
Part I: Financial Information This section presents the unaudited consolidated financial statements and management's discussion and analysis for the period ended June 30, 2025 Item 1. Financial Statements (Unaudited) Unaudited financial statements for Q3 2025 show increased assets and revenue, but a net loss of $3.9 million due to lower margins and no prior-year lawsuit judgment Consolidated Balance Sheets Total assets grew to $189.1 million, driven by an acquisition, while liabilities increased to $134.6 million and equity decreased to $54.5 million Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2025 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Total Current Assets | $121,617,498 | $110,426,929 | | Total Fixed Assets | $54,090,651 | $38,135,714 | | Goodwill | $7,428,761 | $4,087,554 | | Total Assets | $189,121,088 | $158,247,000 | | Total Current Liabilities | $91,001,964 | $74,248,552 | | Long-Term Debt | $37,600,186 | $17,187,992 | | Total Liabilities | $134,579,565 | $99,552,856 | | Total Shareholders' Equity | $54,541,523 | $58,694,144 | Consolidated Statements of Income Nine-month revenue rose to $280.9 million, but gross profit declined, resulting in a net loss of $3.9 million compared to prior year's $18.4 million net income Consolidated Income Statement Summary (Unaudited) | Metric | Nine Months Ended June 30, 2025 ($) | Nine Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Revenue | $280,926,850 | $247,214,602 | | Gross Profit | $22,324,040 | $32,386,339 | | Income (Loss) from Operations | ($3,278,213) | $11,050,477 | | Proceeds from Lawsuit Judgement | $0 | $15,634,499 | | Net Income (Loss) | ($3,863,056) | $18,446,994 | | Diluted EPS | ($0.23) | $1.11 | Consolidated Statements of Cash Flows Operating cash flow was $13.4 million, investing activities used $29.2 million for an acquisition, and financing provided $18.2 million, increasing cash by $2.4 million Consolidated Cash Flow Summary (Unaudited) | Cash Flow Activity | Nine Months Ended June 30, 2025 ($) | Nine Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $13,421,957 | $19,524,533 | | Net Cash from Investing Activities | ($29,159,985) | ($5,670,815) | | Net Cash from Financing Activities | $18,150,226 | ($15,747,423) | | Increase (Decrease) in Cash | $2,412,198 | ($1,893,705) | | Cash at End of Period | $15,338,234 | $14,537,867 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity decreased to $54.5 million due to net loss, dividends, and treasury stock purchases, partially offset by stock issuance for an acquisition - Key changes in shareholders' equity for the nine months ended June 30, 2025 include a net loss, payment of dividends, issuance of $2.0 million in common stock for the Tribute acquisition, and purchase of treasury stock15 Notes to Unaudited Consolidated Financial Statements Notes detail business, accounting policies, the $24 million Tribute acquisition, PPP loan uncertainty, revenue breakdown, and debt covenant non-compliance with waiver - The company provides construction and repair services for the natural gas, petroleum, water distribution, automotive, chemical, and power industries, primarily in the mid-Atlantic and central U.S.19 - On December 2, 2024, the company acquired Tribute Contracting & Consultants, LLC for $22.0 million in cash and $2.0 million in stock, adding water distribution and wastewater system construction capabilities2777 - The company restated prior financial statements due to an ongoing SBA review of its $9.8 million in previously forgiven PPP loans, recording a short-term borrowing liability for the full amount plus interest due to outcome uncertainty333471 - At June 30, 2025, the company had $258.2 million in remaining unsatisfied performance obligations (backlog), expected to be recognized as revenue over the next twelve months48 - The company was not in compliance with all financial covenants at June 30, 2025, but received a waiver from its lender, who agreed to omit the effect of the PPP loan restatement from covenant calculations69163 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 13.6% revenue growth to $280.9 million, a $3.9 million net loss due to lower gross profit, balance sheet expansion from acquisition, and a $304.4 million backlog Results of Operations Revenue increased 13.6% to $280.9 million, but gross profit declined 31.1% to $22.3 million, leading to a $3.9 million net loss due to weather and project mix Revenue by Segment (Nine Months Ended June 30) | Segment | 2025 Revenue ($) | 2024 Revenue ($) | % Change | | :--- | :--- | :--- | :--- | | Gas & Water Distribution | $96,967,546 | $53,892,952 | 79.9% | | Gas & Petroleum Transmission | $37,177,225 | $55,465,127 | -33.0% | | Electrical, Mechanical, & General | $146,782,079 | $137,856,523 | 6.5% | | Total | $280,926,850 | $247,214,602 | 13.6% | Gross Profit Analysis (Nine Months Ended June 30) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $22,324,040 | $32,386,339 | -31.1% | | Gross Margin | 7.9% | 13.1% | -5.2 