Shimmick Corp (SHIM) 2024 Q2 法說會逐字稿

Greetings, and welcome to Shimmick's second-quarter 2024 earnings conference call. (Operator Instructions)

您好，歡迎參加 Shimmick 的 2024 年第二季財報電話會議。（操作員說明）

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anthony Rasmus, Investor Relations. Please go ahead.

提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人投資者關係部門的安東尼·拉斯穆斯 (Anthony Rasmus)。請繼續。

Good morning, and thank you for joining us on today's conference call to discuss Shimmick's second-quarter 2024 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.

早安，感謝您參加今天的電話會議，討論 Shimmick 的 2024 年第二季業績。今天示範的幻燈片可在我們網站 www.shimmick.com 的投資者關係部分取得。在本次電話會議期間，管理階層將根據目前的預期和假設做出前瞻性聲明，這些預期和假設受到風險和不確定性的影響。如果我們的任何關鍵假設不正確，實際結果可能與我們的前瞻性陳述有重大差異。

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.

我們在向美國證券交易委員會提交的報告和文件中確定了可能影響我們業績的主要風險和不確定性，這些資訊也可以在我們的投資者關係網站上找到。我們不承擔更新任何前瞻性陳述的責任。

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.

今天的演示也提到了非公認會計準則財務指標。您應該參考公司第二季新聞稿中包含的信息，以了解歷史非公認會計準則衡量指標與可比較公認會計準則財務衡量指標的定義資訊和調節表。

With that, it's my pleasure to turn the call over to Steve Richards, Shimmick's CEO.

至此，我很高興將電話轉給 Shimmick 執行長 Steve Richards。

Good morning, and thank you, all, for joining us on today's call. I'm joined by Amanda Mobley, Shimmick's Interim CFO.

早安，感謝大家參加今天的電話會議。Shimmick 的臨時財務長 Amanda Mobley 也加入了我的行列。

We settled one of the two Legacy Loss Project claims for $33 million of cash to be paid sometime later this year, which will improve our liquidity. The settlement also eliminates distractions with continuing legal costs and is key to continuing our transformation. As part of the settlement, the quarter includes a $23 million reduction in Legacy Projects' revenue and additional $7 million in gross margin, which Amanda will further discuss later.

我們解決了兩項遺留損失項目索賠中的一項，並在今年稍後支付了 3,300 萬美元現金，這將改善我們的流動性。和解也消除了持續的法律費用帶來的干擾，是我們繼續轉型的關鍵。作為和解協議的一部分，該季度 Legacy Projects 的營收將減少 2,300 萬美元，毛利率將增加 700 萬美元，Amanda 將在稍後進一步討論。

After accounting for the settlement, we delivered second-quarter 2024 revenues of $91 million and experienced a net loss of $51 million with an adjusted EBITDA loss of $40 million. Shimmick projects revenue totaled $84 million in the second quarter versus $103 million a year ago.

計入和解後，我們的 2024 年第二季營收為 9,100 萬美元，淨虧損 5,100 萬美元，調整後 EBITDA 虧損 4,000 萬美元。Shimmick 預計第二季的營收總計為 8,400 萬美元，而去年同期為 1.03 億美元。

Shimmick project gross margins were 5% for the quarter, a decline from 8% gross margin for the first quarter of 2023, driven by schedule extensions, pending change orders, and increased costs. That said, we're encouraged by the 6% sequential margin improvement as compared to the first quarter of 2024 on this front and look forward to building off this momentum.

Shimmick 專案本季毛利率為 5%，較 2023 年第一季的 8% 毛利率有所下降，原因是工期延長、待變更訂單和成本增加。也就是說，與 2024 年第一季相比，這方面的利潤率環比提高了 6%，這讓我們感到鼓舞，並期待繼續鞏固這一勢頭。

As we did on our last call, we'll provide a breakdown of results between Shimmick projects, projects that began after the AECOM sale transaction, and Legacy Projects, those that started before the AECOM sale transaction. Amanda will provide more details specifically related to the breakdown of these results. However, of note, our overall gross margin was weaker in the second quarter, primarily related to the Legacy Project settlement agreement and cost overruns experienced, as well as additional legal fees on the Legacy Loss Projects in order to continue to pursue of contract mods and recoveries from priority donors.

