SHIM - Earnings call transcript Q4 2023 | Shimmick Corporation Common Stock

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Shimmick Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, [ Neil Sika ] with Investor Relations at Shimmick. Thank you.

You may begin.

Unknown Executive

Good morning, and thank you for joining us on today's conference call to discuss Shimmick's Fourth Quarter and Fiscal Year 2023 Results. are www.shimmick.com. the presentation of Relations today's website, our for available Investor on section Slides

conference management subject reports and be and Commission, principal this may on filings from also key the forward-looking financial expectations uncertainties. that in During assumptions call, results non-GAAP uncertainties affect our and on website. Exchange statements Actual We any assumptions current forward-looking based also are performance statements, which statements. Today's measures. to Securities undertake to Relations of which Investor differ incorrect. our can not risks are a could found our our to if and presentation and do update references will risks with We includes materially make duty our forward-looking the identify any

to pleasure turn You of and information contained GAAP financial it information for Shimmick's Richards, company's measures. With to comparable in over reconciliations release press CEO. fourth the to the that, should the my refer call quarter to definitional Steve historical measures non-GAAP the is

Steven Richards

and thank you by on joined I'm CFO. morning, Nordhagen, joining for Shimmick's call. Devin today's us all Good

Investment project, an XX% flowing Act increase Healthy Jobs strong, QX are set on and which in and continued protection, billion remained As leading water other the segment decade. The allocation aside significant provide sanitation, water, market. infrastructure year-over-year replacement, to reflects XXXX. grants. Water Biden solutions underserved is set to water areas. Construction among infrastructure and administration is and the nearly IIJA billions Shimmick our that and and are February for market. Spending pipe to and saw with stimulus to an billion spending operates a and a infrastructure from the water on funds vibrant, growth specifically are treatment signaling year-over-year aside a flow for a that growth clean as Water lead expected dams, XXXX, segment who projects. Shimmick's spending Infrastructure storage, funds Infrastructure In water construction to $XX next new pipeline to drinking the was to expected flood benefiting story, through gain. of infrastructure. for in include having those of further split strengthen more the Infrastructure the from consistent, removal provides was Nearly spectrum. We was entire the reservoirs, across reminder, infrastructure water to key funds. is is IIJA sewer the construction company of focus in over in water impact. you announced be and segment water XX% X assist additional in $X.X The the strongest which federal increase XX resources, states during funds and this the Shimmick combined of from

due approximately We water double-digit high term to overall end and identified drivers. opportunities water $X We is billion the growth through solutions have likely sustainable, demand in over the that macroeconomic while of the for remain other not believe will scarcity XXXX. long priority

projects shifted projects focus Shimmick today sale are business how we a an and an transaction. To For has million, adjusted million. projects. Shimmick attributable results our $XXX and EBITDA of $XX delivered on in the to the and sale see infrastructure, started between AECOM projects strategy prior fiscal large that XXXX, to the transaction, $X projects perspective Legacy we Shimmick we year net Several revenue portfolio. Longer bifurcated transaction. the as speaking significant that company, these grew projects be we'll provide a Corporation million progressing, are overruns. a in Shimmick results Since financial is projects cost our critical that to independent Shimmick on of loss reflected increase to sales portion our AECOM of to of started a after Legacy you water assumed replaced other a infrastructure decline better to term, project XXXX, experienced XX% of compared becoming backlog have projects basis $XXX by is will the be implemented context, and which complex that million, newer XXXX. and revenue in will have Shimmick these and strategic are our projects. With multi-year that

project million a for Importantly, reflecting decreased we $XXX Shimmick compared gross million to decrease margin grew XXXX. Legacy $XXX by revenue the $X million, by year. XX% to when

versus $X.X competitors, during billion. in backlog Shimmick fiscal be view a key reported We XXXX as XXXX. we a our which strong. an with continues Shimmick projects finished year to backlog, XX% specifically differentiator of Our backlog increase,

to of to work, robust demand continue our than expect future federal a have predictable, a a which and generated XX% of governments We increases alongside notable projects Public repeat in programs funding pipeline State and from several public for secured is More of We XXXX. grow long-term we funding for and growing associated water. Federal customers. work projects. in allow water and flow for customers

