SHIM

Good afternoon, and thank you for joining us on today's conference call to discuss Shimmick's first quarter 2026 results. Slides for today's presentation are available on the investor relations section of our website, www.shimmick.com. During this conference call, management will make forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect. We identify the principle risk and uncertainties that may affect our performance in our reports and filings with the Securities and Exchange Commission, which can also be found on our investor relations website. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures.

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

Good afternoon, and thank you all for joining us on today's call. I'm joined by Todd Yoder, Shimmick's CFO. As always, I would like to recognize the men and women who work at Shimmick, safely and effectively delivering the projects we take on. We're all very proud of the work we put in every day that makes a real difference in communities across the states we operate in. I'm going to start by discussing our financial results for the first quarter of 2026. I'm pleased to report that we are continuing to make progress on our strategy, which centers around growing our top line by bidding and winning work aligned with our expertise, winding down non-core projects, and executing at a high level to deliver consistent margins.

For the first quarter, we delivered consolidated revenue of $88 million, 12% gross margin, and adjusted EBITDA of approximately $3 million. We expanded our gross margin on Shimmick projects to 11%, an 89% improvement over last year. We're already seeing increasing monthly top-line revenues as the winter weather subsides and new projects start to ramp up. What's important also is the trajectory. We now have secured and continuing to secure backlog that is going to fuel our growth the rest of the year and beyond. We are excited by the progress we're making on our backlog and have achieved our highest book-to-bill ratio since the company went public, reflecting strong demand and improving project quality.

At the same time, we continue to scale Shimmick projects as a percentage of the overall portfolio, with non-core work now representing less than 5% of total backlog, further supporting visibility and execution consistency going forward. Looking forward, we expect activities on existing and newly won projects pick up as we head into the summer months. July, August, and September are when we expect to see more visible inflection in revenue as new projects begin generating consistent burn. Meanwhile, we're continuing to win new work, and our teams are well-positioned to deliver consistent and growing revenues. For our non-core projects, revenue was $200,000 compared to $29 million a year ago, largely as a result of the termination by the U.S. Army Corps of Engineers of the Chickamauga Lock Replacement Project in Chattanooga, Tennessee, which I'd like to address in more detail.

From time to time, differences of view arise on projects, including scope of work and schedules, and in this instance, the matter is proceeding through the customary federal process. We remain constructive in our approach, appreciate our client's focus on project completion, and are confident that the parties will be able to reach a mutually agreeable resolution in due course. Importantly, this situation does not affect our broader relationship with the U.S. Army Corps of Engineers, who has been a long-term client for us with our first projects dating back to the 1940s through our legacy companies. We currently have two other projects underway with the Corps, one approximately halfway complete and the other one nearing completion, and these projects continue to progress as planned.

As we continue to wind down non-core activities, this development further reduces our remaining non-core backlog to under 5%, allowing us to remain focused on our core priorities. Now, I'd like to spend some more time digging into our progress, provide an update on market conditions, and discuss our continued focus on execution. We continue to see strong momentum across our core geographies, highlighted by our ongoing success winning work in Texas and sustained bidding activity across the platform. Importantly, the work we are booking is firm, contracts are signed, visibility is solid, and the projects we've added to backlog are scheduled to begin ramping up this year. This gives us confidence not just in demand, but in timing and execution as we move through the balance of 2026. We're seeing healthy demand across our end markets and improved selectivity in the work we pursue.

This momentum reflects the collective efforts of our teams across the organization. Our focus remains on sustaining a book-to-bill profile that supports consistent growth and improved revenue visibility over time. With that backdrop, Axia Electric continues to perform well. We're encouraged by the growth and momentum we're seeing in the segment. The electrical business remains an important pillar of our long-term strategy. Axia Electric's progress reinforces our confidence in that vertical as we look to further expand capabilities and market share. We're also seeing increasing opportunity in data centers, which remains an attractive and growing end market for us. Today, we have multiple active bids in Reno and in Texas. We are in regular dialogue with those customers.

While it's still early, the level of engagement and inbound activity reinforces our view that data centers represent a compelling growth vertical over the medium and to long term. From a commercial standpoint, the environment looks very similar to last quarter, with a strong and growing backlog, a healthy pipeline of work, and several pending items we expect to convert over the next quarter or two. Our overall 24-month pipeline remains robust, with expected $600 million-$1 billion in bidding volumes per month. Looking forward, our pipeline continues to be a real strength, allowing us to grow our revenues and margins while being selective and strategic about what we pursue. Our elevated level of bidding activity translated directly into meaningful backlog growth during the quarter, with the total backlog increasing to $944 million at the end of the first quarter of 2026.

This represent our highest backlog level in more than two years, reflecting both improved win rates and continued discipline around the work we pursue. This momentum is also evident in our book-to-bill ratio of 2.6 in the first quarter. During the quarter, we booked $289 million in new work. Taken together, these wins enhance revenue visibility and support our expectation for accelerated growth as projects begin to ramp up over the course of the year. These new projects include major flood protection and stormwater infrastructure projects in California, as well as wastewater expansion work in Texas, reflecting strong demand for our core capabilities across our target markets. In California, we were awarded several water resources projects that speak to the critical nature of our work and our in-depth experience in the state.

