Shimmick Corporation Announces Third Quarter 2024 Results
Shimmick (NASDAQ: SHIM) reported Q3 2024 financial results with revenue of $166 million, including $101 million from Shimmick Projects. The company secured a $97 million settlement for the Golden Gate Bridge Project, to be collected by end of 2024. Q3 highlights include a 6% gross margin on Shimmick Projects, a net loss of $2 million, and Adjusted EBITDA of $30 million. The company's backlog stands at $834 million, with over 85% being Shimmick Projects. Notable events include the appointment of Ural Yal as new CEO, a $17 million gain from a sale-leaseback transaction, and a $16 million one-time charge related to ERP system enhancement.
Shimmick (NASDAQ: SHIM) ha riportato i risultati finanziari del terzo trimestre del 2024 con un fatturato di 166 milioni di dollari, di cui 101 milioni provenienti dai progetti Shimmick. L'azienda ha assicurato un risarcimento di 97 milioni di dollari per il progetto del Golden Gate Bridge, che sarà incassato entro la fine del 2024. I punti salienti del terzo trimestre includono un margine lordo del 6% sui progetti Shimmick, una perdita netta di 2 milioni di dollari e un EBITDA rettificato di 30 milioni di dollari. Il portafoglio ordini dell'azienda ammonta a 834 milioni di dollari, con oltre l'85% rappresentato dai progetti Shimmick. Gli eventi degni di nota includono la nomina di Ural Yal come nuovo CEO, un guadagno di 17 milioni di dollari da una transazione di vendita-leaseback, e un addebito una tantum di 16 milioni di dollari relativo al miglioramento del sistema ERP.
Shimmick (NASDAQ: SHIM) reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 166 millones de dólares, incluyendo 101 millones de proyectos Shimmick. La compañía aseguró un acuerdo de 97 millones de dólares para el Proyecto del Puente Golden Gate, el cual se cobrará a finales de 2024. Los aspectos destacados del tercer trimestre incluyen un margen bruto del 6% en los proyectos Shimmick, una pérdida neta de 2 millones de dólares y un EBITDA ajustado de 30 millones de dólares. La cartera de pedidos de la compañía asciende a 834 millones de dólares, con más del 85% proveniente de proyectos Shimmick. Eventos destacados incluyen el nombramiento de Ural Yal como nuevo CEO, una ganancia de 17 millones de dólares de una transacción de venta y arrendamiento, y un cargo extraordinario de 16 millones de dólares relacionado con la mejora del sistema ERP.
Shimmick (NASDAQ: SHIM)은 2024년 3분기 재무 결과를 보고했으며, 수익은 1억 6천 6백만 달러에 달하고 이 중 1억 1천만 달러는 Shimmick 프로젝트에서 나왔습니다. 이 회사는 2024년 말까지 집행될 9천 7백만 달러의 금액을 골든 게이트 브리지 프로젝트에 대한 합의로 확보했습니다. 3분기 주요 내용은 Shimmick 프로젝트에서 6%의 총 마진, 200만 달러의 순손실, 그리고 3000만 달러의 조정 EBITDA가 포함되었습니다. 회사의 미결 주문은 8억 3천 4백만 달러에 달하며, 85% 이상이 Shimmick 프로젝트에서 발생하고 있습니다. 주요 사건으로는 Ural Yal을 새로운 CEO로 임명한 것, 판매-리스백 거래에서 1천 7백만 달러의 이익을 얻은 것, 그리고 ERP 시스템 개선과 관련된 일회성 비용으로 1천 6백만 달러가 발생한 것이 있습니다.
Shimmick (NASDAQ: SHIM) a présenté les résultats financiers du troisième trimestre 2024 avec un chiffre d'affaires de 166 millions de dollars, dont 101 millions provenant des projets Shimmick. L'entreprise a sécurisé un règlement de 97 millions de dollars pour le projet du pont Golden Gate, à encaisser d'ici la fin de 2024. Les points forts du troisième trimestre incluent une marge brute de 6 % sur les projets Shimmick, une perte nette de 2 millions de dollars et un EBITDA ajusté de 30 millions de dollars. Le carnet de commandes de l'entreprise s'élève à 834 millions de dollars, dont plus de 85 % proviennent de projets Shimmick. Parmi les événements notables, on trouve la nomination d'Ural Yal en tant que nouveau directeur général, un gain de 17 millions de dollars provenant d'une opération de vente-bail, et une charge exceptionnelle de 16 millions de dollars liée à l'amélioration du système ERP.
