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Item 1A. Risk Factors

2021-09-13 compared with 2020-09-03 · 126 added, 144 removed, 202 unchanged (57% of the section changed)

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As we operate in a continuously changing environment, other risk factors may emerge which could have a material adverse effect on our results of operations, financial condition and cash flow.

Risk Factors Related to Our Business

The recent COVID-19 pandemic and related economic repercussions have had, and are expected to continue to have, a significant impact on our business, and depending on the duration of the pandemic and its effect on the oil and gas and other industries, could have a material adverse effect on our business, liquidity, results of operations and financial condition.

The COVID-19 pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the industries we serve.

These events have directly affected our business and have exacerbated the potential negative impact from many of the other risk factors described in this section, including those relating to our customers’ capital spending and trends in oil and natural gas prices.

Given the nature and significance of the events described above, we are not able to enumerate all potential risks to our business;

however, we believe potential impacts of these recent events include, but are not limited to:

• potential disruption to our supply chain for raw materials essential to our business;

• notices from customers, suppliers and other third parties arguing that their non-performance under our contracts with them is permitted as a result of force majeure or other reasons;

• liquidity challenges, including impacts related to delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies;

• a need to preserve liquidity, which could result in a delay or change in our capital investment plan;

• cybersecurity issues, as digital technologies may become more vulnerable and experience a higher rate of cyberattacks in the current environment of remote connectivity;

• litigation risk and possible loss contingencies related to COVID-19 and its impact, including with respect to commercial contracts, employee matters and insurance arrangements;

• reduction of our workforce to adjust to market conditions, including severance payments, retention issues, and an inability to hire employees when market conditions improve;

• costs associated with rationalization of our portfolio of real estate facilities, including exit of leases and facility closures to align with expected activity and workforce capacity;

• additional asset impairments, including an impairment of the carrying value of our goodwill or other intangible assets, along with other accounting charges as demand for our services and products decreases;

• infections and quarantining of our employees and the personnel of our customers, suppliers and other third parties in areas in which we operate;

• actions undertaken by national, regional and local governments and health officials to contain the virus or treat its effects;

• a structural shift in the global economy as a result of changes in the way people work, travel and interact, or in connection with a global recession.

Given the dynamic nature of these events, we cannot reasonably estimate the period of time that the COVID-19 pandemic and related market conditions will persist, the full extent of the impact they will have on our business, financial condition, results of operations or cash flows or the pace or extent of any subsequent recovery.

The confluence of events described above may have a significant impact on our business, and depending on the duration of the pandemic and its effect on the industries we serve, could have, a material adverse effect on our business, liquidity, consolidated results of operations and consolidated financial condition.

For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations - Operational Update.”

Risk Factors Related to the COVID-19 Pandemic

The COVID-19 pandemic has adversely affected our business and operations.

The COVID-19 pandemic has adversely affected our business and operations and the business and operations of our customers.

We have experienced unpredictable reductions in demand for our services.

In response to the COVID-19 pandemic, companies within the oil and natural gas and other industries (including our customers) have announced spending cuts and/or project delays which, in turn, have resulted in decreased awards of new contracts or adjustments, reductions, suspensions or cancellations of existing contracts.

Such continued delays have impacted our business, results of operations and financial condition.

The ongoing pandemic has also resulted in disruptions to labor and global supply chains, which have led to labor shortages and higher prices for some of the materials we need to run our business, including, but not limited to, structural steel, steel piping, rebar, valves, copper, and delivery freight.

We have been proactive with managing our workforce and procurement processes to help reduce the impacts of labor shortages and rising materials prices on our business and to help ensure we continue to have the labor and materials we need available.

However, rising prices and the potential for labor and materials shortages have created additional risk into bidding and executing work profitably.

Because the duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing and difficult to predict, the impact on our business, financial condition and results of operations remains uncertain.

While we expect the COVID-19 pandemic to have an adverse effect on our business, financial condition, liquidity, cash flow and results of operations, we are unable to predict the extent, nature or duration of these impacts at this time.

Financial Risks

Our borrowing capacity under our Credit Agreement is determined by the size of our borrowing base and if the size of our borrowing base does not provide adequate liquidity, then we may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business or achieve our strategic plan.

