8-K
0001887944false00018879442024-03-282024-03-28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 28, 2024

Shimmick Corporation

(Exact name of Registrant as Specified in Its Charter)

Delaware

001-41867

84-3749368

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

530 Technology Drive

Suite 300

Irvine, CA

92618

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (833) 723-2021

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

SHIM

 

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On March 28, 2024, Shimmick Corporation issued a press release announcing financial results for the fourth quarter and full fiscal year ended December 29, 2023. A copy of this press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

The information in this Item 2.02 and Exhibit 99.1 attached hereto is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

 

 

Exhibit

Number

Description

99.1

 

Press Release

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

1


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Shimmick Corporation

Date: March 28, 2024

By:

/s/ Devin J. Nordhagen

Devin J. Nordhagen

Executive Vice President, Chief Financial Officer

 

2


EX-99.1

 

Exhibit 99.1

Shimmick Corporation Announces Fourth Quarter and Fiscal Year 2023 Results

 

Shimmick realized significant progress with 24% growth in Shimmick Projects, with gross margin of 7%

Irvine, CA, March 28, 2024 – Shimmick Corp. (NASDAQ: SHIM), a leading water infrastructure company, today announced financial results for the fiscal year ended December 29, 2023.

 

Fiscal Year 2023 Highlights

Completed Initial Public Offering in November 2023
Reported revenue of $633 million, which includes $434 million of Shimmick Projects revenue, an increase of 24% for fiscal year 2023 compared to fiscal year 2022
Diluted earnings per common share of $(0.11)
Adjusted diluted earnings per common share of $0.48
Backlog of approximately $1.1 billion as of December 29, 2023, and reported an 18% increase in Shimmick Projects backlog for the fiscal year 2023 compared to fiscal year 2022
Secured key $200+ million project win on regional water reclamation expansion
Maintained outstanding safety record for the fiscal year

“We are executing on our strategy as we laid out in our IPO by focusing on higher quality, shorter duration projects with improved margins. We are making progress on completing the legacy jobs and are focused on selectively bidding jobs that achieve our targeted gross margins," said Steve Richards, Chief Executive Officer of Shimmick.

 

"We believe we sit in a unique position in the space, constantly displaying our competitive advantage and are primed to execute on the many opportunities we see in a large total addressable market,” continued Richards.

 

"As we continue to work through and wind down the Legacy Projects and ramping up our new Shimmick Projects, our quarter to quarter results will fluctuate. We are excited to see our Shimmick Projects backlog building and our water infrastructure-focused strategy come to life," said Devin Nordhagen, Chief Financial Officer of Shimmick.

 

 

 

 

 

1


 

A summary of our results is included in the table below:

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

(In millions, except per share data)

December 29, 2023

 

 

December 30, 2022

 

 

Change

 

 

December 29, 2023

 

 

December 30, 2022

 

 

Change

 

Revenue

$

138

 

 

$

186

 

 

$

(48

)

 

$

633

 

 

$

664

 

 

$

(31

)

Gross margin

 

-

 

 

 

5

 

 

 

(5

)

 

 

22

 

 

 

23

 

 

 

(1

)

Net (loss) income attributable to Shimmick Corporation

 

(17

)

 

 

(18

)

 

 

1

 

 

 

(3

)

 

 

4

 

 

 

(7

)

Adjusted net (loss) income

 

(14

)

 

 

(15

)

 

 

1

 

 

 

11

 

 

 

30

 

 

 

(19

)

Adjusted EBITDA

 

(9

)

 

 

(11

)

 

 

2

 

 

 

30

 

 

 

47

 

 

 

(17

)

Diluted loss per common share attributable to Shimmick Corporation

 

(0.74

)

 

 

(0.82

)

 

 

0.08

 

 

 

(0.11

)

 

 

0.17

 

 

 

(0.28

)

Adjusted diluted loss per common share attributable to Shimmick Corporation

$

(0.59

)

 

$

(0.68

)

 

$

0.09

 

 

$

0.48

 

 

$

1.35

 