Turning next to slide. the

project, from an $XXX million Elsinore per As disinfection plant required a day new expanded expansion million the the to area's million growing example, water this and facility Shimmick Valley water for to the expand includes demand. to basins, where Southern electrical Municipal an more work. online. of self-performing work XX facility's aeration will XX% in a UV Water membrane project among major other facility, won including Shimmick is facility the X treatment bioreactor California, gallons bring than capacity X meet District The Shimmick a

dewatering the that, installed our call who discuss expansion. With to like since over to Devin, to facility results. have will I'd critical excavation the turn system, prepare mass for the conducted financial and relocated conduit, We

Devin Nordhagen

same a basis Steve. in will comparisons Thanks, XXXX. the today made period All be on compared to year-over-year

as period. of period. adjusted $X million, was compared to reported the we the of quarter million $XXX flat compared loss with a revenue of to prior prior loss For million to loss compared approximately for year period, million prior million of net EBITDA $XXX the fourth a quarter, the $XX year a $XX in Fourth year

$XXX results, was million $XXX XXXX. million XXXX to compared our fiscal revenue year For for

is As compared Steve wind and the as of to our important Legacy mentioned, on executing down trends look to projects. the at the Shimmick it strategy

chart, compared of projects projects conclusion can the see a $XXX the to revenue was projects Shimmick quarter you XX% in for Shimmick to top-left in slightly revenue The due million, As increase year was compared XXXX. down the to some last XXXX.

consistent starts project last due completions, $X Shimmick to primarily to of show X% year, compared as strategy to prior million comparisons year increased jobs. will job was by timing revenue higher shift driven in higher-margin, lumpiness. quarter the by Given gross the margin some sometimes quarter and management towards projects bidding at and lower-risk

loss used are fiscal million fiscal operating projects over of of winding revenue an a the settlement projects respectively. the decreased was Legacy projects in XX% these down year $XX ended the to The with gross with million. approximately was unfavorable million negative a due Legacy the projects bottom gross negative $XXX XXXX, and on margins in the for cash Legacy XXXX to and On primarily half at $XX projects XXXX, years $X XX% complete margin Legacy slide, the project. end and million,

in $X Fiscal prior to was XXXX like We million Shimmick XXXX fiscal XXXX was compared the per prior $XX million in prior due year as EBITDA the continue in $XX period, loss million $X.XX $X adjusted per Fiscal compared year to margin year to to method share diluted compared net for XXXX. With was common earnings income to in costs. $XX to year to In turn was to diluted income was net compared net income of actively some to attributable XXXX prior $X.XX year million remarks. opportunities Shimmick of Fiscal gross share XXXX. per a that, was period. over Steve million common $X.XX offset settlement And net adjusted million loss $XX equity $X.XX XXXX. Fiscal total, $XX period. it attributable in to adjusted $XX million to period. XXXX, year in year to to pursue additional I'd part project year compared these share all compared in large in the net million common the

Steven Richards

still Backlog work provide and to our like completed. awarded I'd of backlog. our portfolio view be to is

burn the to Legacy of for backlog improving portfolio, to the of XX% over We which and end will continue continuing projects grow only At turn, infrastructure lead in time. off backlog. to to high-margin bid water the margins are projects. plan XXXX, accounted We Legacy Shimmick on our projects

with but We robust further federal of pipeline have increase funding. to expected a bids

to for coming the We will taking capitalize America's on place be which renaissance, positioned are infrastructure water decade. well

revenue projects, newly and of a we and public margin. impact ongoing given gross covering for are the sizable XXXX As only Legacy introducing limited guidance company

believe to gross revenue of year fiscal pipeline, between XX% to expect growth of XX%. Legacy strategy, XXXX, X% decrease XX%, December grow gross to reflects robust the revenue on XX, margin be execution efforts sizeable for as half-weighted momentum results work conclusion, take our the continues advantage well to in back off suited continued our Shimmick as further projects. XXXX. In our Legacy to with be to project ending margin with guidance to backlog, XX% our quality strong to the X% ahead. that and opportunities market operational Shimmick improving with in our our the our The We negative our will to execution XX%. favorably projects XXXX we by X% For of

coupled portfolio, enhanced strategic potential minimizes and with activities, for risk well and positions integration higher margin M&A a margin shift Our vertical growth. us our towards

to their Lastly, for dedication open you tireless the and questions. employees I support. Operator, for all Shimmick line want now thank the may

