
Number of quarters of capital expenditures, tax provision, dividends and stock repurchase payments used for calculation of fixed charge coverage ratio \| item				4
Other disclosures
Weighted average interest rate (as a percent)				2.50%
Revolving credit facility \| Through maturity
Principal financial covenants
Leverage ratio				3.00
Revolving credit facility \| Minimum
Principal financial covenants
Fixed charge coverage ratio				1.50
Additional per annum interest margin added under:
Letter of credit fees (as a percent)				1.25%
Commitment fees payable on unused portion of the facility (as a percent)				0.20%
Revolving credit facility \| Minimum \| Covenant Requirement
Principal financial covenants
Net leverage ratio used as basis for other restrictions				2.50
Revolving credit facility \| Maximum
Principal financial covenants
Permitted amount of acquisitions per transaction				$ 5,000
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction				$ 10,000
Additional per annum interest margin added under:
Letter of credit fees (as a percent)				2.00%
Commitment fees payable on unused portion of the facility (as a percent)				0.35%
Revolving credit facility \| Base Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				0.25%
Revolving credit facility \| Base Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.00 to 1.75
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				0.50%
Revolving credit facility \| Base Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.75 to 2.50
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				0.75%
Revolving credit facility \| Base Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.50 or greater
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				1.00%
Revolving credit facility \| Eurodollar Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				1.25%
Revolving credit facility \| Eurodollar Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.00 to 1.75
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				1.50%
Revolving credit facility \| Eurodollar Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.75 to 2.50
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				1.75%
Revolving credit facility \| Eurodollar Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.50 or greater
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)				2.00%
Amended senior revolving credit facility
Debt Obligations
Borrowing capacity	600,000		$ 400,000
Repayment in terms of percentage of original aggregate principal amount		3.75%	1.25%
Line of credit borrowing capacity accordion option	150,000
Financing and professional cost	1,400
Unamortized costs			$ 1,300
Term loan
Debt Obligations
Borrowing capacity	150,000
Payments of financing costs term loan	400
Outstanding balance	150,000			$ 140,625
Other disclosures
Weighted average interest rate (as a percent)				2.50%
Notes to former owners
Other disclosures
Cumulative number of companies acquired \| item				6
Outstanding balance	48,483			$ 43,667
Promissory note \| Walker
Other disclosures
Outstanding balance				$ 25,000
Weighted average interest rate (as a percent)				4.00%
Promissory note \| BCH
Other disclosures
Outstanding balance				$ 7,200
Weighted average interest rate (as a percent)				3.00%
Promissory note \| Five Immaterial Acquisition
Other disclosures
Outstanding balance				$ 3,500
Promissory note \| Electrical Contractor North Carolina
Other disclosures
Outstanding balance				$ 8,000
Weighted average interest rate (as a percent)				3.00%
Promissory note \| Minimum \| Five Immaterial Acquisition
Other disclosures
Weighted average interest rate (as a percent)				3.00%
Promissory note \| Maximum \| Five Immaterial Acquisition
Other disclosures
Weighted average interest rate (as a percent)				3.50%
Letter of Credit
Debt Obligations
Borrowing capacity	$ 160,000

Commitments and Contingencies - Other and Bonds (Details) - Surety	3 Months Ended
	Mar. 31, 2020
Minimum
Surety
Percentage of business which has required bonds	15.00%
Maximum
Surety
Percentage of business which has required bonds	25.00%

Stockholders' Equity - Incentive and Other (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		156 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Nov. 19, 2019	Mar. 29, 2007
Share Repurchase Program
Share repurchase	$ 8,985	$ 3,321
Stock Repurchase Program 2007
Share Repurchase Program
Number of shares of outstanding common stock authorized to be acquired under a stock repurchase program	9.5		9.5	0.8	1.0
Share repurchase (in shares)	0.2		8.9
Average price (in dollars per share)	$ 37.85		$ 18.24
Share repurchase	$ 9,000

Stockholders' Equity - Anti-Dilutive Stock Options (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stock Options \| Maximum
Earnings Per Share
Anti-dilutive securities excluded from computation of earnings per share amount (in shares)	0.1	0.1

Stockholders' Equity - Number of Shares (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Reconciliation of the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share
Common shares outstanding, end of period	36,450	36,891
Effect of using weighted average common shares outstanding	224	32
Shares used in computing earnings per share-basic	36,674	36,923
Effect of shares issuable under stock option plans based on the treasury stock method	148	230
Effect of restricted and contingently issuable shares	83	81
Shares used in computing earnings per share-diluted	36,905	37,234

Segment Information (Details) $ in Thousands	3 Months Ended
Segment Information (Details) $ in Thousands	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Segment Information
Number of reportable segments \| segment	2
Revenue	$ 700,131	$ 538,473
Gross Profit	117,093	106,665
Capital Expenditures	7,497	8,844
Total Assets	1,618,067		$ 1,505,012
Operating \| Mechanical Services Segment
Segment Information
Revenue	565,464	534,585
Gross Profit	108,922	105,852
Operating \| Electrical Services
Segment Information
Revenue	134,667	3,888
Gross Profit	$ 8,171	$ 813

Subsequent Events (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2020	Nov. 30, 2021	Apr. 01, 2020
Subsequent Events
Revenues	$ 700,131	$ 538,473
Subsequent Event \| Interest Rate Swap [Member]
Subsequent Events
Notional amount				$ 80,000	$ 225,000
Subsequent Event \| Maximum \| TAS Energy [Member]
Subsequent Events
Expected revenue, acquired company			$ 190,000
Subsequent Event \| Minimum \| TAS Energy [Member]
Subsequent Events
Expected revenue, acquired company			$ 170,000