SHIM - Earnings call transcript Q3 2024 | Shimmick Corporation Common Stock

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

Operator

Good day, and welcome to Shimmick Corporation's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the call over to Anthony Rasmus, Investor Relations. Please go ahead.

Anthony Rasmus

Good morning, and thank you for joining us on today's conference call to discuss Shimmick's Third Quarter 2024 results. are www.shimmick.com. the presentation of Relations today's website, our for available Investor on section Slides

can conference management subject this from key expectations uncertainties. During call, results our and on statements Actual any assumptions, current on forward-looking based incorrect. are our principal Securities statements which in Investor reports of differ are could our the Exchange performance with and uncertainties the found to and assumptions if and will risks identify also risks Commission, materially make website. Relations which and our We affect that our be filings forward-looking may

We includes update references to do any also financial non-GAAP Today's measures. presentation a not to undertake forward-looking duty statements.

definitional comparable refer non-GAAP information You to information financial company's GAAP contained reconciliations the third of measures the historical release to should in and measures. for quarter press

it's Steve to With call to Richards, Shimmick's pleasure that, the turn over my CEO.

Steven Richards

this our by settlement I'm Projects Shimmick's of in Good Interim joining of project. as the today's for outstanding major morning, call. our of year the Earlier we Gate Bridge you for claim Legacy and Amanda Mobley, received terms all million the end our last the month, joined settlement announced where thank CFO. before on incurred of under the costs reimbursement $XX project, Loss we Golden the

details to pleased minute. a in more and have provide We're reached will the claim, resolution this I of

work a outstanding to people's hand my what is we to on an and large the difference make Shimmick we've I over Shimmick legacy felt opportunity With had off at operational the lives, The XX-year who and settlements time behind new in projects to I've was proud accomplished with leader. it do focused team a excellence. career. I'm of us,

the new to I'm Shimmick, Shimmick's CEO. and what As the excited announce both and the Yal company He is to am has Ural excited offer December chapter, supported lead and to step XXXX. critical to and future. I'm next thank can as qualified the months officially to well smooth I Shimmick's on CEO over the Ural market. as has role Ural extensive transition. new a in California of X, him the who my water infrastructure few next will introduce we I Ural knowledge ensure me over pleased forward look with working career. into the for everyone

million X% XXXX, results. partially back We projects, XXXX delivered down project a million. of versus quarter ago. Shimmick by decline a of the third work. offset for to in $XXX new by million revenues adjusted $XX EBITDA the in driven a totaled experienced quarter revenues quarter million gross projects of and completion year and business wind of gross were Shimmick's $X the the $XXX XX% $XXX quarter, with third margin Turning net third loss million an of revenue of

X% remain the We second by sequential and this quarter. XXXX performance with negative encouraged quarter in XXXX X% second first margin margin the is straight compared the to trend improvement in as in the quarter

projects, Shimmick call, As a Projects, AECOM transaction Legacy breakdown after sale we sale before we'll AECOM started and our between that results that projects did provide last the on began transaction. of the those

breakdown details provide results. the more will to of those related Amanda specifically

focused nearly in Infrastructure Proposition we billion to to recently don't have bonding impact typically projects the California, Finally, passed business. I election, expect recent address authorizes want material the largest allocation bipartisan see for on on we change has for California of which briefly our a expect And address which XX% climate from X, projects. water with to the infrastructure-related opportunities that additional $XX support.

Gate agreement as Danny's its million through year litigation will our a the of before completion be the also of of of million reduced project. next receive of consolidating a project. change contract on incurred the and Golden Construction terms $X of settlement order and joint LLC, with end scope Under costs GGB for extension to will order Bridge $XX work venture, this project our the venture for Company, Shimmick/Danny's on the there settlement, a result the Turning Shimmick the of slide. contract change joint

After plan pass-through the for project. we including Gate claims, Bridge ongoing Golden completion remaining the to paying operations, subcontractor use proceeds of

to reach XXXX the of We on-site third with substantial after of the that are portion off-site expected this fabrication remaining equipment activities. quarter in the related to completion the project subcontractors work of