正如我們在上次電話會議中所做的那樣，我們將提供 Shimmick 項目（在 AECOM 出售交易之後開始的項目）和舊項目（在 AECOM 出售交易之前開始的項目）之間的結果細目。阿曼達將提供與這些結果細分相關的更多詳細資訊。然而，值得注意的是，我們第二季度的整體毛利率較弱，主要與遺留項目和解協議和成本超支有關，以及遺留損失項目的額外法律費用，以便繼續追求合約模式和來自優先捐助者的回收。

Although we are experiencing near-term headwinds due to project timing and cost issues with Legacy Projects, we remain encouraged by the progress we have seen converting our backlog to Shimmick projects versus Legacy Projects. At the end of the second quarter, Shimmick projects continue to represent a larger portion of our backlog versus Legacy Projects.

儘管由於遺留項目的項目時間和成本問題，我們在近期遇到了阻力，但我們仍然對我們所看到的將積壓項目轉換為 Shimmick 項目而不是遺留項目所取得的進展感到鼓舞。與遺留項目相比，到第二季末，Shimmick 項目繼續占我們積壓訂單的較大部分。

Additionally, our overall backlog remained strong at $922 million as of the end of the second quarter. We continue to have a robust pipeline of future work, which we expect to grow alongside increases in federal funding and a growing demand for water. As we described on the last call, we added estimating personnel late in the second quarter to be responsive to this pipeline of work.

此外，截至第二季末，我們的總體積壓訂單仍然強勁，達到 9.22 億美元。我們繼續擁有強大的未來工作管道，我們預計這些工作將隨著聯邦資金的增加和水需求的增長而增長。正如我們在上次電話會議中所述，我們在第二季末增加了估算人員，以回應此工作流程。

We're beginning to see the uptick in our bidding efforts bear fruit. Most recently, following the end of the second quarter, we secured a win for a $14.5 million project for Delta Diablo cogeneration system replacement in Antioch, California. The Delta Diablo operates in existing cogeneration system at a wastewater treatment plant, once again reinforcing our go-forward focus on water-related projects.

我們開始看到我們的競標努力取得了成果。最近，第二季末後，我們贏得了加州安提阿 Delta Diablo 熱電聯產系統更換項目的 1,450 萬美元項目。Delta Diablo 在污水處理廠現有的熱電聯產系統中運行，再次加強了我們對水相關項目的持續關注。

The cogeneration system improvements project will include the demolition of the existing plant and replaced with a new cogeneration engine, digester gas, condition equipment, exhauster systems and boiler. This also includes upgrades to electrical and control infrastructure and demolition of an existing digester gas storage series. Shimmick work will aid the district's resource recovery capabilities, reduce grid power consumption, and promote more efficient and reliable plant performance.

熱電聯產系統改進項目將包括拆除現有工廠並​​更換新的熱電聯產引擎、沼氣池、調節設備、排氣系統和鍋爐。這也包括升級電氣和控制基礎設施以及拆除現有的沼氣池儲氣庫。Shimmick 的工作將有助於提高該地區的資源回收能力，降低電網功耗，並促進工廠性能更有效率和可靠。

More than 75% of our work is generated from repeat customers. Public customers and associated public funding allows for a predictable long-term flow of programs and projects. Shimmick's core market vision is coming to reality with a more asset-light, higher-margin, water-focused company targeting projects that make use of significant in-sourcing technical skills on projects that average three years in duration.

我們 75% 以上的工作都是由回頭客產生的。公共客戶和相關的公共資金可以實現可預測的長期計劃和專案流程。Shimmick 的核心市場願景正在成為現實，成為一家資產更輕、利潤更高、以水務為重點的公司，其目標是在平均持續時間為三年的專案上利用重要的內包技術技能。

I'd like also to take some time to address the update on Shimmick's transformation. As many of you are aware, Shimmick has a long history of successfully winning and delivering complex water and other critical infrastructure projects in the state of California. The market for water and critical infrastructure projects in California has consistently grown each year with the size and complexity of projects forecasted to grow for decades.

我還想花一些時間來談談希米克轉型的最新情況。正如你們許多人所知，Shimmick 在成功贏得並交付加州複雜的水務和其他關鍵基礎設施項目方面有著悠久的歷史。加州的水務和關鍵基礎設施專案市場每年都在持續成長，專案的規模和複雜性預計將在未來幾十年持續成長。

Today, the company announced initiatives as part of our transformation plan to increasing our focus on the California water and critical infrastructure market. These initiatives include increasing the bid activity by increasing the number of estimators in Southern Northern California, rightsizing our cost structure by reducing our overheads in non-core areas, and redefining our operating model with a renewed focus on supporting the field to safely deliver projects on time and on budget for our clients across California.