Shimmick (NASDAQ: SHIM) hat die finanziellen Ergebnisse für das dritte Quartal 2024 veröffentlicht, mit einem Umsatz von 166 Millionen Dollar, davon 101 Millionen aus Shimmick-Projekten. Das Unternehmen sicherte sich eine Einigung in Höhe von 97 Millionen Dollar für das Projekt Golden Gate Bridge, die bis Ende 2024 eingezogen werden soll. Zu den Höhepunkten des dritten Quartals gehören eine Bruttomarge von 6 % bei Shimmick-Projekten, ein Nettoverlust von 2 Millionen Dollar und ein bereinigtes EBITDA von 30 Millionen Dollar. Das Auftragsbuch des Unternehmens beläuft sich auf 834 Millionen Dollar, wobei über 85 % auf Shimmick-Projekte entfallen. Zu den bemerkenswerten Ereignissen gehören die Ernennung von Ural Yal zum neuen CEO, ein Gewinn von 17 Millionen Dollar aus einer Sale-and-Leaseback-Transaktion und eine einmalige Belastung von 16 Millionen Dollar im Zusammenhang mit der Verbesserung des ERP-Systems.
- Secured $97 million settlement for Golden Gate Bridge Project
- Achieved highest year-to-date gross margin of 6% for Shimmick Projects
- Maintained strong backlog of $834 million
- Realized $17 million gain from sale-leaseback transaction
- Reported Q3 net loss of $2 million
- Revenue declined to $166M from $175M year-over-year
- Gross margin decreased to 7% from 10% year-over-year
- Incurred $16 million one-time charge for ERP system enhancement
Insights
The Q3 results reveal mixed performance with significant developments. The
The net loss of
The guidance suggests continued pressure on margins, with Legacy Projects expected to generate significant losses at
The settlement of the Golden Gate Bridge project marks a critical milestone in clearing legacy issues. The transition away from legacy AECOM projects toward water infrastructure focus is strategically sound, especially with California's
However, operational challenges are evident in core business performance. The
IRVINE, Calif., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Shimmick Corp. (NASDAQ: SHIM), a leading water infrastructure company, today announced financial results for the third quarter ended September 27, 2024.
Third Quarter 2024 and Recent Highlights
- Settlement in the Company’s Golden Gate Bridge ("GGB") Project which will result in
$97 million of cash collected before the end of 2024 and is the last major outstanding legal claim related to its Legacy Projects. - Announced the hiring of Ural Yal as Chief Executive Officer to replace Steve Richards who is retiring after a 43-year career.
- Reported revenue of
$166 million , which includes$101 million of Shimmick Project revenue. - Reported Shimmick Project gross margin of
6% for the quarter, the highest gross margin reported year-to-date. - Recognized a net loss of
$2 million and Adjusted EBITDA of$30 million . - Backlog is over
$834 million as of September 27, 2024, with over85% being Shimmick Projects. - Continued to execute on Transformation Plan.
Golden Gate Bridge Project Settlement:
- As previously announced, the settlement between a consolidating joint venture of the Company, Shimmick/Danny’s Joint Venture ("SDJV") and the Golden Gate Bridge, Highway and Transportation District (the “District”) was entered into on October 31, 2024.
- Under the terms of the settlement, SDJV will receive total settlement proceeds of
$97 million , a contract change order for reduced scope of work of$6 million and a contract change order for extension of project completion and costs incurred on the GGB Project. - The District is required to pay SDJV
$97 million before the end of 2024. - After paying subcontractor pass-through claims, Shimmick plans to use the remaining proceeds for ongoing operations, including completion of the GGB Project.
- Shimmick is expected to reach substantial completion of its onsite portions of the project in the third quarter of 2025 with remaining work after that related to a subcontractor’s offsite equipment fabrication activities.
Transformation Plan Update
The Company continues to advance its strategic transformation toward a more capital-efficient business model with optimized operating costs. In addition to the GGB Project Settlement, key progress includes:
- Hired Ural Yal to replace Steve Richards, who will be retiring after a 43-year career. Ural has extensive knowledge of both the California and the water and critical infrastructure market. Ural will be starting with Shimmick December 2, 2024.
