v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company measures the fair value of financial assets and liabilities in accordance with ASC Topic 820 – Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
•Level 1 — inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date;
•Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities; and
•Level 3 — unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The Company believes that the carrying amounts of its financial instruments, including cash and cash equivalents, trade accounts receivable and accounts payable, consist primarily of instruments without extended maturities, which approximate fair value primarily due to their short-term maturities and low risk of counterparty default. The Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents. Cash equivalents as of September 30, 2026 and December 31, 2025 consisted of overnight repurchase agreements in which cash from the Company’s main operating checking account is invested overnight in highly liquid, short-term investments and certain investments in money market funds sponsored by a large financial institution. For both the three and nine months ending September 30, 2026, interest income in the aggregate was approximately $0.1 million. For the three and nine months ending September 30, 2025, the Company recognized interest income in the aggregate of approximately $0.1 million and $0.8 million, respectively. The Company has not experienced any losses in its cash and cash equivalents and management believes the Company is not exposed to significant credit risk with respect to such accounts.
Fair Value at Reporting Date Using
(in thousands)September 30, 2026Level 1Level 2Level 3
Cash equivalents:
Overnight repurchase agreements$25,392 $25,392 $— $— 
Total$25,392 $25,392 $— $— 
December 31, 2025Level 1Level 2Level 3
Cash equivalents:
Overnight repurchase agreements$10,245 $10,245 $— $— 
Total$10,245 $10,245 $— $— 
PNC Credit Facility
As of September 30, 2026, the estimated fair values of borrowings outstanding under the PNC Revolving Credit Facility and PNC Term Loan Facility were approximately $75.0 million and $50.0 million, respectively, and approximated their carrying amounts before the deduction of unamortized debt issuance costs. The fair values were estimated using discounted cash flow analyses based on current market interest rates for similar debt instruments and were classified as Level 2 within the fair value hierarchy.
Earnout Payments
As a part of the total consideration for the Company’s November 2023 acquisition of Industrial Air, the former owner of Industrial Air was eligible to receive up to an aggregate of $6.5 million in cash, consisting of two individual tranches of $3.0 million and $3.5 million pursuant to the terms of the purchase agreement, if the gross profit of Industrial Air equaled or exceeded (i) $7.6 million in the 12-month period beginning on the closing date of the transaction (the “First IA Earnout Period”) or (ii) $8.8 million in the 12-month period beginning on the first anniversary of the closing date of the transaction (the “Second IA Earnout Period” and together with the First IA Earnout Period, the “IA Earnout Payments”). The Company initially recognized $3.2 million in contingent consideration as of the closing date of the transaction. The fair value of contingent IA Earnout Payments was based on generating growth rates on the projected gross margins of Industrial Air and calculating the associated contingent payments based on achieving the earnout targets, which were reassessed each reporting period. In February 2026 and February 2025, the Company made payments in the amount of $3.5 million and $3.0 million, respectively, to the former owner of Industrial Air related to the First and Second Industrial Air Earnout Periods.
As a part of the total consideration for the Company’s September 2024 acquisition of Kent Island, the former owner of Kent Island is eligible to receive up to an aggregate of $5.0 million in cash, consisting of two individual tranches of $2.5 million pursuant to the terms of the purchase agreement, if the gross profit of Kent Island equals or exceeds approximately (i) $3.3 million in the 12-month period beginning on the closing date of the transaction (the “First Kent Island Earnout Period”) or (ii) $0.2 million in the 12-month period beginning on the first anniversary of the closing date of the transaction (the “Second Kent Island Earnout Period” and together with the First Kent Island Earnout Period, the “Kent Island Earnout Payments”). The Company initially recognized $4.4 million in contingent consideration as of the closing date of the transaction. The fair value of contingent Kent Island Earnout Payments are based on generating growth rates on the projected gross margins of Kent Island and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. In January 2026, the Company made a payment in the amount of $2.5 million to the former owner of Kent Island related to the First Kent Island Earnout Period.