In Northern California, the Vista Grande Drainage Basin Improvements project represents a large-scale modernization of stormwater infrastructure designed to address chronic flooding challenges and improve resilience for the surrounding community. The project involves complex underground construction and integrated civil, mechanical, and electrical scopes, aligning well with our core self-perform capabilities. We were also awarded additional flood protection work in Napa, where we will construct new flood walls as part of the county's broader long-running flood management program. This project further expands our presence in Northern California and reinforces our role in delivering essential infrastructure that protects communities and local economies. In Texas, we continue to see attractive opportunities tied to population growth and long-term infrastructure investment. During the quarter, we were selected for a wastewater treatment plant expansion project in Austin, supporting the city's efforts to increase capacity and meet rising demand.

The scope includes complex concrete structures, underground systems, and process-related infrastructure, and reflects continued demand for our technical expertise in water and wastewater markets. Our strategy is focused on improving execution, revenue growth translates into stronger and more consistent net income. That starts with operational discipline. We've been implementing targeted enhancements across the business to improve visibility, accountability, and decision-making as we scale. Experienced leadership is a key part of that. In April, we announced the appointment of Sarah Tacker as Executive Vice President and Chief Operating Officer. We continue to bolster our management team with hands-on operational experience at scale, which is driving more disciplined project execution and risk management. We're also strengthening our project controls and technology, giving us better insight into cost, schedule, and productivity. This allows us to identify issues earlier and manage performance more proactively.

Centralized procurement is improving purchasing efficiency and cost control by leveraging our scale and standardizing processes across the organization. Talent retention and acquisition remain a top priority for us. Having the right people in place is critical to executing our strategy effectively in a competitive labor market. Additionally, we continue to advance our shift towards more collaborative contracting models. Subsequent to quarter end, we were selected for a project with California Water Service for a wastewater treatment plant in Southern California, delivered through a Progressive Design-Build contract with an estimated construction value of $50 million. While this opportunity is not reflected in our quarter end backlog, it showcases demand for our capabilities and supports our strategic focus on projects that give us an opportunity to partner with our clients earlier in the project life cycle.

These projects support our strategy toward risk-balanced contracts, where we provide value to our clients through our technical expertise. With that, I'd like to turn to Todd, who will review our financials in more detail.

Thank you for joining us today. The Shimmick team has delivered another solid quarter of performance. We are seeing our strategic changes over the past year continue to drive results, not only drive year-over-year improvements, but more importantly, establishing the foundation for continued growth and profitability moving forward. Before I hit the financials, I just wanna echo Ural in thanking all of the talented men and women across Shimmick. I thank each of you for your continued commitment to executing the strategy, your focus on safety, which is the most important thing we do, your commitment to the quality of the work we deliver to our clients every day, and your dedication to executing with excellence.

Your contributions have had a significant impact on the achievements we've made over the past 15 months and put us in a strong position to continue growing the business and winning the right way. Now let's jump into the financial results. I have revenue and gross margin in slide eight, but I will talk about the overall performance for the quarter and reference additional information that is available on our 10-Q filing posted to our website. All comparisons I make will be on a quarter-over-quarter basis as compared to the same period in 2025, unless otherwise noted. Shimmick project revenue for Q1 2026 was $88 million, versus $93 million in Q1 of 2025. The net difference of $5 million was driven by prior year projects reaching completion during 2025 or nearing completion and winding down earlier this year.

Combined with lower burn on new projects, which we will continue to see ramp up throughout 2026. Non-core project revenue for Q1 2026 was $200,000, nearly flat, down from $29 million in Q1 of 2025. The $29 million decrease was driven by the termination of the Chickamauga Lock Replacement Project, as well as a $10 million impact from the continued progress we've made in moving all non-core projects to completion. I've discussed the negative gross margin impact from non-core projects on our total gross margin on prior calls. I couldn't be more excited to end the quarter with non-core backlog now less than 5% of our total backlog. This means we will continue to see favorable mix impact on total gross margin moving forward on a year-over-year basis.

Shimmick consolidated total revenue for Q1 2026 was $88 million, as compared to $122 million in Q1 of 2025. Shimmick project gross margin was $10 million for Q1 2026, up $5 million or 89%, as compared to $5 million in Q1 of 2025. Gross margin as a percentage of revenue was up significantly to 11% for Q1 of 2026 versus 6% for Q1 of 2025. The $5 million increase in gross margin was driven by $3 million from new projects and $2 million from existing projects. The non-core project gross margin was $1 million for Q1 2026 as compared to negative $1 million for Q1 of 2025.

The $2 million increase in gross margin was driven by a positive outcome from a project closeout, as well as cost overruns on non-core loss projects during the first quarter of 2025 that did not recur this year. Shimmick consolidated total gross margin for Q1 2026 was $11 million, up $6 million or 132%, compared to $5 million of gross margin in Q1 of 2025. Total gross margin as a percentage of revenue improved to 12% from 4% in Q1 of 2025. G&A expense for Q1 2026 was $14 million, flat as compared to Q1 of 2025. This is as we continue to optimize our overhead while growing the business.

