What changed in this filing

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Item 1. Financial Statements

2021-10-27 compared with 2021-07-28 · 94 added, 79 removed, 540 unchanged (24% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) June 30,

(in thousands, except share and per share data) September 30,

2021 December 31,

39 unchanged sentences

4,000,000 authorized shares;

none issued and outstanding at June 30, 2021 and December 31, 2020

none issued and outstanding at September 30, 2021 and December 31, 2020

Common stock—$ 0.01 par value per share;

100,000,000 authorized shares;

16,867,470 and 16,734,239 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

16,869,947 and 16,734,239 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 161,593 158,618

10 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands, except per share data) 2021 2020 2021 2020

48 unchanged sentences

Balance at June 30, 2020 — 16,709 167 154,594 ( 398 ) 235,083 389,446 4 389,450

Net income — — — — — 17,292 17,292 — 17,292

Stock issued under compensation plans, net — 10 — 224 — — 224 — 224

Stock-based compensation expense — — — 1,631 — — 1,631 — 1,631

Other comprehensive income — — — — ( 5 ) — ( 5 ) — ( 5 )

Stock issued - other — — — 12 — — 12 — 12

Balance at September 30, 2020 $ — 16,719 $ 167 $ 156,461 $ ( 403 ) $ 252,375 $ 408,600 $ 4 $ 408,604

Balance at December 31, 2020 — 16,734 $ 167 $ 158,618 $ 23 $ 270,480 $ 429,288 $ 4 $ 429,292

12 unchanged sentences

Balance at June 30, 2021 — 16,867 168 159,624 689 311,144 471,625 4 471,629

Net income — — — — — 23,171 23,171 — 23,171

Stock issued under compensation plans, net — 3 — 54 — — 54 — 54

Stock-based compensation expense — — — 1,915 — — 1,915 — 1,915

Other comprehensive income — — — — ( 589 ) — ( 589 ) — ( 589 )

Balance at September 30, 2021 $ — 16,870 $ 168 $ 161,593 $ 100 $ 334,315 $ 496,176 $ 4 $ 496,180

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

September 30,

(in thousands) 2021 2020

69 unchanged sentences

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income, stockholders’ equity and cash flows with respect to the interim consolidated financial statements, have been included.

Certain reclassifications were made to prior year amounts to conform to the current year presentation.

The consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements as of that date.

15 unchanged sentences

Additionally, the joint venture associated with the Company’s noncontrolling interest is a partnership, and consequently, the tax effect of only the Company’s share of the joint venture income is recognized by the Company.

The majority controlled joint venture made no distributions to its partners, and the Company made no capital contributions to the joint venture, during the three and six months ended June 30, 2021.

Additionally, there have been no changes in ownership during the three and six months ended June 30, 2021.

The majority controlled joint venture made no distributions to its partners, and the Company made no capital contributions to the joint venture, during the three and nine months ended September 30, 2021.

Additionally, there have been no changes in ownership during the three and nine months ended September 30, 2021.

The project associated with this joint venture was substantially completed in 2019.

7 unchanged sentences

Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and ineffective long-term monetary assets and liabilities are recorded in the “other income, net” line on the Company’s consolidated statements of operations.

Foreign currency losses, recorded in other income, net, for the six months ended June 30, 2021 were $ 0.1 million.

Foreign currency gains, recorded in other income, net, for the six months ended June 30, 2020 were no t significant.

Foreign currency losses, recorded in other income, net, for the nine months ended September 30, 2021 were $ 0.1 million.

Foreign currency gains, recorded in other income, net, for the nine months ended September 30, 2020 were no t significant.

Effective foreign currency transaction gains and losses, arising primarily from long-term monetary assets and liabilities, are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income.

5 unchanged sentences

The Company estimates a cost accrual every quarter that represents costs incurred but not invoiced for services performed or goods delivered during the period, and estimates revenue from the contract cost portion of these accruals based on current gross margin rates to be consistent with its cost method of revenue recognition.

As of June 30, 2021 and 2020, the Company had recognized revenues of $ 6.0 million and $ 40.1 million, respectively, related to significant change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects.

As of September 30, 2021 and 2020, the Company had recognized revenues of $ 4.0 million and $ 19.1 million, respectively, related to significant change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects.

