Executive Summary & Highlights Second Quarter 2025 Overview Shimmick Corporation announced its financial results for the second quarter ended July 4, 2025, highlighting its role as a leading infrastructure solutions provider in water, climate resilience, energy transition, and sustainable transportation - Company: Shimmick Corp. (NASDAQ: SHIM)1 - Reporting Period: Second quarter ended July 4, 20251 - Core Business: Leading infrastructure solutions provider in water, climate resilience, energy transition, and sustainable transportation1 CEO's Strategic Commentary CEO Ural Yal noted positive results from strategic plan implementation, increased bidding activity, and expected strong backlog growth and improved margins in sustainable infrastructure, particularly electrical work, despite macroeconomic uncertainties and Non-Core Project delays - Strategic plan implementation is showing positive results in 20253 - Increased bidding activity every month this year, with a 12-month bidding outlook exceeding $4.5 billion3 - Expectation of strong backlog growth and improved margins in the profitable core business, focusing on electrical work in sustainable infrastructure3 - Backlog growth and operational improvements are occurring later than expected due to slower bidding activity from previous macroeconomic uncertainties and challenges on remaining Non-Core Projects3 Key Financial & Operational Highlights Q2 2025 saw significant revenue growth (42% YoY) and a favorable gross margin turnaround, with SG&A decreasing due to the Transformation Plan, the launch of Axia Electric, and substantial backlog growth from new project wins | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Revenue | $128 million | $91 million | +42% | | Gross Margin | $8 million | $(31) million | +126% | | Shimmick Projects Gross Margin | $15 million | N/A | N/A | | Non-Core Gross Margin | $(7) million | N/A | N/A | | SG&A Expenses | $15 million | N/A | -20% | | Net Loss | $8 million | N/A | N/A | | Adjusted EBITDA | $(234) thousand | N/A | Nearly flat | | Liquidity (as of Jul 4, 2025) | $73 million | N/A | +$2 million from Q1 2025 | | Backlog (as of Jul 4, 2025) | $652 million | N/A | >88% Shimmick Projects | - Company launched Axia Electric, a dedicated electrical subsidiary specializing in complex electrical and power distribution solutions, targeting growth segments including industrial, data center, advanced manufacturing, and core water/wastewater markets4 - Project wins in target markets will contribute to third quarter 2025 backlog, including $70 million in new awards added in July 2025 and selection as preferred bidder on a $164 million Transit Center and River Pump Station4 Financial Results Consolidated Financial Performance Shimmick Corporation reported a significant improvement in Q2 2025 consolidated financial performance, with revenue increasing by 42% year-over-year and gross margin turning positive from a substantial loss in the prior year, alongside considerable improvements in net loss and Adjusted EBITDA | Metric (in millions) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | Six Months Ended July 4, 2025 | Six Months Ended June 28, 2024 | | :--------------------------------- | :------------------------------ | :------------------------------- | :---------------------------- | :------------------------------- | | Revenue | $128 | $91 | $251 | $211 | | Gross margin | $8 | $(31) | $13 | $(47) | | Net loss attributable to Shimmick Corporation | $(9) | $(51) | $(18) | $(85) | | Adjusted net loss | $(5) | $(45) | $(12) | $(74) | | Adjusted EBITDA | $- | $(40) | $(3) | $(64) | | Diluted loss per common share attributable to Shimmick Corporation | $(0.25) | $(1.83) | $(0.53) | $(3.16) | | Adjusted diluted loss per common share attributable to Shimmick Corporation | $(0.14) | $(1.60) | $(0.35) | $(2.77) | Segment Performance Shimmick Projects demonstrated strong growth in both revenue and gross margin, reflecting successful execution in critical infrastructure, while Non-Core Projects also saw revenue and gross margin improvements, primarily due to a claim settlement, as the company continues to wind down these legacy operations Shimmick Projects Performance Shimmick Projects revenue increased by $29 million (34.5% YoY) to $113 million, driven by new water and infrastructure projects and a California Palisades fire clean-up project, with gross margin significantly improving from 5% to 13%, increasing by $10 million to $15 million | Metric (in millions) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | YoY Change | | :------------------- | :------------------------------ | :------------------------------- | :--------- | | Revenue | $113 | $84 | +$29 (+34.5%) | | Gross Margin | $15 | $5 | +$10 (+200%) | | Gross Margin (%) | 13% | 5% | +8 percentage points | - The $29 million increase in revenue was primarily the result of $18 million from a California Palisades fire clean-up project and $18 million from new water and infrastructure projects ramping up, partially offset by a $7 million decrease from lower activity on existing projects and projects winding down8 - The $10 million increase in gross margin was primarily the result of $6 million in gross margin from new water and infrastructure projects ramping up and $4 million in gross margin from a California Palisades fire clean-up project9 Non-Core Projects Performance Non-Core Projects revenue increased by $9 million (128.6% YoY) to $16 million, and gross margin improved significantly from $(36) million to $(7) million, largely due to a claim settlement that reduced prior year revenue, as the company continues to wind down these projects, including the sale of foundation drilling assets | Metric (in millions) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | YoY Change | | :------------------- | :------------------------------ | :------------------------------- | :--------- | | Revenue | $16 | $7 | +$9 (+128.6%) | | Gross Margin | $(7) | $(36) | +$29 | | Gross Margin (%) | (43)% | (516)% | +473 percentage points | - The increase in revenue and gross margin was primarily the result of the settlement of a claim on a large Non-Core Loss Project, which included a reduction to revenue during the three months ended June 28, 2024, and did not reoccur during the three months ended July 4, 2025111213 - The Company entered into an agreement to sell the assets of foundation drilling Non-Core Projects in the second quarter of 2024 and continued to wind down remaining work, expecting revenue from these projects to continue to decline during the remainder of the 2025 fiscal year610 - Revenue recognized on Non-Core Loss Projects was $13 million and gross margin was $(3) million for the three months ended July 4, 2025, compared to $(7) million revenue and $(32) million gross margin for the three months ended June 28, 202413 Operating Expenses and Other Income/Loss The company saw a decrease in selling, general and administrative expenses and equity in loss of unconsolidated joint ventures, contributing to improved operating results, though gain on sale of assets decreased due to a prior year's asset sale, and other income/expense increased due to claim settlements, with no income tax expense recorded in either period Selling, General and Administrative Expenses SG&A expenses decreased by $4 million in Q2 2025, primarily due to the ongoing implementation of the Transformation Plan - Selling, general and administrative expenses decreased by $4 million during the three months ended July 4, 202515 - The decrease was primarily a result of the continued implementation of the Transformation Plan15 Equity in Loss of Unconsolidated Joint Ventures Equity in loss of unconsolidated joint ventures decreased by $2 million in Q2 2025, as elevated costs from schedule extensions in Q2 2024 did not reoccur - Equity in loss of unconsolidated joint ventures decreased by $2 million during the three months ended July 4, 202516 - The decrease was primarily due to elevated costs from schedule extensions experienced during the three months ended June 28, 2024, which did not reoccur16 Gain on Sale of Assets Gain on sale of assets decreased by $4 million in Q2 2025, primarily because of the gain recognized from the sale of foundation drilling Non-Core Projects assets in Q2 2024 - Gain on sale of assets decreased by $4 million during the three months ended July 4, 202517 - The decrease was primarily due to the gain recognized on the sale of the assets of foundation drilling Non-Core Projects during the second quarter of 202417 Interest Expense Interest expense remained approximately flat period over period - Interest expense remained approximately flat period over period18 Other (Income) Expense, Net Other (income) expense, net, increased by $2 million in Q2 2025, mainly due to a $1 million loss from the settlement of claims with AECOM and other non-recurring costs from Q2 2024 - Other (income) expense, net increased by $2 million during the three months ended July 4, 202519 - The increase was primarily due to a $1 million loss recognized on the settlement of certain claims with AECOM, as well as other costs incurred during the three months ended June 28, 2024, which did not reoccur19 Income Tax Expense