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Commitments and Contingencies
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6 Months Ended |
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Jun. 30, 2012
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
COMMITMENTS AND CONTINGENCIES
Legal Proceedings
On February 27, 2009, the Company received notice of a default termination from a customer for which the Company was performing construction services. The customer seeks reprocurement costs of approximately $6.8 million. The dispute involves the customer's assertion of its understanding of the contractual scope of work involved and the completion date of the project. The Company disputes the customer's assertion as it believes that the basis of the default arose from a delay due to the discovery of and need for remediation of previously undiscovered hazardous materials not identified by the customer during contract negotiations. In February 2010, the Company filed a motion for summary judgment as to a portion of the complaint. In March 2010, the customer filed its response. In May 2012, the Company filed its affirmative claim for outstanding pre-termination amounts owed to it in an aggregate amount of approximately $3.9 million. A hearing on the Company's motion for summary judgment takes place in August 2012.
The Company did not record an additional accrual for this matter beyond the adjustments made to the Company's expected profit on this contract because the Company believes that the likelihood is remote that any additional liability would be incurred related to this matter. Based on the contract termination notice, the Company has adjusted its expected contract revenue and profit until such time as this contingency is resolved.
The Company also is involved in a variety of claims and other legal proceedings generally incidental to its normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on its financial condition or results of operations.
Solar Tariff Contingency
In May 2012, the U.S. Department of Commerce published its preliminary determination, subject to a final determiataion expected to be made in the fourth quarter of 2012, in the anti-dumping and countervailing duty investigations of imports of solar cells manufactured in the People's Republic of China ("PRC"), including solar modules containing such cells, and imposed both an anti-dumping duty of 249.96%, in the case of the Company, and a countervailing duty of 3.61% on the value of imports of such cells, retroactive 90 days to February 25, 2012. Since early 2012, the Company has been importing solar modules containing such cells, though it ceased doing so in July 2012 in response to these duties. The Company is monitoring and evaluating its alternatives for participating in the process for reaching the final determination whether to impose the anti-dumping duty retroactively and potentially for obtaining a separate and reduced anti-dumping duty rate. Depending on whether the 90-day retroactive period is made final and whether the maximum anti-dumping duty rate of 249.96% or some lower rate applies, the Company may be liable for duties of up to approximately $8.7 million.
The Company has established a reserve reflecting its current estimate of its ultimate exposure to these assessments.
Commitments as a Result of Acquisitions
Related to the Company's acquisition of Quantum in the third quarter of 2010 (see Note 3), certain individuals are eligible to receive additional compensation. Total potential additional compensation is up to $1,150,000 and will be recognized as compensation expense as earned.
Related to the Company's acquisition of AEG in the third quarter of 2011 (see Note 3), the former stockholders of AEG, who are now employees of the Company, may be entitled to receive up to $5,000,000 in additional consideration if AEG meets certain financial performance milestones.
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