- Completion of the previously announced sale-leaseback of the Company’s equipment yard in Tracy, California, which resulted in a
$17 million gain in the third quarter of fiscal 2024. - A strategic decision to enhance the Company’s current enterprise resource planning (ERP) system rather than implementing a new platform which, due to prior investments and remaining contractual obligations, which resulted in a one-time charge of
$16 million in the third quarter of fiscal 2024. The Company expects this system upgrade to result in reduced overhead in future periods.
Additional transformation initiatives are progressing as planned. The Company plans to provide further updates in future communications.
“We believe the GGB Project settlement is a major step forward in our 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 don’t expect the election to have a material impact as infrastructure typically has bipartisan support and the recently passed
Financial Results
A summary of our results is included in the table below:
| Three Months Ended | Nine Months Ended | ||||||||||||||
| (In millions, except per share data) | September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | |||||||||||
| Revenue | $ | 166 | $ | 175 | $ | 377 | $ | 495 | |||||||
| Gross margin | 12 | $ | 17 | (35 | ) | 23 | |||||||||
| Net (loss) income attributable to Shimmick Corporation | (2 | ) | 35 | (86 | ) | 15 | |||||||||
| Adjusted net income (loss) | 24 | 37 | (50 | ) | 25 | ||||||||||
| Adjusted EBITDA | 30 | 42 | (34 | ) | 39 | ||||||||||
| Diluted (loss) income per common share attributable to Shimmick Corporation | $ | (0.05 | ) | $ | 1.58 | $ | (2.96 | ) | $ | 0.68 | |||||
| Adjusted diluted income (loss) per common share attributable to Shimmick Corporation | $ | 0.72 | $ | 1.67 | $ | (1.72 | ) | $ | 1.12 | ||||||
The following table presents revenue and gross margin data for the three and nine months ended September 27, 2024 compared to the three and nine months ended September 29, 2023:
| Three Months Ended | Nine Months Ended | ||||||||||||||
| (In millions, except percentage data) | September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | |||||||||||
| Shimmick Projects(1) | |||||||||||||||
| Revenue | $ | 101 | $ | 110 | $ | 275 | $ | 301 | |||||||
| Gross Margin | 6 | 15 | 10 | 29 | |||||||||||
| Gross Margin (%) | 6 | % | 14 | % | 4 | % | 9 | % | |||||||
| Foundations Projects(2) | |||||||||||||||
| Revenue | $ | 11 | $ | 12 | $ | 26 | $ | 41 | |||||||
| Gross Margin | (2 | ) | (1 | ) | (8 | ) | (7 | ) | |||||||
| Gross Margin (%) | (18 | )% | (12 | )% | (32 | )% | (17 | )% | |||||||
| Legacy Projects(3) | |||||||||||||||
| Revenue | $ | 54 | $ | 54 | $ | 75 | $ | 153 | |||||||
| Gross Margin | 8 | 3 | (37 | ) | 1 | ||||||||||
| Gross Margin (%) | 15 | % | 6 | % | (49 | )% | 1 | % | |||||||
| Consolidated Total | |||||||||||||||
| Revenue | $ | 166 | $ | 175 | $ | 377 | $ | 495 | |||||||
| Gross Margin | 12 | 17 | (35 | ) | 23 | ||||||||||
| Gross Margin (%) | 7 | % | 10 | % | (9 | )% | 5 | % | |||||||
| (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. 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 Foundations 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 flat at
Gross margin was
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
Selling, general and administrative expenses
Selling, general and administrative expenses remained approximately flat period over period.
Equity in earnings of unconsolidated joint ventures
Equity in earnings of unconsolidated joint ventures was
Gain on sale of assets
Gain on sale of assets decreased by
ERP pre-implementation asset impairment and associated costs
ERP pre-implementation asset impairment and associated costs increased by
Interest expense
Interest expense increased by
Other expense, net
Other expense, net remained approximately flat period over period.
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 September 29, 2023.
