8-K: Shimmick Corp. Announces First Quarter 2025 Results: Revenue Up, Losses Narrow

Shimmick Corporation reports improved first quarter 2025 financial results with increased revenue and reduced net losses, driven by growth in Shimmick Projects and cost management.

Summary

• Shimmick Corporation announced its first quarter 2025 financial results, showing improvements in several key areas.
• Revenue increased to $122 million from $120 million in the same period last year.
• Gross margin improved significantly to $5 million, compared to a $(16) million loss in the first quarter of 2024.
• Selling, general, and administrative expenses decreased by 11% to $14 million.
• The net loss was reduced to $10 million from $33 million year-over-year.
• Adjusted EBITDA improved to $(3) million from $(24) million in the prior year.
• Backlog stands at approximately $740 million as of April 4, 2025, with over 87% related to Shimmick Projects.
• The company reaffirmed its full-year guidance, expecting Shimmick Projects revenue to increase by 10% to 15% and adjusted EBITDA between $15 million and $25 million.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While the company still reports a net loss, there are significant improvements in revenue, gross margin, and adjusted EBITDA, and the company reaffirmed its full-year guidance. The focus on growth areas and cost management is encouraging.

Positives

• Revenue increased to $122 million, slightly up from $120 million in the same period last year.
• Gross margin improved significantly to $5 million from $(16) million year-over-year.
• Selling, general, and administrative expenses decreased by 11% to $14 million.
• Net loss decreased to $10 million from $33 million year-over-year.
• Adjusted EBITDA improved to $(3) million from $(24) million year-over-year.
• Backlog is strong at $740 million, with 87% being Shimmick Projects.
• The company reaffirmed its full-year guidance.

Negatives

• The company still reported a net loss of $10 million for the quarter.
• Adjusted EBITDA remains negative at $(3) million, although significantly improved.
• Legacy Projects continue to impact profitability, with a gross margin of $(1) million.
• The company is still winding down Legacy and Foundations Projects, which are expected to have revenue between $50 million and $60 million with gross margin between (5)% and (15)% for the full year.

Risks

• The company acknowledges the impact of macroeconomic factors such as tariffs and supply chain pressures.
• Forward-looking statements are subject to risks and uncertainties, including the ability to accurately estimate project costs and the impact of fixed-price contracts.
• The company faces risks related to competition, availability of qualified personnel, and potential changes in government regulations and policies.
• Legacy Loss Projects may incur additional costs as they wind down.

Future Outlook

Shimmick reaffirms its full-year 2025 guidance, expecting Shimmick Projects revenue to increase by 10% to 15% and adjusted EBITDA between $15 million and $25 million. The company anticipates strong bidding activity and opportunities in electrical, water, and environmental infrastructure sectors.

Management Comments

• Ural Yal, Chief Executive Officer, noted the resilience of the business model and heightened demand in electrical, water, and environmental infrastructure sectors.
• Todd Yoder, Executive Vice President and Chief Financial Officer, expressed pleasure with the first quarter results and reaffirmed the full year guidance.

Industry Context

Shimmick's focus on water, climate resilience, energy transition, and sustainable transportation aligns with growing public and private investments in these critical infrastructure sectors. The company's expertise in these areas positions it well to capitalize on increasing demand and opportunities.

Comparison to Industry Standards

• It's difficult to provide a precise comparison without knowing Shimmick's specific project mix and geographic focus.
• However, companies like AECOM, Jacobs, and Fluor also operate in the infrastructure space.
• Gross margins in the construction industry typically range from 5% to 15% for well-managed projects, so Shimmick's target of 9% to 12% for Shimmick Projects is within a reasonable range.
• EBITDA margins for engineering and construction firms can vary widely, but a target of $15 million to $25 million suggests a focus on improving profitability.

Stakeholder Impact

• Shareholders will likely view the improved financial performance positively.
• Employees may benefit from the company's focus on operational excellence and growth.
• Customers can expect continued investment in innovative infrastructure solutions.
• Suppliers and creditors may see increased stability and opportunities for collaboration.

Next Steps

• The company will host a video webcast conference call on May 14, 2025, to discuss the results.
• Shimmick expects strong bidding activity for the rest of 2025 with nearly $2 billion in projects anticipated to come to market within their core capabilities and strategic focus markets.

Key Dates

Keywords

financial results, infrastructure, Shimmick Corporation, EBITDA, revenue, backlog, projects