Shimmick (SHIM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined to $90.6–$91 million, down 42% year-over-year, mainly due to a $23 million reduction from a major Legacy Project settlement and lower activity across all segments.

• Net loss for Q2 2024 was $51–$51.4 million, with adjusted EBITDA loss of $40 million, both impacted by a $30 million gross margin reduction from the settlement.

• Transformation plan underway, focusing on California water and critical infrastructure markets, cost structure optimization, and sale of non-core assets.

• Backlog at June 28, 2024, was $923 million, with over 80% from Shimmick Projects and more than half in water projects.

• Completed sale of Tracy Equipment Yard and non-core Foundation Projects assets, using proceeds to repay debt and support liquidity.

Financial highlights

• Q2 2024 revenue was $90.6–$91 million, down from $155–$155.2 million year-over-year.

• Gross margin for Q2 2024 was negative $31–$34 million, mainly due to the Legacy Project settlement.

• Adjusted net loss for Q2 2024 was $45 million; adjusted EBITDA loss was $40 million.

• Cash and cash equivalents at quarter-end were $22–$22.4 million; total liquidity was $35 million including credit facilities.

• Backlog at quarter-end was $923 million, with 80%–86% expected to be recognized within 24 months.

Outlook and guidance

• Shimmick Projects revenue for FY 2024 expected to be $350–$370 million, with gross margin between 4% and 9%.

• Legacy Projects revenue forecasted at $55–$65 million for FY 2024, with negative gross margin of 80%–90%.

• Results expected to be back-half weighted in 2024, with stronger growth anticipated in 2025.

• Margin improvements expected in the second half of the year, barring unforeseen events.

• $33 million from the Legacy Project settlement expected to be collected in fiscal 2024, supporting liquidity.