Shimmick Corp

Previous wording

As of April 4, 2025, we had a backlog of projects of approximately $739 million, mostly located in California, with ongoing projects in six other states. We self-perform many of these projects, which we believe allows us to better control critical aspects of construction, reduce cost and schedule risks, and deliver greater value to clients.

Current wording

As of July 4, 2025, we had a backlog of projects of approximately $652 million, mostly located in California, with ongoing projects in six other states. We self-perform many of these projects, which we believe allows us to better control critical aspects of construction, reduce cost and schedule risks, and deliver greater value to clients.

Previous wording

Equity in earnings of unconsolidated joint ventures includes our return on investment in unconsolidated joint ventures.

Current wording

Equity in (loss) earnings of unconsolidated joint ventures includes our return on investment in unconsolidated joint ventures.

Previous wording

Projects started after the AECOM Sale Transaction ("Shimmick Projects") have focused on critical infrastructure aligned with our strategy, including water, climate resilience, energy transition and sustainable transportation. Revenue recognized on Shimmick Projects was $93 million and $90 million for the three months ended April 4, 2025 and March 29, 2024, respectively. The $3 million increase in revenue was primarily the result of $13 million of revenue from a California Palisades fire clean-up project and $10 million of revenue from new water and infrastructure projects ramping up, partially offset by a $20 million decrease from lower activity on existing projects and projects winding down.

Current wording

Projects started after the AECOM Sale Transaction ("Shimmick Projects") have focused on critical infrastructure aligned with our strategy, including water, climate resilience, energy transition and sustainable transportation. Revenue recognized on Shimmick Projects was $113 million and $84 million for the three months ended July 4, 2025 and June 28, 2024, respectively. The $29 million increase in revenue was primarily the result of $18 million of revenue from a California Palisades fire clean-up project and $18 million of revenue from new water and infrastructure projects ramping up, partially offset by a $7 million decrease from lower activity on existing projects and projects winding down.

Previous wording

Gross margin recognized on Shimmick Projects was $5 million and $(1) million for the three months ended April 4, 2025 and March 29, 2024, respectively. The $6 million increase in the gross margin was primarily the result of $3 million in gross margin from a California Palisades fire clean-up project and $3 million in gross margin from new water and infrastructure projects ramping up.

Current wording

Gross margin recognized on Shimmick Projects was $15 million and $5 million for the three months ended July 4, 2025 and June 28, 2024, respectively. The $10 million increase in the 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 project.

Previous wording

As part of the AECOM Sale Transaction, we acquired the Legacy Projects and backlog that were started under prior ownership. The Company entered into an agreement to sell the assets of our non-core Foundations Projects in the second quarter of 2024 and continued to wind down the remaining work which is largely completed.

Current wording

As part of the AECOM Sale Transaction, we acquired projects and backlog that were started under prior ownership (formerly referred to as "Legacy and Foundations Projects"). Separately, the Company entered into an agreement to sell the assets of our foundation drilling Non-Core Projects in the second quarter of 2024 and continued to wind down the remaining work which is largely completed.

Previous wording

A subset of Legacy Projects ("Legacy Loss Projects") have experienced significant cost overruns due to the COVID pandemic, design issues, legal costs and other factors. In the Legacy Loss Projects, we have recognized the estimated costs to complete and the loss expected from these projects. If the estimates of costs to complete fixed-price contracts indicate a further loss, the entire amount of the additional loss expected over the life of the project is recognized as a period cost in the cost of revenue. As these Legacy Loss Projects continue to wind down to completion, no further gross margin will be recognized and in some cases, there may be additional costs associated with these projects. Revenue recognized on these Legacy Loss Projects was $18 million and $15 million for the three months ended April 4, 2025 and March 29, 2024, respectively. Gross margin recognized on these Legacy Loss Projects was $(2) million and $(11) million for the three months ended April 4, 2025 and March 29, 2024, respectively. The change in gross margin was primarily the result of cost increases for time and design-related schedule extensions identified during the first quarter of 2024 which did not reoccur during the three months ended April 4, 2025.

Current wording

A subset of Non-Core Projects ("Non-Core Loss Projects") have experienced significant cost overruns due to the COVID pandemic, design issues, legal costs and other factors. In the Non-Core Loss Projects, we have recognized the estimated costs to complete and the loss expected from these projects. If the estimates of costs to complete fixed-price contracts indicate a further loss, the entire amount of the additional loss expected over the life of the project is recognized as a period cost in the cost of revenue. As these Non-Core Loss Projects continue to wind down to completion, no further gross margin will be recognized and in some cases, there may be additional costs associated with these projects. Revenue recognized on these Non-Core Loss Projects was $13 million and $(7) million for the three months ended July 4, 2025 and June 28, 2024, respectively. Gross margin recognized on these Non-Core Loss Projects was $(3) million and $(32) million for the three months ended July 4, 2025 and June 28, 2024, respectively. The change in gross margin was primarily the result of the settlement of a claim discussed above, which included a reduction to revenue and which did not reoccur during the three months ended July 4, 2025.