These change orders and/or claims are in the process of being negotiated in the normal course of business, and a portion of these recognized revenues had been included in multiple periods.

The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process.

During the three months ended June 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.8 %, which resulted in increases in operating income of $ 5.1 million, net income of $ 3.6 million and diluted earnings per common share of $ 0.21 .

During the six months ended June 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.3 %, which resulted in increases in operating income of $ 3.9 million, net income of $ 2.7 million and diluted earnings per common share of $ 0.16 .

During the three months ended June 30, 2020, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.2 %, which resulted in increases in operating income of $ 1.2 million, net income of $ 0.9 million and diluted earnings per common share of $ 0.05 .

During the six months ended June 30, 2020, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.1 %, which resulted in decreases in operating income of $ 0.7 million, net income of $ 0.5 million and diluted earnings per common share of $ 0.03 .

During the three months ended September 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 1.4 %, which resulted in increases in operating income of $ 8.2 million, net income of $ 5.9 million and diluted earnings per common share of $ 0.35 .

During the nine months ended September 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.4 %, which resulted in increases in operating income of $ 7.2 million, net income of $ 5.2 million and diluted earnings per common share of $ 0.30 .

During the three months ended September 30, 2020, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.3 %, which resulted in decreases in operating income of $ 1.9 million, net income of $ 1.5 million and diluted earnings per common share of $ 0.09 .

During the nine months ended September 30, 2020, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.4 %, which resulted in decreases in operating income of $ 7.6 million, net income of $ 5.5 million and diluted earnings per common share of $ 0.33 .

Recent Accounting Pronouncements

10 unchanged sentences

The Company’s consolidated balance sheets present contract assets, which contain unbilled revenue and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved.

The allowance for doubtful accounts associated with contract assets was $ 0.3 million as of June 30, 2021 and $ 0.4 million as of December 31, 2020.

The allowance for doubtful accounts associated with contract assets was $ 0.4 million as of September 30, 2021 and December 31, 2020.

Contract assets consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2021 December 31,

4 unchanged sentences

Contract liabilities consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2021 December 31,

3 unchanged sentences

The following table provides information about contract assets and contract liabilities from contracts with customers:

(in thousands) June 30,

(in thousands) September 30,

2021 December 31,

3 unchanged sentences

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 22.3 million and $ 73.9 million for the three and six months ended June 30, 2021, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 16.9 million and $ 43.0 million for the three and six months ended June 30, 2020, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 13.8 million and $ 98.0 million for the three and nine months ended September 30, 2021, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 31.3 million and $ 57.7 million for the three and nine months ended September 30, 2020, respectively.

This revenue consists primarily of work performed on previous billings to customers.

The net asset position for contracts in process consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2021 December 31,

3 unchanged sentences

The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows:

(in thousands) June 30,

(in thousands) September 30,

2021 December 31,

5 unchanged sentences

These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them.

The Company’s leases have remaining terms ranging from one to five years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases within one year .

The Company’s leases have remaining terms ranging from one to six years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases within one year .

Currently, all the Company’s leases contain fixed payment terms.

1 unchanged sentence

Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability.

At June 30, 2021, the Company had several leases with residual value guarantees.

At September 30, 2021, the Company had several leases with residual value guarantees.

Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements.

2 unchanged sentences

The following is a summary of the lease-related assets and liabilities recorded:

September 30,

2021 December 31,

10 unchanged sentences

The following is a summary of the lease terms and discount rates:

September 30,

2021 December 31,

Weighted-average remaining lease term - finance leases 0.1 years 0.4 years

Weighted-average remaining lease term - finance leases zero years 0.4 years

Weighted-average remaining lease term - operating leases 3.0 years 3.4 years

3 unchanged sentences

(in thousands) Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

6 unchanged sentences

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

Six months ended June 30,

Nine months ended September 30,

(in thousands) 2021 2020

3 unchanged sentences

Right-of-use asset obtained in exchange for new operating lease obligations $ 5,687 $ 5,592

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets under operating leases, less imputed interest, as of June 30, 2021 were as follows:

(in thousands) Operating Lease

Remainder of 2021

Thereafter 10

Total minimum lease payments 25,544

4 unchanged sentences

The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

As of June 30, 2021, the Company had no outstanding finance lease obligations.

As of September 30, 2021, the Company had no outstanding finance lease obligations.

Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries.