 

$

(0.87

)

 

 

The following table presents revenue and gross margin data for the fourth quarter and fiscal year ended December 29, 2023 compared to the fourth quarter and fiscal year ended December 30, 2022:

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

(In millions, except percentage data)

December 29, 2023

 

 

December 30, 2022

 

 

Change

 

 

December 29, 2023

 

 

December 30, 2022

 

 

Change

 

Shimmick Projects(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

104

 

 

$

121

 

 

$

(17

)

 

$

434

 

 

$

351

 

 

$

83

 

Gross Margin

 

3

 

 

 

9

 

 

 

(6

)

 

 

29

 

 

 

24

 

 

 

5

 

Gross Margin (%)

 

3

%

 

 

7

%

 

 

(4

)%

 

 

7

%

 

 

7

%

 

 

0

%

Legacy Projects(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

34

 

 

$

65

 

 

$

(31

)

 

$

199

 

 

$

313

 

 

$

(114

)

Gross Margin

 

(3

)

 

 

(4

)

 

 

1

 

 

 

(7

)

 

 

(1

)

 

 

(6

)

Gross Margin (%)

 

(9

)%

 

 

(6

)%

 

 

(3

)%

 

 

(4

)%

 

 

0

%

 

 

(4

)%

Consolidated Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

138

 

 

$

186

 

 

$

(48

)

 

$

633

 

 

$

664

 

 

$

(31

)

Gross Margin

 

-

 

 

 

5

 

 

$

(5

)

 

 

22

 

 

 

23

 

 

 

(1

)

Gross Margin (%)

 

0

%

 

 

1

%

 

 

(7

)%

 

 

3

%

 

 

3

%

 

 

0

%

 

(1) Shimmick Projects are those projects started after the AECOM Sale Transactions that have focused on water infrastructure and other critical infrastructure.

(2) Legacy Projects are those projects assumed as part of the AECOM Sale Transactions, that were started under AECOM ownership.

 

Shimmick Projects

 

As a result of management's shift in job bidding strategy toward higher margin lower risk jobs and new jobs ramping up, total revenue recognized on these Shimmick Projects increased by $83 million to $434 million and gross margin increased $5 million, or 20%, for the fiscal year ended December 29, 2023. Shimmick Projects revenue decreased by $17 million to $104 million and gross margin decreased $6 million, or 67%, for the quarter ended December 29, 2023 primarily as a result of timing of work performed and jobs winding down that were not replaced by new jobs in the current quarter.

 

2


 

Legacy Projects

 

As part of the AECOM Sale Transactions, we assumed the Legacy Projects and backlog that were started under AECOM. Legacy Projects revenue decreased $114 million and gross margin was negative $7 million for fiscal year ended December 29, 2023, a decrease of $6 million from prior fiscal year ended December 30, 2022, primarily as a result of projects winding down and an unfavorable settlement on a Legacy Project. Legacy Projects revenue decreased by $31 million to $34 million and gross margin improved $1 million, or 25% for the quarter ended December 29, 2023 as compared to revenue of $65 million for the quarter ended December 30, 2022 primarily as a result of timing of work performed, jobs winding down and timing of cost recovery.

 

The negative gross margin is primarily the result of a subset of these projects (“Legacy Loss Projects”) that have experienced significant cost overruns due to the COVID pandemic, design issues and other factors. On this subset, we have recognized the estimated cost to complete and the loss expected from these projects. As these Legacy Loss Projects continue to wind down to completion, no further gross margin will be recognized and in some cases, there may be additional costs associated with these jobs. Revenue recognized on these Legacy Loss Projects was $99 million and $123 million for the fiscal years ended December 29, 2023 and December 30, 2022, respectively. Gross margin recognized on these Legacy Loss Projects was ($14) million and ($23) million for the fiscal years ended December 29, 2023 and December 30, 2022, respectively.

 

Selling, general and administrative expenses increased by $1 million, or 2%, primarily resulting from higher legal, professional services and other costs.

 

Equity in earnings of unconsolidated joint ventures decreased $42 million, or 80%, primarily due to a $56 million impact from the settlement of claims for three infrastructure projects during the fiscal year ended December 30, 2022 that did not re-occur in the fiscal year ended December 29, 2023.

 

Gain on sale of assets increased $32 million driven by the sale of non-core business contracts for $30 million in Q3 2023.

 

Other expense, net was $3 million for the fiscal year ended December 29, 2023, compared to $9 million in the year ended December 30, 2022. Other expense, net for the year ended December 29, 2023 primarily related to interest expense on the Revolving Credit Facility while other expense, net during the year ended December 30, 2022 was primarily driven by a change in the fair value of contingent consideration from the AECOM Sale Transactions.

 

Net (loss) income decreased by $5 million to a net loss of $2 million for the fiscal year ended December 29, 2023, due to a decrease in income from operations primarily due to a decrease in equity in earnings of unconsolidated joint ventures partially offset by gain on the sale of assets as well as a decrease in other expense, net.

 

3


 

Diluted loss per common share was $0.11 for the fiscal year ended December 29, 2023, compared to diluted earnings per common share of $0.17 for the same period in 2022.

Adjusted net income was $11 million for the fiscal year ended December 29, 2023, compared to $30 million for the same period in 2022.

Adjusted diluted earnings per common share was $0.48 for the fiscal year ended December 29, 2023.

Adjusted EBITDA was $30 million for the twelve months ended December 29, 2023, compared to $47 million for the same period in 2022.

Backlog for the fiscal year ended was $1.1 billion as of December 29, 2023.

 

Fiscal Year 2024 Guidance

 

As a newly public company and given the sizeable ongoing impact of the Legacy Projects, we are introducing limited guidance for 2024 covering only revenue and gross margin.

 

For the full fiscal year ending December 27, 2024, we expect:

Shimmick Projects revenue to grow 7 to 13 percent with gross margin between 7 to 13 percent
Legacy Projects revenue to decrease by 45 to 55 percent with negative gross margin of 5 to 10 percent

 

“The guidance reflects our execution on our strategy, our robust pipeline, the improving quality of our backlog, and our continued operational execution as well as our efforts to work off our Legacy Projects. We believe that our results will be back-half weighted in 2024 with further strong momentum for growth in 2025,” concluded Richards.

 

 

Conference Call and Webcast Information

Shimmick will host an investor conference call Thursday, March 28th, at 8:30 am ET. Interested parties are invited to listen to the conference call which can be accessed live over the phone by dialing (877)-869-3847, or for international callers, (201)-689-8261. A replay will be available two hours after the call and can be accessed by dialing (877)-660-6853, or for international callers, (201)-612-7415. The passcode for the live call and the replay is 13745192. The replay will be available until 11:59 p.m. (ET) on April 18, 2024. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by visiting the Investors section of the Company’s website at www.shimmick.com. The online replay will be available for a limited time beginning immediately following the call.

4


 

About Shimmick Corporation

Shimmick Corporation ("Shimmick", the "Company") (NASDAQ: SHIM) is a leading provider of water infrastructure solutions nationwide. Shimmick has a long history of working on complex water projects, ranging from the world’s largest wastewater recycling and purification system in California to the iconic Hoover Dam. According to Engineering News Record, in 2023, Shimmick was nationally ranked as a top ten builder of water supply (#6), dams and reservoirs (#7), and water treatment and desalination plants (#7). Shimmick is led by industry veterans, many with over 20 years of experience, and works closely with its customers to deliver complete solutions, including long-term operations and maintenance.

 

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are often characterized by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are only predictions based on our current expectations and our projections about future events, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. Forward-looking statements contained in this release include, but are not limited to, statements about: expected future financial performance (including the assumptions related thereto), including our revenue, net income and expected EBITDA; our growth prospects; our expectations regarding profitability; our continued successful adjustment to becoming a public company following our initial public offering; our expectations regarding successful partnerships with our new investors; and our capital plans and expectations related thereto. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Forward-looking statements are only predictions based on our current expectations and our projections about future events, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law.

We wish to caution readers that, although we believe any forward-looking statements are based on reasonable assumptions, certain important factors may have affected and could in the future affect our actual financial results and could cause our actual financial results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on our behalf, including, but not limited to, the following: our ability to accurately estimate risks, requirements or costs when we bid on or negotiate a contract; the impact of our fixed-price contracts; qualifying as an eligible bidder for contracts; the availability of qualified personnel, joint venture partners and subcontractors; inability to attract and retain qualified managers and skilled employees and the impact of loss of key management; higher costs to lease, acquire and maintain equipment necessary for our operations or a decline in the

5


 

market value of owned equipment; subcontractors failing to satisfy their obligations to us or other parties or any inability to maintain subcontractor relationships; marketplace competition; our limited operating history as an independent company following our separation from AECOM; our inability to obtain bonding; disputes with our prior owner, AECOM, and requirements to make future payments to AECOM; AECOM defaulting on its contractual obligations to us or under agreements in which we are beneficiary; our limited number of customers; dependence on subcontractors and suppliers of materials; any inability to secure sufficient aggregates; an inability to complete a merger or acquisition or to integrate an acquired company’s business; adjustments in our contact backlog; accounting for our revenue and costs involves significant estimates, as does our use of the input method of revenue recognition based on costs incurred relative to total expected costs; any failure to comply with covenants under any current indebtedness, and future indebtedness we may incur; the adequacy of sources of liquidity; cybersecurity attacks against, disruptions, failures or security breaches of, our information technology systems; seasonality of our business; pandemics and health emergencies; commodity products price fluctuations and rising inflation and/or interest rates; liabilities under environmental laws, compliance with immigration laws, and other regulatory matters, including changes in regulations and laws; climate change; deterioration of the U.S. economy; geopolitical risks, including those related to the war between Russia and Ukraine and the conflict in the Gaza Strip and the conflict in the Red Sea Region; and other risks detailed in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year ended December 29, 2023 and those described from time to time in our future reports with the SEC.

Non-GAAP Definitions This press release includes unaudited non-GAAP financial measures, adjusted EBITDA and adjusted net (loss) income and adjusted diluted earnings per common share. For definitions of these non-GAAP financial measures and reconciliations to the most comparable GAAP measures, see "Explanatory Notes" and tables that following in this press release. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.

 

Please refer to the Reconciliation between Net (loss) income Attributable to Shimmick Corporation and Adjusted Net (loss) income and Adjusted diluted earnings per common share included within Table A and the Reconciliation between Net (loss) income Attributable to Shimmick Corporation and Adjusted EBITDA included within Table B below.

 

We do not provide forward-looking guidance for certain financial measures on a U.S. GAAP basis because we are unable to predict certain items contained in the U.S. GAAP measures without unreasonable efforts. These items may include legal fees and other costs for a legacy loss project, acquisition-related costs, litigation charges or settlements, and certain other unusual adjustments.

 

Investor Relations Contact

1-949-704-2350

IR@shimmick.com

6


 

Shimmick Corporation

Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

December 29,

 

 

December 30,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,939

 

 

$

77,762

 

Restricted cash

 

 

971

 

 

 

4,323

 

Accounts receivable, net

 

 

54,178

 

 

 

56,430

 

Contract assets, current

 

 

125,943

 

 

 

80,901

 

Prepaids and other current assets

 

 

13,427

 

 

 

14,060

 

 

 

 

 

 

 

 

TOTAL CURRENT ASSETS

 

 

257,458

 

 

 

233,476

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

46,373

 

 

 

55,208

 

Intangible assets, net

 

 

9,244

 

 

 

12,044

 

Contract assets, non-current

 

 

48,316

 

 

 

84,024

 

Lease right-of-use assets

 

 

23,855

 

 

 

22,690

 

Investment in unconsolidated joint ventures

 

 

21,283

 

 

 

17,363

 

Deferred tax assets

 

 

17,252

 

 

 

18,851

 

Other assets

 

 