Previous wording

Selling, general and administrative expenses decreased by $2 million primarily as a result of reduced salary, bonus and legal expenses incurred during the three months ended April 4, 2025 as compared to the three months ended March 29, 2024.

Current wording

Selling, general and administrative expenses decreased by $4 million during the three months ended July 4, 2025 primarily as a result of the continued implementation of our transformation plan.

Previous wording

Due to an expected tax loss for the fiscal year ending 2025 and fiscal year ended 2024, no income tax expense was recorded in either period.

Current wording

Due to an expected tax loss for the fiscal year ending 2025 and a realized tax loss for the fiscal year ended 2024, no income tax expense was recorded for either the three months ended July 4, 2025 or the three months ended June 28, 2024.

Previous wording

Net loss decreased by $24 million to a net loss of $10 million for the three months ended April 4, 2025, primarily due to increase in gross margin of $21 million and decrease in salary, general and administrative expenses of $2 million as described above.

Current wording

Net loss decreased by $43 million to a net loss of $8 million for the three months ended July 4, 2025, primarily due to increase in gross margin of $39 million, decrease in selling, general and administrative expenses of $4 million, decrease in equity in loss of unconsolidated joint ventures of $2 million and increase in other (income) expense, net of $2 million, partially offset by decrease in the gain on the sale of assets of $4 million, all as described above.

Previous wording

Gross margin was $(1) million for the three months ended April 4, 2025 as compared to $(15) million for the three months ended March 29, 2024. The $14 million increase was primarily the result of cost increases for time and design-related schedule extensions identified during the first quarter of 2024 which did not reoccur during the three months ended April 4, 2025.

Current wording

Gross margin was $(7) million for the six months ended July 4, 2025 as compared to $(51) million for the six months ended June 28, 2024. The $44 million increase was primarily the result of the settlement of a claim discussed above as well as cost increases for time and design-related schedule extensions identified during the six months ended June 28, 2024 which did not reoccur during the six months ended July 4, 2025.

Previous wording

Adjusted net loss represents Net loss attributable to Shimmick Corporation adjusted to eliminate stock-based compensation, legal fees and other costs for Legacy Projects and other costs. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the Legacy Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

Current wording

Adjusted net loss represents Net loss attributable to Shimmick Corporation adjusted to eliminate stock-based compensation, legal fees and other costs for Non-Core Projects and other costs. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the Non-Core Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

Previous wording

Adjusted EBITDA represents our Net loss attributable to Shimmick Corporation before interest expense, income tax expense and depreciation and amortization, adjusted to eliminate stock-based compensation, legal fees and other costs for Legacy Projects and other costs. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the Legacy Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

Current wording

Adjusted EBITDA represents our Net loss attributable to Shimmick Corporation before interest expense, income tax expense and depreciation and amortization, adjusted to eliminate stock-based compensation, legal fees and other costs for Non-Core Projects and other costs. We have also made an adjustment for transformation costs we have incurred including advisory costs in connection with settling outstanding claims, exiting the Non-Core Projects and transforming the Company to shift our strategy to meet the nation’s growing need for water and other critical infrastructure and grow our business.

Previous wording

(1) Consists of transformation-related costs we have incurred including advisory costs in connection with settling outstanding claims in connection with exiting certain Legacy Projects as part of the Company’s growth strategy to address and capitalize on the nation’s growing need for water and other critical infrastructure.

Current wording

(1) Consists of transformation-related costs we have incurred including advisory costs in connection with settling outstanding claims in connection with exiting certain Non-Core Projects as part of the Company’s growth strategy to address and capitalize on the nation’s growing need for water and other critical infrastructure.

Previous wording

(2) Consists of legal fees and other costs incurred in connection with claims relating to Legacy Projects.

Current wording

(2) Consists of legal fees and other costs incurred in connection with claims relating to Non-Core Projects.

Previous wording

During the three months ended April 4, 2025 our capital expenditures were approximately $1 million compared to $5 million for the three months ended March 29, 2024. Historically, we have had significant cash requirements in order to organically expand our business to undertake new projects. Our cash requirements include costs related to increased expenditures for equipment, facilities and information systems, purchase of materials and production of materials and cash to fund our organic expansion into new markets, including through joint ventures. Our working capital needs are driven by the seasonality and growth of our business, with our cash requirements greater in periods of growth. Additional cash requirements resulting from our growth include the costs of additional personnel, enhancing our information systems, our compliance with laws and rules applicable to being a public company and, in the future, our integration of any acquisitions. Unrestricted cash and cash equivalents at April 4, 2025 totaled $16 million and availability under the Credit Agreement, ACF Credit Agreement and Ansley Loan Agreement totaled $44 million, $11 million and $0.1 million, respectively, resulting in total liquidity of $71 million.