Cash and cash equivalents on hand at June 30, 2021 totaled $83.9 million.

Management believes it has sufficient cash on hand and will generate sufficient cash from operations to fund the business.

However, should we require additional liquidity, there is risk that we will be unable access the amount of additional liquidity needed from our Credit Agreement if the level of assets included in the borrowing base is insufficient.

The borrowing base includes restricted cash plus a percentage of the value of certain accounts receivable, inventory and equipment, reduced for certain reserves.

To the extent that cash on hand, cash flow from operations, and borrowing availability under the Credit Agreement are insufficient to make future investments, or provide needed working capital, we may require additional financing from other sources.

Our ability to obtain such additional financing in the future will depend in part upon prevailing capital market conditions, as well as conditions in our business and our operating results;

and those factors may affect our efforts to arrange additional financing on terms that are satisfactory to us.

If adequate funds are not available, or are not available on acceptable terms, we may not be able to make future investments or respond to competitive challenges.

Our Credit Agreement imposes restrictions that may limit business alternatives.

Our Credit Agreement prohibits or limits us from making acquisitions, repurchasing equity, incurring additional debt, acquiring or disposing of assets, or making other distributions, including cash dividends.

In addition, our Credit Agreement requires that we comply with a Fixed Charge Coverage Ratio financial covenant under certain conditions.

These covenants and restrictions may impact our ability to effectively execute operating and strategic plans and our operating performance may not be sufficient to comply with the required covenants.

Our failure to comply with one or more of the covenants in our Credit Agreement could result in an event of default.

We can provide no assurance that a default could be remedied, or that our creditors would grant a waiver or further amend the terms of the Credit Agreement.

Risk Factors Related to Our Business and Operations

Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.

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If we under utilize our workforce, our project gross margins and overall profitability suffer in the short-term.

If we over utilize our workforce, we may negatively impact safety, employee satisfaction and project execution, which could result in a decline in future project awards.

If we over utilize our workforce, we may negatively impact safety, employee satisfaction and project execution.

The utilization of our workforce is impacted by numerous factors including:

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An inability to attract and retain qualified personnel, and in particular, engineers, project managers, and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenue and profitability.

Our ability to attract and retain qualified engineers, project managers, skilled craftsmen and other experienced professionals in accordance with our needs is an important factor in our ability to maintain profitability and grow our business.

We initiated workforce reductions during the COVID-19 pandemic as demand for our services declined.

Once the demand for our services increases, our ability to attract and retain qualified engineers, project managers, skilled craftsmen and other experienced professionals in accordance with our need will be an important factor in our ability to maintain profitability and grow our business.

The market for these professionals is competitive, particularly during periods of economic growth when the supply is limited.

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If we do incur additional compensation and benefit costs, our customer contracts may not allow us to pass through these costs.

Competent and experienced engineers, project managers, and craft workers are especially critical to the profitable performance of our contracts, particularly on our fixed-price contracts where superior design and execution of the project can result in profits greater than originally estimated or where inferior design and project execution can reduce or eliminate estimated profits or even result in a loss.

Competent and experienced engineers, project estimators, project managers, and craft workers are especially critical to the profitable performance of our contracts, particularly on our fixed-price contracts where superior design and execution of the project can result in profits greater than originally estimated or where inferior design and project execution can reduce or eliminate estimated profits or even result in a loss.

Our project managers are involved in most aspects of contracting and contract execution, including:

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The demand for our products and services depends upon the existence of construction and maintenance projects primarily in the midstream and downstream petroleum, power and other heavy industries in the United States and Canada.

Therefore, it is likely that our business will continue to be cyclical in nature and vulnerable to general downturns in the United States, Canadian and world economies and changes in commodity prices, which could adversely affect the demand for our products and services.

The availability of engineering and construction projects is dependent upon economic conditions in the oil, gas, petrochemical, industrial, and power industries, and specifically, the level of capital expenditures on energy infrastructure.

Therefore, it is likely that our business will continue to be cyclical in nature and vulnerable to general downturns in the United States, Canadian and world economies and negative changes in commodity prices, which could adversely affect the demand for our products and services.

The availability of engineering and construction projects is dependent upon economic conditions in the oil, natural gas, petrochemical, industrial, and power industries, and specifically, the level of capital expenditures on energy infrastructure.