今天，該公司宣布了一些舉措，作為我們轉型計劃的一部分，以加強對加州水務和關鍵基礎設施市場的關注。這些舉措包括透過增加南加州和北加州的估算員數量來增加投標活動，透過減少非核心領域的管理費用來調整我們的成本結構，以及重新定義我們的營運模式，重新專注於支持該領域安全交付項目為加州各地的客戶提供時間和預算。

Our transformation at Shimmick is well underway, and we continue to work towards refocusing our operations to best position ourselves to capture the market we see in the California market.

Shimmick 的轉型正在順利進行，我們將繼續努力重新調整我們的業務重點，以最好地定位我們在加州市場的市場。

Turning to the next slide. I'd like to take a moment to highlight our recently completed $42 million project at the Richmond wastewater treatment plant, which has been a significant milestone for both Shimmick and the city of Richmond. In 2010, the Richmond facility was identified as needing critical rehabilitation due to its impact on the San Francisco Bay area. To address this, Shimmick was brought in to execute a series of high-priority upgrades designed to improve treatment quality and meet both current and future environmental regulations.

轉到下一張投影片。我想花點時間強調我們最近完成的耗資 4200 萬美元的里士滿廢水處理廠項目，該項目對於希米克和里士滿市來說都是一個重要的里程碑。2010 年，由於對舊金山灣地區的影響，里士滿工廠被確定需要進行重大修復。為了解決這個問題，Shimmick 受邀執行一系列高度優先的升級，旨在提高處理品質並滿足當前和未來的環境法規。

Shimmick constructed new buildings, upgraded the ration basins with state-of-the-art force error diffusion system and removed outdated and unused facilities. These strategic improvements have not only enhanced the operational efficiency of the plant, but also reduce its environmental footprint.

Shimmick 建造了新建築，以最先進的力誤差擴散系統升級了配給池，並拆除了過時和未使用的設施。這些策略改進不僅提高了工廠的營運效率，也減少了其環境足跡。

Now with the project successfully completed, the Richmond wastewater system operates more efficiently. The new project has significantly reduced energy usage, chemical treatment needs and greenhouse gas emissions while cutting costs for the city. This means a cleaner environment, reduced orders and overall improved quality of life for the residents of Richmond.

現在，隨著該專案的成功完成，里士滿廢水系統的運作效率更高。新項目顯著減少了能源使用、化學處理需求和溫室氣體排放，同時降低了城市成本。這意味著里士滿居民的環境更加清潔，訂單減少，生活品質全面提升。

This project is a testament to Shimmick's commitment to delivering sustainable infrastructure solutions that benefit both communities and the environment.

該計畫證明了 Shimmick 致力於提供有利於社區和環境的永續基礎設施解決方案。

We are proud of the outcome and look forward to continuing our work in this vital sector. With that, I'd like to turn the call over to Amanda, who will discuss our financial results.

我們對這項成果感到自豪，並期待繼續在這一重要領域開展工作。說到這裡，我想把電話轉給阿曼達，她將討論我們的財務表現。

Thanks, Steve. All comparisons made today will be on a year-over-year basis compared to the same period in 2023.

謝謝，史蒂夫。今天進行的所有比較都將與 2023 年同期進行同比比較。

For the second quarter, we recorded revenue of $91 million compared to $155 million for the prior year period, primarily as a result of the Legacy Project settlement mentioned earlier and discuss more on the next slide, and from lower activity on existing jobs, and job pointing down partially offset by an increase in the revenue driven by a new water infrastructure job. We had a net loss of $51 million compared to a net loss of $10 million for the prior-year period. Again, largely as a result of the Legacy Project settlement, as well as equity and loss of unconsolidated joint ventures.

第二季度，我們的收入為9,100 萬美元，而上年同期為1.55 億美元，這主要是由於前面提到的遺留項目和解，並在下一張幻燈片中討論更多內容，以及現有工作和工作活動的減少。我們的淨虧損為 5,100 萬美元，而去年同期的淨虧損為 1,000 萬美元。同樣，這主要是由於遺留項目和解以及未合併合資企業的股權和損失造成的。

Second quarter adjusted EBITDA was a loss of $40 million compared to a loss of $2 million in the prior-year period. Revenue recognized on Foundation's projects was $8 million in the second quarter of 2024 compared to $9 million a year ago. The $1 million decline in revenue was a result of timing of jobs pointing down.