Operator

line [Operator comes Instructions] of Roth Our with from question the Gerry first Capital. Sweeney

Gerard Sweeney

projects.They on upon year some margin versus you "Shimmick is in, I margins Shimmick what touch think, to year-over-year appear quarter. in discuss the Can Shimmick, basis. I wanted new expectations the I X% projects" about Margins last lower almost think, on to my that the were of new impact came X.X%. at driving underperform quarter? a the in

on Just the dynamics of some if on that's could? you going there, curious

Steven Richards

Devin, take I to or can? want you that

Devin Nordhagen

you for Thanks weren't where can. aspects that little our Shimmick winding the the timing that have in of some QX, that quarter I a on think some Gerry. the quarter. for for going backlogs Yes, have by you and bit projects in down have Shimmick replaced period projects, timing Yes, question, specifically project you I

Gerard Sweeney

projects desired? as there that any challenges well as aren't going or Were

Devin Nordhagen

No.

the size, water you'll of Shimmick projects are been we've all our the I space. that mentioned looking and financials, call that scope that things the think for in in projects duration, are I right that in infrastructure and our see the

on the the bring looking there that so, we're -- projects And are to more of. they

Gerard Sweeney

Got you.

your on are justification? So currently. through the in Is new and words, backlog into the well that executing you've pipeline there's other is the upon or fair operating projects a -- as desired -- brought that Shimmick in

Devin Nordhagen

Correct.

Gerard Sweeney

see let then, me And it. here. Got

that. There to hit As some well by got you weather QX, and rain look like as guys was year, we out obviously, things XQ. some impacts in last

Just because challenges as that's to the curious XQ quarter into going that of if first they in did weather? play XXXX how arising XXXX similar are in

Steven Richards

do the some as have to well. those seeing year, not them, have last same We're Yes. Gerry. seasonal are impact projects nature as as planned We but that

Gerard Sweeney

guidance, to they X% Shimmick provided us on know needs what as maybe right those entered But if towards XX%, the not to but industry. what you're projects Got could would given appreciative. get it's you you on well And you. some margin the of have X% be new the revenue of but projects, And stream? the -- understandable which on to nature curious, you to also more came feel side, Well, that's revenue that on the takes we're executing though completely the very some puts that provide the XX%? go know. challenges wide, given good then, new of the closer rather I just the especially on and that maybe, to side? Just

Steven Richards

margin little of step as in and can out to answer buy the be, along that material the IPO, impacts, kind kick-off you okay. we that the slows earlier, manage sure see and sometimes, more Go example, best. to Well, would of projects. be a weather we pass we're we've smart We But anything. the progress so very key talked subs subcontractors and the where project the minimize that that be than providers, right way for impact bit about it and who the make may mentioned go-right that would wrong pushes risk in in early possibly overall, should escalation vendors we to any as

So the main strong start-up I'd of activities. good things be say would those project

Gerard Sweeney

me, from more in Got you. jump then, And line. one then I'll

the But I project. Aaron when of beam think then me. the behind work right? the have of is a get margin into you how -- probably you In profile mobilization does ramp, you terms

] process, the the chugging you as ready project, the the project for demobilization thinking And maybe similar associated and some of mobilization project? in impacting along? And we're costs margins? the Is of lower of [ hit margins that low is mobilizing if XQ, the project So early very the or even thinking it that way Is teeth margin XQ, demobilization. then, with margins, and not because way of how into getting seeing costs of then, this you're a it? about are fair new

