Shimmick Corp (SHIM) 2024 Q3 法說會逐字稿

Good day, and welcome to Schimmick Corporation's third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

大家好，歡迎參加 Schimmick Corporation 2024 年第三季財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。

I'd now like to turn the call over to [Anthony Rasmus], Investor Relations. Please go ahead.

現在我想將電話轉給投資者關係部門 [Anthony Rasmus]。請繼續。

Good morning, and thank you for joining us on today's conference call to discuss Shimmick's third-quarter 2024 results. Slides for today's presentation are available on the Investor Relations section of our website www.shimmick.com.

早安，感謝您參加今天的電話會議，討論 Shimmick 2024 年第三季的業績。今天示範的幻燈片可以在我們網站 www.shimmick.com 的投資者關係部分找到。

During this conference call, management will make forward-looking statements based on current expectations and assumptions which are subject to risk and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect.

在本次電話會議中，管理階層將根據目前的預期和假設做出前瞻性陳述，這些陳述受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 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.

我們在提交給美國證券交易委員會的報告和文件中列出了可能影響我們業績的主要風險和不確定因素，這些內容也可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 third quarter press release for definitional information and reconciliations of historical non-GAAP measures to comparable GAAP financial measures.

今天的演示中也引用了非公認會計準則財務指標。您應該參考公司第三季新聞稿中包含的信息，以獲得定義資訊以及歷史非 GAAP 指標與可比較 GAAP 財務指標的對帳。

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

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

Good morning, and thank you all for joining today's call. I'm joined by Amanda Mobley, Shimmick's Interim CFO. Earlier this month, we announced the settlement of our last major outstanding claim of our Legacy Loss Projects under the terms of the settlement in our Golden Gate Bridge project, we will receive $97 million before the end of the year as reimbursement for costs incurred on the project.

早安，感謝大家參加今天的電話會議。與我一起參加的是 Shimmick 臨時財務長 Amanda Mobley。本月初，我們宣布根據金門大橋項目的和解條款解決了遺留損失項目的最後一項重大未決索賠，我們將在年底前收到 9700 萬美元作為該項目發生的成本的補償。

We're pleased to have reached a resolution of this claim and I will provide more details in a minute. With the large legacy settlements behind us, I felt it was time to hand over Shimmick to a new leader. I'm proud of what we've accomplished at Shimmick in over my 43-year career. The projects we do make a difference in people's lives and I've had the opportunity to work with an outstanding team who is focused on operational excellence.

我們很高興就此索賠達成解決方案，我將在稍後提供更多細節。在完成了大筆遺產安置工作後，我覺得是時候將希米克交給新的領導人了。我為我們在 43 年的職業生涯中在希米克的成就感到自豪。我們所做的專案改變了人們的生活，我有機會與一支專注於卓越營運的優秀團隊合作。

As we look forward to the next chapter, I am pleased to announce Ural Yal as Shimmick's new CEO. Ural has extensive knowledge of both the California and the water and critical infrastructure market. He is well qualified to lead Shimmick and I'm excited for what the company can offer in the future.

當我們展望下一章時，我很高興宣布烏拉爾·亞爾 (Ural Yal) 為 Shimmick 的新任執行長。烏拉爾對加州以及水和關鍵基礎設施市場有著廣泛的了解。他完全有資格領導 Shimmick，我對公司的未來發展充滿期待。

Ural will officially step into the role as Shimmick's new CEO on December 2, 2024. I thank everyone who has supported me over my career. I'm excited to introduce Ural and working with him over the next few months to ensure a smooth transition.

烏拉爾將於 2024 年 12 月 2 日正式擔任 Shimmick 新任執行長。我感謝在我的職業生涯中支持過我的所有人。我很高興介紹烏拉爾並在接下來的幾個月與他合作，以確保順利過渡。

Turning back to the business results, we delivered third-quarter 2024 revenues of $166 million and experienced a net loss of $2 million, with an adjusted EBITDA of $30 million. Shimmick's project revenue totaled $101 million in the third quarter versus $110 million a year ago. Shimmick project gross revenues are 6% for the quarter, a decline of 15% gross margin in the third quarter of 2023 driven by wind down and completion of projects partially offset by new work.