第二季調整後 EBITDA 虧損 4,000 萬美元，而上年同期虧損 200 萬美元。2024 年第二季度，基金會專案確認的收入為 800 萬美元，而去年同期為 900 萬美元。收入下降 100 萬美元是因為就業機會下降。

As a reminder, we entered into an agreement to sell the assets of non-core foundations projects and will wind down work during the year. Gross margin recognized on foundations projects was a negative $2 million and negative $7 million for the three months ended June 28, 2024, and June 30, 2023, respectively. The increase in the gross margin was a result of cost overruns incurred on two jobs during the three months ended June 30, 2023, which were substantially completed during the 2023 fiscal year.

提醒一下，我們簽訂了出售非核心基金會專案資產的協議，並將在年內逐步結束工作。截至2024年6月28日及2023年6月30日的三個月，基金會專案確認的毛利率分別為負200萬美元及負700萬美元。毛利率的成長是由於截至2023年6月30日的三個月內兩項工作發生成本超支，這些工作在2023財年基本完成。

Legacy Projects revenue decreased by $44 million to a negative $2 million compared to 2023 and to gross margin of negative $34 million, primarily impacted by the Legacy Project settlement and cost overruns and continued legal costs. As the 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 projects, which will all be recognized in the period.

與 2023 年相比，遺留項目收入減少了 4,400 萬美元，至負 200 萬美元，毛利率為負 3,400 萬美元，主要受到遺留項目和解、成本超支和持續法律費用的影響。隨著遺留損失項目繼續逐步完成，將不會進一步確認毛利率，並且在某些情況下，可能存在與這些項目相關的額外成本，這些成本將全部在該期間內確認。

Revenue recognized on these Legacy Loss Projects was a negative $7 million and $27 million for the three months ended June 28, 2024, and June 30, 2023, respectively. Gross margin recognized on these Legacy Loss Projects was a negative $32 million for the three months ended June 28, 2024, and a negative $1 million for the three months ended June 30, 2023. We continue to actively pursue all opportunities to offset these costs.

截至2024年6月28日及2023年6月30日的三個月，這些遺留損失項目確認的收入分別為負700萬美元和2,700萬美元。截至2024年6月28日止三個月，這些遺留損失項目確認的毛利率為負3,200萬美元，截至2023年6月30日止三個月為負100萬美元。我們將繼續積極尋求一切機會來抵消這些成本。

Turning to the balance sheet. Unrestricted cash and cash equivalents at June 28, 2024 totaled $22 million and availability under the revolving credit facility and credit facility totaled $7 million and $6 million, respectively, resulting in total liquidity of $35 million.

轉向資產負債表。截至 2024 年 6 月 28 日，不受限制的現金和現金等價物總額為 2,200 萬美元，循環信貸安排和信貸安排下的可用資金分別為 700 萬美元和 600 萬美元，流動性總額為 3,500 萬美元。

Turning to the next slide. As Steve mentioned earlier, we expect to receive $33 million in cash related to a claim on a large legacy project later this year. However, our second quarter results were impacted by a change in estimate from the settlement agreement and on the Legacy Loss Project. As a result of the settlement and previously estimated contract revenue, the company recognized a net loss of $30 million, which includes a $23 million reduction to revenue, and a $7 million dollar adjustment to forward loss reserves, recorded within the condensed consolidated statements of operations for the three and six months ended June 28, 2024.

轉到下一張投影片。正如史蒂夫之前提到的，我們預計將在今年稍後收到與大型遺留項目索賠相關的 3300 萬美元現金。然而，我們第二季的業績受到和解協議和遺留損失項目估計變化的影響。由於和解和先前估計的合約收入，公司確認了 3000 萬美元的淨虧損，其中包括收入減少 2300 萬美元，以及遠期損失準備金調整 700 萬美元，記錄在簡明合併運營報表中截至2024年6月28日的三個月和六個月。

While this obviously impacted our revenue recorded in the quarter, we expect to receive cash payment later this year, which has helped support our liquidity position and eliminates the continuation of litigation costs.

雖然這顯然影響了我們本季記錄的收入，但我們預計將在今年稍後收到現金付款，這有助於支持我們的流動性狀況並消除持續的訴訟成本。

On August 9, 2024, we completed the previously disclosed transaction for the sale lease back of our equipment yard in Tracy, California. The agreement consummated the sale of the equipment yard for $20.5 million and allows us to continue using the property under a seven-year lease. We received net proceeds of $17 million after adjustments for prepaid rent through February of 2026 and related closing costs. The equipment yard had a net book value of approximately $3 million and the remaining $17 million of net proceeds received from the transaction were used to repay borrowings under the revolving credit facility.

