Earnings call transcript: Shimmick Corp Q2 2025 shows strong revenue growth

Shimmick Corp’s second-quarter earnings call revealed significant revenue growth, with a 42% year-over-year increase, reaching $128 million. Despite posting a net loss of $8 million, the company showed marked improvement from the previous year’s $51 million loss. The stock, however, saw a slight decline of 3.65% in after-hours trading, closing at $2.19. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, though investors should note the company’s weak financial health score of 0.96.

For deeper insights, InvestingPro subscribers have access to 12 additional ProTips and comprehensive financial metrics that shed light on Shimmick’s performance and potential.

Key Takeaways

• Revenue surged 42% year-over-year to $128 million.
• Net loss narrowed significantly to $8 million from $51 million last year.
• Stock price fell 3.65% in after-hours trading.
• Launched new subsidiary, Axia Electric, to boost electrical work backlog.
• Backlog remains strong at $652 million, with 88% from Shimmick projects.

Company Performance

Shimmick Corp demonstrated robust performance in Q2 2025, with revenue increasing by 42% year-over-year. This growth was largely driven by the Shimmick Projects, which contributed $113 million, a 35% increase from the previous year. The company’s gross margin also improved significantly, reaching $8 million, a 126% rise year-over-year. Despite a net loss of $8 million, this was a substantial improvement from the $51 million loss reported in the same quarter of 2024.

Financial Highlights

• Revenue: $128 million, up 42% YoY
• Net Loss: $8 million, improved from $51 million in 2024
• Gross Margin: $8 million, up 126% YoY
• Adjusted EBITDA: Nearly flat at -$234,000, up from -$40 million in 2024
• Total Liquidity: $73 million, an increase of $2 million from Q1

Outlook & Guidance

Shimmick Corp projects its 2025 revenue from Shimmick Projects to be between $405 million and $415 million, with a gross margin of 9-12%. The company anticipates non-core projects to contribute $80 million to $90 million in revenue. Consolidated adjusted EBITDA is expected to range from $5 million to $15 million. The company is targeting a gradual improvement in margins through 2026. Analyst consensus from InvestingPro suggests a price target range of $2.50 to $3.00, with two analysts recently revising their earnings expectations downward for the upcoming period.

Executive Commentary

Yarl Yarl, CEO, expressed confidence in the company’s strategic direction, stating, "We are on our way towards being one of the nation’s leading sustainable infrastructure companies." He highlighted the company’s focus on "winning the right way" and emphasized the strength of their ongoing projects. CFO Todd Yoder echoed this sentiment, noting the company’s commitment to operational improvements and disciplined project management.

Risks and Challenges

• Market Uncertainty: While easing, ongoing market uncertainties could affect future bidding activities.
• Margin Pressure: The company faces pressure to improve margins as it continues to wind down non-core projects.
• Competitive Landscape: Shimmick must navigate a competitive market for infrastructure projects.
• Economic Conditions: Broader economic trends could impact project funding and execution.

Q&A

Analysts inquired about Shimmick’s win rates and bidding margins. The company reported a win rate of 15% on fixed-price contracts and 20% on negotiated contracts, with bidding margins averaging around 14-15%. Questions also focused on the company’s strategy for expanding Axia Electric into new markets like Texas, Georgia, and Tennessee, and its aspirational target of reducing SG&A expenses to 7.5% of revenue.

Full transcript - Shimmick Corp (SHIM) Q2 2025:

Investor Relations Moderator, Shimick: Good afternoon, and thank you for joining us on today’s conference call to discuss Shimick’s second quarter twenty twenty five 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 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 second 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 Yarl Yarl, Shimek’s CEO.

Yarl Yarl, CEO, Shimick: Good afternoon, and thank you all for joining us on today’s call. I’m joined by Todd Yoder, Shimek’s CFO. And let’s get started. I’m going to start by discussing our results for the second quarter and the increasing momentum we are experiencing in our business. For the 2025, we delivered revenues of $128,000,000 the gross margin of $8,000,000 and of nearly flat adjusted EBITDA of negative $234,000 Of the second quarter revenues, over 88% came from Chimik projects, which is a 12% improvement from the 2025.