A prolonged period of relatively low commodity prices in North America has had an adverse impact on the level of capital expenditures of our customers and/or their ability to finance these expenditures.

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There are numerous factors beyond our control that influence the level of maintenance and capital expenditures of our customers, including:

• current or projected commodity prices, including oil, gas, power and mineral prices;

• current or projected commodity prices, including oil, natural gas, power and mineral prices;

• the demand for alternative energy products;

• refining margins;

• the demand for oil, gas and electricity;

• the ability of oil, gas, industrial and power companies to generate, access and deploy capital;

• the demand for oil, natural gas and electricity;

• the ability of oil, natural gas, industrial and power companies to generate, access and deploy capital;

• exploration, production and transportation costs;

• interest rates;

• the discovery rate, size and location of new oil and natural gas reserves;

• technological challenges and advances;

• ability to export hydrocarbon products;

• tax incentives, including those for alternative energy projects;

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• local, national and international political and economic conditions.

Our revenue and profitability may be adversely affected by a reduced level of activity in the hydrocarbon industry.

In recent years, demand from the worldwide hydrocarbon industry has been a significant generator of our revenue.

Numerous factors influence capital expenditure decisions in the hydrocarbon industry, including, but not limited to, the following:

• current and projected oil and gas prices;

• exploration, extraction, production and transportation costs;

• refining margins;

• the discovery rate, size and location of new oil and gas reserves;

• technological challenges and advances;

• ability to export hydrocarbon products;

• demand for hydrocarbon production;

• competition from alternative energy sources, including wind and solar;

• changing taxes, price controls, and laws and regulations.

The aforementioned factors are beyond our control and could have a material adverse effect on our results of operations and on our financial position or cash flow.

The volume of storage related projects are influenced by the overall forward market for crude oil, and certain market conditions may adversely affect financial and operating results.

The volume of storage related projects is influenced by the overall forward market for crude oil, and certain market conditions may adversely affect financial and operating results.

Our results may be influenced by the overall forward market for crude oil.

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We can provide no assurance that we will be successful in obtaining, through negotiation, arbitration, litigation or otherwise, approved change orders in an amount adequate to compensate us for our additional work or expenses.

Our use of percentage-of-completion accounting for fixed-price contracts and our reporting of profits for cost-plus contracts prior to contract completion could result in a reduction or elimination of previously reported profits.

Our revenue are recognized using the percentage-of-completion method of accounting.

Under percentage-of-completion accounting, contract revenue and earnings are recognized ratably over the contract term based on the proportion of actual costs incurred to total estimated costs.

In addition, some contracts contain penalty provisions for failure to achieve certain milestones, schedules or performance standards.

We review our estimates of contract revenue, costs and profitability on a monthly basis.

As a result, we may adjust our estimates on one or more occasions as a result of changes in cost estimates, change orders to the original contract, or claims against the customer for increased costs incurred by us due to customer-induced delays and other factors.

If estimates of costs to complete fixed price contracts indicate a loss, a provision is made through a contract write-down for the total loss anticipated in the period the loss is determined.

Contract profit estimates are also adjusted, on a percentage of completion basis, in the fiscal period in which it is determined that an adjustment is required.

No restatements are made to prior periods.

Further, a number of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded on a percentage of completion basis in the period when estimable and probable.

As a result of the requirements of the percentage-of-completion method of accounting, the possibility exists that we could have estimated and reported a profit on a contract over several prior periods and later determine, as a result of additional information, that all or a portion of such previously estimated and reported profits were overstated.

If this occurs, the full aggregate amount of the overstatement will be reported for the period in which such change in estimate occurs.

Actual results could differ from the estimates and assumptions that we use to prepare our financial statements.

To prepare financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions, as of the date of the financial statements, which affect the reported values of assets, liabilities, revenue and expenses and disclosures of contingent assets and liabilities.

Areas requiring significant estimation by our management include:

• contract costs and application of percentage-of-completion accounting;

• provisions for uncollectible receivables from customers for invoiced amounts;

• the amount and collectibility of unpriced change orders and claims against customers;

• provisions for income taxes and related valuation allowances;

• recoverability of goodwill and intangible assets;

• valuation of assets acquired and liabilities assumed in connection with business combinations;

• accruals for estimated liabilities, including litigation and insurance reserves.