2,871

 

 

 

3,143

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

426,652

 

 

$

446,799

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

81,589

 

 

$

67,541

 

Contract liabilities, current

 

 

115,785

 

 

 

163,725

 

Accrued salaries, wages and benefits

 

 

26,911

 

 

 

36,248

 

Accrued expenses

 

 

33,897

 

 

 

60,758

 

Other current liabilities

 

 

13,071

 

 

 

12,672

 

 

 

 

 

 

 

 

TOTAL CURRENT LIABILITIES

 

 

271,253

 

 

 

340,944

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

29,627

 

 

 

 

Lease liabilities, non-current

 

 

15,045

 

 

 

14,442

 

Contract liabilities, non-current

 

 

3,215

 

 

 

1,846

 

Contingent consideration

 

 

15,488

 

 

 

15,662

 

Deferred tax liabilities

 

 

17,252

 

 

 

18,851

 

Other liabilities

 

 

4,282

 

 

 

3,459

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

356,162

 

 

 

395,204

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Common stock, $0.01 par value, 100,000,000 shares authorized as of December 29, 2023 and December 30, 2022; 25,493,877 and 21,908,800 shares issued and outstanding as of December 29, 2023 and December 30, 2022, respectively

 

 

255

 

 

 

219

 

Additional paid-in-capital

 

 

24,445

 

 

 

3,341

 

Retained earnings

 

 

46,537

 

 

 

49,083

 

Non-controlling interests

 

 

(747

)

 

 

(1,048

)

 

 

 

 

 

 

 

TOTAL STOCKHOLDERS' EQUITY

 

 

70,490

 

 

 

51,595

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

426,652

 

 

$

446,799

 

 

7


 

Shimmick Corporation

Consolidated Statements of Operations

(In thousands, except per share data)

 

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

December 29,

 

 

December 30,

 

 

December 29,

 

 

December 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

138,062

 

 

$

186,213

 

 

$

632,806

 

 

$

664,158

 

Cost of revenue

 

 

138,467

 

 

 

181,215

 

 

 

610,434

 

 

 

640,643

 

Gross margin

 

 

(405

)

 

 

4,998

 

 

 

22,372

 

 

 

23,515

 

Selling, general and administrative expenses

 

 

15,640

 

 

 

16,609

 

 

 

61,507

 

 

 

60,442

 

Amortization of intangibles

 

 

644

 

 

 

658

 

 

 

2,618

 

 

 

2,632

 

Total operating expenses

 

 

16,284

 

 

 

17,267

 

 

 

64,125

 

 

 

63,074

 

Equity in earnings (loss) of unconsolidated joint ventures

 

 

784

 

 

 

(5,909

)

 

 

10,354

 

 

 

52,471

 

Gain on sale of assets

 

 

85

 

 

 

 

 

 

31,834

 

 

 

 

(Loss) income from operations

 

 

(15,820

)

 

 

(18,178

)

 

 

435

 

 

 

12,912

 

Other expense (income), net

 

 

1,653

 

 

 

(132

)

 

 

2,721

 

 

 

8,731

 

Net (loss) income before income tax

 

 

(17,473

)

 

 

(18,046

)

 

 

(2,286

)

 

 

4,181

 

Income tax expense

 

 

 

 

 

17

 

 

 

 

 

 

1,274

 

Net (loss) income

 

 

(17,473

)

 

 

(18,063

)

 

 

(2,286

)

 

 

2,907

 

Net income (loss) attributable to non-controlling interests

 

 

3

 

 

 

(147

)

 

 

260

 

 

 

(853

)

Net (loss) income attributable to Shimmick Corporation

 

$

(17,476

)

 

$

(17,916

)

 

$

(2,546

)

 

$

3,760

 

Net (loss) income attributable to Shimmick Corporation per common share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.74

)

 

$

(0.82

)

 

$

(0.11

)

 

$

0.17

 

Diluted

 

$

(0.74

)

 

$

(0.82

)

 

$

(0.11

)

 

$

0.17

 

 

8


 