We have also tripled our gross margin on Chimik projects from prior year’s second quarter on the heels of the continued operational improvements we have been putting in place since the beginning of the year. We expect our core business to generate higher margins as we continue to build our backlog. We are now referring to the source of revenue previously defined as legacy and foundations projects within the income statement as noncore projects to better define our vision forward. In this quarter, similar to last quarter, these noncore projects, which are projects that date back to previous ownership or types of projects we no longer intend to pursue, saw losses as we continue to work through that backlog. However, the share of these projects are decreasing both in our backlog and in our end revenue quarter after quarter and replaced by projects that align with our go forward strategy and profitable core business.

We also strengthened our liquidity position in the second quarter, finishing the quarter with a total liquidity of $73,000,000 a sequential increase of $2,000,000 compared to the first quarter. As we move through the 2025, I’m pleased to report accelerating momentum in the business. This progress is the direct result of the revamped strategy we introduced at the beginning of the year, one centered on driving better margins through bidding projects aligned with our core competencies, deeper client engagement that drive improved project outcomes and sharper operational discipline that enhance employee satisfaction and effective execution. We are especially encouraged to see strong positive activity in adding to our backlog, which I will discuss next. We are now seeing our growth strategy take hold, starting with a significant uptick in bidding activity.

Both the volume and the quality of opportunities have improved meaningfully over the last two quarters. In fact, we hit our best month of bid volume per month recently, and our twelve month bidding outlook stands at over $4,500,000,000 which supports our robust backlog growth based on our historical win rates. This is a strong indication of our ability to pursue larger volumes of work across our geographies and disciplines. Our pipeline is large and well aligned with our core capabilities, targeting complex infrastructure projects where our self perform model drives profits and adds value for our public and private clients. We are also focused on developing our backlog with projects delivered through integrated risk balanced delivery models that over time will yield more consistent results for Chimik.

Now with our investment and increased capacity and resources and work winning, we have the ability to pursue and win projects where we can perform, deliver and scale sustainably and profitably. We are seeing good opportunities across water, electrical and public transportation fields, which we expect to capitalize on in the second half of the year. In the second quarter, we added a few projects to our backlog, but we’ve seen greater momentum in the business post quarter close. To highlight a few of the project wins that we added to the backlog in the second quarter, these include an electrical power distribution system improvements project for Orange County Sanitation District, another electrical project for Redwood Materials’ battery recycling facility in Nevada and a flood control project for the Sacramento Area Flood Control Agency. Since the end of the second quarter, we’ve been awarded several projects and have been selected as preferred bidder on two others, which underscores the strength of our new positioning.

At the July, we announced a $51,000,000 contract for below the weir modifications in Stockton, California. This project includes the construction of a gate weir, a surface water intake and fish screens and ladders within a conveyance system. This project exemplifies how infrastructure can serve both people and the environment. By combining advanced water conveyance with ecological safeguards, we are helping shape the future of water management in California. Additionally, we have been awarded several contracts worth $70,000,000 that added to our backlog in July and have been selected as preferred bidder on two additional projects for 164,000,000, totaling EUR $234,000,000 across California and Washington, spanning different aspects of water, transportation and electrical infrastructure.

These projects are expected to be awarded and commenced in the third quarter and reflect the growing demand for Chimix integrated delivery solutions, which includes civil, mechanical and electrical self perform capabilities. These not only reinforce our standing with existing clients, but also opens doors with new new partners and agencies that value dependable delivery. And with electrical work nearly 30% of the contract value, these wins reflect another successful outcome of our strategy of increasing the share of electrical work in our backlog. Turning to our electrical project focus. I’m pleased to share that we’ve officially announced Axi Electric in the second quarter, a dedicated electrical subsidiary designed to meet the growing market demand for specialized electrical and power distribution solutions.