Net loss for Q1 was $4 million, favorable $6 million or 55% as compared to a net loss of $10 million in Q1 of 2025. Adjusted EBITDA for Q1 2026 was $3 million as compared to negative $3 million in the first quarter of 2025. The improvement was driven by the significant increase in gross margin from Shimmick projects on a year-over-year basis. Turning to liquidity, we ended the first quarter with $34 million of liquidity. The $34 million consisted of unrestricted cash equivalents of $15 million and another $19 million of availability under our credit agreements.

New awards booked during Q1 2026 were $289 million, a sequential increase of $150 million from Q4 of 2025, giving us a book-to-bill of 2.6 for the quarter, which is the highest book-to-bill achieved since becoming a public company. We ended the quarter with total backlog of $944 million. On slide nine, I have our 2026 full year guide. As I mentioned on our last call, we expected a slower start to 2026, and largely the first quarter was in line with our expectations. We expect quarter-over-quarter sequential improvement throughout the year as these new project awards start to ramp up. Despite the termination of the Chickamauga Lock Replacement Project that I mentioned earlier, we are reaffirming our full year 2026 guidance.

We expect Shimmick consolidated revenue to grow year-over-year between 12% and 22%. That is 17% at the midpoint, representing approximately $550 million-$600 million of work put in place for the full year 2026. We also expect adjusted EBITDA to increase year-over-year between 200% and 500%. That's 350% at the midpoint. We would finish the year of adjusted EBITDA in the range of $15 million-$30 million. With that, I wanna thank you for joining us today and we for your interest in Shimmick, and I'll turn it back to you, Ural.

Overall, we are energized by our first quarter performance. We delivered our highest book-to-bill ratio since becoming a public company and ended the quarter with the largest backlog we've reported in more than two years. Just as importantly, we continue to make progress winding down non-core work, further improving backlog quality and positioning the business for more consistent execution and a sustainable growth. As we look ahead, we believe the momentum exiting the quarter provides a solid foundation for the remainder of the year. We look forward to updating you on our progress as we move forward in 2026. Operator, you may now open the line for questions.

We will now move to our question and answer session. At this time, if you would like to ask a question, please click on the Raise Hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will receive a message on your screen asking to be promoted to a panelist. Please accept, wait a moment, and once you've been promoted, you will hear your name called and you may unmute your video and audio to ask your question. We'll now pause a moment to allow the queue to assemble. Our first question will come from Aaron Spychalla with Craig-Hallum. Your line is open. Please unmute your audio and video and ask your question.

Yeah. Hi, Ural and Todd. Thanks for taking the questions.

Aaron.

Hi. Maybe first for me, just on, you know, Todd, you kinda just talked about it on backlog, but just wanted to kind of confirm, so Chickamauga Lock, you know, out of, out of backlog, and then for the guide, you know, revenue and EBITDA, can you just kinda talk about the impact there, you know, reiterating the guidance? Any other financial impact? Sounds like you don't expect any impact on your ability to go out and win and bid on new work from that?

Maybe I'll start and then turn over to Todd. Thanks for the question. Generally, we're, even though there's a reduction in revenue from Chickamauga Lock, we believe we can, we believe we're gonna hit the guidance on the revenue side. We may trend towards maybe a little bit on the lower side, but we think, based on the really strong backlog we got over this quarter and everything that we're planning to book, that's pending, we have a really good start to the year and we expect to see pretty significant revenue growth here the rest of the year.

Yeah. I would just add to that, you know, in 2025, we burned in non-core just under $100 million, and we didn't expect it to burn anywhere near that in 2026, so it's not as big of an impact as when you're looking at it on a year-over-year basis. Then the second thing to Ural's point, with, you know, $289 million worth in new awards booked just in the first quarter, we feel very confident that the numbers are achievable.

Going back to the ability to win work, we're bidding, just like we have been. We don't expect any slowing down there. Like I said, we have some pending awards, but we're continuing to bid at about the same clip that we have been for the last six to eight months.

Good. Thanks for that. Just on, you know, margins, good performance in the quarter for the core business. Can you just kinda talk about, you know, confidence there, you know, margins that are in backlog and what you're bidding, and then just any, you know, how you're kinda navigating impact from higher commodity costs in that as well?

Yeah. We're generally, as far as higher commodity costs, new work we're bidding, that's all getting built into the built into the pricing. If you're gonna win a project, that's the inflation and supply chain issues will be built into the to our pricing. We don't expect any issues there. Same with fuel. We're managing the rest of it for the for the book of business that we have. I expect we're gonna continue to grow on the on the growth margin side, and start to really get into those 12s and the 13s as we get through and start really burning the work that we have won in 2025 since Todd and I joined.

Yeah. I would just add to that, you know, when you're modeling it out with the non-core that we did have in backlog ending 2025, right? That was a significant drag on. Even though there are lost projects with zero margin, there's, you know, there's always costs that occur to keep those projects operating. When you take that kind of drag off of it, you know, it may be a little lumpy as construction business is, right? An 11% print on Shimmick work is very encouraging.