The terms and rental rates of these leases are at market rental rates.

As of June 30, 2021, the minimum lease payments required under these leases totaled $ 2.7 million, which are due over the next 3.0 years.

As of September 30, 2021, the minimum lease payments required under these leases totaled $ 2.5 million, which are due over the next 2.8 years.

Fair Value Measurements

4 unchanged sentences

and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of June 30, 2021 and December 31, 2020, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs.

As of June 30, 2021 and December 31, 2020, the fair values of the Company’s long-term debt and finance lease obligations were based on Level 2 inputs.

The Company’s long-term debt was based on variable and fixed interest rates at June 30, 2021 and December 31, 2020, for new issues with similar remaining maturities, and approximated carrying value.

As of September 30, 2021 and December 31, 2020, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs.

As of September 30, 2021 and December 31, 2020, the fair values of the Company’s long-term debt and finance lease obligations were based on Level 2 inputs.

The Company’s long-term debt was based on variable and fixed interest rates at September 30, 2021 and December 31, 2020, for new issues with similar remaining maturities, and approximated carrying value.

In addition, based on borrowing rates currently available to the Company for borrowings with similar terms, the carrying values of the Company’s finance lease obligations also approximated fair value.

5 unchanged sentences

Balance as of

June 30, 2021

September 30, 2021

Balance as of

28 unchanged sentences

The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of June 30, 2021.

As of June 30, 2021, the Company had no debt outstanding under the Facility and letters of credit outstanding under the Facility of approximately $ 12.3 million, which are almost entirely related to the Company's payment obligation under its insurance programs.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of September 30, 2021.

As of September 30, 2021, the Company had no debt outstanding under the Facility and letters of credit outstanding under the Facility of approximately $ 12.3 million, which are almost entirely related to the Company's payment obligation under its insurance programs.

As of December 31, 2020, the Company had no debt outstanding under the Facility and letters of credit outstanding under the Facility of approximately $ 10.4 million, including $ 9.8 million related to the Company's payment obligation under its insurance programs and approximately $ 0.6 million related to contract performance obligations.

The Company had remaining deferred debt issuance costs totaling $ 1.0 million as of June 30, 2021, related to the line of credit.

The Company had remaining deferred debt issuance costs totaling $ 0.9 million as of September 30, 2021, related to the line of credit.

As permitted, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the line of credit.

3 unchanged sentences

Each Equipment Note executed under the Master Loan Agreements constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses.

As of June 30, 2021, the Company had two Equipment Notes outstanding under the Master Loan Agreements that are collateralized by equipment and vehicles owned by the Company.

The following table sets forth our remaining principal payments for the Company’s outstanding Equipment Notes as of June 30, 2021:

As of September 30, 2021, the Company had one Equipment Note outstanding under the Master Loan Agreements that is collateralized by equipment and vehicles owned by the Company.

The following table sets forth our remaining principal payments for the Company’s outstanding Equipment Note as of September 30, 2021:

(in thousands) Future

23 unchanged sentences

Additional information related to the Company’s market types is provided in Note 10–Segment Information.

The components of the Company’s revenue by contract type for the three and six months ended June 30, 2021 and 2020 were as follows:

Three months ended June 30, 2021

The components of the Company’s revenue by contract type for the three and nine months ended September 30, 2021 and 2020 were as follows:

Three months ended September 30, 2021

T&D C&I Total

3 unchanged sentences

T&E 101,161 33.0 35,266 11.6 136,427 22.3

Other 6,340 1.9 26,903 8.4 33,243 5.1

$ 306,546 100.0 % $ 303,636 100.0 % $ 610,182 100.0 %

Three months ended June 30, 2020

Three months ended September 30, 2020

T&D C&I Total

3 unchanged sentences

T&E 84,443 28.2 36,998 12.0 121,441 20.0

Other 4,148 1.4 7,831 3.3 11,979 2.3

$ 299,739 100.0 % $ 308,162 100.0 % $ 607,901 100.0 %

The components of the Company’s revenue by contract type for the six months ended June 30, 2021 and 2020 were as follows:

Six months ended June 30, 2021

The components of the Company’s revenue by contract type for the nine months ended September 30, 2021 and 2020 were as follows:

Nine months ended September 30, 2021

T&D C&I Total

3 unchanged sentences

T&E 258,123 27.2 111,793 12.3 369,916 20.0

Other 13,770 2.2 43,959 7.3 57,729 4.6

$ 948,285 100.0 % $ 903,956 100.0 % $ 1,852,241 100.0 %

Six months ended June 30, 2020

Nine months ended September 30, 2020

T&D C&I Total

3 unchanged sentences

T&E 224,983 26.9 89,126 11.1 314,109 19.1

Other 11,055 2.1 14,614 2.9 25,669 2.5

$ 835,768 100.0 % $ 803,654 100.0 % $ 1,639,422 100.0 %

The components of the Company’s revenue by market type for the three months ended June 30, 2021 and 2020 were as follows:

Three months ended June 30, 2021 Three months ended June 30, 2020

The components of the Company’s revenue by market type for the three months ended September 30, 2021 and 2020 were as follows:

Three months ended September 30, 2021 Three months ended September 30, 2020

(dollars in thousands) Amount Percent Segment Amount Percent Segment

4 unchanged sentences

Total revenue $ 610,182 100.0 % $ 607,901 100.0 %

The components of the Company’s revenue by market type for the six months ended June 30, 2021 and 2020 were as follows:

Six months ended June 30, 2021 Six months ended June 30, 2020

The components of the Company’s revenue by market type for the nine months ended September 30, 2021 and 2020 were as follows:

Nine months ended September 30, 2021 Nine months ended September 30, 2020

(dollars in thousands) Amount Percent Segment Amount Percent Segment

5 unchanged sentences

Remaining Performance Obligations

As of June 30, 2021, the Company had $ 1.45 billion of remaining performance obligations.

As of September 30, 2021, the Company had $ 1.51 billion of remaining performance obligations.

The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions.

The following table summarizes the amount of remaining performance obligations as of June 30, 2021 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will not be recognized within the next twelve months.

Remaining Performance Obligations at June 30, 2021

The following table summarizes the amount of remaining performance obligations as of September 30, 2021 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will not be recognized within the next twelve months.

Remaining Performance Obligations at September 30, 2021

(in thousands) Total Amount estimated to not be

7 unchanged sentences

“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

federal statutory tax rate was 21 % for each of the three and six months ended June 30, 2021 and 2020.

The Company’s effective tax rate for the three and six months ended June 30, 2021 was 27.0 % and 26.6 %, respectively, of pretax income compared to the effective tax rate for the three and six months ended June 30, 2020 of 27.1 % and 27.9 %, respectively.

federal statutory tax rate was 21 % for each of the three and nine months ended September 30, 2021 and 2020.

The Company’s effective tax rate for the three and nine months ended September 30, 2021 was 24.6 % and 25.9 %, respectively, of pretax income compared to the effective tax rate for the three and nine months ended September 30, 2020 of 27.4 % and 27.7 %, respectively.

The difference between the U.S.

federal statutory tax rate and the Company’s effective tax rate for the three and six months ended June 30, 2021 was primarily due to state income taxes and foreign earnings and the associated impact of the global intangible low tax income (“GILTI”) and other permanent difference items, partially offset by a favorable impact from stock compensation excess tax benefits.

federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended September 30, 2021 was primarily due to state income taxes, foreign earnings and other permanent difference items, partially offset by a favorable impact from stock compensation excess tax benefits.

The difference between the U.S.

federal statutory tax rate and the Company’s effective tax rate for the three and six months ended June 30, 2020, was primarily due to state income taxes and foreign earnings and the associated impact GILTI.

The Company had unrecognized tax benefits of approximately $ 0.5 million and $ 0.4 million as of June 30, 2021 and December 31, 2020, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.

federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended September 30, 2020, was primarily due to state income taxes and foreign earnings and the associated impact of the global intangible low tax income.

The Company had unrecognized tax benefits of approximately $ 0.5 million and $ 0.4 million as of September 30, 2021 and December 31, 2020, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.

The Company’s policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations.

The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was no t significant for the three and six months ended June 30, 2021 and 2020.

The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was no t significant for the three and nine months ended September 30, 2021 and 2020.

The Company is subject to taxation in various jurisdictions.

4 unchanged sentences

Purchase Commitments

As of June 30, 2021, the Company had approximately $ 14.2 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur over the next six months .

As of September 30, 2021, the Company had approximately $ 11.2 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur over the next eight months .