As a part of the total consideration for the Company’s December 2024 acquisition of Consolidated Mechanical, the former owner of Consolidated Mechanical is eligible to receive up to an aggregate of $2.0 million in cash, consisting of two individual tranches of $1.0 million pursuant to the terms of the purchase agreement, if the gross profit of Consolidated Mechanical equals or exceeds approximately (i) $6.8 million in the 12-month period beginning on the closing date of the transaction (the “First Consolidated Mechanical Earnout Period”) or (ii) $6.8 million in the 12-month period beginning on the first anniversary of the closing date of the transaction (the “Second Consolidated Mechanical Earnout Period” and together with the First Consolidated Mechanical Earnout Period, the “Consolidated Mechanical Earnout Payments”). The Company initially recognized $0.8 million in contingent consideration as of the closing date of the transaction. The fair value of contingent Consolidated Mechanical Earnout Payments is based on generating growth rates on the projected gross margins of Consolidated Mechanical and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period. In April 2026, the Company made a payment in the amount of $0.9 million to the former owner of Consolidated Mechanical related to the First Consolidated Mechanical Earnout Period.
As a part of the total consideration for the Company’s September 2026 acquisition of 1901, the 1901 Sellers are eligible to receive up to an aggregate of $6.0 million in cash, consisting of two individual tranches of $3.0 million pursuant to the terms of the 1901 Purchase Agreement. The Company initially recognized $4.8 million in contingent consideration as of the 1901 Effective Date. The fair value of contingent 1901 Earnout Payments is based on generating growth rates on the projected gross margins of 1901 and calculating the associated contingent payments based on achieving the earnout targets, which are reassessed each reporting period.
Based on the Company’s ongoing assessment of the fair value of contingent earnout liabilities, the Company recorded a net increase in the estimated fair value of such liabilities of $0.2 million and $0.3 million for the three and nine months ended September 30, 2026, respectively, which was presented in the acquisition-related retention expense and contingent consideration in the Company’s condensed consolidated statements of operations. For the three and nine months ended September 30, 2025, the Company recorded a net increase in the estimated fair value of such liabilities of $0.3 million and
$1.5 million, respectively. The Company determined the fair value of the earnout payments by utilizing the Monte Carlo Simulation method, which represents a Level 3 measurement.
The following table presents the carrying values of the Company’s contingent earnout payment obligations included in the accompanying condensed consolidated balance sheets, which approximated fair value at September 30, 2026 and December 31, 2025.
Fair Value at Reporting Date Using
(in thousands)September 30, 2026Level 1Level 2Level 3
Accrued expenses and other current liabilities:
Second Kent Island Earnout Period$2,500 $— $— $2,500 
Second Consolidated Mechanical Earnout Period880 — — 880 
First 1901 Earnout Period2,431 — — 2,431 
Other long-term liabilities:— 
Second 1901 Earnout Period2,320 — — 2,320 
Total$8,131 $— $— $8,131 
Fair Value at Reporting Date Using
(in thousands)December 31, 2025Level 1Level 2Level 3
Accrued expenses and other current liabilities:
Second IA Earnout Period(1)
3,500 — — 3,500 
First Kent Island Earnout Period(2)
2,500 — — 2,500 
First Consolidated Mechanical Earnout Period(3)
954 — — 954 
Other long-term liabilities:
Second Kent Island Earnout Period2,372 — — 2,372 
Second Consolidated Mechanical Earnout Period
636 — — 636 
Total$9,962 $— $— $9,962 
(1)    In February 2026, the Company made a $3.5 million payment to the former owner of Industrial Air related to the Second IA Earnout Period.
(2)    In January 2026, the Company made a $2.5 million payment to the former owner of Kent Island related to the First Kent Island Earnout Period.
(3)    In April 2026, the Company made a $0.9 million payment to the former owner of Consolidated Mechanical related to the First Consolidated Mechanical Earnout Period.
Interest Rate Swap
Prior to its termination, the fair value of the interest rate swap was determined using observable market inputs, including interest rate curves, and incorporated assumptions regarding the nonperformance risk of both the Company and the counterparty. Accordingly, the interest rate swap was classified as a Level 2 item within the fair value hierarchy.
In connection with the termination of the Wintrust revolving credit agreement, the Company terminated and settled the interest rate swap on September 9, 2026. The swap was remeasured to fair value immediately prior to settlement, with the resulting adjustment recognized in earnings, and was derecognized upon settlement. Accordingly, no interest rate swap asset remained outstanding as of September 30, 2026. As of December 31, 2025, the swap had a fair value of less than $0.1 million and was recognized in other assets on the Company’s condensed consolidated balance sheets.
For the three and nine months ended September 30, 2026, the Company recognized a loss of less than $0.1 million and a gain of approximately $0.1 million, respectively, related to the changes in the fair value of the interest rate swap. For the three and nine months ended September 30, 2025, the Company recognized losses of less than $0.1 million and $0.2 million, respectively, related to the changes in the fair value of the interest rate swap.