Yeah. Good. That kind of just the last question I, you know, you kind of started to touch on it there. I mean, cash flow and the outlook there. Sounds like there might be or might have been some drag on, you know, completing some of the legacy work. You know, kind of outlook for cash flows as some of these new projects ramp up to you.

The less legacy work we have, the better for our cash flow. Generally, that has been the case. We expect improvement there as well as not only as we really just burn all of the legacy work, non-core work, but also as these newer projects get online and start generating upfront cash to help with the cash flow. We're very optimistic about the rest of the year on that side as well.

Yeah. I would echo the very, very optimistic on liquidity. The rest of the business outside of the legacy projects, non-core projects, you know, are have generated cash and continue to generate cash, so very optimistic.

Good. That's good to hear. Thanks for taking the questions. I'll turn it over.

Thanks, Aaron.

Thanks, Aaron.

Your next question will come from Gerard Sweeney with ROTH. Please unmute your audio, video, and ask your question.

Good afternoon, Ural and Todd. Thanks for taking my call.

Hi, Gerard.

Hey, Gerard.

I wanted to talk about gross margins a little bit further. Obviously, I think you highlighted selectivity, your ability to, I guess, be a little bit more selective with projects on a go-forward basis. I think you printed 11% at, for Shimmick projects this quarter. Those projects that you're seeing in, that are coming through today, when were they bid and what were they bid at versus what you're bidding today?

Yeah, good question. You know, within the Shimmick portfolio, there are projects anywhere between 10% and 20%. As we get in a better position from a backlog perspective, we're able to be more selective with what we bid because we have the kind of the core backlog already in place. We're now in that position. We're gonna inch that up to about 2.5x as far as, you know, revenue, backlog versus revenue. That's our goal as through, as the rest of the year unfolds. Generally, having that kind of a strong backlog now allows us to bid at higher margins or pick the projects to bid that we can get at higher margins.

I expect that to continue to, that 11% to continue to go up from that, from here.

With over $900 million in backlog, you're starting to book business into 2027 and later, correct?

Yeah. Our average job is about 2.5 years.

We have a year-long jobs, we have four-year jobs, If you average it out, it's about 2.5 years. We're setting ourselves up really well for 2027, and some of it into 2028. Yeah.

Got it. Switching gears to data centers. Everybody's talking about data centers, and obviously you've rebranded Axia. The way we sort of been dissecting the data center work is, it probably takes between two and three years between say, "Hey, I wanna build a data center," to site selection permitting to maybe shovels hitting the ground. We're starting to see a lot of dollars come through on some front-end D and C companies, on the concrete side. Arguably, the electrical's a little bit further along in that curve, right? I know you're going out to data centers, what I'm trying to say is, as that business start to accelerate and you're getting into that business, there's probably a dearth of probably qualified electricians.

We should start to see more and more opportunities on the electrical side for you as we move through this year into next year. Is that a fair assumption?

That's a fair assumption, also I would say the types of work that we're bidding within the data center world is in the mechanical and the electrical side.

Okay.

We're not really doing a lot of the bidding, a lot of the kind of the earth work concrete pieces of it that fits this type of work fits us better. Water treatment, water purification, electrical data center, the racks, the switchgear, the medium voltage, and then even the power generation side. We have a lot of opportunity there that both fits our the Axia brand, the electrical brand business as well as the core Shimmick business as well from a water treatment process mechanical piece.

Got it. Yeah, I was just using concrete as like that's one of the first step and you're after that.

Yeah. Exactly.

How at what point would a data center or I assume you're working with, the data centers would be other E&C companies, but how much visibility do you have between bidding and maybe the start of the jobs that are related to the data center?

It's usually Again, it's not that different from our public works projects. You know, it's, we bid it, and then over the next few months after that, we have a, we will know if we want it or not. We're bidding actively right now. I mean, I think one of the good news is. A lot of these data centers are really shifting towards Texas, which is where we're growing as well. That has brought in a lot more opportunity. On the West Coast, it's Reno that's kind of the work center in Reno, which also is a great, easy place for us to work. We're in the right place right now.

Gotcha. One last question. I know the legacy work was only $200,000, and there was some of the Chickamauga negotiations with the Army Corps. How much if that had not occurred, I'm just curious, you know, how much sort of revenue from Chickamauga would have come through? You had the $88 million revenue, you had a weather hit, and you had Chickamauga. Just trying to levelize what happened in 1Q as well, if that makes sense.

Somewhere around $20 million-$30 million this year.

Okay. Yeah, right.

Yeah.

Yeah.

Yeah, it went down more than half.

Okay. like we said, I mean, at the end of the day, this helps your margin profile, it helps your cash flow, it's gonna go through the, you know, the standard, federal process, correct?

Yeah. Obviously there's an established process there. We're confident we're going to get to an amicable solution. It takes a while with the federal process. In the meantime, everything you said about backlog and cash and everything else is very accurate.

That's a legacy from, like, 2017 or 2018. It's I think it started in 2004 originally, but not with you.

Yeah, we bid that project in 2017, pre-COVID, you know, long time ago, along with a couple other of these legacy projects, so we're looking forward to really getting them done and moving forward new work.