Net (loss) income
Net (loss) income decreased by
Diluted loss per common share was
Adjusted net income was
Adjusted diluted income per common share was
Adjusted EBITDA 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 7 percent - Legacy Projects revenue of
$90 t o$95 million with negative gross margin of (40% ) to (50% ), 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 Tuesday, November 12, at 8:30 am 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 13749091. The replay will be available until 11:59 p.m. (ET) December 3, 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 and critical infrastructure solutions throughout California and nationwide. Shimmick has a long history of working on all types of complex 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 2024, Shimmick was nationally ranked as a top ten builder of water supply (#8), dams and reservoirs (#6), and water treatment and desalination plants (#7). Shimmick consistently achieves project excellence through its experienced and dedicated workforce and a continued commitment towards delivering on our client’s goals.
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 reducing overhead in future periods by enhancing our current enterprise resource planning system to; our strategic transformation towards becoming more capital-efficient business; our plans to use the proceeds from the GGB settlement; our expectations regarding substantially completing our onsite portions of the GGB project; our continued successful adjustment to being a public company following our initial public offering; our expectations regarding successful partnerships with our new investors; our capital plans and expectations related thereto, and our statements regarding our CEO transition. 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 inflation and/or elevated 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; uncertain political conditions (including as a result of the 2024 elections) and 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 follow 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) | ||||||||
| September 27, | December 29, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 25,962 | $ | 62,939 | ||||
| Restricted cash | 611 | 971 | ||||||
| Accounts receivable, net | 53,516 | 54,178 | ||||||
| Contract assets, current | 127,518 | 125,943 | ||||||
| Prepaids and other current assets | 13,582 | 13,427 | ||||||
| TOTAL CURRENT ASSETS | 221,189 | 257,458 | ||||||
| Property, plant and equipment, net | 21,396 | 46,373 | ||||||
| Intangible assets, net | 7,312 | 9,244 | ||||||
| Contract assets, non-current | 49,159 | 48,316 | ||||||
| Lease right-of-use assets | 25,996 | 23,855 | ||||||
| Investment in unconsolidated joint ventures | 19,936 | 21,283 | ||||||
| Deferred tax assets | - | 17,252 | ||||||
| Other assets | 1,749 | 2,871 | ||||||
| TOTAL ASSETS | $ | 346,737 | $ | 426,652 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 69,441 | $ | 81,589 | ||||
| Contract liabilities, current | 97,627 | 115,785 | ||||||
| Accrued salaries, wages and benefits | 29,400 | 26,911 | ||||||
| Accrued expenses | 62,782 | 33,897 | ||||||
| Other current liabilities | 18,926 | 13,071 | ||||||
| TOTAL CURRENT LIABILITIES | 278,176 | 271,253 | ||||||
| Long-term debt, net | 39,903 | 29,627 | ||||||
| Lease liabilities, non-current | 17,117 | 15,045 | ||||||
| Contract liabilities, non-current | - | 3,215 | ||||||
| Contingent consideration | 4,718 | 15,488 | ||||||
| Deferred tax liabilities | - | 17,252 | ||||||
| Other liabilities | 5,850 | 4,282 | ||||||
| TOTAL LIABILITIES | 345,764 | 356,162 | ||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, | 338 | 255 | ||||||
| Additional paid-in-capital | 40,543 | 24,445 | ||||||
| Retained (deficit) earnings | (39,749 | ) | 46,537 | |||||
| Non-controlling interests | (159 | ) | (747 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 973 | 70,490 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 346,737 | $ | 426,652 | ||||
| Shimmick Corporation Consolidated Statements of Operations (In thousands, except per share data) (unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 27, | September 29, | September 27, | September 29, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 166,035 | $ | 175,448 | $ | 376,684 | $ | 494,744 | ||||||||
| Cost of revenue | 153,846 | 158,436 | 411,485 | 471,967 | ||||||||||||
| Gross margin | 12,189 | 17,012 | (34,801 | ) | 22,777 | |||||||||||
