Annual report pursuant to Section 13 and 15(d)

Acquisition - Summary of Preliminary Purchase Price Allocation (Details)

Acquisition - Summary of Preliminary Purchase Price Allocation (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 01, 2021
Tangible assets and liabilities:      
Goodwill $ 2,217 $ 2,217  
DSS Acquisition      
Tangible assets and liabilities:      
Land and buildings [1]     $ 475
Machinery and equipment [2]     2,557
Right-of-use asset [3]     2,000
Accrued expenses and other liabilities     (672)
Net tangible assets and liabilities     4,360
Intangible assets - customer relationships [4]     996
Goodwill     2,217
Purchase Price [5]     $ 7,573
[1] Represents an acquired operating facility located in Ingleside, Texas (“Ingleside Facility”). The fair value of the facility was estimated based on a third-party appraisal.
[2] Represents acquired machinery, equipment and vehicles. The fair values of the assets were estimated based on third-party appraisals.
[3] Represents a fabrication and operating facility located in Harvey, Louisiana (“Harvey Option Facility”) that was subject to both a lease arrangement with Dynamic and a separate purchase option that provided us with a right to buy the facility from Dynamic prior to December 2, 2022, for a nominal amount (“Harvey Option”). We believed it was probable we would exercise the Harvey Option, and accordingly, concluded that the arrangement represented a finance lease under the guidance of ASC 842,“Leases”, due to the Harvey Option representing a bargain purchase option. Therefore, we reflected the estimated fair value of the Harvey Option Facility plus future lease payment obligations as a right-of-use asset in our purchase price allocation, with the estimated fair value based on a combination of a third-party appraisal, third-party indications of interest for the facility, and indications of value communicated by and between us and Dynamic during the due diligence process. We subsequently determined that the Harvey Option Facility was no longer necessary for our future operations, and during the third quarter 2022, we sold the Harvey Option to a third-party for $2.1 million ($1.9 million, net of transaction and other costs). No material gain or loss was recognized on the sale of the Harvey Option as the net proceeds approximated the carrying value of the underlying right-of-use asset. The net proceeds from the sale are reflected on our Statement of Cash Flows within proceeds from the sale of property and equipment.
[4] Represents the estimated fair value of existing underlying customer relationships with estimated lives of seven years. The fair value was estimated based on a multi-period excess earnings method which incorporated Level 3 inputs. The significant assumptions used in estimating fair value included revenue and income projections for the DSS Business and the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Amortization expense for our intangible assets was $0.1 million for 2022 and was not material for 2021. At December 31, 2022, our intangible asset balance totaled $0.8 million and amortization expense is estimated to be $0.1 million to $0.2 million for each of 2023, 2024, 2025, 2026, 2027 and 2028.
[5] Represents a base cash purchase price of $8.0 million, less $0.4 million attributable to assumed employee vacation obligations