Okay, great. Congratulations. I, you know, very nice quarter on the margins. I understand the weather. Thanks for your time, and talk to you in a little bit.

Thank you.

Thank you.

There are no further questions at this time. I'd now like to turn the call over to Ural for closing remarks.

We've had another strong quarter, aligned with our expectations and the strategy that we put in place back in 2025. A lot of the backlog and our margins, gross margins are reflecting that. We're still in the early phases of our growth, but we expect the rest of the year to continue to improve and have a very strong year and looking forward to the next quarter. Thank you.

Good afternoon, and thank you for joining us on today's conference call to discuss Shimmick's Fourth Quarter and Full Year 2025 results. Slides for today's presentation are available on the Investor Relations section of the website, www.shimmick.com. During this conference call, management will make forward-looking statements based on current expectations and assumptions which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect. We identified the principal risks and uncertainties that may affect our performance in our reports and filings with the Securities and Exchange Commission, which can also be found on our Investor Relations website. We do not undertake a duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's fourth quarter press release for definitional information and reconciliations of historical non-GAAP financial measures to comparable GAAP financial measures. With that, it's my pleasure to turn the call over to Ural Yal, Shimmick CEO.

Good afternoon, and thank you all for joining us on today's call. I'm joined by Todd Yoder, Shimmick CFO. Before I get started, I would like to recognize the women and men who work at Shimmick, safely and effectively delivering the projects we take on as good stewards of the communities where we work. Our work is supporting our nation's infrastructure, and we are all very proud of it. With that, I'm going to start by discussing our financial results for 2025. We finished 2025 strong and in line with our expectations in what was largely a transformational year for Shimmick. We made meaningful progress on the strategic priorities we introduced at the beginning of the year. As a reminder, our strategy remains centered on 3 pillars: one, growing the top line by bidding, winning and strategic risk balance work aligned with our expertise; two, completing and winding down legacy low-margin noncore projects, and three, driving operational improvements to deliver consistent margins and improved G&A leverage. We made substantial progress across all 3 pillars throughout the year and still believe we are in the early stages of the new Shimmick we're building. These priorities have strengthened our business fundamentally, evident by our 2025 results. As we turn to our 2025 results, for the full year, we delivered a consolidated revenue of $493 million 7% gross margin and adjusted EBITDA of $5 million. Full year 2025 Shimmick projects revenue was $395 million, a 12% increase year-over-year. These projects now represented 75% of our total revenue in 2025, highlighting the concentration of activity on more strategic work. In turn, we expanded our gross margin on Shimmick projects to 10% and a 400 basis point improvement over last year. For our noncore projects, 2025 revenue was $96 million compared to $125 million in 2024, reflecting our focus on effectively advancing the wind down of these projects. We also maintained a strong liquidity position, finishing the year with a total liquidity of $44 million. As you can see from our fiscal year results, we've made substantial progress executing our plan, specifically narrowing our focus to projects that leverage our core strengths. Now I'd like to spend some time speaking about that progress, providing an update on our wins, what are we seeing in the market and the operational improvements we are making. As we look at the market today, our momentum continues to build. Our core markets are continuing to see consistent investment and we're able to selectively bid projects that advance our strategy. This means we are increasingly able to improve our resilience by diversifying our customer base, focusing on growth markets geographically and lowering the risk profile of our book of work. Our backlog has grown meaningfully and remains well above a 1:1 book-to-burn ratio, which is an important indicator of the underlying strength in our -- in demand and our ability to win. We expect our book-to-burn ratio in the first quarter of 2026 to remain well above 1 as well, reinforcing the trajectory we've been on. Looking ahead to 2026, our pipeline volumes continue to be a real strength, allowing us to grow our revenues and margins while being strategic about what we pursue. Our wins in this quarter, some of which you are seeing on the screen continue to be aligned with our strategy and reflect the strength of the market. Our bidding activity has translated directly into backlog growth, which has increased to $793 million at the end of our fiscal year with $139 million in new awards and ended up near the numbers we started the year with, which shows the stabilization of our backlog as we continue to complete noncore projects. Additionally, we've been awarded contracts with $128 million that added to our backlog so far in 2026. And lastly, after the year concluded, we've been selected as a preferred bidder on projects totaling $234 million with projects that are predominantly in our core sectors of water and electrical construction and are mostly located in California and Texas. We are currently negotiating these contracts or waiting for awards from our clients which we expect to happen over the upcoming weeks and months. From a commercial standpoint, the market environment looks relatively unchanged from last quarter with a strong and growing backlog, a healthy pipeline of new work and several pending items we expect to convert over the next quarter or 2. Our overall 24-month pipeline remains robust, supporting $600 million to $1 billion of bidding volumes per month. Last year, we explained our approach to position Shimmick to compete and win in collaborative delivery markets. Those efforts are now paying off. This quarter, we expect to announce our first progressive design-build awards since I joined Shimmick. A milestone that reflects the credibility built and the value we bring to owners through early engagement and partnership. This project is valued at approximately $55 million located in Southern California and will allow us to bring our expertise in waste water treatment as well as specialty electrical work. Instead of competing through low bid contracting, we will be working with the client to provide value through the preconstruction phase, building trust and alignment before construction begins. We expect to negotiate the construction contract at the end of 2026 with the construction beginning in '27. This is exactly the kind of work we want to be doing. It derisks the business improves predictability and aligns our interest with the client from day 1. Another collaborative contracting method we are focused on is construction manager, general contracting, the CM/GC method. We have completed a few of these projects in the past and continue to see strong momentum in our pipeline for these lower-risk projects. One such project and an estimated $200 million effort that supports [ bus ] infrastructure as Los Angeles prepares for the 2028 Olympics is approaching the construction phase. We expect to announce this milestone in the second quarter and start construction shortly thereafter. We're also progressing a number of opportunities in higher-growth verticals. The data center market continues to evolve quickly and while we're not yet in a position to announce a new contract, we are actively pursuing several meaningful opportunities. These include potential engagements with large operators in Texas, Washington and Nevada. And should any of these materialize, they would represent significant contributions to our pipeline. I've talked about pairing the pipeline improvements with operational improvements over the last year. We are making progress on that front as well. We believe we can support strong top line growth without significant increases to our SG&A spend, and we continue to adapt and transform how we do business and use those SG&A dollars effectively. We've strengthened our project controls enhanced our procurement capabilities and expanded the use of Power BI and other AI-based analytical tools to improve visibility, decision-making and accountability across the organization, spending all of our critical functions like safety, quality and human resources. In project controls, we now have the capability to manage a much larger number of contracts with a higher level of rigor. The structure we put in place allows us to scale without sacrificing control, which is critical as our backlog continues to grow. On the procurement side, we've added expertise and systems that significantly derisk the business. We are improving risk management or one of the biggest cost drivers in our operations with more discipline and transparent oversight across the company. This gives us the ability to manage supply relationships more strategically and ensure we're extracting real value from our spend. We've also made real progress on the talent front. Our attrition rates continue to move in the right direction, which is a direct reflection of the work our teams are doing to strengthen employee experience and create a more supportive and performance-driven environment. Retaining top down is critical to executing our long-term strategy. And the data we're seeing gives us confidence that we're on the right track. In short, the market remains healthy. Our competitive position continues to strengthen and our backlog and pipeline dynamics are moving in the right direction. We are operating with greater efficiency, executing with more discipline and building the foundation for sustained growth. With that, I'd like to turn to Todd, who will review our financials in more detail.

