Shimmick (SHIM) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for the three months ended September 27, 2024, was $166 million, a decrease of$9 million (5%) compared to $175 million for the same period in 2023[116]. - Gross margin for the same period was$12 million, down $4.8 million (28$17 million in the prior year[116]. - Shimmick Projects generated revenue of $101 million, a decrease of$8.4 million (8%) from $110 million in the previous year[119]. - Foundations Projects revenue was$11 million, down from $12 million, reflecting the winding down of jobs[120]. - Legacy Projects revenue remained flat at$54 million, with a $31 million adjustment due to the GGB Project settlement included in this figure[122]. - Net loss for the three months ended September 27, 2024, was$2 million, a decrease of $36 million compared to a net income of$34 million in the prior year[129]. - Revenue for the nine months ended September 27, 2024, was $376.7 million, a decrease of$118.1 million or 24% compared to $494.7 million for the same period in 2023[130]. - Gross margin for the nine months ended September 27, 2024, was$(34.8) million, a decline of $57.6 million or 253$22.8 million for the same period in 2023[130]. - Net loss for the nine months ended September 27, 2024, was $86.3 million, an increase of$101.5 million or 668% compared to a net income of $15.2 million in the prior year[143]. - Adjusted EBITDA for the three months ended September 27, 2024, was$29,679,000, down from $41,712,000 in the same period of 2023, reflecting a decrease of approximately 29$834 million, with over 50% attributed to water projects[89]. - The backlog as of September 27, 2024, was composed of 70% from state and local agencies, 13% from federal agencies, and 17% from private owners[174]. - The estimated backlog recognized within 0 to 24 months is 81% of the total backlog as of September 27, 2024[176]. Settlements and Legal Matters - A settlement agreement for the Golden Gate Bridge Project will yield total proceeds of $97 million, with$25 million due within 14 business days and the remaining $72 million by December 17, 2024[91]. - The company recognized a gross margin increase of$11 million from the Golden Gate Bridge Project settlement during the three months ended September 27, 2024[93]. - The company received $33 million in cash from a settlement with the United States Army Corps of Engineers, impacting revenue for the six months ended June 28, 2024[94]. - The company expects to receive approximately$97 million in the 2024 fiscal year from the settlement of a claim on the GGB Project[153]. Capital and Financing Activities - The company completed a sale-leaseback of its equipment yard for $20.5 million, resulting in net proceeds of$17 million used to repay borrowings[95]. - The company’s initial public offering in November 2023 raised approximately $19 million in net proceeds from the sale of 3,575,000 shares at$7.00 per share[99]. - The company reported a net cash provided by investing activities for the nine months ended September 27, 2024, of $18 million, primarily from asset sales of$32 million[165]. - For the same period, net cash provided by financing activities was $10 million, mainly from net borrowings of$12 million[167]. - The company incurred $2 million in debt issuance costs related to the Credit Facility agreement during the nine months ended September 27, 2024[167]. - As of September 27, 2024, total debt outstanding under the Credit Facility was$42 million, with no borrowings under the Revolving Credit Facility[161]. - The Revolving Credit Facility has a total commitment of $15 million and matures on December 31, 2024, with no instances of noncompliance reported as of September 27, 2024[160]. Operational Challenges - The company anticipates that adverse weather conditions and natural disasters could negatively impact financial results due to project delays and increased liabilities[101]. - Interest expense rose by$2 million, attributed to charges on a new Credit Facility established in May 2024[128]. - Interest expense increased by $3.4 million, primarily due to interest charges on the Credit Facility and Revolving Credit Facility[141]. Strategic Decisions and Changes - A strategic decision to enhance the current ERP system led to a one-time charge of$16 million recorded in the three months ended September 27, 2024[96]. - ERP pre-implementation asset impairment and associated costs increased by $16 million due to a strategic decision to enhance the current ERP system[127]. - The company focuses on self-performing complex projects to reduce risks of cost and schedule overruns, differentiating itself from competitors[89]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of scaled disclosure obligations[180][183]. Cash Flow and Liquidity - Unrestricted cash and cash equivalents as of September 27, 2024, totaled$26 million, with total liquidity amounting to $59 million including available credit facilities[153]. - Net cash used in operating activities for the nine months ended September 27, 2024, was$(66,183,000), compared to $(64,776,000) for the same period in 2023[163]. - The company experienced a net increase in contract capital of$2 million during the nine months ended September 27, 2024, due to decreases in accounts payable and contract liabilities[164]. Asset Management - Gain on sale of assets decreased by $13 million, primarily due to a prior year gain of$30 million that did not recur[126]. - Gain on sale of assets decreased by $11.2 million, primarily due to the absence of a prior year gain from the sale of non-core business contracts[140]. - Capital expenditures for the nine months ended September 27, 2024, were approximately$10 million, an increase from $6 million in the same period of 2023[153].