Our actual results could materially differ from these estimates.

Domestic and Foreign trade tariffs could raise the price and reduce the availability of raw materials to us, which could negatively impact our operating results and financial condition.

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If we are unable to collect amounts owed to us under our contracts, we may be required to record a charge against previously recognized earnings related to the project, and our liquidity, financial condition and results of operations could be adversely affected.

Acquisitions may result in significant transaction expenses, and unidentified liabilities and risks associated with entering new markets.

We may also be unable to profitably integrate and operate these businesses.

We may lack sufficient management, financial and other resources to successfully integrate future acquisitions, including acquisitions in markets where we have not previously operated.

Any future acquisitions may result in significant transaction expenses, unexpected liabilities and other risks in addition to the integration and consolidation risks.

If we make any future acquisitions, we will likely assume liabilities of the acquired business or have exposure to contingent liabilities that may not be adequately covered by insurance or indemnification, if any, from the former owners of the acquired business.

These potential liabilities could have a material adverse effect on our business.

We may not be able to successfully integrate our acquisitions, which could adversely impact our business.

We may not be able to successfully complete our ongoing integration of the operations, personnel and technology from our acquisitions.

Because of their size and complexity, if we fail to complete our integration efforts successfully, we may experience interruptions in our business activities, a decrease in the quality of our services, a deterioration in our employee and customer relationships, and harm to our reputation, all of which could have a material adverse effect on our business, financial condition and results of operations.

Our integration activities have required significant attention from management, which potentially decreases the time that management may devote to serve existing customers, attract new customers and develop new services and strategies.

We may also experience difficulties in combining corporate cultures, maintaining employee morale and retaining key employees.

The integration efforts may also impose substantial demands on our operations or other projects.

We will have to actively strive to demonstrate to our existing customers that these integrations have not resulted in adverse changes in our standards or business focus.

Our acquisitions have involved a significant capital commitment, and the return that we achieve on any capital invested may be less than the return achieved on our other projects or investments.

There will be challenges in consolidating and rationalizing information technology platforms and administrative infrastructures.

In addition, any delays or increased costs of integrating acquired companies could adversely affect our operations, financial results and liquidity.

We may not realize the growth opportunities, operating margins and synergies that are anticipated from acquisitions.

The benefits we expect to achieve as a result of an acquisition will depend, in part, on our ability to realize the anticipated growth opportunities, operating margins and synergies.

Our success in realizing these growth opportunities, operating margins and synergies, and the timing of this realization, depends on the successful integration of the acquired business and operations with our existing business and operations.

Even if we are able to integrate existing and acquired businesses successfully, this integration may not result in the realization of the full benefits of the growth opportunities, operating margins and synergies we currently expect within the anticipated time frame or at all.

Accordingly, the benefits from an acquisition may be offset by costs incurred or delays in integrating the companies, which could cause our revenue assumptions and operating margin to be inaccurate.

We may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business or achieve our strategic plan.

To the extent that cash flow from operations, together with available borrowings under our senior secured revolving credit facility, are insufficient to make future investments, acquisitions or provide needed working capital, we may require additional financing from other sources.

Our ability to obtain such additional financing in the future will depend in part upon prevailing capital market conditions, as well as conditions in our business and our operating results;

and those factors may affect our efforts to arrange additional financing on terms that are satisfactory to us.

If adequate funds are not available, or are not available on acceptable terms, we may not be able to make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges.

We face substantial competition in each of our business segments, which may have a material adverse effect on our business.

We face competition in all areas of our business from regional, national and international competitors.

Our competitors range from small, family-owned businesses to well-established, well-financed entities, both privately and publicly held, including many large engineering and construction companies and specialty contractors.

We compete primarily on the basis of price, customer satisfaction, safety performance and programs, quality of our products and services, and schedule.

As a result, an increase in the level of competition in one or more markets may result in lower operating margins than we have recently experienced.

Our backlog is subject to unexpected fluctuations, adjustments and cancellations and does not include the full value of our long-term maintenance contracts, and therefore, may not be a reliable indicator of our future earnings.

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The loss of business from any one of these customers could have a material adverse effect on our business or results of operations.