| Selling, general and administrative expenses | 12,985 | 14,022 | 47,878 | 47,841 | ||||||||||||
| ERP pre-implementation asset impairment and associated costs | 15,708 | — | 15,708 | — | ||||||||||||
| Total operating expenses | 28,693 | 14,022 | 63,586 | 47,841 | ||||||||||||
| Equity in earnings (loss) of unconsolidated joint ventures | 812 | 2,577 | (779 | ) | 9,570 | |||||||||||
| Gain on sale of assets | 16,896 | 30,069 | 20,585 | 31,749 | ||||||||||||
| Income (loss) from operations | 1,204 | 35,636 | (78,581 | ) | 16,255 | |||||||||||
| Interest expense | 1,977 | 412 | 4,370 | 1,020 | ||||||||||||
| Other expense, net | 791 | 393 | 3,335 | 48 | ||||||||||||
| Net (loss) income before income tax | (1,564 | ) | 34,831 | (86,286 | ) | 15,187 | ||||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net (loss) income | (1,564 | ) | 34,831 | (86,286 | ) | 15,187 | ||||||||||
| Net income attributable to non-controlling interests | — | 264 | — | 257 | ||||||||||||
| Net (loss) income attributable to Shimmick Corporation | $ | (1,564 | ) | $ | 34,567 | $ | (86,286 | ) | $ | 14,930 | ||||||
| Net (loss) income attributable to Shimmick Corporation per common share | ||||||||||||||||
| Basic | $ | (0.05 | ) | $ | 1.58 | $ | (2.96 | ) | $ | 0.68 | ||||||
| Diluted | $ | (0.05 | ) | $ | 1.58 | $ | (2.96 | ) | $ | 0.68 | ||||||
| Shimmick Corporation Consolidated Statements of Cash Flows (In thousands) (unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 27, | September 29, | |||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net (loss) income | $ | (86,286 | ) | $ | 15,187 | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Stock-based compensation | 3,304 | 1,547 | ||||||
| Depreciation and amortization | 11,646 | 13,186 | ||||||
| Equity in loss (earnings) of unconsolidated joint ventures | 779 | (9,570 | ) | |||||
| Return on investment in unconsolidated joint ventures | 610 | 14,220 | ||||||
| ERP pre-implementation asset impairment | 10,428 | - | ||||||
| Gain on sale of assets | (20,585 | ) | (31,749 | ) | ||||
| Other | 1,892 | 111 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | 663 | (12,012 | ) | |||||
| Contract assets | (2,418 | ) | (10,134 | ) | ||||
| Accounts payable | (12,149 | ) | 24,221 | |||||
| Contract liabilities | (18,157 | ) | (41,797 | ) | ||||
| Accrued salaries, wages and benefits | 2,489 | (2,073 | ) | |||||
| Accrued expenses | 34,165 | (22,042 | ) | |||||
| Other assets and liabilities | 7,436 | (3,871 | ) | |||||
| Net cash used in operating activities | (66,183 | ) | (64,776 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property, plant and equipment | (9,963 | ) | (6,140 | ) | ||||
| Proceeds from sale of assets | 31,608 | 34,983 | ||||||
| Unconsolidated joint venture equity contributions | (3,460 | ) | (19,670 | ) | ||||
| Return of investment in unconsolidated joint ventures | 204 | 3,980 | ||||||
| Net cash provided by investing activities | 18,389 | 13,153 | ||||||
| Cash Flows From Financing Activities | ||||||||
| Net borrowings on Credit Facility | 42,000 | — | ||||||
| Net (repayments of) borrowings on Revolving Credit Facility | (29,619 | ) | 33,722 | |||||
| Other, net | (1,924 | ) | (1,028 | ) | ||||
| Net cash provided by financing activities | 10,457 | 32,694 | ||||||
| Net decrease in cash, cash equivalents and restricted cash | (37,337 | ) | (18,929 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 63,910 | 82,085 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 26,573 | $ | 63,156 | ||||
| Reconciliation of cash, cash equivalents and restricted cash to the | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| Cash and cash equivalents | $ | 25,962 | $ | 61,862 | ||||
| Restricted cash | 611 | 1,294 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 26,573 | $ | 63,156 | ||||
EXPLANATORY NOTES
Non-GAAP Financial Measures
Adjusted Net income and Adjusted Diluted Earnings Per Common Share
Adjusted net income represents Net (loss) income attributable to Shimmick Corporation adjusted to eliminate stock-based compensation, ERP pre-implementation asset impairment and associated costs, 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 as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business.
We have included Adjusted net income 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 income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted net income provides useful information to investors and others in understanding and evaluating our results of operations.