p.p. | - The decrease in gross profit was primarily due to less efficient performance, significant impacts from inclement weather in Q2, and a later start for Gas & Petroleum Transmission work compared to the prior year130 - Selling and administrative expenses increased by $4.3 million, driven by additional personnel, increased consulting and audit fees from becoming an accelerated filer, and costs from the newly acquired Tribute subsidiary136 Comparison of Financial Condition Total assets grew to $189.1 million and liabilities to $134.6 million, primarily due to the Tribute acquisition, while shareholders' equity decreased to $54.5 million - Net property, plant and equipment increased by $16.0 million, primarily due to $14.9 million in assets from the Tribute acquisition145 - Goodwill increased by $3.3 million to $7.4 million due to the Tribute acquisition148 - Total debt (current and long-term) increased by $25.2 million, mainly due to $16.0 million in financing for the Tribute acquisition and the assumption of $3.8 million of its debt153 Liquidity and Capital Resources The company has a $30.0 million credit line, received a waiver for debt covenant non-compliance, faces uncertainty regarding $9.8 million in PPP loans, and has $86.9 million in performance bonds - The company renewed its $30.0 million line of credit in July 2025, with an outstanding balance of $11.6 million at June 30, 2025161162 - The company was not in compliance with all debt covenants at June 30, 2025, and received a waiver, with the lender agreeing to exclude the impact of the PPP loan restatement from covenant calculations163 - The SBA is reviewing the forgiveness of $9.8 million in PPP loans, creating uncertainty and a potential repayment liability that could negatively impact financial condition166168 - As of June 30, 2025, the company had $86.9 million in performance bonds outstanding to guarantee project performance and payments to subcontractors188 Outlook Management reports a strong backlog of $304.4 million, with significant bid opportunities in water, wastewater, electrical, and mechanical projects Backlog Comparison | Date | Unaudited Backlog ($) | | :--- | :--- | | June 30, 2025 | $304.4 million | | June 30, 2024 | $250.9 million | | September 30, 2024 | $243.2 million | - The company is seeing significant bid opportunities for water, wastewater, electrical, and mechanical projects, with backlogs of $125.0 million and $133.0 million in these areas, respectively233 - Bidding and awards for natural gas projects are occurring later than in previous years, but bid opportunities increased in the third fiscal quarter, with the backlog for transmission projects at $30.0 million234 Item 3. Quantitative and Qualitative Disclosures About Market Risk Disclosure about market risk is not required as the company qualifies as a smaller reporting company - Disclosure about market risk is not required as the company qualifies as a smaller reporting company236 Item 4. Controls and Procedures Management concluded disclosure controls were effective, with no material changes to internal controls, and the Tribute subsidiary is within its SOX compliance grace period - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025237 - The recently acquired Tribute subsidiary has a one-year grace period before needing to fully comply with Sarbanes-Oxley (SOX) regulations239 Part II: Other Information This section provides information on legal proceedings, risk factors, equity security sales, other disclosures, and exhibits Item 1. Legal Proceedings The company is negotiating a disputed pension withdrawal liability claim, with no future liability expected, and other legal proceedings are not material - The company is negotiating a disputed pension withdrawal liability claim for work that ended in 2011, with payments suspended and no future liability expected242 Item 1A. Risk Factors No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K - No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K244 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities The company reported no unregistered equity sales and repurchased 106,392 shares of common stock for $844,230 during Q3 FY2025 Issuer Purchases of Equity Securities (Q3 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Total Value of Shares Purchased ($) | | :--- | :--- | :--- | :--- | | April 2025 | — | — | — | | May 2025 | 106,392 | $7.94 | $844,230 | | June 2025 | — | — | — | | Total | 106,392 | $7.94 | $844,230 | Item 5. Other Information No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the third fiscal quarter of 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the third fiscal quarter of 2025246 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including SOX certifications and XBRL data files - Exhibits filed include Sarbanes-Oxley certifications (302 and 906) and XBRL interactive data files250 Signatures The report is duly signed by the Chief Executive Officer and Chief Financial Officer on August 11, 2025