Summary of SHIM Q1 2026 Earnings Call

1Key Financial Results and Metrics

Consolidated Revenue: $88 million, down from $122 million in Q1 2025.

Gross Margin: 12% of revenue, up from 4% in Q1 2025; gross margin for Shimmick projects specifically was 11%, an 89% improvement year-over-year.

Adjusted EBITDA: $3 million, compared to a loss of $3 million in Q1 2025.

Net Loss: $4 million, improved from a net loss of $10 million in the prior year.

Backlog: Total backlog reached $944 million, the highest in over two years, with a book-to-burn ratio of 2.6.

Liquidity: Ended the quarter with $34 million in liquidity, consisting of $15 million in cash and $19 million available under credit agreements.

2Strategic Updates and Business Highlights

Continued focus on core projects, with noncore work now representing less than 5% of total backlog.

Significant new project wins, including flood protection and wastewater treatment projects in California and Texas.

Appointment of Sarah Tacker as Executive Vice President and COO to enhance operational execution.

Strong demand in core markets, particularly in Texas and data centers, with multiple active bids.

3Forward Guidance and Outlook

Revenue Growth: Expected to increase by 12% to 22% year-over-year, projecting approximately $550 million to $600 million for the full year 2026.

Adjusted EBITDA: Anticipated to grow between 200% and 500%, with a target range of $15 million to $30 million.

Positive momentum expected to continue as new projects ramp up, particularly in the summer months.

4Bad News, Challenges, or Points of Concern

Noncore Project Termination: The termination of the Chickamauga Lock Replacement Project significantly impacted noncore revenue, which fell to $200,000 from $29 million in Q1 2025.

Revenue Decline: Overall revenue decreased due to the winding down of prior projects and a lower burn rate on new projects.

Market Risks: Potential impacts from rising commodity costs and supply chain issues, though management indicated they are incorporating these factors into pricing for new bids.

5Notable Q&A Insights

Management reassured that the termination of the Chickamauga project would not hinder their ability to win new work, maintaining a strong bidding activity.

Confidence in margin improvement was expressed, with expectations to reach gross margins of 12% to 13% as new projects are executed.

Discussions highlighted the strategic focus on data centers, with management noting that the company is well-positioned to capitalize on growing opportunities in this sector.

The legacy work's completion is expected to improve cash flow, as noncore projects are phased out, enhancing overall liquidity and operational performance. Overall, Shimmick is experiencing a transformative phase with a focus on core capabilities, improving financial metrics, and a robust pipeline, despite facing challenges from legacy projects and market conditions.