Future events, including those associated with our strategic plan, could negatively affect our liquidity position.

We can provide no assurance that we will have sufficient earnings from operations or the credit capacity to meet all of our future cash needs should we encounter significant working capital requirements or incur significant acquisition costs.

Insufficient earnings from operations, significant working capital requirements, and contract disputes have in the past, and could in the future, reduce availability under our senior secured revolving credit facility.

Our business may be affected by difficult work sites and environments, which may adversely affect our overall business.

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• injuries or fatalities;

• weather related damage to our facilities;

• weather related damage to our facilities or work-in-progress on project sites;

• disruption of information systems;

• inability to receive machinery, equipment and materials at jobsites;

• inability to receive machinery, equipment and materials at job sites;

• loss of productivity.

The frequency and severity of severe weather conditions may be enhanced by present and future changes to our climate.

Our senior secured revolving credit facility imposes restrictions that may limit business alternatives.

Our senior secured revolving credit facility contains covenants that restrict or limit our ability to incur additional debt, acquire or dispose of assets, repurchase equity, or make certain distributions, including dividends.

In addition, our senior secured revolving credit facility requires that we comply with a number of financial covenants.

These covenants and restrictions may impact our ability to effectively execute operating and strategic plans and our operating performance may not be sufficient to comply with the required covenants.

Additionally, availability under the credit facility is dependent upon profitable operating results.

If results deteriorate, availability under the credit facility is reduced.

Our failure to comply with one or more of the covenants in our senior secured revolving credit facility could result in an event of default.

We can provide no assurance that a default could be remedied, or that our creditors would grant a waiver or amend the terms of the senior secured revolving credit facility.

If an event of default occurs, our lenders could elect to declare all amounts outstanding under the facility to be immediately due and payable, terminate all commitments, refuse to extend further credit, and require us to provide cash to collateralize any outstanding letters of credit.

If an event of default occurs and the lenders under the senior secured revolving credit facility accelerate the maturity of any loans or other debt outstanding, we may not have sufficient liquidity to repay amounts outstanding under the existing agreement.

We contribute to multiemployer plans that could result in liabilities to us if those plans are terminated or if we withdraw from those plans.

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The Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980, imposes certain liabilities upon employers who are contributors to a multiemployer plan in the event of the employer’s withdrawal from, or upon termination of, such plan.

If we terminate or withdraw from a multiemployer pension plan, we could be required to make significant cash contributions to fund that plan's unfunded vested benefit, which could materially and adversely affect our financial condition and results of operations;

In fiscal 2021, we incurred withdrawal liability to one multiemployer plan due to our strategic initiative to exit the domestic iron and steel industry .

If we terminate, withdraw, or partially withdraw from other multiemployer pension plans, we could be required to make significant cash contributions to fund that plan's unfunded vested benefit, which could materially and adversely affect our financial condition and results of operations;

however, we are not currently able to determine the net assets and actuarial present value of the multiemployer pension plans’ unfunded vested benefits allocable to us, if any, and we are not presently aware of the amounts, if any, for which we may be contingently liable if we were to withdraw from any of these plans.

In addition, if the funding level of any of these multiemployer plans becomes classified as “critical status” under the Pension Protection Act of 2006, we could be required to make significant additional contributions to those plans.

A failure or outage in our operational systems or cyber security attacks on any of our systems, or those of third parties, may adversely affect our financial results.

We have become more reliant on technology to help increase efficiency in our business.

We use numerous technologies to help run our operations, and this may subject our business to increased risks.

Any cyber security attack that affects our facilities, our systems, our customers and any of our financial data could have a material adverse effect on our business.

In addition, a cyber-attack on our customer and employee data may result in a financial loss, including potential fines for failure to safeguard data, and may damage our reputation.

Third-party systems on which we rely could also suffer system failure.

Any of these occurrences could disrupt our business, result in potential liability or reputational damage or otherwise have an adverse effect on our financial results.

We have experienced cybersecurity threats to our information technology infrastructure and have experienced cyber-attacks, attempts to breach our systems and other similar incidents.

Such prior events have not had a material impact on our financial condition, results of operations or liquidity.

However, future threats could cause harm to our business and our reputation, as well as negatively impact our results of operations materially.