This new brand identity, which means value in Greek, not only aligns with how the market views us today, but also positions us for where we’re headed and reflects our vision for Chimich. Akcea Electric will serve a range of infrastructure markets, including industrial, transportation, commercial and advanced manufacturing and data center construction, in addition to our core water related electrical work. The subsidiary’s self perform model, strong safety culture and the ability to deliver turnkey solutions offer our clients the best possible budget and schedule outcomes. As a reminder, with the investments we’re making in estimating and sales and operations, we expect electrical work to continue to grow in share of our backlog with a target of 30% by 2027 from approximately 17% today. Our business operates in a very active segment of the market with a wide base of existing and potential clients, reflecting an addressable market of over $100,000,000,000 of annual spend based on our geographic focus and core capability markets.

That said, I want to take a moment to address the quickly improving operating environment across our broader pipeline, particularly as it relates to the timing of work. Last quarter, I talked about some of the delays in bidding and award activity by our clients due to uncertainties around the economy. In the second quarter, we have seen these concerns ease substantially and bidding activity recover. We have seen this trend continue into the first couple of months of the third quarter, and the good news is that we’re taking advantage of this rebound. We’re winning work and improving operationally through disciplined cost and risk management and our efforts towards attracting and retaining talent.

We are optimistic about our future and the quarters ahead. And in the meantime, we are focused on precise execution of our active work and preserving our ability to scale quickly. I’m excited about the progress we’ve made so far in 2025. Our business is strong and will continue to get stronger as we burn off our noncore backlog and continue to capitalize on favorable market conditions. Looking ahead, we feel confident about the trajectory we’re on.

With a stronger pipeline and growing backlog and a sharper execution model, we’re well positioned to carry this momentum into 2026 and beyond. And with that, I’d like to turn to Todd who will review our financials in more detail.

Todd Yoder, CFO, Shimick: Thank you, Yooral. It was an amazing second quarter at Chimik and a very productive first quarter for me. During the quarter, I had the opportunity to visit many of our projects across the country and spend time with the talented men and women who are out on our project sites making it happen every day. I wanna thank all of you for the warm welcome to and for the great work that you’re all doing to make Chemic safe and successful. And like you all, I couldn’t be more excited with the momentum and the opportunities we have going in into the second half of the year.

With that, let’s jump into the results for the second quarter. All comparisons made today will be on a year over year basis as compared to the same period in 2024. So to kick off with revenue for the second quarter twenty twenty five, we had a $128,000,000. That’s up 42% compared to $91,000,000 for the 2024. Shimich project revenue for the second quarter twenty five was a $113,000,000, up 35% compared to $84,000,000 last year.

The $29,000,000 increase in revenue was driven in part by 18,000,000 of revenue from new water and infrastructure projects ramping up and 18,000,000 of revenue from our California Palisades fire cleanup project. This was partially offset by $7,000,000 of lower burn on a combination of existing projects and projects winding down. Non core project revenue for the second quarter was $16,000,000 up 129% compared to $7,000,000 last year. The increase versus the prior year period was driven by the settlement of a claim on a large non core loss project during the 2024, which did not recur during the 2025. Gross margin for the 2025 was $8,000,000, up a 126 compared to negative gross margin of 31,000,000 for the 2024.

Gross margin recognized on Shimich projects was $15,000,000, up 226% compared to $5,000,000 for the second quarter twenty twenty four. The $10,000,000 increase in gross margin was driven by 6,000,000 in new from new water and infrastructure projects ramping up and $4,000,000 from our California Palisades fire cleanup project. Gross margin recognized on non core projects was negative $7,000,000 for the second quarter, favorable $29,000,000 as compared to a negative gross margin of $36,000,000 for the 2024, driven by the claim settlement that, occurred in the 2024 that I mentioned earlier. This is a a good time to remind our attendees as noncore projects in a loss position continue to wind down to completion, no further gross margin will be recognized. And in some cases, we could experience additional costs associated with the completion of these projects, all of which will be recognized in the period.

Moving on to g and a. Expenses for the 2025 were $15,000,000, down 20% or nearly $4,000,000 as compared to the 2024. The lower G and A expense is a testament to our diligence and the continued implementation of our transformation plan. We reported a net loss for the 2025 of $8,000,000 compared to a net loss of $51,000,000 for the 2024. This $43,000,000 improvement was driven by favorable gross margin of $39,000,000 and the reduction in g and a expenses of $4,000,000 that I mentioned earlier.

Adjusted EBITDA for the second quarter twenty twenty five was nearly flat at negative $234,000 compared to negative adjusted EBITDA of $40,000,000 in the second quarter twenty twenty four. Turning to the balance sheet, unrestricted cash and cash equivalents at the end of the quarter totaled $21,000,000 and the availability under our credit agreements totaled $52,000,000 This results in our total liquidity position of $73,000,000 ending the second quarter, and I’ll note that’s a $2,000,000 increase from where we ended the first quarter. We feel comfortable that our liquidity position ending the second quarter provides the capital needed to continue executing on our strategic and operational priorities. We ended the 2025 with backlog of $652,000,000 The mix of our backlog continues to improve as Chemic projects now represent 88% of the total backlog as of the end of the second quarter. We are fully committed to winning the right way.

One of the the three pillars that define define our growth strategy is sustainable risk balanced backlog, which centers around a disciplined approach to how we bid work, what type of work we bid, where we bid work, all of this while remaining focused on risk balance pursuits that align with our core capabilities and strategic growth plan. We are pleased with the second quarter progress and especially pleased and excited about the momentum we have going into the second half of the year. Moving on to Slide eight, we experienced stronger revenue burn on both SHMIC projects and noncore projects during this 2025 as as well as a slower ramp up of new work as compared to our initial guidance. In our initial guidance, we estimated noncore projects would be approximately 10% of our total revenue in the second half, and we now expect noncore project burn to be in the range of 14% to 18% in the second half, of our total revenue. Our first half gross margin for Shimich projects was 10%, while our gross margin on these noncore projects was a negative 16% for the quarter for the first half.

This creates an overall net negative mix impact on total Shimmyk gross margin. We’re updating our full year 2025 guidance, and we now expect Chimich projects revenue in the range of 405,000,000 to $415,000,000, up from our initial guidance of 392,000,000 to 410,000,000, with an overall gross margin on Chemic projects between 912%. Non core projects revenue, we now expect in the range of $80,000,000 to $90,000,000, up from our initial guidance of $50,000,000 to $60,000,000 with gross margin for non core projects between negative 15% and negative 5%. We now expect to achieve consolidated adjusted EBITDA of between $5,000,000 and $15,000,000 versus our initial guidance range of 15 to $25,000,000. This is driven by the negative mix impact that I just mentioned earlier.

With that, I wanna thank those of you who are joining us on the call today and for your continued interest in Now back to you all.

Yarl Yarl, CEO, Shimick: Last quarter, I stated our goal of making Chemic one of the nation’s leading sustainable infrastructure companies. We are on our way towards that goal. To recap, our investments towards growing our backlog is working. And as the share of our overall revenue represented by loss generating noncore projects decline, we expect that our overall margins will continue to improve. And now with our newly established electrical subsidiary, we are able to target growth markets for even higher margin work in industrial, advanced manufacturing and data center markets in addition to our core water and wastewater work.

I’m encouraged by the positive signs of our strategy taking hold. Over the upcoming quarters, I’m confident that we will show continued progress in getting through lost projects of the past, deliver stronger results on our core profitable work and quickly grow our backlog with work that is better aligned with our strengths. As always, I want to express my appreciation for the entire Chimich team for their enthusiasm and contributions to our company’s bright future. Operator, you may now open the line for questions.

Conference Operator: We will now move to a question and answer session. At this time, if you’d like to ask a question, please click on the raised 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 have been promoted, you’ll hear your name called, and you may unmute your video and audio and ask your question.

We will now pause a moment to assemble the queue. Our first question comes from Aaron Sparhola from Craig Hallum. Unmute your line and go ahead.

Aaron Sparhola, Analyst, Craig Hallum: Yeah. Hi, Yaron. Todd, thanks for taking the questions. You know, maybe first Aaron,

Yarl Yarl, CEO, Shimick: good to see you.

Aaron Sparhola, Analyst, Craig Hallum: Yeah. Good to see you guys too. Maybe first for me on the pipeline, dollars 4,500,000,000.0, twelve months. Can you just maybe talk a little bit about how that compares to the past couple of quarters? And then maybe just remind us of of kind of your historical win rates or targeted win rates as as you kind of think about that over the next handful of quarters.

Yarl Yarl, CEO, Shimick: Yeah. No. That’s a great question. So four and a half is a mix of what I would call fixed price contracts and negotiated contracts. So we have generally have had traditional different win rates between those two.

So, generally, we average around 15% on the fixed price contracts and more like 20% ish on the on the negotiated contracts. So it will be a it will be a mix between those two. So from a from a backlog growth perspective, four and a half is a is a sign of a great market, and I think our expanded geographical reach and access to electrical market is kinda growth, showing that increase over quarter after quarter as to what what that number is. When we first started the the the beginning of the year, it was more in the $2,000,000,000 range. So it’s we’ve seen some significant growth there, and that’s partly related to the market just not having that pause that I talked about.

So more projects are coming into into the mix and into the into the pipeline. And and we’re just identifying more because we have access to more geographies and types of work than than we did eight months ago.

Aaron Sparhola, Analyst, Craig Hallum: Alright. Thanks for that. And then maybe, you know, on the operational improvements, you know, good to see the margins tick up this quarter for the Shimik projects. Can you just maybe talk about where you’re at in that progress there, you know, confidence in that moving forward? What types of margins are are in backlog today, and and just maybe what you’re targeting moving forward as you bid on projects?

Yarl Yarl, CEO, Shimick: Yeah. It’s yeah. So like Todd talked about, the the Shimik margins are going up. We still we’re still kinda settled by the the legacy non core work margins that are in the negatives. So that brings down the overall average, but we’re we’re I see a gradual increase over the next couple of quarters.

And probably as the work we’re winning now kicks into and then starts really start generating revenue, it will accelerate the the the overall Shimmyk margins. And then you have that you have that dynamic where there’s more there’s less of the noncore work that’s negative. There’s more of the new Shimmyk work that’s positive. And, also, a lot of these jobs are really just starting and not at the back end of them. So overall, slower increase in margins over the next couple of quarters, and then into 2026, I see a faster increase through that.

While we’re bidding ranges anywhere from 10 to 20 with a good average probably around that 14% range 15% range right now. And market conditions are improving, so I expect that to also go up as far as our bidding structure goes.

Aaron Sparhola, Analyst, Craig Hallum: Alright. Thanks for that. And then, you know, maybe last for me. Good to see some of the the legacy activity moving into to 2025. I mean, understand the dynamic on on how that impacts the guidance.

But can you just talk a little bit about how much is left for 2026 and just how comfortable you are at completing the remainder of that work generally on budget and maybe not seeing as much kind of volatility as past quarters?

Yarl Yarl, CEO, Shimick: Yeah. Yeah. Good question. So on the there’s really two sides to the noncore work. One is the foundations piece, which we’ve we’re we’re entirely done with the field work.

Know, We a couple of commercial issues that we need to to to close out, but they are not substantial. They won’t so that that part is I can comfortably say that that part is done. And on the noncore work out of the, you know, six or seven projects where it started a couple of years, three years ago, we’re down to, I would call it, project and a half. One of the the two projects left, we are going to finish in the in the fourth quarter, possibly even in the the back end of the third quarter. And the the second project is has another roughly four to four quarters left, maybe five quarters left until into middle of late twenties 2026.

There’s still a bit of risk on that second project, but, you know, if if I think about what the risk profile of noncore work looked like at the ’24 when I first joined. As to now, it’s a it’s a gradual decrease on that on that front as well. So every quarter, we’re feeling more comfortable, getting to the finish line.

Aaron Sparhola, Analyst, Craig Hallum: Alright. Good. They appreciate the color, and thanks for taking the questions. I’ll turn it over.

Yarl Yarl, CEO, Shimick: Thank you. Good to see you.

Conference Operator: Your next question comes from the line of Jerry Sweeney from Roth. Please unmute your audio and video and ask your question.

Jerry Sweeney, Analyst, Roth: Hey. Good afternoon, you all. And Todd. Hi, Jerry.

Yarl Yarl, CEO, Shimick: How are you?

Jerry Sweeney, Analyst, Roth: I’m doing well. And

Todd Yoder, CFO, Shimick: you? Good.

Jerry Sweeney, Analyst, Roth: Good. Some random hotel in in Saint Louis, so I apologize. But, I just want to dig in a little bit more on on some of the noncore project work. It is expanded a little bit more, I guess, in the second half, which is you know, changes the mix work and is impacting margins and some of your guidance, which I understand. But does that mean I’m just curious if that means less noncore work was gonna be performed in 2026 that is being pulled forward?

Or did the work was there an expansion in scope with some of that work?

Yarl Yarl, CEO, Shimick: It’s both. This got that’s a really good question. It it is both. We pulled some of it forward, but there’s also been some scope growth. I mean, it’s it’s the job that especially the project that I mentioned, it’s it’s about 90% eighty eighty eight, 90% complete.

And this this stage of the project, when you’re trying to kind of finalize and close it up, we generally see some scope growth. Mhmm. So that’s it’s I would say it’s a it’s a mixture of both that we’ve seen in this quarter, and we might we might see some of that in the next quarter as well as kind of pulling it forward. We’re trying to get it done as fast as we can, obviously. Our clients want it done.

We want it done. So but, yeah, there is some scope growth there as well.

Jerry Sweeney, Analyst, Roth: Is there any ability for change orders or collections or or write ups in any of these projects, or are we are we through with that?

Yarl Yarl, CEO, Shimick: We have change orders that are in process that we’re renegotiating and talking to our clients around related to some of these scope growth. So however, they they tend to happen towards the end of the project or sometimes after the project’s done. So I we don’t expect anything immediate there. But certainly, there are there’s change orders and change orders related to that scope growth that we expect to negotiate with our clients next year.

Jerry Sweeney, Analyst, Roth: Got it. And I apologize. Aaron may have asked us. I had some connection issues and lost you for a couple of seconds. But as we look out to next year, I mean, next couple of years, we have negotiated work, we have Axia electric working, then we have more than traditional water infrastructure work that’s coming through.

How should we think about margins trending over the next couple of years? I think you mentioned 14% to 15%. And

Aaron Sparhola, Analyst, Craig Hallum: I’m not

Jerry Sweeney, Analyst, Roth: sure if that is if there’s contingency built into that, and that’s should be the numbers we’re using in our model, or we should use something else. And then how does it go from from those levels? Little bit of a long way. Yeah. I think Yeah.

Yarl Yarl, CEO, Shimick: I know. That’s that’s a good question. It’s so we I would I would say we as we win more work, which we are now, which we’re pretty happy about. And I think, finally, we’re at a point where we feel very strong around rapidly replacing and increasing our backlog with with with good SHIMIC work. And that a lot of that’s gonna start playing out, started first of the year and q four and q one, the the work that we’re winning right now.

So we’ll see margins kick up. That that that’s going to allow our margins to kick up. And the the wind down of the noncore work is going to allow us to also not have negative margin work. So all around margins are gonna kick up. I would say it’s gonna be more gradual because we still have other work to to to to to get through.

So if you’re bidding at an average 14, we we we guided nine to 12. I think at the high end of that is where we’re where we’re targeting. And I think we we have a we have a we’re that we can we can work our way towards that. But, also, it’s as a whole, we expect to our revenues to grow and going into next year and kind of take more advantage of our overhead structure that can handle a lot more work. So we’re there’s a there’s a benefit to growing our growing our revenues as well, which I

Jerry Sweeney, Analyst, Roth: I think is going to start

Yarl Yarl, CEO, Shimick: really playing out in 2026. Yeah.

Jerry Sweeney, Analyst, Roth: Gotcha. Axia. Right? So, the electrical opportunity. You know, on the slide, you highlighted some areas that I think are maybe nontraditional for you.

I think I saw just Tennessee or maybe the Southwest a little bit. How do you move into those markets, build that business in a sort of risk, a risk adjusted way?

Yarl Yarl, CEO, Shimick: Yeah. So elect our electrical team and and our Axia is is is a lot more, I would say, mobile than the the rest of the Shimich business. So we we tend to be a lot more regional in, like, the California focus, the West Coast focus, Washington focus, etcetera for core Shimich work. But Akcea, that’s a very that that’s more we can move people around a lot easier in that group. And a lot of the work is is even though it’s different than what we have done in the past, fundamentally, what you’re doing is not that different, and we have a really strong team of over a 150 people that have a lot of lot of great talent and experience in that in that on that side of the business.

So going into markets like Texas and Georgia and Tennessee where we see a lot of that advanced manufacturing Yep. Data center type type type work, that’s that’s that’s we have we have I have great confidence in our team. I’ve been very impressed. We’re also making some strategic hires in that in that part of the business. So moving around and and getting in there.

And and a lot of the times, the other aspect of that is you’re not in a general contractor position there. We’re generally subcontractors just doing the electrical work. Yep. So going into a new job and managing it is a lot easier, a lot less complicated as long as we’re able to move the move people around and get to get get them to the right places. So we’re bidding work in Nevada.

We’re bidding work in Washington in that space, Georgia, Tennessee, Texas. Those are those are really strong markets for that kind of technology related electrical work right now.

Jerry Sweeney, Analyst, Roth: Got it. And final question. SG and A structure, I know you’ve been doing some work tweaking that. Is that all done, or what should we be thinking about on SG and A on a go forward basis?

Yarl Yarl, CEO, Shimick: We still have a little bit more work to do there with Todd here. We’re doing a lot of deep dives and looking for better ways to go about things. So I can see a little bit more efficiency and decrease there going into the next coming few quarters. But it’s not going to be like the 20% we’ve achieved from 2024. It will be probably more modest.

I think what we’re going to see going into next year is revenues increasing and and the SG and A not increasing at that same percentage or or or at all. And the the the the percentages of SG and A to revenue will come into a lot more aligned with or better than industry average.

Jerry Sweeney, Analyst, Roth: Yeah. And I

Todd Yoder, CFO, Shimick: would just say in the second half, there’ll be some puts and takes in g and a. So, you know, it was a huge improvement over prior year, but it’s slightly up from the first quarter. Yeah. But there were some onetime events in the second quarter that won’t won’t repeat. So

Jerry Sweeney, Analyst, Roth: I gotcha. So what would be, maybe aspirational target for SG and A as a percentage of revenue? I mean, I think it’s running, you know, eleven, eleven and a half percent for the quarter. You know, maybe 11

Yarl Yarl, CEO, Shimick: and half percent is where we wanna be. Seven and a half percent is the, okay, aspirational goal. That’s where we wanna be. Yeah.

Jerry Sweeney, Analyst, Roth: I was gonna say 10, but I’ll take seven and a half.

Yarl Yarl, CEO, Shimick: Well, you have to get through you have to get through 10 to get to seven Yeah.

Todd Yoder, CFO, Shimick: Yeah. I was gonna say. One step at a seven. So you’re all right. Right in the middle.

Yarl Yarl, CEO, Shimick: Was Yeah.

Jerry Sweeney, Analyst, Roth: Alrighty. I appreciate it, guys. And I know it’s been a long road, and and I dare I say, I think maybe some green shoots are coming up, and and, you know, I know there’s still some more work to do, but, I appreciate the quarter. So

Yarl Yarl, CEO, Shimick: Yeah. Thanks, Gary. Thanks, Gary. We’re we’re we’re we’re pretty excited. Yeah.

Definitely. Thanks for the questions.

Jerry Sweeney, Analyst, Roth: Thank you.

Conference Operator: There are no more questions at this time. I’d now like to turn the call over to Yuril for closing remarks.

Yarl Yarl, CEO, Shimick: Well, thank you for joining our second quarter twenty twenty five earnings call and presentation. Like like we’ve expressed, we’re excited about the future of our company, excited about the progress we’re making to get through past issues and move forward, increase our margins, grow our size, and look look to a strong couple of quarters next core next the rest of the year and into 2026. So thank you for your time.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.