Thank you for joining us today. We're pleased to report another solid quarter and a strong full year performance that reflects the operational improvements and disciplined execution Ural outlined earlier. Before I dive into the numbers, I want to thank the entire Shimmick team. Your focus on safety, your commitment to quality and your consistency in executing with excellence have all played a critical role in our results this year. Thank you for everything you do. With that, let's jump into the financial results, beginning with Slide 8. As a reminder, all comparisons made today will be on a year-over-year basis as compared to the same period in 2024, unless otherwise noted. Shimmick project revenue for Q4 2025 was $84 million, up 4% compared to $81 million in Q4 of 2024. The net increase of $3 million was primarily driven by our new projects ramping up. Noncore project revenue for Q4 '25 was $16 million, down $24 million as compared to Q4 2024. This is reflective of the fact we have less noncore in our backlog to burn off, this year versus prior year. And I will point out that noncore projects in total were close to 90% complete ending 2025. Shimmick consolidated total revenue for Q4 '25 was $100 million as compared to $104 million in the prior year. Moving on to gross margin. Shimmick project gross margin was $10 million for Q4 '25 of $8 million or 400% compared to $2 million in Q4 '24. Gross margin as a percentage of revenue was 12% for Q4 2025 versus 3% in Q4 of 2024. The $8 million increase in gross margin was driven by $6 million from new awards and $2 million from existing projects. Noncore project gross margin was flat for Q4 2025 as compared to negative $23 million for Q4 of 2024. The $23 million increase in gross margin was driven by cost overruns on noncore loss projects during Q4 of 2024 that did not recur this year. Shimmick consolidated total gross margin for Q4 2025 was $10 million. up $31 million compared to a negative $21 million gross margin in Q4 of 2024. Total gross margin as a percentage of revenue improved to 10%, from a negative 20% in Q4 of 2024. G&A expense for Q4 2025 was $11 million, favorable 32% were $5 million as compared to $16 million of G&A in Q4 of 2024. The favorable impact was the result of our continued transformation of the business. Net loss for Q4 2025 was $3 million, favorable $37 million as compared to a net loss of $38 million in Q4 of 2024. Adjusted EBITDA for Q4 '25 was $4 million as compared to negative $27 million in Q4 of '24. The improvement was primarily driven by the increase in gross margin combined with the decrease in SG&A. Turning to liquidity. If you recall, we ended Q3 '25 with $48 million of liquidity. We ended Q4 2025 with liquidity of $44 million. The $44 million consisted of unrestricted cash and cash equivalents of $20 million and availability under our credit agreements totaled $24 million. We remain comfortable that our liquidity position provides the capital needed to continue executing on our strategic and operational priorities. New awards booked during Q4 '25 were $135 million, a sequential increase of more than $39 million from Q3 2025. Giving us a book-to-burn for the quarter of 1.4x. We ended the quarter with total backlog of $793 million. Turning to Slide 9 for the 2025 full year results. Shimmick projects gross margin was $397 million for the year, up $41 million or 12% compared to $357 million in 2024. Noncore project revenue was $96 million for the year compared to $125 million in 2024. Shimmick consolidated total revenue for 2025 was $493 million, up $13 million or 3% compared to $480 million in 2024. Shimmick project gross margin was $40 million or 10% as a percentage of revenue. This is a $28 million increase compared to $12 million or 3% in 2024. Noncore project gross margin was negative $7 million or negative 7% as a percentage of revenue. This is a $61 million increase compared to negative $68 million in 2024. Shimmick consolidated total gross margin was $34 million for 2025. Making gross margin 7% of revenue overall. This is a $90 million increase compared to negative $56 million gross margin in 2024. Adjusted net loss was negative $15 million in '25 as compared to negative $81 million in '24. Adjusted EBITDA for 2025 was $5 million, favorable $66 million from negative $61 million adjusted EBITDA in 2024. Again, new awards booked during Q4 2025 were $139 million, a sequential increase of $39 million from Q3, giving us the book-to-burn of 1.4x. We ended the quarter with a total backlog of $793 million. Our backlog mix continues to improve, with Shimmick projects now representing close to 90% of our total backlog ending 2025. Additionally, we have $128 million in new awards added to backlog as of the close of February 2026. And we have another $234 million of additional new awards that were pending fully executed contracts as of the end of February 2026. Turning to Slide 10 and our 2026 guide. To set the stage, I want to call out that some Shimmick projects in California and Texas experienced slower burn due to unusual heavy rainfall in California and cold weather in Texas, which limited field activity. In addition, some of our newly awarded contracts have taken a bit longer to ramp up than normal. While these projects experienced some shift to the right, they are back on track. While we anticipate a slower start to the year due to this weather, we expect quarter-over-quarter sequential improvement throughout the year as new project awards ramp up and represent a growing share of our project mix. We expect Shimmick consolidated revenue to grow between 12% and 22%, 17% at the midpoint, representing approximately $550 million to $600 million of work put in place for the full year 2026. Adjusted EBITDA is projected to increase between 200% and 500%. That's 350% at the midpoint, putting adjusted EBITDA in the range of $15 million to $30 million for the full year. With that, we are confident 2026 will be a great year for Shimmick. I thank you for joining us today and for your interest in Shimmick. Now back to Ural.

