• Revenue: $104 million for Q4 2024; $480 million for full-year 2024.
• Adjusted EBITDA: Negative $27 million for Q4 2024; Negative $61 million for full-year 2024.
• Gross Margin: Positive on Shimmick projects despite weather impacts; Negative $12 million on Legacy Projects for Q4 2024.
• Net Loss: $38 million for Q4 2024, compared to $17 million in Q4 2023.
• Total Liquidity: $100 million at the end of fiscal year 2024.
• Backlog: $822 million, with Shimmick projects representing 87% of the backlog.
• SG&A Costs: Improved in 2024, trending towards industry benchmarks.
• Legacy Projects Revenue: $18 million for Q4 2024, a decline from $46 million in Q4 2023.
• Foundation Projects Revenue: $5 million for Q4 2024, compared to $7 million a year ago.
• Guidance for 2025: Shimmick projects revenue expected to increase 10% to 15%; Adjusted EBITDA between $15 million and $25 million.

• Warning! GuruFocus has detected 3 Warning Sign with SHIM.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Shimmick Corp (NASDAQ:SHIM) reported a strong backlog of $822 million, providing a 20-month runway for their new strategy.
• The company achieved significant improvements in SG&A costs in 2024, trending towards industry benchmarks.
• Shimmick Corp (NASDAQ:SHIM) has a total liquidity of $100 million, indicating strong financial health and forward momentum.
• The company has secured several strategic project wins in key markets such as water, climate resilience, and transportation.
• Shimmick Corp (NASDAQ:SHIM) is expanding its focus on sustainable infrastructure solutions, targeting growth in water resources, climate resilience, energy transition, and sustainable transportation.

Negative Points

• Shimmick Corp (NASDAQ:SHIM) reported a negative adjusted EBITDA of $27 million for Q4 2024 and negative $61 million for the full year.
• The company is still dealing with the negative impacts of legacy projects, which have continued to affect financial results.
• Gross margins on Shimmick projects decreased significantly due to increased costs and project delays.
• The company experienced a net loss of $38 million for Q4 2024, compared to a net loss of $17 million in the prior year period.
• Revenue for the fourth quarter decreased to $104 million from $138 million in the prior year period, reflecting lower activity on existing jobs.

Q & A Highlights

Q: Can you explain how Shimmick plans to achieve the projected 9% to 12% gross margins for 2025, given the 2.5% gross margin in the fourth quarter? A: Ural Yal, CEO, explained that the current backlog consists of profitable work, and they are confident in achieving the 9% to 12% margin due to low-risk projects and ongoing discussions for scope growth. Additionally, new high-margin work expected to be won in 2025 will contribute to these margins.

Q: Have you been able to implement any changes to improve existing work since joining Shimmick? A: Ural Yal, CEO, mentioned that while many projects are mature, there are opportunities for risk management improvements. By identifying issues earlier and collaborating with clients, they aim to resolve issues before they impact the bottom line.

Q: What is the expected cadence of gross margin and revenue throughout the year? A: Ural Yal, CEO, stated that the third quarter is expected to be the strongest, with improvements in the second quarter and a flat fourth quarter. This aligns with typical construction business trends.

Q: Are there any concerns about federal budget issues or local market conditions affecting your projects? A: Ural Yal, CEO, noted that there have been no impacts on active projects or immediate pipeline bids. While there may be shifts in funding priorities, the overall funding level is expected to remain stable, particularly for water projects supported by the EPA.

Q: How is Shimmick addressing labor availability as it pursues new projects? A: Ural Yal, CEO, indicated that the West Coast labor market is in good shape, with sufficient qualified labor available. While there may be challenges in other markets, particularly outside California and Washington, they have not seen significant impacts yet.

Q: What is the outlook for free cash flow in 2025? A: Ural Yal, CEO, expressed confidence in maintaining a strong cash position, supported by stringent cash flow controls and a revolving credit facility. Amanda Mobley, CFO, added that they have secured a new revolving credit facility to support operations and growth.

Q: Can you discuss the transition from bid work to more negotiated work? A: Ural Yal, CEO, explained that winning projects now involves a pre-construction phase where contract costs and terms are negotiated. This sets the stage for balanced portfolio growth, with a goal of achieving a 50/50 balance between fixed-price and negotiated work by 2027-2028.

Q: How does Shimmick plan to diversify its client portfolio? A: Ural Yal, CEO, emphasized the importance of diversifying the client portfolio to reduce reliance on a single client type. They aim to increase private client work and achieve a better balance, enhancing long-term resilience.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.