Our insurance coverage may not be adequate to cover all the costs related to cyber-attacks or disruptions resulting from such events.

Any security breach resulting in the unauthorized use or disclosure of certain personal information could put individuals at risk of identity theft and financial or other harm and result in costs to us in investigation, remediation, legal defense and in liability to parties who are financially harmed.

We may incur significant costs to protect against the threat of information security breaches or to respond to or alleviate problems caused by such breaches.

For example, laws may require notification to regulators, clients or employees and enlisting credit monitoring or identity theft protection in the event of a privacy breach.

A cybersecurity attack could also be directed at our systems and result in interruptions in our operations or delivery of services to our clients and their customers.

Furthermore, a material security breach could cause us to lose revenue, lose clients or cause damage to our reputation.

To reduce organizational risk from cybersecurity threats, we carry cyber liability insurance and have undertaken several initiatives in recent years.

We strengthened our identity and access management capabilities by requiring multi-factor authentication, increased the threat detection efficiencies within our security information and event management capacity, and completed projects designed to reduce our organization's external attack surface.

In addition, in the area of security awareness and training, we have updated our foundational curriculum, established mandatory recurring training requirements, and commenced periodic phishing campaign assessments.

We rely on internally and externally developed software applications and systems to support critical functions including project management, estimating, scheduling, human resources, accounting, and financial reporting.

Any sudden loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense as well as disrupt the management of our business operations.

We rely on various software systems to conduct our critical operating and administrative functions.

We depend on our software vendors to provide long-term software maintenance support for our information systems.

Software vendors may decide to discontinue further development, integration or long-term software maintenance support for our information systems, in which case we may need to abandon one or more of our current information systems and migrate some or all of our project management, human resources, estimating, scheduling, accounting and financial information to other systems, thus increasing our operational expense as well as disrupting the management of our business operations.

Accounting Risks

Our revenue are recognized using the percentage-of-completion method of accounting.

Under percentage-of-completion accounting, contract revenue and earnings are recognized ratably over the contract term based on the proportion of actual costs incurred to total estimated costs.

In addition, some contracts contain penalty provisions for failure to achieve certain milestones, schedules or performance standards.

We review our estimates of contract revenue, costs and profitability on a monthly basis.

If estimates of costs to complete fixed price contracts indicate a loss, a provision is made through a contract write-down for the total loss anticipated in the period the loss is determined.

Contract profit estimates are also adjusted, on a percentage of completion basis, in the fiscal period in which it is determined that an adjustment is required.

No restatements are made to prior periods.

Further, many of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded on a percentage of completion basis in the period when estimable and probable.

If this occurs, the full aggregate amount of the overstatement will be reported for the period in which such change in estimate occurs.

Actual results could differ from the estimates and assumptions that we use to prepare our financial statements.

Areas requiring significant estimation by our management include:

• contract costs and application of percentage-of-completion accounting;

• provisions for uncollectible receivables from customers for invoiced amounts;

• the amount and collectibility of unpriced change orders and claims against customers;

• provisions for income taxes and related valuation allowances;

• recoverability of goodwill and intangible assets;

• valuation of assets acquired and liabilities assumed in connection with business combinations;

• accruals for estimated liabilities, including litigation and insurance reserves.

Our actual results could materially differ from these estimates.

Earnings for future periods may be affected by impairment charges.

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In addition, we perform an impairment review whenever events or changes in circumstances indicate the carrying value of goodwill or an intangible or fixed asset may not be recoverable.

In fiscal 2020, we had $40.0 million of goodwill and other intangible asset impairments, of which $1.5 million was reported as restructuring costs.

As of June 30, 2021, we had $6.6 million of amortizing intangible assets and $60.6 million of non-amortizing goodwill representing 1.4% and 13.0% of our total assets, respectively.

Legal, Insurance, Regulatory and Compliance Risks

We are involved, and are likely to continue to be involved in legal proceedings, which will increase our costs and, if adversely determined, could have a material effect on our financial condition, results of operations, cash flows and liquidity.

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Further, the rendering of our services on these projects could expose us to risks and claims by third parties and governmental agencies for personal injuries, property damage and environmental matters, among others.