回顧業務業績，我們實現 2024 年第三季營收 1.66 億美元，淨虧損 200 萬美元，調整後 EBITDA 為 3,000 萬美元。第三季度，Shimmick 的專案總收入為 1.01 億美元，而去年同期為 1.1 億美元。Shimmick 專案本季總營收為 6%，2023 年第三季毛利率下降 15%，因為專案關閉和完工部分被新工作所抵銷。

We remain encouraged by the margin performance trend in 2024 as this is the second straight quarter with sequential margin improvement compared to 5% in the second quarter 2024 and negative 1% in the first quarter.

我們對 2024 年的利潤率表現趨勢仍然感到鼓舞，因為這是連續第二個季度利潤率環比提高，而 2024 年第二季度為 5%，第一季為負 1%。

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 those results.

正如我們上次電話會議中所做的那樣，我們將對 Shimmick 項目（AECOM 銷售交易後開始的項目）和遺留項目（AECOM 銷售交易前開始的項目）的結果進行細分。阿曼達將提供更多與這些結果的細分具體相關的細節。

Finally, I want to address briefly the recent election which we don't expect to have a material impact on our business. Infrastructure typically has bipartisan support and in California, we expect to see additional opportunities from the recently passed California Proposition 4, which authorizes bonding for $10 billion for infrastructure related projects that address climate change with the largest allocation of nearly 40% focused on water projects.

最後，我想簡單談談最近的選舉，我們預計它不會對我們的業務產生重大影響。基礎設施通常得到兩黨的支持，在加州，我們預計最近通過的加州第 4 號提案將帶來更多機會，該提案授權為應對氣候變遷的基礎設施相關項目發行 100 億美元債券，其中最大一筆撥款（近 40%）集中在水利工程上。

Turning to the next slide. Shimmick through its consolidating joint venture with Danny's Construction Company LLC, the Shimmick/Danny's joint venture will receive $97 million before the end of this year as a result of our settlement agreement on the litigation of our Golden Gate Bridge project.

翻到下一張投影片。Shimmick 將透過其與 Danny's Construction Company LLC 成立的合併合資企業，根據我們就金門大橋專案訴訟達成的和解協議，Shimmick/Danny's 合資企業將在今年年底前獲得 9,700 萬美元。

Under the terms of the settlement, there will also be a contract change order for reduced scope of work of $6 million and a contract change order for extension of project completion and costs incurred on the GGB project. After paying subcontractor pass-through claims, we plan to use the remaining proceeds for ongoing operations including completion of the Golden Gate Bridge project.

根據和解條款，還將有一份合約變更令，減少 600 萬美元的工作範圍，以及一份合約變更令，延長專案完成時間並增加 GGB 專案發生的費用。在支付分包商轉嫁索賠後，我們計劃將剩餘收益用於持續運營，包括完成金門大橋專案。

We're expected to reach substantial completion of this on-site portion of the project in the third quarter of 2025 with the remaining work after that related to the subcontractors off-site equipment fabrication activities. We're proud of the work that's been done on this project which installed life saving suicide prevention nets on the iconic Golden Gate Bridge.

我們預計在 2025 年第三季基本完成專案的現場部分，之後的剩餘工作將與分包商的場外設備製造活動有關。我們為這個計畫所做的工作感到自豪，該計畫在標誌性的金門大橋上安裝了救生自殺預防網。

It is a difficult working environment with the heights, the weather and the traffic control. Our team has done an exceptional job on the project. We are pleased to have settled the claim as another step forward in our transformation plan. We look forward to being able to further focus our efforts and financial resources on advancing our core projects.