2024 年 8 月 9 日，我們完成了先前披露的加州特雷西設備場售後租回交易。該協議以 2050 萬美元的價格完成了設備場的出售，並允許我們繼續以七年租約使用該財產。在截至 2026 年 2 月的預付租金和相關成交費用進行調整後，我們獲得了 1,700 萬美元的淨收益。該設備場的帳面淨值約為 300 萬美元，從交易中收到的剩餘 1,700 萬美元淨收益用於償還循環信貸安排下的借款。

For the fiscal year ending January 3, 2025, after excluding non-core foundations project revenue of $64 million for the fiscal year ending December 29, 2023, we now expect that Shimmick project's revenue remained generally flat with gross margin between 4% to 9%.

截至2025年1月3日的財年，剔除截至2023年12月29日財年的6,400萬美元非核心基金會專案營收後，我們現在預期Shimmick專案的營收基本持平，毛利率在4%至9 %之間。

Legacy Projects revenue of $55 million to $65 million with negative gross margins of 80% to 90% due to the Legacy Loss Project settlement. Additional costs recorded for the Legacy Loss Project related to pending change awards and other cost overruns. The guidance reflects our execution on our strategy, a 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.

由於遺產損失項目和解，遺產項目收入為 5,500 萬至 6,500 萬美元，毛利率為負 80% 至 90%。遺留損失項目記錄的與待定變更獎勵和其他成本超支相關的額外成本。該指南反映了我們對策略的執行、強大的管道、積壓訂單品質的提高、持續的營運執行以及我們為解決遺留項目所做的努力。我們相信，我們的業績將在 2024 年恢復一半權重，並在 2025 年實現進一步強勁的成長動能。

With that, I'd like to turn it over now to Steve for some additional remarks.

說到這裡，我現在想把它轉交給史蒂夫，讓他補充一些意見。

Thanks, Amanda. In conclusion, we are encouraged by the continued progress made in working off the Legacy Loss Project backlog. It is important to note that we are approaching the finish line related to the Legacy Loss Projects and hope to have these distractions behind us as we close '24 and the end of 2025.

謝謝，阿曼達。總之，我們對處理遺留損失專案積壓工作所取得的持續進展感到鼓舞。值得注意的是，我們正在接近與遺留損失項目相關的終點線，並希望在 24 年結束和 2025 年底時將這些幹擾拋在腦後。

We expect the jury trial to be held in the second half of the year on claims on our other large Legacy Loss job. And those projects are beginning to correct itself, albeit slower than we anticipated. We believe these challenges to be short term in nature as Shimmick continues to be favorably positioned to take advantage of the sizable market opportunities ahead we continue to expect new project start-ups to advance.

我們預計陪審團審判將於今年下半年就我們另一項大型遺產損失工作的索賠進行。這些項目正在開始自我糾正，儘管比我們預期的要慢。我們認為，這些挑戰本質上是短期的，因為 Shimmick 繼續處於有利地位，可以利用未來的龐大市場機會，我們繼續期望新專案新創公司能夠取得進展。

It is important to reinforce that our strategy for our core business remains unchanged. Our vertical integration minimizes risk and our strategic shift towards a higher margin, low CapEx portfolio coupled with potential M&A activities, position us for enhanced margins and growth. We want to once again thank our team for their tireless efforts as we work to transform Shimmick into one of America's best water infrastructure companies.

需要強調的是，我們的核心業務策略保持不變。我們的垂直整​​合最大限度地降低了風險，我們的策略轉向利潤率更高、資本支出更低的投資組合，再加上潛在的併購活動，使我們能夠提高利潤率和成長。我們要再次感謝我們的團隊在我們努力將 Shimmick 轉變為美國最好的水基礎設施公司之一的過程中所做的不懈努力。

Operator, you may now open the line for questions.

接線員，現在可以撥打電話提問。

(Operator Instructions) Gerry Sweeney, Roth Capital Partners.

（操作員說明）Gerry Sweeney，Roth Capital Partners。

Yeah, good morning. Thanks for taking my call.

是的，早安。感謝您接聽我的電話。

Hey, morning, Gerry.

嘿，早上好，格里。

Steve, I was wondering if you could give us a little bit of maybe qualitative background on the new projects out there, the activity, not so much projects that you won, but what you're seeing in terms of the funnel and maybe thoughts on how some of that translates over the next two, three, four, five, six quarters.