Our use of Adjusted net income 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 income does not reflect changes in, or cash requirements for, our working capital needs,
- Adjusted net income does not reflect the potentially dilutive impact of stock-based compensation, and
- other companies, including companies in our industry, might calculate Adjusted net income or similarly titled measures differently, which reduces their usefulness as comparative measures.
Because of these and other limitations, you should consider Adjusted net income alongside Net (loss) income attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.
Table A
| Reconciliation between Net (loss) income attributable to Shimmick Corporation and Adjusted net income (unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 27, | September 29, | September 27, | September 29, | ||||||||||||
| (In thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net (loss) income attributable to Shimmick Corporation | $ | (1,564 | ) | $ | 34,567 | $ | (86,286 | ) | $ | 14,930 | |||||
| Transformation costs (1) | 1,924 | - | 4,532 | - | |||||||||||
| Stock-based compensation | 1,337 | 496 | 3,304 | 1,547 | |||||||||||
| ERP pre-implementation asset impairment and associated costs(2) | 15,708 | - | 15,708 | - | |||||||||||
| Legal fees and other costs for Legacy Projects (3) | 6,436 | 1,708 | 11,796 | 6,346 | |||||||||||
| Other (4) | 414 | (109 | ) | 860 | 1,808 | ||||||||||
| Adjusted net income | $ | 24,255 | $ | 36,662 | $ | (50,086 | ) | $ | 24,631 | ||||||
| Adjusted net income attributable to Shimmick Corporation per common share | |||||||||||||||
| Basic | $ | 0.72 | $ | 1.67 | $ | (1.72 | ) | $ | 1.12 | ||||||
| Diluted | $ | 0.72 | $ | 1.67 | $ | (1.72 | ) | $ | 1.12 | ||||||
| (1) Consists of transformation-related costs we have incurred including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business. | |||||||||||||||
| (2) Reflects a strategic decision to enhance the Company’s current ERP system rather than implementing a new platform which, due to prior investments and remaining contractual obligations, resulted in a one-time charge of approximately | |||||||||||||||
| (3) Consists of legal fees and other costs incurred in connection with claims relating to Legacy Projects. | |||||||||||||||
| (4) 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) income attributable to Shimmick Corporation before interest expense, income tax expense and depreciation and amortization, adjusted to eliminate stock-based compensation, ERP pre-implementation asset impairment and associated costs, 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 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) income attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.
Table B
| Reconciliation between Net (loss) income attributable to Shimmick Corporation and Adjusted EBITDA (unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 27, | September 29, | September 27, | September 29, | ||||||||||||
| (In thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net (loss) income attributable to Shimmick Corporation | $ | (1,564 | ) | $ | 34,567 | $ | (86,286 | ) | $ | 14,930 | |||||
| Depreciation and amortization | 3,447 | 4,637 | 11,646 | 13,186 | |||||||||||
| Interest expense | 1,977 | 413 | 4,370 | 1,020 | |||||||||||
| Income tax expense | - | - | - | - | |||||||||||
| Transformation costs (1) | 1,924 | - | 4,532 | - | |||||||||||
| Stock-based compensation | 1,337 | 496 | 3,304 | 1,547 | |||||||||||
| ERP pre-implementation asset impairment and associated costs(2) | 15,708 | - | 15,708 | - | |||||||||||
| Legal fees and other costs for Legacy Projects (3) | 6,436 | 1,708 | 11,796 | 6,346 | |||||||||||
| Other (4) | 414 | (109 | ) | 860 | 1,808 | ||||||||||
| Adjusted EBITDA | $ | 29,679 | $ | 41,712 | $ | (34,070 | ) | $ | 38,837 | ||||||
| (1) Consists of transformation-related costs we have incurred including advisory costs as we settle outstanding claims, exit the Legacy Projects and transform the Company into a water-focused business. | |||||||||||||||
| (2) Reflects a strategic decision to enhance the Company’s current ERP system rather than implementing a new platform which, due to prior investments and remaining contractual obligations, resulted in a one-time charge of approximately | |||||||||||||||
| (3) Consists of legal fees and other costs incurred in connection with claims relating to Legacy Projects. | |||||||||||||||
| (4) 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 in Q3 2024?
How much was the Golden Gate Bridge Project settlement for SHIM?
What was Shimmick's (SHIM) backlog as of September 27, 2024?
What was SHIM's Q3 2024 gross margin for Shimmick Projects?