Steven Richards

Devin in let jump well. methodology. use completion I'll percentage we as But accounting of

we And so, right you we and supplement actual be over an earning with want if completing completed that? work to cost progress should your earnings you're cost, and is your go. Devin, costs as anticipated do

Devin Nordhagen

in that Yes. Steve, job I mean up. is how to your can some have changes ramping point, you

cost that the for life of the the linear completely cost So the earn you you're job. expected ] you're job, on going it incurring to always depends over not the that job [ the revenue your in

you peaks so certain points some have time. could valleys in and And in

Operator

line Our Craig-Hallum. comes from with Spychalla next Aaron question the of

Aaron Spychalla

level just First like little touch you just got sounds now expectation? a And to billion called you Can see It Is and to Do out I your funds. we from then, bit to mostly in opportunity. a $X some for trending? of the XXXX? the a start on on that state projects funding. that's me. that how think been maybe pipeline XXXX, that's the flow

Steven Richards

looking fits average that We the pleased for pipeline. billion. X-year pipeline we We're, are Shimmick, $XX with look It's how jobs of $X the duration. to range, we in at mentioned, kind do. million We're the new million that really that as $XXX tracking

is filling pipeline That up really is it. To see as to about during weighted. continuing the the where I coming. question are we're your call would funding our bidding So We coming? like but mentioned back-half that funding we that. activity about kind the include good IIJA well, of the still feel

of we'll they see the RFPs of designers those funding see major and be for leading which us form in coming for Some increase watch products opportunities how the activity the would programs, and their indicators come in more clients. through that that seeing and an more as we seeing there, as out We'll are design well.

Aaron Spychalla

to you're seeing you're could a then of and the that balance market you of perspective? with of growth kind kind chain All touch right. chain And just as labor of kind that on the supply supply expecting you from kind what try there

Steven Richards

Southern got seeing still -- Yes. got where with we've and The in we're market Northern years. strong our craft we've following labor especially a that presence Shimmick, Cal regional strong for areas Cal of

And continuity It staff so, we've a good is staying got out from standpoint. us there. a with of challenge craft

work on a we our chase to in doing new some work on filling add attractive on in and recruiting We've pipeline of areas. job this chasing for talent are to some the to and have. to We projects top estimators initiatives going great got efforts and additional bringing new new

them. pleased with talent, on war a how there, but Shimmick out definitely So is addressing

Aaron Spychalla

projects? go? out know, might then, hundred how left just talk there couple like it a kind XX% It is called looks you Legacy much Understood. you about of of the to Just complete. bucks. million And I can be

On the on on you for should a a side. similar rest about maybe to the Or little profile? guide that of we left bit just this didn't what Legacy year, margin what's talk expect

Steven Richards

we've -- information some a there note, as a will XX, couple Yes, sight is project in standpoint. I'll on of related on the of months, from margin fill about before then to good we I increases, to projects. margins that and XX Devin, Legacy the legal-type completion add got Devin But I'll there? do line on on A years additional left start want do those be you do as what those, cost not may there talked especially well. some expenses. And think we and we've carry

Devin Nordhagen

Yes.

So XXXX, the was end now charts of the Legacy at see XXXX backlog where of XX%. in you the there, the can And like at at Aaron, XX%. is it's end

So period mentioned. burn that's it rest had and of in we'll off that time we're off pleased of the burning Steve how with that kind

Aaron Spychalla

give of you valuations on your forward? be update is and How kind Okay. for on versus that moving And market looking -- might touch just maybe M&A, expectations the like? what just areas of Can last me. then focus, an trending

Steven Richards

seeing coming focus We're as Definitely us opportunities of move an through. area for still forward. we M&A watching and

We seeing the But there. to more continue evaluate that's I'd as that as say to go. say those I'd our of it now, looking we right we our future quarters that fits standpoint, Definitely have into from to for continues vision, fill Shimmick. where vision forward we're at. activity strategic

Operator

you. Thank

And end with of today's question-and-answer the this teleconference. our reached that, session. have We concludes

may You your for lines participation at time. Thank you disconnect this your

Shimmick Corporation Common Stock (SHIM) 28 Mar 242023 Q4 Earnings call transcript