史蒂夫，我想知道你是否可以給我們一些關於新項目、活動的定性背景，不是你贏得的項目，而是你在漏斗方面看到的內容，也許還有一些想法其中一些在接下來的兩個、三個、四個、五個、六個季度將如何轉換。

Sure. Well, we're seeing a lot of activity in the California market. Southern California, Northern California, both the projects fit our profile with the number of projects out there really having to filter them down to be in those projects that we like in size, $50 million to $150 million through your average duration. And so you've seen a lot of those projects, like what I've been most encouraged about is that a good amount of that work is allowing us to self perform up to our target amount of about 75%.

當然。嗯，我們看到加州市場有很多活動。南加州、北加州，這兩個項目都符合我們的概況，因為那裡的項目數量確實必須篩選出我們喜歡的項目規模，平均持續時間為 5000 萬美元到 1.5 億美元。所以你已經看到了很多這樣的項目，就像我最受鼓舞的是，大量的工作讓我們能夠自我完成大約 75% 的目標。

So, good pipeline. We're adding more estimators, actually, Gerry, to take on the pipeline that we see, both in the Northwest and Southwest divisions plus our electrical division of work. So pretty excited about it all.

所以，良好的管道。事實上，我們正​​在增加更多的估算員，格里，以承擔我們所看到的管道，包括西北和西南部門以及我們的電氣部門的工作。對這一切感到非常興奮。

Got it. And then obviously, on the legacy projects, I think you gave a little bit of guidance on that front. Could you just go over that again real quick? And then I probably have some follow-up questions on that front.

知道了。顯然，在遺留項目上，我認為您在這方面提供了一些指導。你能很快再回顧嗎？然後我可能在這方面還有一些後續問題。

Yeah. Amanda will jump in with me on this. But what we see happening, we mentioned in our release that we see one of the Legacy Projects entering into a jury trial later this year. So we're encouraged by that to get by that claim from a backlog standpoint and working that job off.

是的。阿曼達會和我一起討論這個問題。但我們所看到的情況是，我們在新聞稿中提到，我們看到其中一個遺留項目將在今年稍後進入陪審團審判。因此，我們受到鼓舞，從積壓的角度來實現這項要求並完成這項工作。

We've got the majority of the most difficult part of the job nearly complete. It will finish off in the spring, and then we'll enter into more traditional installation or manufacturing piece of the work.

我們已經幾乎完成了工作中最困難部分的大部分。它將在春季完成，然後我們將進入更傳統的安裝或製造工作。

The other project, again, the interim milestones for the most difficult work are approaching completion by the end of '24. Overall completion would be later in '25 for the majority of the project.

另一個項目，最困難的工作的臨時里程碑也將在 24 年底前完成。該項目的大部分工作將在 25 年稍後完成。

Amanda, do you want to add any color as far as the backlog numbers and what's to burn on the Legacy A content?

阿曼達，您想添加任何關於積壓數量的顏色以及要在舊版 A 內容上刻錄的內容嗎？

Yeah. I hit on kind of the same remarks there that we'll continue to see the backlog winding down and the legacy jobs, the majority of that will be done through 2025 and a little going into 2026 there continue to decrease the backlog.

是的。我在那裡也提到了同樣的言論，即我們將繼續看到積壓工作逐漸減少，遺留工作，其中大部分將在 2025 年之前完成，一小部分進入 2026 年，積壓工作將繼續減少。

Got it. And then obviously, you had a settlement on the lot project and then you have this other project that you're going to trial on. But I was curious if there is an opportunity for any other -- or are there still claims outstanding that you could recoup some losses?

知道了。顯然，您已經就該地段項目達成了和解，然後您還有要試用的其他項目。但我很好奇是否還有其他機會，或者是否仍有未決索賠可以彌補一些損失？

Yeah, sure. Normal course of business for us, we always see change orders coming through the system. And they have the potential to improve not only margin but certainly cash flow.

是的，當然。在我們的正常業務流程中，我們總是會看到系統發出變更單。它們不僅有可能提高利潤率，而且有可能提高現金流。

Got it. And how much in the quarter were legal fees? And obviously, as you get closer to some of these trials, legal fees ramp up, but just curious as to maybe a more normalized, even SG&A, once you get through some of this the settlements in this trial, what would sort of be a normalized G&A run rate?