Insurance and Claims Accruals

The Company carries insurance policies, which are subject to certain deductibles, for workers’ compensation, general liability, automobile liability and other insurance coverage.

The Company carries insurance policies, which are subject to certain deductibles and limits, for workers’ compensation, general liability, automobile liability and other insurance coverage.

The deductible per occurrence for each line of coverage is up to $ 1.0 million, except for wildfire coverage which has a deductible of $ 2.0 million.

The Company also maintains excess umbrella coverage providing higher layers of insurance coverage for losses that exhaust the limits of underlying coverage.

A layer of this umbrella coverage requires the Company to pay a portion of any loss within a certain loss range and our potential exposure for such losses is up to approximately $ 3.8 million.

The Company’s health benefit plans are subject to stop-loss limits of up to $ 0.2 million for qualified individuals.

5 unchanged sentences

The Company has indemnified its sureties for any expenses paid out under these bonds.

As of June 30, 2021, an aggregate of approximately $ 1.30 billion in original face amount of bonds issued by the Company’s sureties were outstanding.

The Company estimated the remaining cost to complete these bonded projects was approximately $ 605.4 million as of June 30, 2021.

As of September 30, 2021, an aggregate of approximately $ 1.28 billion in original face amount of bonds issued by the Company’s sureties were outstanding.

The Company estimated the remaining cost to complete these bonded projects was approximately $ 531.5 million as of September 30, 2021.

From time to time, the Company guarantees the obligations of wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses.

22 unchanged sentences

The Company has outstanding grants of non-qualified stock options, time-vested stock awards in the form of restricted stock units and internal metric-based and market-based performance stock units.

During the six months ended June 30, 2021, the Company granted time-vested stock awards covering 57,196 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $ 66.80 .

During the six months ended June 30, 2021, time-vested stock awards covering 87,584 shares of common stock vested at a weighted average grant date fair value of $ 29.20 .

During the six months ended June 30, 2021, the Company granted 42,091 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2023, at a weighted average grant date fair value of $ 80.11 .

During the nine months ended September 30, 2021, the Company granted time-vested stock awards covering 57,196 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $ 66.80 .

During the nine months ended September 30, 2021, time-vested stock awards covering 87,584 shares of common stock vested at a weighted average grant date fair value of $ 29.20 .

During the nine months ended September 30, 2021, the Company granted 42,091 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2023, at a weighted average grant date fair value of $ 80.11 .

The number of shares ultimately earned under a performance award may vary from zero to 200 % of the target shares granted, based upon the Company’s performance compared to certain metrics.

1 unchanged sentence

Performance awards granted cliff vest following the performance period if the stated performance targets and minimum service requirements are attained and are paid in shares of the Company’s common stock.

During the six months ended June 30, 2021, plan participants exercised options to purchase 18,640 shares of the Company’s common stock with a weighted average exercise price of $ 23.02 .

During the nine months ended September 30, 2021, plan participants exercised options to purchase 21,117 shares of the Company’s common stock with a weighted average exercise price of $ 22.88 .

The Company recognizes stock-based compensation expense related to restricted stock units based on the grant date fair value, which was the closing price of the Company’s stock on the date of grant.

23 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands) 2021 2020 2021 2020

13 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands, except per share data) 2021 2020 2021 2020

6 unchanged sentences

Diluted $ 1.35 $ 1.02 $ 3.75 $ 2.42

For the three and six months ended June 30, 2021 and 2020, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would either have been anti-dilutive or, for stock options, the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period.

For the three and nine months ended September 30, 2021 and 2020, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would either have been anti-dilutive or, for stock options, the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period.

All of the Company’s unvested time-vested stock awards were included in the computation of weighted average dilutive securities.

The following table summarizes the shares of common stock underlying the Company’s unvested time-vested stock awards and performance awards that were excluded from the calculation of dilutive securities:

The following table summarizes the shares of common stock underlying the Company’s unvested performance awards that were excluded from the calculation of dilutive securities:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands) 2021 2020 2021 2020

Time-vested stock awards — 44 — —

Performance awards — 34 17 34

Subsequent Event

On July 2, 2021, the Company prepaid its $ 3.8 million Equipment Note 9 using cash on hand.

This prepayment included an insignificant amount of accrued interest and there was no associated prepayment penalty.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements