Shimmick Corporation Announces Second Quarter 2024 Results - Provides Update on Transformation Plan
Shimmick Corp. (NASDAQ: SHIM) announced Q2 2024 results and provided an update on its transformation plan. Key highlights include:
- Revenue of $91 million, including $84 million from Shimmick Projects and a $23 million reduction in Legacy Projects revenue due to a settlement
- Net loss of $51 million and Adjusted EBITDA loss of $40 million
- Backlog of over $923 million, with 80% being Shimmick Projects
- Settlement agreement on a Legacy Loss Project, resulting in $33 million additional liquidity
- Sale of Tracy Equipment Yard for $20.5 million, with net proceeds used to repay debt
The company is focusing on the California water and critical infrastructure market, implementing initiatives to improve bidding, right-size costs, and redefine its operating model. Shimmick Projects revenue is expected to remain flat for FY2024, with gross margin between 4-9%.
Shimmick Corp. (NASDAQ: SHIM) ha annunciato i risultati del secondo trimestre 2024 e fornito un aggiornamento sul suo piano di trasformazione. I principali punti salienti includono:
- Fatturato di 91 milioni di dollari, di cui 84 milioni provenienti dai progetti Shimmick e una riduzione di 23 milioni di dollari nel fatturato dei progetti Legacy a causa di un accordo
- Perdita netta di 51 milioni di dollari e perdita dell'EBITDA rettificato di 40 milioni di dollari
- Un portafoglio ordini superiore a 923 milioni di dollari, con l'80% rappresentato dai progetti Shimmick
- Accordo di transazione su un progetto Legacy Loss, con un risultato di 33 milioni di dollari di liquidità aggiuntiva
- Vendita del Tracy Equipment Yard per 20,5 milioni di dollari, con il ricavato netto utilizzato per ripagare debiti
La società si sta concentrando sul mercato idrico della California e sulle infrastrutture critiche, implementando iniziative per migliorare le offerte, ottimizzare i costi e ridefinire il proprio modello operativo. Si prevede che il fatturato dei progetti Shimmick rimanga stabile per l'anno fiscale 2024, con un margine lordo compreso tra il 4% e il 9%.
Shimmick Corp. (NASDAQ: SHIM) anunció los resultados del segundo trimestre de 2024 y proporcionó una actualización sobre su plan de transformación. Los aspectos más destacados incluyen:
- Ingresos de 91 millones de dólares, incluyendo 84 millones de proyectos Shimmick y una reducción de 23 millones en los ingresos por proyectos Legacy debido a un acuerdo
- Pérdida neta de 51 millones de dólares y pérdida ajustada de EBITDA de 40 millones de dólares
- Cartera de pedidos de más de 923 millones de dólares, con el 80% correspondiente a proyectos Shimmick
- Acuerdo de liquidación sobre un proyecto de pérdida Legacy, resultando en 33 millones de dólares de liquidez adicional
- Venta del Tracy Equipment Yard por 20,5 millones de dólares, con los ingresos netos utilizados para pagar deudas
La empresa se está enfocando en el mercado del agua de California y en la infraestructura crítica, implementando iniciativas para mejorar la licitación, ajustar costos y redefinir su modelo operativo. Se espera que los ingresos de los proyectos Shimmick se mantengan estables para el año fiscal 2024, con un margen bruto entre el 4% y el 9%.
Shimmick Corp. (NASDAQ: SHIM)는 2024년 2분기 결과를 발표하고 전환 계획에 대한 업데이트를 제공했습니다. 주요 하이라이트는:
- 9,100만 달러의 수익, 이 중 8,400만 달러는 Shimmick 프로젝트에서 발생하며, 합의로 인해 기존 프로젝트의 수익이 2,300만 달러 감소
- 5,100만 달러의 순손실 및 조정 EBITDA 손실 4,000만 달러
- 9억 2,300만 달러 이상의 미결주문 잔고, 이 중 80%가 Shimmick 프로젝트
- 기존 손실 프로젝트에 대한 합의 계약, 추가로 3,300만 달러의 유동성 확보
- Tracy 장비 야드의 2,050만 달러에 판매, 순이익은 부채 상환에 사용됨
회사는 캘리포니아의 수자원 및 중요한 인프라 시장에 집중하고 있으며, 입찰 개선, 비용 조정 및 운영 모델 재정의를 위한 이니셔티브를 시행하고 있습니다. FY2024에 대한 Shimmick 프로젝트의 수익은 안정적으로 유지될 것으로 예상되며, 총 마진은 4-9% 사이일 것으로 보입니다.
Shimmick Corp. (NASDAQ: SHIM) a annoncé les résultats du deuxième trimestre 2024 et a fourni une mise à jour de son plan de transformation. Les points clés incluent:
- Un chiffre d'affaires de 91 millions de dollars, dont 84 millions provenant des projets Shimmick et une réduction de 23 millions de dollars dans les revenus des projets Legacy en raison d'un règlement
- Une perte nette de 51 millions de dollars et une perte d'EBITDA ajusté de 40 millions de dollars
- Un carnet de commandes de plus de 923 millions de dollars, 80 % étant des projets Shimmick
- Accord de règlement sur un projet de perte Legacy, entraînant une liquidité supplémentaire de 33 millions de dollars
- Vente de Tracy Equipment Yard pour 20,5 millions de dollars, avec le produit net utilisé pour rembourser des dettes
L'entreprise se concentre sur le marché de l'eau en Californie et sur les infrastructures critiques, mettant en œuvre des initiatives pour améliorer les offres, ajuster les coûts et redéfinir son modèle opérationnel. Les revenus des projets Shimmick devraient rester stables pour l'exercice 2024, avec une marge brute comprise entre 4 % et 9 %.
Shimmick Corp. (NASDAQ: SHIM) hat die Ergebnisse des zweiten Quartals 2024 bekannt gegeben und ein Update zu ihrem Transformationsplan bereitgestellt. Wichtige Highlights sind:
- Umsatz von 91 Millionen Dollar, einschließlich 84 Millionen Dollar aus Shimmick-Projekten und einer Reduzierung von 23 Millionen Dollar im Umsatz der Legacy-Projekte aufgrund eines Vergleichs
- Nettverlust von 51 Millionen Dollar und bereinigter EBITDA-Verlust von 40 Millionen Dollar
- Auftragsbestand von über 923 Millionen Dollar, wobei 80 % aus Shimmick-Projekten stammen
- Vergleichsvereinbarung zu einem Legacy Loss Projekt, die zu zusätzlichen 33 Millionen Dollar Liquide führt
- Verkauf des Tracy Equipment Yard für 20,5 Millionen Dollar, wobei der Nettoerlös zur Schuldentilgung verwendet wird
Das Unternehmen konzentriert sich auf den kalifornischen Wasser- und kritischen Infrastruktursektor und setzt Initiativen um, um die Angebote zu verbessern, Kosten anzupassen und sein Betriebsmodell neu zu definieren. Der Umsatz aus Shimmick-Projekten wird für das Geschäftsjahr 2024 voraussichtlich stabil bleiben, mit einer Bruttomarge von 4 bis 9 %.
- Settlement agreement on Legacy Loss Project resulting in $33 million additional liquidity
- Sale of Tracy Equipment Yard for $20.5 million, with proceeds used to repay debt
- Strong backlog of over $923 million, with 80% being Shimmick Projects
- Won a new cogeneration system replacement project
- Implementing transformation plan to focus on California water and critical infrastructure market
- Reported net loss of $51 million in Q2 2024
- Adjusted EBITDA loss of $40 million in Q2 2024
- Revenue decreased to $91 million from $155 million in Q2 2023
- Gross margin declined to -23% from 4% in Q2 2023
- Legacy Projects continue to negatively impact financial results
Insights
Shimmick's Q2 2024 results reveal significant challenges. Revenue dropped to
The
With a backlog of
Shimmick's Q2 results highlight the perils of legacy projects in the construction industry. The
The company's pivot to focus on California's water and critical infrastructure market is strategic, given the state's projected growth in this sector. However, the success of this transformation hinges on Shimmick's ability to win higher-margin projects and effectively manage risks. The increase in regionally based estimators is a positive step, potentially leading to more accurate bids and better project execution.
The sale of non-core foundation business assets and the equipment yard sale-leaseback indicate a move towards a more capital-light model, which could improve flexibility but may impact operational capabilities. The company's ability to adapt to this new model while maintaining project quality will be important for future success.
Shimmick's Q2 results and strategic shift reflect broader trends in the infrastructure sector. The focus on California's water infrastructure aligns with increasing demand driven by climate change and aging systems. With California's water infrastructure market projected to grow, Shimmick's specialization could position it favorably.
However, the company faces significant challenges. The gross margin for Shimmick Projects declined from
The transformation plan, including increased local estimators and overhead reduction, aims to improve bid quality and cost structure. This approach is important in a market where project complexity is increasing. However, the effectiveness of these measures remains to be seen, especially given the company's current financial constraints.
Investors should watch for improvements in project win rates, gross margins and the resolution of the remaining Legacy Loss Project as indicators of the transformation plan's success.
IRVINE, Calif., Aug. 15, 2024 (GLOBE NEWSWIRE) -- Shimmick Corp. (NASDAQ: SHIM), a leading water infrastructure company, today announced financial results for the second quarter ended June 28, 2024.
Second Quarter 2024 and Recent Highlights
- A settlement agreement on litigation on one of the two Legacy Loss Projects (a federal lock and dam project) which will result in
$33 million in additional liquidity and eliminates the cost and distraction of prolonged litigation - Reported revenue of
$91 million , which includes$84 million of Shimmick Projects revenue and a$23 million reduction in Legacy Projects revenue associated with the settlement - Reported a net loss of
$51 million with an Adjusted EBITDA loss of$40 million which includes a$30 million reduction in Legacy Projects gross margin associated with the settlement - Backlog is over
$923 million as of June 28, 2024, with over80% being Shimmick Projects - Won a new cogeneration system replacement project
- Completed sale of our Tracy Equipment Yard with net proceeds used to paydown debt
- Continued to execute on Transformation plan
Legacy Project Settlement and Sale of Tracy Equipment Yard
On August 8, 2024, the Company entered into a settlement agreement involving change orders and additional compensation sought for a federal lock and dam project. Pursuant to the settlement agreement, the United States Army Corps of Engineers agreed to pay the Company
The settlement amount is recorded in contract assets within the condensed consolidated balance sheets. As a result of the settlement and previously estimated contract revenue, the Company recognized a net loss of
The Company continues to pursue the litigation on the second of the two large Legacy Loss Projects with a trial scheduled for later this year.
On August 9, 2024, we completed the previously disclosed transaction for the sale-leaseback of our equipment yard in Tracy, California. The agreement consummated the sale of the equipment yard for
Transformation Plan Update
Given Shimmick’s track-record of winning and delivering complex water and other critical infrastructure projects in California, a market which has experienced consistent annual growth with forecasted increases in both the size and complexity of these target projects over the next decade, the Company has announced today the following initiatives as part of our transformation plan to increase our focus on the California water and critical infrastructure market:
- Increasing the number of regionally based estimators in both southern and northern California to meet increased bid pipeline expectations, improve quality of bids and minimize risk
- Right-sizing our cost structure by reducing our overhead in non-core areas
- Redefining our operating model with a renewed focus on supporting the field to safely deliver projects on-time and on-budget for our clients across California
“With our transformation plan progress, the previously announced sale of the assets of the foundation business, the sale-leaseback of the equipment yard, and the Legacy Loss Project claim settlement, we have made progress to a more capital light focused business focused on capturing the growth opportunity in the California water and critical infrastructure market,” said Steve Richards, Chief Executive Officer of Shimmick. “We continue to make progress on bidding activity and are winning new projects. The recently awarded Delta Diablo contract for the Cogeneration System Replacement Project highlights our strategy to focus on winning higher-margin projects in the water space. These activities will position us to meet our long-term goals of driving gross margin expansion in the future."
Financial Results
A summary of our results is included in the table below:
| Three Months Ended | Six Months Ended | ||||||||||||||
| (In millions, except per share data) | June 28, 2024 | June 30, 2023 | June 28, 2024 | June 30, 2023 | |||||||||||
| Revenue | $ | 91 | $ | 155 | $ | 211 | $ | 319 | |||||||
| Gross margin | (31 | ) | $ | (0 | ) | (47 | ) | 6 | |||||||
| Net loss attributable to Shimmick Corporation | (51 | ) | (10 | ) | (85 | ) | (20 | ) | |||||||
| Adjusted net loss | (45 | ) | (7 | ) | (74 | ) | (12 | ) | |||||||
| Adjusted EBITDA | (40 | ) | (2 | ) | (64 | ) | (3 | ) | |||||||
| Diluted loss per common share attributable to Shimmick Corporation | $ | (1.83 | ) | $ | (0.47 | ) | $ | (3.16 | ) | $ | (0.90 | ) | |||
| Adjusted diluted loss per common share attributable to Shimmick Corporation | $ | (1.60 | ) | $ | (0.31 | ) | $ | (2.77 | ) | $ | (0.55 | ) | |||
The following table presents revenue and gross margin data for the three and six months ended June 28, 2024 compared to the three and six months ended June 30, 2023:
| Three Months Ended | Six Months Ended | ||||||||||||||
| (In millions, except percentage data) | June 28, 2024 | June 30, 2023 | June 28, 2024 | June 30, 2023 | |||||||||||
| Shimmick Projects(1) | |||||||||||||||
| Revenue | $ | 84 | $ | 103 | $ | 174 | $ | 192 | |||||||
| Gross Margin | 5 | 9 | 4 | 14 | |||||||||||
| Gross Margin (%) | 5 | % | 8 | % | 2 | % | 7 | % | |||||||
| Foundations Projects(2) | |||||||||||||||
| Revenue | $ | 8 | $ | 9 | $ | 15 | $ | 29 | |||||||
| Gross Margin | (2 | ) | (7 | ) | (6 | ) | (6 | ) | |||||||
| Gross Margin (%) | (23 | )% | (83 | )% | (42 | )% | (19 | )% | |||||||
| Legacy Projects(3) | |||||||||||||||
| Revenue | $ | (2 | ) | $ | 43 | $ | 22 | $ | 99 | ||||||
| Gross Margin | (34 | ) | (2 | ) | (45 | ) | (2 | ) | |||||||
| Gross Margin (%) | 2195 | % | (4 | )% | (208 | )% | (2 | )% | |||||||
| Consolidated Total | |||||||||||||||
| Revenue | $ | 91 | $ | 155 | $ | 211 | $ | 319 | |||||||
| Gross Margin | (21 | ) | 16 | (26 | ) | 40 | |||||||||
| Gross Margin (%) | (23 | )% | 4 | % | (12 | )% | 13 | % | |||||||
(1) Shimmick Projects are those projects started after the AECOM Sale Transactions that have focused on water infrastructure and other critical infrastructure.
(2) The Company entered into an agreement to sell the assets of non-core foundation projects in the second quarter of 2024 and is winding down any remaining work during the year. As the revenue will decline during the remainder of the 2024 fiscal year, the Company is reporting revenue and gross margin related to the projects separately for the periods presented ("Foundations Projects").
(3) Legacy Projects are those projects assumed as part of the AECOM Sale Transactions, that were started under AECOM ownership. Included in the results is a net loss of
Shimmick Projects
Projects started after the AECOM Sale Transactions ("Shimmick Projects") have focused on water infrastructure and other critical infrastructure. Revenue recognized on Shimmick Projects was
Gross margin recognized on Shimmick Projects was
Foundations Projects
The Company entered into an agreement to sell the assets of our non-core Foundation Projects in the second quarter of 2024 and will be winding down any remaining work during the remainder of the 2024 fiscal year. As a result, revenue from Foundations Projects will decline during the remainder of the 2024 fiscal year. Revenue recognized on Foundations Projects was
Gross margin recognized on Foundations Projects was
Legacy Projects
As part of the AECOM Sale Transactions, we assumed the Legacy Projects and backlog that were started under AECOM. Legacy Projects revenue was
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
Selling, general and administrative expenses
Selling, general and administrative expenses remained approximately flat period over period.
Equity in (loss) earnings of unconsolidated joint ventures
Equity in (loss) earnings of unconsolidated joint ventures was
Gain on sale of assets
Gain on sale of assets increased by
Interest expense
Interest expense increased by
Other expense (income), net
Other expense (income), net increased by
Income tax expense
Income tax expense was flat period over period. Due to an expected tax loss for fiscal year ending 2024, no taxable income or tax expense is anticipated for 2024, and no taxable income was recorded for the prior year three months ended June 30, 2023.
Net loss
Net loss increased by
Diluted loss per common share was
Adjusted net loss was
Adjusted diluted loss per common share was
Adjusted EBITDA was
Backlog was
Fiscal Year 2024 Guidance
For the full 2024 fiscal year, we now expect:
- After excluding Foundations Projects revenue of
$64 million for the fiscal year ending December 29, 2023, Shimmick Projects revenue to remain generally flat with gross margin between 4 to 9 percent - Legacy Projects revenue of
$55 t o$65 million with negative gross margin of (80% ) to (90% ), due to the Legacy Loss Project settlement, additional costs recorded for a Legacy Loss Project related to pending change orders and other cost overruns
Conference Call and Webcast Information
Shimmick will host an investor conference call Friday, August 16th, at 8:30am EST. Interested parties are invited to listen to the conference call which can be accessed live over the phone by dialing (877)-869-3847, or for international callers, (201)-689-8261. A replay will be available two hours after the call and can be accessed by dialing (877)-660-6853, or for international callers, (201)-612-7415. The passcode for the live call and the replay is 13748447. The replay will be available until 11:59 p.m. (ET) on September 6, 2024. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by visiting the Investors section of the Company’s website at www.shimmick.com. The online replay will be available for a limited time beginning immediately following the call.
About Shimmick Corporation
Shimmick Corporation ("Shimmick", the "Company") (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. According to Engineering News Record, in 2023, Shimmick was nationally ranked as a top ten builder of water supply (#6), dams and reservoirs (#7), and water treatment and desalination plants (#7). 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.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are often characterized by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are only predictions based on our current expectations and our projections about future events, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. Forward-looking statements contained in this release include, but are not limited to, statements about: expected future financial performance (including the assumptions related thereto), including our revenue, net loss and EBITDA; our growth prospects; our expectations regarding profitability; our expectations regarding the sale of the assets related to non-core foundation drilling projects and other non-core assets; our continued successful adjustment to becoming a public company following our initial public offering; our expectations regarding successful partnerships with our new investors; and our capital plans and expectations related thereto. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Forward-looking statements are only predictions based on our current expectations and our projections about future events, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law.
We wish to caution readers that, although we believe any forward-looking statements are based on reasonable assumptions, certain important factors may have affected and could in the future affect our actual financial results and could cause our actual financial results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on our behalf, including, but not limited to, the following: our ability to accurately estimate risks, requirements or costs when we bid on or negotiate a contract; the impact of our fixed-price contracts; qualifying as an eligible bidder for contracts; the availability of qualified personnel, joint venture partners and subcontractors; inability to attract and retain qualified managers and skilled employees and the impact of loss of key management; higher costs to lease, acquire and maintain equipment necessary for our operations or a decline in the market value of owned equipment; subcontractors failing to satisfy their obligations to us or other parties or any inability to maintain subcontractor relationships; marketplace competition; our limited operating history as an independent company following our separation from AECOM; our inability to obtain bonding; our relationship and transactions with our prior owner, AECOM, and requirements to make future payments to AECOM; AECOM defaulting on its contractual obligations to us or under agreements in which we are beneficiary; our limited number of customers; dependence on subcontractors and suppliers of materials; any inability to secure sufficient aggregates; an inability to complete a merger or acquisition or to integrate an acquired company’s business; adjustments in our contact backlog; accounting for our revenue and costs involves significant estimates, as does our use of the input method of revenue recognition based on costs incurred relative to total expected costs; any failure to comply with covenants under any current indebtedness, and future indebtedness we may incur; the adequacy of sources of liquidity; cybersecurity attacks against, disruptions, failures or security breaches of, our information technology systems; seasonality of our business; pandemics and health emergencies; commodity products price fluctuations and rising inflation and/or interest rates; liabilities under environmental laws, compliance with immigration laws, and other regulatory matters, including changes in regulations and laws; climate change; deterioration of the U.S. economy; geopolitical risks, including those related to the war between Russia and Ukraine and the conflict in the Gaza Strip and the conflict in the Red Sea Region; our ability to timely file reports with the Securities and Exchange Commission; and other risks detailed in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year ended December 29, 2023 and those described from time to time in our future reports with the SEC.
Non-GAAP Definitions This press release includes unaudited non-GAAP financial measures, adjusted EBITDA and adjusted net loss and adjusted diluted loss per common share. For definitions of these non-GAAP financial measures and reconciliations to the most comparable GAAP measures, see "Explanatory Notes" and tables that following in this press release. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.
Please refer to the Reconciliation between Net loss Attributable to Shimmick Corporation and Adjusted net loss and Adjusted diluted loss per common share included within Table A and the Reconciliation between Net Loss Attributable to Shimmick Corporation and Adjusted EBITDA included within Table B below.
We do not provide forward-looking guidance for certain financial measures on a U.S. GAAP basis because we are unable to predict certain items contained in the U.S. GAAP measures without unreasonable efforts. These items may include legal fees and other costs for a legacy loss project, acquisition-related costs, litigation charges or settlements, and certain other unusual adjustments.
Investor Relations Contact
1-949-704-2350
IR@shimmick.com
Shimmick Corporation
Consolidated Balance Sheets
(In thousands, except share data)
(unaudited)
| June 28, | December 29, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 22,381 | $ | 62,939 | ||||
| Restricted cash | 497 | 971 | ||||||
| Accounts receivable, net | 48,519 | 54,178 | ||||||
| Contract assets, current | 119,694 | 125,943 | ||||||
| Prepaids and other current assets | 17,734 | 13,427 | ||||||
| TOTAL CURRENT ASSETS | 208,825 | 257,458 | ||||||
| Property, plant and equipment, net | 36,153 | 46,373 | ||||||
| Intangible assets, net | 7,956 | 9,244 | ||||||
| Contract assets, non-current | 46,569 | 48,316 | ||||||
| Lease right-of-use assets | 21,328 | 23,855 | ||||||
| Investment in unconsolidated joint ventures | 22,202 | 21,283 | ||||||
| Deferred tax assets | - | 17,252 | ||||||
| Other assets | 1,481 | 2,871 | ||||||
| TOTAL ASSETS | $ | 344,514 | $ | 426,652 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 57,081 | $ | 81,589 | ||||
| Contract liabilities, current | 111,821 | 115,785 | ||||||
| Accrued salaries, wages and benefits | 28,610 | 26,911 | ||||||
| Accrued expenses | 39,073 | 33,897 | ||||||
| Short-term debt | 14,773 | - | ||||||
| Other current liabilities | 14,621 | 13,071 | ||||||
| TOTAL CURRENT LIABILITIES | 265,979 | 271,253 | ||||||
| Long-term debt, net | 52,789 | 29,627 | ||||||
| Lease liabilities, non-current | 13,154 | 15,045 | ||||||
| Contract liabilities, non-current | 2,689 | 3,215 | ||||||
| Contingent consideration | 4,304 | 15,488 | ||||||
| Deferred tax liabilities | - | 17,252 | ||||||
| Other liabilities | 5,163 | 4,282 | ||||||
| TOTAL LIABILITIES | 344,078 | 356,162 | ||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, | 337 | 255 | ||||||
| Additional paid-in-capital | 39,205 | 24,445 | ||||||
| (Accumulated deficit) Retained earnings | (38,185 | ) | 46,537 | |||||
| Non-controlling interests | (921 | ) | (747 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 436 | 70,490 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 344,514 | $ | 426,652 | ||||
Shimmick Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 28, | June 30, | June 28, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 90,605 | $ | 155,189 | $ | 210,648 | $ | 319,297 | ||||||||
| Cost of revenue | 121,736 | 155,646 | 257,639 | 313,532 | ||||||||||||
| Gross margin | (31,131 | ) | (457 | ) | (46,991 | ) | 5,765 | |||||||||
| Selling, general and administrative expenses | 18,079 | 16,943 | 33,603 | 32,502 | ||||||||||||
| Amortization of intangibles | 644 | 658 | 1,288 | 1,316 | ||||||||||||
| Total operating expenses | 18,723 | 17,601 | 34,891 | 33,818 | ||||||||||||
| Equity in (loss) earnings of unconsolidated joint ventures | (1,854 | ) | 7,534 | (1,591 | ) | 6,993 | ||||||||||
| Gain on sale of assets | 3,714 | 140 | 3,688 | 1,680 | ||||||||||||
| Loss from operations | (47,994 | ) | (10,384 | ) | (79,785 | ) | (19,380 | ) | ||||||||
| Interest expense | 1,496 | 576 | 2,393 | 607 | ||||||||||||
| Other expense (income), net | 1,899 | (649 | ) | 2,545 | (343 | ) | ||||||||||
| Net loss before income tax | (51,389 | ) | (10,311 | ) | (84,723 | ) | (19,644 | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | (51,389 | ) | (10,311 | ) | (84,723 | ) | (19,644 | ) | ||||||||
| Net loss attributable to non-controlling interests | - | (11 | ) | (1 | ) | (7 | ) | |||||||||
| Net loss attributable to Shimmick Corporation | $ | (51,389 | ) | $ | (10,300 | ) | $ | (84,722 | ) | $ | (19,637 | ) | ||||
| Net loss attributable to Shimmick Corporation per common share | ||||||||||||||||
| Basic | $ | (1.83 | ) | $ | (0.47 | ) | $ | (3.16 | ) | $ | (0.90 | ) | ||||
| Diluted | $ | (1.83 | ) | $ | (0.47 | ) | $ | (3.16 | ) | $ | (0.90 | ) | ||||
Shimmick Corporation
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
| Six Months Ended | ||||||||
| June 28, | June 30, | |||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | (84,723 | ) | $ | (19,644 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | 1,967 | 1,051 | ||||||
| Depreciation and amortization | 8,199 | 8,549 | ||||||
| Equity in loss (earnings) of unconsolidated joint ventures | 1,591 | (6,993 | ) | |||||
| Return on investment in unconsolidated joint ventures | 421 | 11,437 | ||||||
| Gain on sale of assets | (3,714 | ) | (1,680 | ) | ||||
| Other | 1,478 | 409 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | 5,659 | (4,797 | ) | |||||
| Contract assets | 7,996 | (9,823 | ) | |||||
| Accounts payable | (24,508 | ) | 9,274 | |||||
| Contract liabilities | (3,963 | ) | (34,156 | ) | ||||
| Accrued salaries, wages and benefits | 1,699 | (427 | ) | |||||
| Accrued expenses | 5,176 | (19,336 | ) | |||||
| Other assets and liabilities | 3,874 | 5,464 | ||||||
| Net cash used in operating activities | (78,848 | ) | (60,672 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property, plant and equipment | (7,595 | ) | (3,210 | ) | ||||
| Proceeds from sale of assets | 11,037 | 4,881 | ||||||
| Proceeds from advance on sale of non-core business contracts | - | 20,000 | ||||||
| Unconsolidated joint venture equity contributions | (3,460 | ) | (13,310 | ) | ||||
| Return of investment in unconsolidated joint ventures | - | 4,286 | ||||||
| Net cash (used in) provided by investing activities | (18 | ) | 12,647 | |||||
| Cash Flows From Financing Activities | ||||||||
| Net borrowings on Credit Facility | 54,200 | — | ||||||
| Net repayments on Revolving Credit Facility | (14,675 | ) | 30,000 | |||||
| Other | (1,691 | ) | (955 | ) | ||||
| Net cash provided by financing activities | 37,834 | 29,045 | ||||||
| Net decrease in cash, cash equivalents and restricted cash | (41,032 | ) | (18,980 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 63,910 | 82,085 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 22,878 | $ | 63,105 | ||||
| Reconciliation of cash, cash equivalents and restricted cash to the | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| Cash and cash equivalents | $ | 22,381 | $ | 61,295 | ||||
| Restricted cash | 497 | 1,810 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 22,878 | $ | 63,105 | ||||
EXPLANATORY NOTES
Non-GAAP Financial Measures
Adjusted Net loss and Adjusted Diluted Earnings Per Common Share
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 and expect to incur including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business.
We have included Adjusted net loss in this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the income and expenses eliminated in calculating adjusted net loss can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted net loss provides useful information to investors and others in understanding and evaluating our results of operations.
Our use of Adjusted net loss as an analytical tool has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:
- Adjusted net loss does not reflect changes in, or cash requirements for, our working capital needs,
- Adjusted net loss does not reflect the potentially dilutive impact of stock-based compensation, and
- other companies, including companies in our industry, might calculate Adjusted net loss or similarly titled measures differently, which reduces their usefulness as comparative measures.
Because of these and other limitations, you should consider Adjusted net loss alongside Net loss attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.
Table A
Reconciliation between Net loss attributable to
Shimmick Corporation and Adjusted net loss
(unaudited)
| Three Months Ended | |||||||
| June 28, | June 30, | ||||||
| (In thousands) | 2024 | 2023 | |||||
| Net loss attributable to Shimmick Corporation | $ | (51,389 | ) | $ | (10,300 | ) | |
| Transformation costs (1) | 2,608 | - | |||||
| Stock-based compensation | 969 | 523 | |||||
| Legal fees and other costs for Legacy Projects (2) | 2,629 | 2,128 | |||||
| Other (3) | 209 | 889 | |||||
| Adjusted net loss | $ | (44,974 | ) | $ | (6,760 | ) | |
| Adjusted net loss attributable to Shimmick Corporation per common share | |||||||
| Basic | $ | (1.60 | ) | $ | (0.31 | ) | |
| Diluted | $ | (1.60 | ) | $ | (0.31 | ) | |
(1) Consists of transformation-related costs we have and expect to incur including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business.
(2) Consists legal fees and other costs incurred in connection with claims relating to Legacy Projects.
(3) Consists of transaction-related costs and changes in fair value of contingent consideration remaining after the impact of transactions with AECOM.
Adjusted EBITDA
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 and expect to incur including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business.
We have included Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the income and expenses eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations.
Our use of Adjusted EBITDA as an analytical tool has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized might have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements,
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs,
- Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation,
- Adjusted EBITDA does not reflect interest or tax payments that would reduce the cash available to us, and
- other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
Because of these and other limitations, you should consider Adjusted EBITDA alongside Net loss attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.
Table B
Reconciliation between Net loss attributable to
Shimmick Corporation and Adjusted EBITDA
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 28, | June 30, | June 28, | June 30, | |||||||||||||
| (In thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss attributable to Shimmick Corporation | $ | (51,389 | ) | $ | (10,300 | ) | $ | (84,722 | ) | $ | (19,637 | ) | ||||
| Depreciation and amortization | 3,789 | 4,384 | 8,199 | 8,549 | ||||||||||||
| Interest expense | 1,496 | 575 | 2,393 | 607 | ||||||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Transformation costs (1) | 2,608 | - | 2,608 | - | ||||||||||||
| Stock-based compensation | 969 | 523 | 1,967 | 1,051 | ||||||||||||
| Legal fees and other costs for Legacy Projects (2) | 2,629 | 2,128 | 5,360 | 4,638 | ||||||||||||
| Other (3) | 209 | 889 | 446 | 1,918 | ||||||||||||
| Adjusted EBITDA | $ | (39,689 | ) | $ | (1,801 | ) | $ | (63,749 | ) | $ | (2,875 | ) | ||||
(1) Consists of transformation-related costs we have and expect to incur including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business.
(2) Consists of legal fees and other costs incurred in connection with claims relating to Legacy Projects.
(3) Consists of transaction-related costs and changes in fair value of contingent consideration remaining after the impact of transactions with AECOM.
FAQ
What was Shimmick's (SHIM) revenue for Q2 2024?
How much was Shimmick's (SHIM) net loss in Q2 2024?
What is Shimmick's (SHIM) backlog as of June 28, 2024?
What was the outcome of Shimmick's (SHIM) Legacy Loss Project settlement in August 2024?
What is Shimmick's (SHIM) revenue guidance for Shimmick Projects in fiscal year 2024?