Gate on We has are on that this which suicide iconic of Golden Bridge. been done proud the net the project, life-saving prevention work installed

a the is the travel environment heights, control. difficult with the and weather It working

Our the on team has done job project. an exceptional

are We look the plan. on financial in our to forward able to transformation our settled efforts as have claim forward core step and our resources focus pleased We being advancing further projects. to another

XXXX slide. to the project Turning included at in-water shoring, the to flood the for needs with San enhanced work critical completed and solutions Gate. project gate access area. Smith Stockton began to our and Gulf Shimmick the San improvements a recently next July on this Country sheet pile temporary works a structure I'd like address fixed Dad's floodwall to constructing the Joaquin miter highlight protection We in to River, along Club. cellular and Joaquin Canal Point

boaters while during water the canal essential events conditions. access from normal These protect for elements allowing high

enhance significantly from homes With business improvements resilience, events and water these state project high now Stockton's protecting standards. federal and completed, while flood the meeting

will the solutions exemplifies benefit commitment I'd that, financial delivering Again, over that turn sustainable project call that the to our Shimmick's this like Amanda, just communities to is and both another environment. results. With infrastructure who discuss to

Amanda Mobley

you of point. thank this behalf your to On Shimmick want bringing to leadership I in Steve. for the Thanks, company,

strong an future have foundation for integral part growth. establishing You been of a

and you him contributions for I'm forward you excited smooth look to are this your transition, XX-year We working on us. have all congratulate grateful I Ural and your career. on join with to and

in same the today the be to will back comparisons compared period Turning XXXX. All basis year-over-year a to financials. made on

compared the impact project year discuss in includes which will GGB revenue quarter, the which the third I of we to million the prior million settlement, For of minute. period, $XXX for a reported $XXX

other that ago. on down, was XXXX jobs million water million recognized to focus decrease The infrastructure to third existing Shimmick was jobs compared offset $XXX primarily and by revenue quarter Shimmick the on on job. Moving and critical in a the Projects. partially winding infrastructure Projects on $XXX from result a the water activity decrease of year lower a infrastructure from Revenue new

the year quarter on margin a X% Shimmick compared XX% Gross to in recognized third ago. Projects was

a mentioned, percentage the driven winding of we to by ago, compared the jobs Steve gross the third result reported of had on $XX in year timing million Revenue million XXXX recognized highest of As down. was year. foundation quarter projects our margin $XX

$X Gross loss ago. lower revenue Foundations quarter a Project million loss a flat ago. Legacy at recognized $XX in year Projects the margin year on third compared at million to was to the XXXX was slightly to a the compared million Included $XX $XX declined of Without to revenue reflect continuing wind the the revenue adjustment adjustment, would that million the the Legacy settlement million, have quarter project in is Projects. amount. reflecting down by GGB Legacy $X Project

Loss of legal recoveries to well impacts cost continued to million result as Legacy modifications million Legacy year and contract in fees down pursue Projects Projects. other gross the of margin increase additional was primarily a gross The margin project additional by the overruns ago. a offset the $X settlement, Projects third quarter and Legacy partially GGB winding was as in $X compared on

the Projects these reminder, in these be Legacy will continue cases, no recognized a recognized. be which be may as down wind gross And with additional further some As to costs margin projects, period. completion, Loss to in will there associated

We continue to actively offset pursue to these all costs. opportunities

million $XX overhead decision This also periods. platform. expenses expense to in reduce to recognized system decision quarter, current implementing this believe we ERP future primarily a of our than relating a new noncash enhance rather will our onetime We

largely impairment for year. Our $XX decrease gain a related million. for million $X net was income sale the $XX third assets loss to decline net a The to the ERP of in of compared prior XXXX and million on the quarter of is

result $XX of QX in million of business sale million did sale yard $XX our equipment sale gain that not on year gain the reoccur, year. of gain The is on a by offset this O&M the in last the change