No income tax expense was recorded for Q2 2025 or Q2 2024, due to expected and realized tax losses for the respective fiscal years - No income tax expense was recorded for either the three months ended July 4, 2025, or June 28, 202420 - This was due to an expected tax loss for the fiscal year ending 2025 and a realized tax loss for the fiscal year ended 202420 Net Loss and Per Share Data Net loss significantly decreased by $43 million to $8 million in Q2 2025, driven by increased gross margin and reduced operating expenses, partially offset by a lower gain on asset sales, with diluted loss per common share and Adjusted net loss also showing substantial improvements | Metric | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | Change | | :------------------------------------------------- | :------------------------------ | :------------------------------- | :----- | | Net loss | $(8) million | $(51) million | $(43) million decrease | | Diluted loss per common share attributable to Shimmick Corporation | $(0.25) | $(1.83) | $(1.58) decrease | | Adjusted net loss | $(5) million | $(45) million | $(40) million decrease | | Adjusted diluted loss per common share attributable to Shimmick Corporation | $(0.14) | $(1.60) | $(1.46) decrease | | Adjusted EBITDA | $(0.2) million | $(40) million | $(39.8) million decrease | - The $43 million decrease in net loss was primarily due to an increase in gross margin of $39 million, a decrease in selling, general and administrative expenses of $4 million, a decrease in equity in loss of unconsolidated joint ventures of $2 million, and an increase in other (income) expense, net of $2 million, partially offset by a decrease in the gain on the sale of assets of $4 million21 Outlook and Guidance Full Year 2025 Guidance Update Shimmick updated its full-year 2025 guidance, increasing revenue expectations for both Shimmick and Non-Core Projects due to stronger first-half performance, but lowered consolidated Adjusted EBITDA guidance due to an unfavorable gross margin mix impact from the increased Non-Core revenue - Full-year revenue guidance is increasing due to stronger first-half revenue performance in both Shimmick and Non-Core Projects24 - Non-Core Projects revenue increase is driven by putting more non-core work in place due to increased efforts towards completing these projects24 - Consolidated Adjusted EBITDA guidance is lowered due to an unfavorable gross margin mix impact, as the Non-Core revenue increase is a higher percentage of total revenue for the year24 | Metric | Updated Full Year 2025 Guidance | Initial Guidance | Change | | :-------------------------------- | :------------------------------ | :--------------- | :----- | | Shimmick Projects Revenue | $405 million - $415 million | $392 million - $410 million | Increased | | Shimmick Projects Gross Margin | 9% - 12% | N/A | N/A | | Non-Core Projects Revenue | $80 million - $90 million | $50 million - $60 million | Increased | | Non-Core Projects Gross Margin | (15%) - (5%) | N/A | N/A | | Consolidated Adjusted EBITDA | $5 million - $15 million | $15 million - $25 million | Decreased | Conference Call and Webcast Information Shimmick will host a video webcast conference call on August 14, 2025, at 5:00 p.m. Eastern Time, accessible via the Company's Investor Relations website, with a replay available afterward - Shimmick will host a video webcast conference call on Thursday, August 14, 2025, at 5:00 p.m. Eastern Time25 - Interested parties can access the live-streamed conference call via the Company's Investor Relations website (**https://investors.shimmick.com/**)[25](index=25&type=chunk) - A copy of the earnings call presentation and a replay of the video webcast will be available through the same link following the conference call25 Company Information About Shimmick Corporation Shimmick Corporation is a California-headquartered industry leader in turnkey infrastructure solutions, specializing in water, energy, climate resiliency, and sustainable transportation, leveraging technical excellence and collaborative project delivery to provide innovative, technology-driven solutions with a track record spanning over a century - Shimmick Corporation is an industry leader in delivering turnkey infrastructure solutions that strengthen critical markets across water, energy, climate resiliency, and sustainable transportation27 - The company integrates technical excellence with collaborative project delivery methods to provide innovative, technology-driven infrastructure solutions27 - Headquartered in California, Shimmick has a track record that spans over a