Shimmick Awarded $27.6 Million Subcontract for Sunol Valley Water Treatment Plant Ozonation Project

Rhea-AI Summary

Shimmick (Nasdaq: SHIM) has secured a $27.6 million subcontract for electrical work on the Sunol Valley Water Treatment Plant Ozonation project. This is part of a larger $234.8 million prime contract awarded to J.F. Shea Construction by the San Francisco Public Utilities Commission. The project, located in Sunol, Alameda County, aims to improve water quality for millions of Bay Area residents.

Shimmick's scope includes installing high-voltage power systems, instrumentation, and controls for the new ozonation facility. The project involves constructing an Ozone Generator Building, an Ozone Contact Basin, and supporting systems. This ozonation system will provide additional primary disinfection, improve treatment reliability, and offer protection against potential emerging contaminants.

Positive

• Secured a $27.6 million subcontract for electrical work
• Part of a larger $234.8 million prime contract
• Demonstrates expertise in complex water treatment projects
• Leverages in-house capabilities for specialized electric work
• Project improves water quality for millions of Bay Area residents

Negative

• None.

Insights

Financial Analyst

The subcontract awarded to Shimmick Corporation valued at $27,583,595 demonstrates their continued success in securing sizable projects within the water infrastructure sector. This subcontract represents roughly 11.75% of the total prime contract value awarded to J.F. Shea Construction, which is $234,782,000. For a company like Shimmick, this can be considered a substantial addition to their backlog, which should positively influence their revenue streams in the next financial period.

From an investor's perspective, these contracts enhance financial stability and predictability, as infrastructure projects usually involve long-term engagements and steady cash flows. It's also noteworthy that Shimmick's expertise in specialized electric work could position them as a preferred subcontractor for future projects, thus bolstering their market reputation.

However, investors should assess the broader market conditions and the company's overall project portfolio to ensure diversified revenue sources and mitigated risks associated with over-reliance on specific types of projects or clients.

Market Research Analyst

The signing of this subcontract is a strategic move for Shimmick, reinforcing their standing in the competitive water infrastructure market. The focus on ozonation, a sophisticated water treatment process, indicates that Shimmick is involved in cutting-edge water purification methods. This is particularly relevant as public health concerns and regulatory pressures drive demand for advanced water treatment solutions.

For retail investors, understanding the market dynamics is crucial. The increasing demand for clean water, driven by population growth and urbanization, positions companies like Shimmick favorably. Their participation in high-value projects with public utilities also highlights a stable and lucrative client base, which tends to have lower default risks compared to private sector clients.

However, investors should monitor the project's progress and any potential delays or cost overruns, which could impact the financial performance and stock price volatility.

IRVINE, Calif., July 16, 2024 (GLOBE NEWSWIRE) -- Shimmick Corporation (“Shimmick” or the “Company”) (Nasdaq: SHIM), a leading water infrastructure company, today announced that it has signed a $27,583,595 subcontract for electrical work on the Sunol Valley Water Treatment Plant Ozonation project. The prime contract, valued at $234,782,000, was awarded to J.F. Shea Construction, Inc. by the San Francisco Public Utilities Commission (SFPUC) on May 14, 2024.

The project, located in Sunol, Alameda County, aims to control the taste and odor of raw water supplied to the Sunol Valley Water Treatment Plant. It involves the construction of an ozone treatment facility and associated infrastructure, including an Ozone Generator Building, an Ozone Contact Basin, and various supporting systems. Shimmick's scope of work includes installing high-voltage power systems, and instrumentation and controls for the new ozonation facility.

"We are thrilled to be part of this critical infrastructure project that will significantly improve water quality for millions of Bay Area residents," said Steve Richards, Chief Executive Officer. "This contract underscores our expertise in complex water treatment projects and our ability to perform critical specialized electric work that leverages our in-house capabilities."

This project represents a significant investment in improving water quality for the San Francisco Bay Area. The ozonation system will provide additional primary disinfection, improve treatment reliability, and offer an extra barrier against potential emerging contaminants of concern.

About Shimmick

Shimmick (NASDAQ: SHIM) is a leading provider of water infrastructure solutions nationwide. Shimmick has a long history of working on complex water projects, ranging from the world’s largest wastewater recycling and purification system in California to the iconic Hoover Dam. Shimmick is led by industry veterans, many with over 20 years of experience, and works closely with its customers to deliver complete solutions, including long-term operations and maintenance.

Media Contact:
Tonya Sandman
303-478-4987
Tonya.sandman@shimmick.com

Investor Contact:
Investor Relations
+1-949-704-2350
IR@shimmick.com

FAQ

What is the value of Shimmick's subcontract for the Sunol Valley Water Treatment Plant Ozonation project?

Shimmick (SHIM) was awarded a $27,583,595 subcontract for electrical work on the Sunol Valley Water Treatment Plant Ozonation project.

What is the total value of the prime contract for the Sunol Valley Water Treatment Plant Ozonation project?

The prime contract for the Sunol Valley Water Treatment Plant Ozonation project is valued at $234,782,000, awarded to J.F. Shea Construction, Inc. by the San Francisco Public Utilities Commission on May 14, 2024.

What is Shimmick's (SHIM) scope of work in the Sunol Valley Water Treatment Plant Ozonation project?

Shimmick's scope of work includes installing high-voltage power systems, and instrumentation and controls for the new ozonation facility at the Sunol Valley Water Treatment Plant.

How will the Sunol Valley Water Treatment Plant Ozonation project benefit Bay Area residents?

The project will significantly improve water quality for millions of Bay Area residents by providing additional primary disinfection, improving treatment reliability, and offering an extra barrier against potential emerging contaminants of concern.