Third due period, in prior million sale. quarter in on gain gain was the compared to adjusted primarily change year $XX the a of EBITDA again, to $XX million

totaled facility position liquidity with totaled credit Over to and equivalents September XXXX, and from cash XX, the availability at proceeds to the million cash of and million liquidity under XXXX and strengthen million, settlement. sheet. $XX Unrestricted a the $XX million. the respectively, project balance total The continue in will facility credit in $XX GGB revolving the resulting $XX

the on process business. Our margins ago. This continues quarter backlog of quarter. end during to third the that the our Projects commitment at represent of million profitable more strong at quarter be mix XX% drive as Shimmick jobs improve backlog the bidding our and $XXX the versus of a backlog focus of third remains selective our The was in the to XX% the reinforces team's and higher end

recorded to XXXX, to $XX generally other remain pending gross Legacy million Loss additional noncore XX% year Project to flat expect and of between settlement, Legacy the with to January relating costs Project fiscal For to Projects excluding Foundations $XX million with Legacy change Shimmick margin Projects, for overruns. to XX% due negative gross of revenue we that after revenue X%. Projects ending now margin X, X% a cost the Loss orders

and a execution continued pipeline, robust projects. improving our excellence our as of efforts as strategy, The backlog operational our off guidance to reflects the on well our our legacy our work quality

And out to with the for we will Steve XXXX. in efforts, work like it remarks. we with some jobs show turn additional As over to close to growth that, I'd we believe and plan these transformation now

Steven Richards

the portfolio. to us. Thanks, phase claim water-related this are into encouraged excited to by our pleased outstanding these to strategic in and source Amanda. fit are projects transformation, we're In that putting have distractions forward well move next resolved we enter confident behind our capabilities team's major our to in and conclusion, We're last

we once may Operator, questions. open We team for for as one thank again their companies. want our infrastructure water tireless work the of efforts transform to Shimmick best line you into now America's to

Operator

ROTH [Operator from Instructions] Gerry Our comes first Sweeney, Partners. question Capital

Gerard Sweeney

margin the to want this increase? as right? the the different. margin, all projects Shimmick revenue gross -- Should equal, on I understand see into in are move should rest through gross this we But side, direction. year, we just things year start of X% next heading right So we I being

I would is contains, Is projects. bid My fair that -- assumption? margin the sense a be margin or guess, higher higher backlog

Steven Richards

start we new and in. Amanda, through should think get anything? backlog the I would you margin as Gerry, Yes, think math I and tell the improvements. add I that jump see work, especially we higher as can you that we backlog,

Amanda Mobley

the We'll the work higher-margin exactly with continue that's that replace and wind Legacy right. to 'XX to see in Projects Yes, increase down margin.

Gerard Sweeney

amount been have there -- How is I were et think for on are lot of per background? single how larger progressing? But se, a occasion work give but additional I you in only people believe necessarily or but than opportunities us an out bids because there, can amassing one. idea activity just That bidders, away, as but cetera. is some looking pulled work not the bid going of bidders maybe the sort to are a

Steven Richards

continues Yes. The bid to increase.

We that, opportunities up of on our Shimmick, number projects, X bidders. estimating And filter see more are good in a increased our to system we resources. the X, And say of estimators, with heard We've water example, for X, through a resources, and capitalize that we still loading point, projects the absolutely, estimating see best opportunities. -- I'd what's our out lot we I that's as our see still are we'll there. of for your reflection the of

Gerard Sweeney

But mentioned criteria. And wanted see around if those you think historically, are I of criteria? XX% those know meeting projects to your are margins. that projects looking gross for fitting I I sort

Steven Richards

Yes. projects bid, seeing When and that that make we opportunity still from that on looking filter decision a at have go standpoint. the in jobs are certainly, we're upper best teens to margin those the opportunity an definitely

Gerard Sweeney

Gate? had the Shifting I doing to math, million Legacy little about settled. Projects. gears Golden Golden that how Legacy think maybe just the I is great left much much ends How there's on bit, The see was, a I other $XXX Projects, think, the question Gate that lock of is, Bridge much that projects? of maybe project? loose other And of How of tag some is

Steven Richards

ahead, Amanda. Go

Amanda Mobley

XX% GGB. Currently, we're Yes. about done on

with So XXXX there running year We'll well. about remaining. continue completion be million as and of this on substantial through there's backlog reach to little XXXX in a $XX

Gerard Sweeney

about be or the project, remainder the that is for take? And -- would lock so $XX million give

Amanda Mobley

Yes, that's correct.