由於高空、惡劣天氣和交通管制，這裡的工作環境十分艱苦。我們的團隊在這個專案上表現十分出色。我們很高興解決了這個索賠問題，這是我們的轉型計劃向前邁出的又一步。我們期待能夠進一步集中我們的精力和財力來推進我們的核心項目。

Turning to the next slide, I'd like to highlight our recently completed project at the Smith Canal Gate. We began work on this project in July 2020 to address critical flood protection needs for the San Joaquin area. Shimmick's solutions included constructing a fixed cellular heat pile flood wall along the San Joaquin River, a miter gate structure with temporary in-water works and shoring, improvements to Dad's Point and enhanced access to the Stockton Golf and Country Club.

翻到下一張投影片，我想重點介紹我們最近完成的史密斯運河閘門計畫。我們於 2020 年 7 月開始進行此項目，以解決聖華金地區的關鍵防洪需求。Shimmick 的解決方案包括在聖華金河沿岸建造一道固定蜂窩熱堆防洪牆、一座帶有臨時水中工程和支撐的斜切門結構、改善 Dad's Point 並改善通往斯托克頓高爾夫鄉村俱樂部的通道。

These elements protect the canal from highwater events while allowing essential access for borders during normal conditions. With the project now completed, these improvements significantly enhanced Stockton's flood resilience, protecting homes and business from high water events while meeting state and federal standards.

這些要素可以保護運河免受洪水災害的影響，同時在正常情況下允許邊境的重要通行。隨著計畫的完成，這些改進顯著增強了斯托克頓的洪災抵禦能力，保護了居民住宅和企業免受洪水災害的影響，同時滿足了州和聯邦的標準。

Again, this is just another project that exemplifies Shimmick's commitment to delivering sustainable infrastructure solutions that benefit both communities and the environment.

再次強調，這只是 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的另一個項目。

With that, I'd like to turn the call over to Amanda, who will discuss our financial results.

說完這些，我想將電話轉給阿曼達，她將討論我們的財務結果。

Thanks, Steve. On behalf of the company, I want to thank you for your leadership and bringing Shimmick to this point. You have been an integral part of establishing a strong foundation for future growth. We are grateful for all your contributions and congratulate you on your 43-year career. I look forward to working with you and Ural on this smooth transition, and I'm excited to have him join us.

謝謝，史蒂夫。我謹代表公司感謝您的領導，帶領 Shimmick 走到今天這一步。您是奠定未來發展堅實基礎不可或缺的一部分。我們感謝您的所有貢獻，並祝賀您43年的職業生涯。我期待著與您和烏拉爾一起實現這一平穩過渡，並且我很高興他能加入我們。

Turning back to the financials. All comparisons made today will be on a year-over-year basis compared to the same period in 2023. For the third quarter, we reported revenue of $166 million compared to $175 million for the prior year period, which includes the impact of the GGB project settlement, which I will discuss in a minute.

回到財務問題。今天進行的所有比較都將以 2023 年同期為基準。第三季度，我們報告的收入為 1.66 億美元，而去年同期的收入為 1.75 億美元，其中包括 GGB 項目結算的影響，我將在稍後討論。

Moving on to the Shimmick Project. Revenue recognized on Shimmick Project that focus on water infrastructure and other critical infrastructure with $101 million in the third-quarter 2024, compared to $110 million a year ago. The decrease was primarily the result of a decrease from lower activity on existing jobs and job finding down, partially offset by revenue from a new water infrastructure job.

繼續進行 Shimmick 專案。2024 年第三季度，專注於水基礎設施和其他關鍵基礎設施的 Shimmick 項目確認的收入為 1.01 億美元，而去年同期為 1.1 億美元。下降的主要原因是現有工作活動減少和工作尋找減少，但新水利基礎設施工作的收入部分抵消了這種影響。

Gross margin recognized on Shimmick Projects in the third quarter was 6%, compared to 14% a year ago. As Steve mentioned, we had our highest reported gross margin percentage of the year. Revenue recognized on foundation projects was $11 million in the third quarter of 2024, compared to $12 million a year ago, driven by the result of timing of jobs winding down.