Shimmick Corporation

Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

Fiscal Year Ended

 

 

 

December 29,

 

 

December 30,

 

 

 

2023

 

 

2022

 

Cash Flows From Operating Activities

 

 

 

 

 

 

Net (loss) income

 

$

(2,286

)

 

$

2,907

 

Adjustments to reconcile net (loss) income to net cash used in operating
   activities:

 

 

 

 

 

 

Stock-based compensation

 

 

2,062

 

 

 

2,295

 

Depreciation and amortization

 

 

17,121

 

 

 

15,979

 

Equity in earnings of unconsolidated joint ventures

 

 

(10,354

)

 

 

(52,471

)

Return on investment in unconsolidated joint ventures

 

 

14,682

 

 

 

59,651

 

Gain on sale of assets

 

 

(31,834

)

 

 

 

Other

 

 

(47

)

 

 

9,462

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

2,251

 

 

 

41,574

 

Due from unconsolidated joint ventures

 

 

313

 

 

 

7,079

 

Contract assets

 

 

(9,334

)

 

 

(46,736

)

Accounts payable

 

 

13,747

 

 

 

10,436

 

Contract liabilities

 

 

(47,940

)

 

 

(94,165

)

Accrued expenses

 

 

(26,861

)

 

 

31,471

 

Accrued salaries, wages and benefits

 

 

(8,975

)

 

 

4,149

 

Other assets and liabilities

 

 

(645

)

 

 

5,285

 

Net cash used in operating activities

 

 

(88,100

)

 

 

(3,084

)

Cash Flows From Investing Activities

 

 

 

 

 

 

Net working capital settlement in association with business
   combination

 

 

 

 

 

32,000

 

Purchases of property, plant and equipment

 

 

(7,042

)

 

 

(10,443

)

Proceeds from sale of assets

 

 

35,975

 

 

 

1,722

 

Unconsolidated joint venture equity contributions

 

 

(23,170

)

 

 

(19,709

)

Return of investment in unconsolidated joint ventures

 

 

16,287

 

 

 

627

 

Net cash provided by investing activities

 

 

22,050

 

 

 

4,197

 

Cash Flows From Financing Activities

 

 

 

 

 

 

Payments on finance lease obligation

 

 

(303

)

 

 

(303

)

Net borrowings on revolving credit facility

 

 

29,915

 

 

 

 

Contributions from non-controlling interests

 

 

301

 

 

 

 

Distributions to non-controlling interests

 

 

(260

)

 

 

(628

)

Proceeds from IPO

 

 

25,025

 

 

 

 

Payments of IPO costs

 

 

(5,961

)

 

 

 

Other

 

 

(842

)

 

 

 

Net cash provided by (used in) financing activities

 

 

47,875

 

 

 

(931

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(18,175

)

 

 

182

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

82,085

 

 

 

81,903

 

Cash, cash equivalents and restricted cash, end of period

 

$

63,910

 

 

$

82,085

 

Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets

 

 

 

 

 

 

Cash and cash equivalents

 

 

62,939

 

 

 

77,762

 

Restricted cash

 

 

971

 

 

 

4,323

 

Total cash, cash equivalents and restricted cash

 

$

63,910

 

 

$

82,085

 

 

 

EXPLANATORY NOTES

9


 

Non-GAAP Financial Measures

 

Adjusted Net (loss) income and Adjusted Diluted Earnings Per Common Share

 

Adjusted net (loss) income represents net income (loss) attributable to Shimmick Corporation adjusted to eliminate changes in fair value of contingent consideration, transaction-related costs, stock-based compensation, and legal fees and other costs for a legacy loss project.

 

We have included Adjusted net (loss) income in this press release because it is a key measure used by our management and Board to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the income and expenses eliminated in calculating adjusted net (loss) income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted net (loss) income provides useful information to investors and others in understanding and evaluating our results of operations.

 

Our use of Adjusted net (loss) income as an analytical tool has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:

Adjusted net (loss) income does not reflect changes in, or cash requirements for, our working capital needs,
Adjusted net (loss) income does not reflect the potentially dilutive impact of stock-based compensation, and
other companies, including companies in our industry, might calculate Adjusted net (loss) income or similarly titled measures differently, which reduces their usefulness as comparative measures.

 

Because of these and other limitations, you should consider Adjusted net (loss) income alongside Net (loss) income attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.

 

 

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Table A

 

Reconciliation between Net (loss) income attributable to

Shimmick Corporation and Adjusted net (loss) income

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

December 29,

 

 

December 30,

 

 

December 29,

 

 

December 30,

 

(In thousands, except per share data)

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income attributable to Shimmick Corporation

$

(17,476

)

 

$

(17,916

)

 

$

(2,546

)

 

$

3,760

 

Changes in fair value of contingent consideration

 

(185

)

 

 

(94

)

 

 

(174

)

 

 

9,462

 

Transaction-related costs

 

798

 

 

 

365

 

 

 

2,595

 

 

 

3,104

 

Stock-based compensation

 

515

 

 

 

519

 

 

 

2,062

 

 

 

2,295

 

Legal fees and other costs for a Legacy Loss Project (1)

 

2,394

 

 

 

2,209

 

 

 

8,740

 

 

 

10,904

 

Adjusted net (loss) income

$

(13,954

)

 

$

(14,917

)

 

$

10,677

 

 

$

29,525

 

Adjusted net (loss) income attributable to Shimmick Corporation per common share

 

 

 

 

 

 

 

 

 

 

 

      Basic

$

(0.59

)

 

$

(0.68

)

 

$

0.48

 

 

$

1.35

 

      Diluted

$

(0.59

)

 

$

(0.68

)

 

$

0.48

 

 

$

1.35

 

 

(1) Consists of legal fees and other costs incurred in connection with claims relating to a Legacy Loss Project.

 

Adjusted EBITDA

 

Adjusted EBITDA represents our net (loss) income attributable to Shimmick Corporation before interest expense, income tax expense and depreciation and amortization, adjusted to eliminate changes in fair value of contingent consideration, transaction-related costs, stock-based compensation, and legal fees and other costs for a legacy loss project.

 

We have included Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the income and expenses eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations.

 

Our use of Adjusted EBITDA as an analytical tool has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized might have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements,
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs,

11


 

Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation,
Adjusted EBITDA does not reflect interest or tax payments that would reduce the cash available to us, and
other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.

 

Because of these and other limitations, you should consider Adjusted EBITDA alongside Net (loss) income attributable to Shimmick Corporation, which is the most directly comparable GAAP measure.

 

 

12


 

Table B

 

Reconciliation between Net (loss) income attributable to

Shimmick Corporation and Adjusted EBITDA

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

December 29,

 

 

December 30,

 

 

December 29,

 

 

December 30,

 

(In thousands)

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income attributable to Shimmick Corporation

$

(17,476

)

 

$

(17,916

)

 

$

(2,546

)

 

$

3,760

 

Depreciation and amortization

 

3,935

 

 

 

4,123

 

 

 

17,121

 

 

 

15,979

 

Interest expense

 

1,264

 

 

 

160

 

 

 

2,284

 

 

 

226

 

Income tax expense

 

-

 

 

 

17

 

 

 

 

 

 

1,274

 

Changes in fair value of contingent consideration

 

(185

)

 

 

(94

)

 

 

(174

)

 

 

9,462

 

Transaction-related costs

 

798

 

 

 

365

 

 

 

2,595

 

 

 

3,104

 

Stock-based compensation

 

515

 

 

 

519

 

 

 

2,062

 

 

 

2,295

 

Legal fees and other costs for a Legacy Loss Project (1)

 

2,394

 

 

 

2,209

 

 

 

8,740

 

 

 

10,904

 

Adjusted EBITDA

$

(8,755

)

 

$

(10,617

)

 

$

30,082

 

 

$

47,004

 

 

(1) Consists of legal fees and other costs incurred in connection with claims relating to a Legacy Loss Project.

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