Gerard Sweeney

of in margin margin that And to carry the XXXX cetera? the period have gross within allocated, then of that sort those because understand are asking. of have costs will for costs negative sort will what think by Or projected think the specific projects I a -- of the you this some the year? hit But costs update within I quarter. that that potential gross been improve a I'm et rest you of updated some margins

Amanda Mobley

are we legal primarily right, currently And Yes. have costs do incurring loss we've after as jobs X been Those go you're that period on claims. them. costs, margin those these recognize to

forward, the behind costs high us. with shouldn't we have of those legal so going And these we -- settlement won't

Gerard Sweeney

So that sort that margin. gross should help negative improve of

Amanda Mobley

We going that forward. on would margin would those estimate jobs be X loss

Gerard Sweeney

cash And for that include then the lock settlement? the on one recorded? the received sheet on the quarter. Had end the Does balance last question or been of that

Amanda Mobley

credit on those were quarter, the That pay was received the proceeds debt some to used and down the of facility. during

Operator

Craig-Hallum. questions come next Spychalla, from Our Aaron

Aaron Spychalla

as reducing could just system It you could the of me, costs with more just goods about as sounds XXXX. we on how where can go structure, cost for towards focus trend the cost about like you transformation the the look just are kind ERP of kind plan legal that as talk that the line, and costs? but on sold OpEx of part talk of First

Steven Richards

to You're that? how the at SG&A and we look talking

Aaron Spychalla

Yes.

Steven Richards

as Yes. in an We efficiencies we earlier, mentioned our investment still estimating -- coming see I resources. on have we work California, made we more focus

you that's work. is definitely So if some new from negative, positive, gaining cost a to standpoint, resources it add but will, a

have Other items a As the off, other the off as our we of bit, work burns top as backlog down. other soon. we go grow of transformation will Legacy little will do line off, some -- business the Projects a SG&A burn percentage burn Foundations

with -- well. or And margin so SG&A that some we improvements should some see as

Aaron Spychalla

some that Can then some transitions about just half Can we curious on bit Or of the backlog first environment. you kind it here you but this forward? kind elaborate later little you Is I you And just year? kind moving I the are pipeline? appreciate hired into kind just on of pipeline a bit projects the that know 'XX? talk commentary of thinking more how dynamics. little estimators, a regulatory election expect -- on and you've kind of if do of of can

Steven Richards

Yes. We work see for don't being us. seasonal really

now. that are definitely have in in nice bidding projects we the So pipeline some right that we're QX

come we year. And 'XX as the win be our projects share in definitely, nice so a would look in to theme see the the finish as to at rate And continue off early well.

sure. So or it the don't coming whether see any decline in more bidding with activity definitely And Prop X pipeline. in the other that for new lot opportunities be in, things, money a

Aaron Spychalla

that It what XXXX? like of sounds priorities year-end? you just the goes Gate should about kind last that then see the the of on how there's cash you And proceeds that getting Can just for for project, some to large balance that by but kind in sheet some allocation maybe talk thinking of you're balance me, just by Golden capital with are about year-end.

Steven Richards

GGB finish I definitely, is company. to that finish late out the in. the fantastic liquidity job, work the then largely off suicide will in want start can the field, But work completed the suicide be point to access net 'XX. nets needs it job. jump I'll the settlement load the themselves that will a and the It the the in and for takes have we of to Amanda

district. off-site the with And travelers. installation then to eliminated agreement contract from that subcontract work has the of settlement complete on, of The through the it's from activity then the been the fabrication

funds? forward address So you on as Amanda, to want the it's But Aaron's far of on positive question GGB. the company use the going do as a from risk

Amanda Mobley

Yes.

liquidity we've for the on and in legacy the we as well operations get just positive to down company those the just -- jobs. and use to pay it's well for close to out as continuing used well as finish the as cash as ongoing So debt these

Operator

like at This time. your to conclude this teleconference. further looks there It are today's questions We'd everyone for no thank does like participation.

time. your disconnect at may lines this You

Shimmick Corporation Common Stock (SHIM) 12 Nov 242024 Q3 Earnings call transcript