century27 Forward-Looking Statements The release contains forward-looking statements regarding future financial performance, growth prospects, profitability, strategic transformation, and market relationships, which are predictions based on current expectations and projections, subject to risks and uncertainties that could cause actual results to differ materially - This release contains forward-looking statements about expected future financial performance (including revenue, net loss, backlog, and Adjusted EBITDA), growth prospects, profitability, strategic transformation, market relationships, and capital plans28 - Forward-looking statements are predictions based on current expectations and projections about future events, and the company undertakes no obligation to update them28 - Actual results may differ materially from any future results expressed or implied by these statements due to various risks and uncertainties28 - Important factors that could affect actual financial results include the ability to accurately estimate risks/costs, impact of fixed-price contracts, availability of qualified personnel, marketplace competition, inability to obtain bonding, limited operating history as an independent company, relationship with AECOM, dependence on subcontractors, cybersecurity attacks, seasonality, inflation, interest rates, environmental laws, and changes in government policies2930 Investor Relations Contact Investor relations inquiries can be directed via phone at 1-949-704-2350 or email at IR@shimmick.com - Investor Relations Contact Phone: 1-949-704-235035 - Investor Relations Contact Email: IR@shimmick.com35 Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets The balance sheet shows total assets decreased from $233.864 million at January 3, 2025, to $202.983 million at July 4, 2025, with total liabilities also decreasing, while stockholders' deficit increased, reflecting accumulated losses | Metric (in thousands) | July 4, 2025 | January 3, 2025 | Change | | :-------------------- | :----------- | :-------------- | :----- | | TOTAL ASSETS | $202,983 | $233,864 | $(30,881) | | TOTAL LIABILITIES | $252,445 | $268,538 | $(16,093) | | TOTAL STOCKHOLDERS' DEFICIT | $(49,462) | $(34,674) | $(14,788) | - Cash and cash equivalents decreased from $33,730 thousand at January 3, 2025, to $21,393 thousand at July 4, 202537 - Long-term debt, net, increased from $9,478 thousand at January 3, 2025, to $32,562 thousand at July 4, 202537 Condensed Consolidated Statements of Operations The statement of operations shows a substantial improvement in Q2 2025 compared to Q2 2024, with revenue increasing and gross margin turning positive, and net loss attributable to Shimmick Corporation significantly decreasing for both the three and six-month periods | Metric (in thousands) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | Six Months Ended July 4, 2025 | Six Months Ended June 28, 2024 | | :-------------------- | :------------------------------ | :------------------------------- | :---------------------------- | :------------------------------- | | Revenue | $128,402 | $90,605 | $250,512 | $210,648 | | Cost of revenue | $120,273 | $121,736 | $237,687 | $257,639 | | Gross margin | $8,129 | $(31,131) | $12,825 | $(46,991) | | Selling, general and administrative expenses | $15,041 | $18,723 | $29,409 | $34,891 | | Net loss attributable to Shimmick Corporation | $(8,525) | $(51,389) | $(18,295) | $(84,722) | | Diluted loss per common share | $(0.25) | $(1.83) | $(0.53) | $(3.16) | Condensed Consolidated Statements of Cash Flows For the six months ended July 4, 2025, net cash used in operating activities decreased significantly compared to the prior year, with investing activities generating cash primarily from returns on unconsolidated joint ventures, while financing activities provided cash through borrowings | Metric (in thousands) | Six Months Ended July 4, 2025 | Six Months Ended June 28, 2024 | Change | | :---------------------------------- | :---------------------------- | :------------------------------- | :----- | | Net cash used in operating activities | $(41,987) | $(78,848) | $(36,861) decrease in cash used | | Net cash provided by (used in) investing activities | $2,051 | $(18) | $2,069 increase | | Net cash provided by financing activities | $26,808 | $37,834 | $(11,026) decrease | | Net decrease in cash, cash equivalents and restricted cash | $(13,128) | $(41,032) | $(27,904) decrease in net decrease | | Cash, cash equivalents and restricted cash, end of period | $22,667 | $22,878 | $(211) decrease | - Net cash used in operating activities