2025 was a pivotal year for Shimmick. We delivered results in line with our expectations, executed with greater discipline and made meaningful progress on the strategic priorities we set out at the beginning of the year. Our focus on bidding and winning strategic risk balance work, winding down legacy noncore projects and driving operational improvements is reshaping the company and setting us up for long-term success. The improvements we're seeing in backlog growth, project execution, talent retention, procurement discipline and project controls, all point out to a business that is operating with more predictability, resilience and focus than a year ago. Our pipeline remains robust. Our market backdrop is healthy, and we're winning the right work, work that is aligned with our expertise and our long-term value proposition. While we recognize there is still more work to do, we are moving in the right direction, and our progress in 2025 gives us confidence in our ability to advance our journey to make Shimmick a top infrastructure provider in the market and delivering value to our shareholders. We look forward to updating you on our progress as we move forward in 2026. Operator, you may now open the line for questions.

[Operator Instructions] Our first question comes from Gerry Sweeney with ROTH. Gerry is connecting now. One moment, please. [Operator Instructions]

Good afternoon. I forgot I was going to be on video. Otherwise, I would have dressed up a little nicely. So anyhow, congratulations, obviously making nice progress, continuously push some of the legacy business behind you. And there's a lot of initiatives on the forefront. So a couple of questions around -- I'm going to use gross margin as sort of the overlying aspect, but some progressive design awards, I think CM/GC opportunities and electrical opportunities. How does this all play through? And how does that impact margins as we go through 2026?

Yes. No, I think overall, gross margins are going to be -- we expect them to go up. It's always a function of the mix of projects, obviously. So however, some projects tend to be closer in the high teens, some projects tend to be in the lower in the teens. But we're going to -- we're watching that balance very carefully to make sure that we're continuously making improvement on the gross margin. But what you'll also see at the bottom line as we grow the revenues, we're very focused on controlling the SG&A around the levels that it is today for 2026. And that's also going to be contributing. It's not just top gross margin, but it's the more efficient SG&A running a larger book of business.

Got it. I had a question on SG&A, but before I get there. What about just the -- I think you mentioned you were bidding $600 million to $1 billion a month, but how does the backlog look? Obviously, I think Texas has been very strong with some of our other companies. I mean there's always water projects to do in California. But what's your visibility and feeling on just the overall spend in sort of the macro environment across your territories?

Yes, it's great. Actually, great question. So really, very focused in California and Texas, like we've been along with the Pacific Northwest. Waterwise, Texas is very active. California is always active, like you mentioned. So we're seeing opportunities, like, there's really no shortage of opportunities going in the next 12 to 24 months in that kind of volume. Which then -- we don't need all of it in our win rates, but that gets us to be more selective, more strategic about. We really want to be California, Texas, Pacific Northwest and focus on those markets and grow from there. So it really allows us to be -- to pick the right jobs with lower competition, maybe higher margins, more strategic for the future. So it's -- as far as kind of overall pipeline perspective, it hasn't let up in the last 6 months at all.