知道了。本季的法律費用是多少？顯然，當你接近其中一些審判時，法律費用會增加，但只是好奇也許會更加正常化，甚至SG＆A，一旦你在本次審判中完成了其中的一些和解，會是什麼樣的標準化管理費用運行率？

Amanda, do you want to hit on the legal fees that we incurred in the quarter? I'm not sure that's rightly available.

阿曼達，您想了解我們本季產生的法律費用嗎？我不確定這是否正確可用。

Yeah. We would look to see more information in the Q that will come out later, but for the legal fees, about $2 million for the quarter.

是的。我們希望在稍後發布的 Q 中看到更多信息，但本季度的法律費用約為 200 萬美元。

Okay, got it. Okay.

好的，明白了。好的。

And you're right, Gerry. As we approach the trial, for example, those fees really ramp up from the standpoint of the legal activity, whether it be depositions or just the press to be ready for the trial, normal run rate, what Amanda just described, we would see that fall off. And so it would be an improvement for job costs and overhead.

你是對的，格里。例如，當我們接近審判時，從法律活動的角度來看，這些費用確實在增加，無論是證詞還是只是為審判做好準備的媒體，正常的運行率，阿曼達剛才描述的，我們會看到脫落。因此，這將改善工作成本和管理費用。

Got it. And just digging around here on the Shim projects you talked about maybe back-half loaded, and you've made some sequential improvements on gross margins. Barring weather or unforeseen circumstances that would slow things down, could we anticipate margins improving through the rest of the year? Is that what you sort of infer when you say back-half loaded?

知道了。只要在這裡挖掘一下您提到的 Shim 項目，可能已經加載了一半，您已經在毛利率上取得了一些連續的改進。除非天氣或不可預見的情況會減慢速度，否則我們可以預期今年剩餘時間的利潤率會有所改善嗎？當你說「後半載」時，這就是你所推斷的嗎？

Yeah, that's right. Our guidance, what we just came through was lower end of the guidance, and we've got the higher range still out there. So that would tell you that we see improvements over the next two quarters.

是的，沒錯。我們的指導，我們剛剛經歷的是指導的下限，我們仍然有更高的範圍。所以這會告訴你，我們在接下來的兩個季度看到了進步。

Okay, great. I know I'll follow up with you. So I'll jump back in line, but thanks.

好的，太好了。我知道我會跟進你的。所以我會跳回隊列，但謝謝。

Thanks, Gerry.

謝謝，格里。

Aaron Spychalla, Craig Hallum.

亞倫·斯皮查拉，克雷格·哈勒姆。

Yeah, good morning, Steven, Amanda. Thanks for taking the questions. First, you talked about a new operating model. Can you just share a little more on what that entails? You kind of hit targeted project size a little bit of $50 million to $150 million. But just anything margins, anything else behind that would be helpful.

是的，早上好，史蒂文，阿曼達。感謝您提出問題。首先，您談到了新的營運模式。能多分享一下這需要什麼嗎？您的目標專案規模約為 5,000 萬至 1.5 億美元。但任何利潤，任何其他背後的東西都會有幫助。

Yeah. So geographically, we'll be focused on the California area. We're already set up there with our regional offices, headquarters in Irvine, and then our major regional office in Suisun City, which is a little bit east of Oakland. So we've got the right geographic presence for not only our estimating teams that know the local supply chain or the local market, but also our leadership and the key staff that are running the jobs. So feel really good about that and the craft labor that's following this.

是的。因此，從地理位置上來說，我們將重點放在加州地區。我們已經在那裡設立了區域辦事處，總部位於爾灣，然後我們的主要區域辦事處位於奧克蘭以東一點的 Suisun 市。因此，我們不僅為了解當地供應鏈或當地市場的估算團隊提供了合適的地理位置，而且還為我們的領導層和負責工作的關鍵員工提供了合適的地理位置。因此，對此以及隨之而來的手工勞動感覺非常好。

But I think that from a margin standpoint, we haven't seen a drop in margin opportunity as we're bidding work. And for us, the key is that we find the right mouse trap to win the job, to find that best way to finish the cost of it most efficiently, and we'll get our share of the market. So we see in that upper-teen area still as being the target area for job margins.

但我認為，從利潤的角度來看，我們在投標工作時並沒有看到利潤機會下降。對我們來說，關鍵是我們找到合適的捕鼠器來贏得這份工作，找到最有效降低成本的最佳方法，我們將獲得我們的市場份額。因此，我們認為上十幾歲的地區仍然是工作利潤率的目標地區。

All right. Thanks for that. And then just on the addition of more estimating personnel. With the pipeline you have today and just expected growth, how are you feeling about just labor capacity and labor availability in the market, and just kind of overall capacity for your business as you move forward?

