Shimmick (SHIM) Q3 2024 earnings summary

Executive summary

• Settled the last major outstanding claim on the Golden Gate Bridge (GGB) project, securing $97 million cash before year-end and resolving the final major legacy legal claim.

• Q3 2024 revenue was $166 million, down 5% year-over-year, with a net loss of $2 million compared to net income of $35 million in Q3 2023, driven by lower gross margin, a $16 million ERP impairment, and reduced asset sale gains.

• Backlog at quarter-end was $834 million, with over 85% from Shimmick Projects and more than half in water projects, positioning for future growth.

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

• Continued execution of transformation plan, focusing on water and critical infrastructure projects and higher-margin backlog.

Financial highlights

• Q3 2024 revenue was $166 million, down from $175 million year-over-year; gross margin was $12 million (7%), down from $17 million (10%).

• Net loss of $2 million in Q3 2024, compared to net income of $35 million in Q3 2023; Adjusted EBITDA was $30 million, down from $42 million.

• Adjusted net income for Q3 2024 was $24 million; adjusted diluted EPS was $0.72.

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

• No borrowings outstanding under the Revolving Credit Facility at quarter-end; $42 million outstanding under the Credit Facility.

Outlook and guidance

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

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

• Margin improvement anticipated as legacy projects wind down and higher-margin backlog is executed.

• Growth expected in 2025 as transformation plan progresses.

• No taxable income or tax expense is anticipated for 2024 due to expected tax loss.