Then circling back, SG&A came in just shy of $11 million. I think you indicated that maybe that's a good number that you use on a -- at least for 2026. One, I want to see if that's accurate? And then two, how much more revenue can you have prior to maybe starting to invest a little bit more in the SG&A front?

Yes. So I think what we had in 2025 is a reasonable number to assume for 2026 approximately.

Okay. So the [ $84.5 ] million...

Somewhere around there. And I think as we do that, the revenues are going to go up, that's what we're guiding. And to the second part of your question, I think we're going to be fine kind of in that range, plus or minus in that mid-50s range up until about [ $750 million ] honestly.

[indiscernible] '26, in the G&A for the fourth quarter, right? It was a little lower than you saw in previous quarters, but as you model that out for '26, I think that 14 number is a good number, a good run rate.

Our next question comes from the line of Gerry Sweeney with ROTH. [Operator Instructions] Apologies. This question comes from Aaron Spychalla with Craig Hallum Capital Group. [Operator Instructions].

Maybe first for me on the guidance for 2026. Can you just kind of talk about some of the puts or takes there, especially on like the EBITDA range? And then just maybe how much of noncore revenue and kind of margin gross profit are you looking for, for the year?

Yes. Good question. So yes, so we've simplified the guidance a little bit this time. But looking at the noncore work, we are expecting to burn through pretty much all of it. It's right now about 11% of the backlog. It's going to be very little left, if any, into 2027, so -- and then that's also kind of along the lines of we've booked forward losses on those. So you're going to assume those at 0%. You're going to continue to kind of impact overall aggregate margin. But I think as far as the gross margin, the real key is how fast can we get the new work to be kind of hitting there -- hitting its stride, all these projects that we won and now starting how fast can they start generating revenue and margins. That's really the story of 2026 for us. As far as backlog goes, we finished the year almost at where we started. So we've really stabilized very close to where we started and now with the wins that we've announced today as those contracts come to fruition, we have a clear path to getting over $1 billion in backlog. And it's just going to be a matter of how do we get those jobs going quickly throughout the summer. Did that answer your question?

Yes. No, that was great. And then maybe on the electrical infrastructure side of things, you kind of talked about, I think, in the release and the call, some pending awards on the electrical side of things. So it starts -- it sounds like you're starting to see some traction there. Maybe just a little bit more color, and I think you noted significant kind of potential there. Just what types of projects and project sizes? Are you looking for there?

Yes. So electrical business, our electrical business is a low-voltage, medium voltage electrical business that does a variety of sizes of projects. projects that are very small, $5 million, $10 million all the way to $200 million kind of like more of the larger Shimmick projects, and we're able to do range in that -- up and down in that range. Texas is extremely strong. We're bidding a lot of work in Texas, continuing to bid a lot of work in California, continuing to support the larger Shimmick projects with our electrical capabilities. So there's a lot of activity. And what I'm tracking every month is that the amount of Axia work we're bidding is becoming a higher percentage of the overall bids pretty much every month. So I think it's just a matter of time. We're really hitting our stride now on the bidding side. We're going to see some serious increase in our backlog for Axia work, and then that will translate to revenue in a quarter or 2.

Good. And then on the legacy or the noncore projects, good kind of execution this quarter, and it sounds like they're 90% wrapped up. You just kind of talk about it. It seems like you have a good handle on ramping those up. But maybe just a little bit of color there would be helpful.

Yes. I mean we're moving along. It's really 2 projects at this point that are active, that's left. And we're going to get through those this year. The end of these larger kind of more complicated projects, there are always some risk at the end of them to close them out and cost overruns, but we're managing it, and we're pretty comfortable that we're going to -- that's going to really start decreasing as part of our revenue, especially in the second half of this year.

Yes. I would just add, it was nice to see flat gross margin, which you would expect to see outside of some minor costs related to legal and other factors. But these are noncore loss projects, right? with 0 margin. But when you look at our total gross margin over the year, quarter-over-quarter, 4%, 6%, 8%, 10%. So you see as that like you all mentioned the mix, right? So noncore is becoming such a small percentage of the mix. And especially given the strong wins with $330 million in new awards in the second half and already starting just through February, right, with $128 million and $234 million pending. So it's a step change, right? And so we'll see that favorable mix throughout '26.

Looking forward to it.

There are no more questions at this time. I'd now like to turn the call over to Ural for closing remarks.

We've had another strong quarter and a strong year to finish 2025. It was a -- it was a year of change for Shimmick, and we've made a lot of operational improvements and made a lot of progress in getting through the noncore projects. So we're very optimistic about 2026 and beyond for our company, and these new awards that we've announced and booked are a good indication of that as we shift towards more of the work that we won in a risk balanced and effective way. Our margins are going to improve and both bottom line and top line. So we're really looking forward to a great 2026. Thank you all for joining.