decreased by $36,861 thousand, primarily due to a smaller net loss and favorable changes in accounts payable and contract assets, partially offset by a decrease in contract liabilities41 - Investing activities shifted from using cash to providing cash, driven by proceeds from the sale of assets and return of investment in unconsolidated joint ventures41 Non-GAAP Financial Measures Reconciliation Explanatory Notes on Non-GAAP Measures Shimmick uses non-GAAP financial measures like Adjusted Net Loss and Adjusted EBITDA to evaluate core operating performance, excluding items such as stock-based compensation, legal fees for Non-Core Projects, and transformation costs, though these measures are not GAAP substitutes and have limitations, including not reflecting cash requirements or dilutive impacts - Non-GAAP financial measures (Adjusted EBITDA, Adjusted net loss, and Adjusted diluted loss per common share) are used by management and the board to understand and evaluate core operating performance and trends314350 - Adjusted net loss and Adjusted EBITDA eliminate stock-based compensation, legal fees and other costs for Non-Core Projects, and transformation costs (advisory costs for settling claims, exiting Non-Core Projects, and shifting strategy)4249 - Limitations of non-GAAP measures include not reflecting changes in working capital needs, the potentially dilutive impact of stock-based compensation, cash capital expenditure requirements for asset replacement, or interest/tax payments44455153 - The company does not provide a reconciliation for forward-looking non-GAAP guidance due to the inability to predict certain U.S. GAAP measures (e.g., legal fees, acquisition-related costs, litigation charges) without unreasonable efforts33 Reconciliation of Adjusted Net Loss The reconciliation shows that Adjusted Net Loss for Q2 2025 was $(4.796) million, a significant improvement from $(44.974) million in Q2 2024, after adjusting for transformation costs, stock-based compensation, legal fees for Non-Core Projects, and other items | Metric (in thousands) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | Six Months Ended July 4, 2025 | Six Months Ended June 28, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------- | :---------------------------- | :------------------------------- | | Net loss attributable to Shimmick Corporation | $(8,525) | $(51,389) | $(18,295) | $(84,722) | | Transformation costs | $725 | $2,608 | $1,440 | $2,608 | | Stock-based compensation | $1,528 | $969 | $3,318 | $1,967 | | Legal fees and other costs for Non-Core Projects | $1,434 | $2,629 | $1,094 | $5,360 | | Other | $42 | $209 | $233 | $446 | | Adjusted net loss | $(4,796) | $(44,974) | $(12,210) | $(74,341) | | Adjusted net loss attributable to Shimmick Corporation per common share (Diluted) | $(0.14) | $(1.60) | $(0.35) | $(2.77) | - Transformation costs consist of advisory costs in connection with settling outstanding claims related to exiting certain Non-Core Projects as part of the Company's growth strategy4748 - Legal fees and other costs for Non-Core Projects consist of costs incurred in connection with claims relating to Non-Core Projects4748 Reconciliation of Adjusted EBITDA Adjusted EBITDA for Q2 2025 was $(234) thousand, a significant improvement from $(39.689) million in Q2 2024, with this reconciliation adding back interest expense, depreciation and amortization, and other non-GAAP adjustments to net loss | Metric (in thousands) | Three Months Ended July 4, 2025 | Three Months Ended June 28, 2024 | Six Months Ended July 4, 2025 | Six Months Ended June 28, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------- | :---------------------------- | :------------------------------- | | Net loss attributable to Shimmick Corporation | $(8,525) | $(51,389) | $(18,295) | $(84,722) | | Interest expense | $1,313 | $1,496 | $2,313 | $2,393 | | Income tax expense | $0 | $0 | $0 | $0 | | Depreciation and amortization | $3,249 | $3,789 | $6,709 | $8,199 | | Transformation costs | $725 | $2,608 | $1,440 | $2,608 | | Stock-based compensation | $1,528 | $969 | $3,318 | $1,967 | | Legal fees and other costs for Non-Core Projects | $1,434 | $2,629 | $1,094 | $5,360 | | Other | $42 | $209 | $233 | $446 | | Adjusted EBITDA | $(234) | $(39,689) | $(3,188) | $(63,749) | - Adjusted EBITDA is calculated by taking Net loss attributable to Shimmick Corporation and adjusting for interest expense, income tax benefit, depreciation and amortization, stock-based compensation, legal fees and other costs for Non-Core Projects, and transformation costs4955
Shimmick (SHIM) - 2025 Q2 - Quarterly Results