好的。謝謝你。然後就增加更多的估算人員。憑藉您今天擁有的管道和預期的成長，您對市場上的勞動力能力和勞動力可用性以及您的業務在前進過程中的整體能力感覺如何？

Right. Well, what we're able to do with our teams, first of all, is we're able to work share across regions. And so we've got folks that are coming out of our -- the emphasis on the national market to be having them as the additional support for our California pursuits. And so that's a value add immediately that we can transfer over.

正確的。嗯，我們能夠與我們的團隊一起做的，首先是我們能夠跨地區共享工作。因此，我們有來自我們對全國市場的重視的人，讓他們為我們在加州的追求提供額外的支持。因此，這是我們可以立即轉移的增值。

From the standpoint of recruiting other staff, this is a great networking business. We've got a lot of connectivity in the industry and feel good about being able to get those right people. We're really scrutinizing the folks that we're going on. We want to bring those that have not only the talent, but the right culture fit for them. They can feel good about who we've recruited so far.

從招募其他員工的角度來看，這是一項很棒的網路業務。我們在行業中擁有廣泛的聯繫，並且對於能夠找到合適的人才感到高興。我們確實正在仔細審查我們正在進行的人員。我們希望引進那些不僅有才華，而且有適合他們的文化的人。他們對我們迄今為止招募的人員感覺良好。

All right. Thanks for that. And then just on the new projects, I mean, you got the guidance, obviously for the year in the back half. But it sounds like you're starting to see project execution improve after just some of the higher kind of start-up costs and delays that you saw earlier this year?

好的。謝謝你。然後就新項目而言，我的意思是，您得到了指導，顯然是下半年的指導。但聽起來，在經歷了今年早些時候出現的一些較高的啟動成本和延誤之後，您似乎開始看到專案執行有所改善？

Yeah. That's what we see, yeah. We're seeing, for example, last year, we started the major project we won in Elsinore. And that job is well past mobilization now and into its run rate of revenues and margins you're in keeping pace. So that would be a good example of what we see through the balance of the year on jobs that move the needle for us.

是的。這就是我們所看到的，是的。例如，我們看到，去年，我們開始了在埃爾西諾贏得的重大項目。這項工作現在已經遠遠超過了動員階段，收入和利潤的運行速度也與您保持同步。因此，這將是我們在今年餘下的工作中看到的一個很好的例子，這些工作為我們帶來了推動。

All right, thanks. And then just maybe last question on cash flow. Can you just talk about how you think that trends in the coming quarters and just outlook as we head into 2025?

好的，謝謝。然後也許是關於現金流的最後一個問題。您能否談談您對未來幾季趨勢的看法以及對 2025 年的展望？

Yeah. The activities over the last quarter have been significant, not only -- previously, we had announced the asset purchase or sale of the Foundations business and those assets -- finishing that work, as Amanda mentioned in her remarks, finishing up work later this year. So that provided some liquidity. And then in addition, the sale leaseback the $17 billion provides cash into the system.

是的。上個季度的活動意義重大，不僅——之前我們已經宣布了基金會業務和這些資產的資產購買或出售——完成了這項工作，正如阿曼達在她的演講中提到的，今年晚點時候完成了工作。這提供了一些流動性。此外，170 億美元的售後回租也為系統提供了現金。

And then certainly, the settlement with the core of engineers for the $33 million that is up nicely from a liquidity standpoint. So feel very good about the decisions we make to improve the liquidity, and it's a step well for not only the balance of the year but finishing those projects.

當然，與核心工程師達成的 3,300 萬美元和解協議，從流動性的角度來看，這已經是相當不錯的了。因此，我們對我們為提高流動性所做的決定感到非常滿意，這不僅對今年的剩餘時間而且對完成這些項目來說都是一個很好的一步。

All right. Sounds good. Thanks for taking the questions. I'll turn it over here.

好的。聽起來不錯。感謝您提出問題。我會把它翻過來的。

Thank you.

謝謝。

Thank you. Ladies and gentlemen, that concludes today's question-and-answer session and today's conference call. We would like to thank you for your participation and interest in Shimmick Corporation. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

謝謝。女士們、先生們，今天的問答環節和電話會議到此結束。我們衷心感謝您的參與以及對 Shimmick Corporation 的關注。此時，您可以斷開線路或登出網路廣播，享受剩下的一天。