Shimmick (SHIM) Q3 2024 earnings summary

Executive summary

• Settled the Golden Gate Bridge Project, securing $97 million cash before year-end and resolving the last major legacy legal claim, marking a milestone in the transformation plan.

• Q3 2024 revenue was $166 million, with a net loss of $2 million and Adjusted EBITDA of $30 million; backlog exceeded $834 million, with over 85% from Shimmick Projects.

• Leadership transition: Ural Yal to become CEO on December 2, 2024, succeeding Steve Richards.

• Completed Smith Canal Gate Project, enhancing flood protection and FEMA accreditation for Stockton, CA.

• Transformation plan execution continues, focusing on water infrastructure and higher-margin projects.

Financial highlights

• Q3 2024 revenue declined to $166 million from $175 million year-over-year; gross margin was 7%, down from 10% a year ago.

• Net loss of $2 million versus net income of $35 million in Q3 2023, mainly due to a $16 million ERP impairment and lower gains on asset sales.

• Adjusted EBITDA was $30 million, down from $42 million in the prior year; Adjusted net income for Q3 was $24 million.

• Cash and cash equivalents at quarter-end totaled $26 million; total liquidity was $59 million.

• Diluted loss per share was $(0.05); adjusted diluted EPS was $0.72.

Outlook and guidance

• Shimmick Project revenue expected to remain flat for FY2024, with gross margin between 4% and 7%.

• Legacy Projects forecasted to generate $90–$95 million in revenue with negative gross margin of (40%) to (50%) due to settlements and cost overruns.

• Anticipates margin improvement in 2025 as legacy projects wind down and higher-margin work is added.

• No income tax expense expected for FY2024 due to anticipated tax loss.

• Backlog of $834 million provides visibility, but most contracts are cancelable and subject to change.