Any claim, regardless of its merit or eventual outcome, could result in substantial costs, divert management’s attention and create negative publicity, particularly for claims relating to environmental matters where the amount of the claim could be extremely large.

amount of the claim could be extremely large.

We may not be able to or may choose not to obtain or maintain insurance coverage for the types of claims described above.

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There has been an increased focus in the last several years on climate change in response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment.

As a result, there have been a variety of regulatory developments, proposals or requirements and legislative initiatives that have been introduced in the U.S.

(and other parts of the world) that are focused on restricting the emission of greenhouse gases.

The adoption of new or more stringent legislation or regulatory programs limiting greenhouse gas emissions from customers for whom we provide services could affect demand for our products and services.

Further, some scientists have concluded that increasing greenhouse gas concentrations in the atmosphere may produce physical effects, such as increased severity and frequency of storms, droughts, floods and other climate events.

As a result, there have been a variety of regulatory developments, proposals or requirements and legislative initiatives as well as pressure from institutional investors to restrict the emission of greenhouse gases.

The growing imperative on customers for whom we provide services to limit greenhouse gas emissions could affect demand for our products and services.

Further, scientists have concluded that increasing greenhouse gas concentrations in the atmosphere may produce physical effects, such as increased severity and frequency of storms, droughts, floods and other climate events.

Such climate events have the potential to adversely affect our operations or those of our customers, which in turn could have a negative effect on us.

A failure or outage in our operational systems or cyber security attacks on any of our systems, or those of third parties, may adversely affect our financial results.

We have become more reliant on technology to help increase efficiency in our business.

We use numerous technologies to help run our operations, and this may subject our business to increased risks.

Any cyber security attack that affects our facilities, our systems, our customers and any of our financial data could have a material adverse effect on our business.

In addition, a cyber-attack on our customer and employee data may result in a financial loss, including potential fines for failure to safeguard data, and may negatively impact our reputation.

Third-party systems on which we rely could also suffer system failure.

Any of these occurrences could disrupt our business, result in potential liability or reputational damage or otherwise have an adverse effect on our financial results.

We have experienced cybersecurity threats to our information technology infrastructure and have experienced cyber-attacks, attempts to breach our systems and other similar incidents.

Such prior events have not had a material impact on our financial condition, results of operations or liquidity.

However, future threats could cause harm to our business and our reputation, as well as negatively impact our results of operations materially.

Our insurance coverage may not be adequate to cover all the costs related to cyber-attacks or disruptions resulting from such events.

Any security breach resulting in the unauthorized use or disclosure of certain personal information could put individuals at risk of identity theft and financial or other harm and result in costs to the Company in investigation, remediation, legal defense and in liability to parties who are financially harmed.

We may incur significant costs to protect against the threat of information security breaches or to respond to or alleviate problems caused by such breaches.

For example, laws may require notification to regulators, clients or employees and enlisting credit monitoring or identity theft protection in the event of a privacy breach.

A cybersecurity attack could also be directed at our systems and result in interruptions in our operations or delivery of services to our clients and their customers.

Furthermore, a material security breach could cause us to lose revenue, lose clients or cause damage to our reputation.

To reduce organizational risk from cybersecurity threats, the Company has undertaken several initiatives in recent years.

Any sudden loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense as well as disrupt the management of our business operations.

We rely on various software systems to conduct our critical operating and administrative functions.

We depend on our software vendors to provide long-term software maintenance support for our information systems.

We could be adversely affected by violations of the U.S.

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A portion of our operations are conducted outside the United States, and accordingly, our business is subject to risks associated with doing business internationally, including changes in foreign currency exchange rates, instability in political or economic conditions, difficulty in repatriating cash proceeds, differing employee relations, differing regulatory environments, trade protection measures, and difficulty in administering and enforcing corporate policies which may be different than the normal business practices of local cultures.

Risk Factors Related to Our Common Stock

General Risk Factors

Acquisitions may result in significant transaction expenses, and unidentified liabilities and risks associated with entering new markets.

We may also be unable to profitably integrate and operate these businesses.

Any future acquisitions may result in significant transaction expenses, unexpected liabilities and other risks in addition to the integration and consolidation risks.

These potential liabilities could have a material adverse effect on our business.

We may also not be able to successfully complete our ongoing integration of the operations, personnel and technology from our acquisitions.