Current wording

During the six months ended July 4, 2025 our capital expenditures were approximately $1 million compared to $8 million for the six months ended June 28, 2024. Historically, we have had significant cash requirements in order to organically expand our business to undertake new projects. Our cash requirements include costs related to increased expenditures for equipment, facilities and information systems, purchase of materials and production of materials and cash to fund our organic expansion into new markets, including through joint ventures. Our working capital needs are driven by the seasonality and growth of our business, with our cash requirements greater in periods of growth. Additional cash requirements resulting from our growth include the costs of additional personnel, enhancing our information systems, our compliance with laws and rules applicable to being a public company and, in the future, our integration of any acquisitions. Unrestricted cash and cash equivalents at July 4, 2025 totaled $21 million and availability under the Credit Agreement and ACF Credit Agreement totaled $51 million and $1 million, respectively, resulting in total liquidity of $73 million.

Previous wording

Total debt outstanding is presented on the condensed consolidated balance sheets as follows:

Current wording

Total debt outstanding on the condensed consolidated balance sheets is comprised of the following:

Previous wording

On May 20, 2024, the Company, as guarantor, and its wholly-owned subsidiaries as borrowers (“Borrowers”), Alter Domus (US) LLC, as agent, and AECOM and Berkshire Hathaway Specialty Insurance Company (“BHSI”) as lenders, entered into a revolving credit facility (the “Credit Agreement”), which was subsequently amended on September 25, 2024, January 30, 2025, March 12, 2025, March 31, 2025 and May 12, 2025 to, among other things, permit the Company’s concurrent amendment to the Revolving Credit Facility and waive the specified noncompliance of the Material Project Documents covenant regarding entering into non-bonded contracts. As amended, the Credit Agreement provides borrowing capacity up to $60 million. The obligations under the Credit Agreement bear interest at a per annum rate equal to One Month Term SOFR (as defined in the Credit Agreement), subject to a 1.00% floor, plus 3.50%. Interest on any outstanding amounts drawn under the Credit Agreement will be payable, in kind or in cash at our election, on the last day of each month and upon prepayment. Payment-in-kind interest accrued and capitalized shall not constitute loan outstanding amounts for the purposes of calculating loan availability.

Current wording

On May 20, 2024, the Company, as guarantor, and its wholly-owned subsidiaries as borrowers (“Borrowers”), Alter Domus (US) LLC, as agent, and AECOM and Berkshire Hathaway Specialty Insurance Company (“BHSI”) as lenders, entered into a revolving credit facility (the “Credit Agreement”), which was most recently amended on August 8, 2025 to, among other things, permit the Company’s concurrent amendment to the Revolving Credit Facility and waive the specified noncompliance of the Material Project Documents covenant regarding entering into non-bonded contracts. As amended, the Credit Agreement provides borrowing capacity up to $60 million. The obligations under the Credit Agreement bear interest at a per annum rate equal to One Month Term SOFR (as defined in the Credit Agreement), subject to a 1.00% floor, plus 3.50%. Interest on any outstanding amounts drawn under the Credit Agreement will be payable, in kind or in cash at our election, on the last day of each month and upon prepayment. Payment-in-kind interest accrued and capitalized shall not constitute loan outstanding amounts for the purposes of calculating loan availability.

Previous wording

The Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit liens, asset sales and investments, in each case subject to negotiated exceptions and baskets. In addition, the Credit Agreement contains a maximum leverage ratio covenant as tested quarterly commencing with the close of the second quarter of 2026. The Credit Agreement also contains representations and warranties and event of default provisions customary for a transaction of this type. The

Current wording

The Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit liens, asset sales and investments, in each case subject to negotiated exceptions and baskets. In addition, the Credit Agreement contains a maximum leverage ratio covenant as tested quarterly commencing with the close of the third quarter of 2026. The Credit Agreement also contains representations and warranties and event of default provisions customary for a transaction of this type. The

Previous wording

During the three months ended April 4, 2025, the Company paid $300 thousand in cash interest and accrued $200 thousand in non-cash payment-in-kind interest.

Current wording

During the six months ended July 4, 2025, the Company paid $1 million in cash interest and accrued $2 million in non-cash payment-in-kind interest as of July 4, 2025.

Previous wording

During the three months ended April 4, 2025, net cash used in operating activities was $38 million, compared to net cash used in operating activities of $35 million for the three months ended March 29, 2024. Cash flows used in operating activities were driven by net loss, adjusted for various non-cash items and changes in contract liabilities, contract assets, accounts payable and accrued expenses balances, other assets and liabilities, accounts receivable and accrued salaries and wages as discussed below.

Current wording

During the six months ended July 4, 2025, net cash used in operating activities was $42 million, compared to net cash used in operating activities of $79 million for the six months ended June 28, 2024. Cash flows used in operating activities were driven by net loss, adjusted for various non-cash items and changes in contract liabilities, contract assets, accounts payable and accrued expenses balances, other assets and liabilities, accounts receivable and accrued salaries and wages as discussed below.

Previous wording

Operating assets and liabilities — The change in operating assets and liabilities varies due to fluctuations and timing in operating activities. The changes in the components of operating assets and liabilities during the three months ended April 4, 2025 and March 29, 2024 were as follows:

Current wording

Operating assets and liabilities — The change in operating assets and liabilities varies due to fluctuations and timing in operating activities. The changes in the components of operating assets and liabilities during the six months ended July 4, 2025 and June 28, 2024 were as follows:

Previous wording

During the three months ended April 4, 2025, the decrease in operating assets and liabilities was $34 million, which was primarily driven by increases in contract assets and decreases in contract liabilities and accrued expenses. The Company’s operating assets and liabilities fluctuations are impacted by the mix of projects in backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Operating assets and liabilities are also impacted at period end by the timing of accounts receivable collections and accounts payable payments for projects.

Current wording

During the six months ended July 4, 2025, the decrease in operating assets and liabilities was $37 million, which was primarily driven by decreases in contract liabilities and increases in accounts payable. The Company’s operating assets and liabilities fluctuations are impacted by the mix of projects in backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Operating assets and liabilities are also impacted at period end by the timing of accounts receivable collections and accounts payable payments for projects.

Previous wording

For the three months ended April 4, 2025, net cash provided by investing activities was $0.4 million, which was primarily driven by purchases of property, plant and equipment.

Current wording

For the six months ended July 4, 2025, net cash provided by investing activities was $2 million, which was primarily driven by return of investment in unconsolidated joint ventures.

Previous wording

For the three months ended March 29, 2024, net cash used in investing activities was $7 million, which was primarily driven by purchases of property, plant and equipment of $5 million and contributions to unconsolidated joint ventures of $3 million.

Current wording

For the six months ended June 28, 2024, net cash used in investing activities was negligible, which was primarily driven by purchases of property, plant and equipment of $8 million and contributions to unconsolidated joint ventures of $4 million, offset by proceeds from the sale of assets of $11 million.

Previous wording

For the three months ended April 4, 2025, net cash provided by financing activities was $22 million, which primarily consisted of net borrowings from credit and loan agreements of $23 million, partially offset by $1 million of other, net which is primarily comprised of debt issuance costs incurred for the ACF Credit Agreement and Ansley Loan Agreement entered into during the three months ended April 4, 2025.

Current wording

For the six months ended July 4, 2025, net cash provided by financing activities was $27 million, which primarily consisted of net borrowings from credit and loan agreements of $28 million, partially offset by $1 million of other, net which is primarily comprised of debt issuance costs incurred for the ACF Credit Agreement and Ansley Loan Agreement entered into during the first quarter of 2025.

Previous wording

For the three months ended March 29, 2024, net cash provided by financing activities was $7 million, which primarily consisted of net borrowings from the Revolving Credit Facility borrowings of $2 million and other notes payable borrowings of $5 million.

Current wording

For the six months ended June 28, 2024, net cash provided by financing activities was $38 million, which primarily consisted of net borrowings from credit facilities of $40 million, partially offset by debt issuance costs incurred for the Credit Facility entered into during the second quarter of 2024.

Previous wording

Contractual obligations of the Company consisted of liabilities associated with remaining lease payments for the remainder of the fiscal year ending January 2, 2026 through the fiscal years ending through January 3, 2030 of approximately $6 million, $6 million, $5 million, $5 million, $3 million, respectively, and approximately $3 million in the aggregate thereafter based on balances outstanding as of April 4, 2025.

Current wording

Contractual obligations of the Company consisted of liabilities associated with remaining lease payments for the remainder of the fiscal year ending January 2, 2026 through the fiscal years ending through January 3, 2030 of approximately $4 million, $6 million, $5 million, $5 million, $3 million, respectively, and approximately $3 million in the aggregate thereafter based on balances outstanding as of July 4, 2025.

Previous wording

As of April 4, 2025, we had a backlog of projects of $739 million with over half of those projects in the strategic target markets, aligned with our strategic plan.

Current wording

As of July 4, 2025, we had a backlog of projects of $652 million with over half of those projects in strategic target markets aligned with our strategic plan.