Shimmick Projects 第三季的毛利率為 6%，去年同期為 14%。正如史蒂夫所提到的，我們報告的毛利率百分比是今年最高的。2024 年第三季基礎項目確認的收入為 1,100 萬美元，而去年同期為 1,200 萬美元，這主要是由於工作結束的時間所致。

Gross margin recognized on the Foundations Projects was slightly lower at $2 million loss in the third quarter 2024 compared to $1 million loss s year ago. Project revenue was flat at $54 million compared to a year ago.

2024 年第三季基礎項目的毛利率略有下降，虧損 200 萬美元，而去年同期的虧損為 100 萬美元。項目收入與去年同期相比持平，為 5,400 萬美元。

Included in the quarter is a $31 million adjustment to revenue to reflect the GGB project settlement amount. Without that adjustment, the Legacy Project revenue would have declined by $31 million. Reflecting the continuing wind down of the Legacy Projects.

本季包括 3,100 萬美元的收入調整，以反映 GGB 項目結算金額。如果沒有這項調整，遺產項目的收入將減少 3,100 萬美元。反映出遺留項目的持續減少。

Legacy Project's growth margin was $8 million in the third quarter compared to $3 million a year ago. The increase in growth margin was primarily a result of the GGB project settlement partially offset by continued impact of the Legacy Project's winding down as well as additional legal fees to pursue contract modifications and recovery and additional cost overruns on other Legacy Loss Projects.

Legacy Project 第三季的成長利潤為 800 萬美元，而去年同期為 300 萬美元。成長利潤率的提高主要歸因於 GGB 項目結算，但被遺留項目逐漸結束的持續影響、尋求合約修改和恢復的額外法律費用以及其他遺留損失項目的額外成本超支部分抵消。

As a reminder, 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 projects which will be recognized in the period. We continue to actively pursue all opportunities to offset these costs.

提醒一下，隨著這些遺留損失項目陸續完工，將不再確認毛利率。在某些情況下，這些項目可能會產生額外成本，這些成本將在該期間確認。我們將繼續積極尋求一切機會來抵消這些成本。

This quarter, we also recognized a one time primarily non cash expense of $16 million relating to our decision to enhance our current ERP system rather than implementing a new platform. We believe this decision will reduce overhead expenses in future periods.

本季度，我們也確認了一次性非現金支出 1,600 萬美元，這與我們決定增強現有 ERP 系統而不是實施新平台有關。我們相信這項決定將會減少未來的管理費用。

Our net loss for the third quarter 2024 was $2 million compared to a net income of $35 million for the prior year. The decline is largely related to the ERP impairment and a decrease in gain on sale of assets of $13 million.

我們 2024 年第三季的淨虧損為 200 萬美元，而去年同期的淨收入為 3,500 萬美元。下降主要與 ERP 減損及資產出售收益減少 1,300 萬美元有關。

The gain on sale change is the result of the $30 million gain on sale of our O&M business at Q3 last year that did not reoccur, offset by $17 million gain in the sale of the equipment yards this year. Third quarter adjusted EBITDA was a gain of $30 million compared to $42 million in the prior year period. Again, primarily due to the change in gain on sale.

銷售收益的變化是由於我們去年第三季的 O&M 業務銷售收益為 3000 萬美元，但這一收益沒有再次出現，而今年設備場銷售收益為 1700 萬美元，抵消了這一收益。第三季調整後的 EBITDA 獲利 3,000 萬美元，而去年同期為 4,200 萬美元。再一次，這主要是由於銷售收益的變化。

And over to the balance sheet. Unrestricted cash and cash equivalents at September 27, 2024, totaled $26 million and availability under the revolving credit facility and the credit facility totaled $18 million and $15 million respectively, resulting in a total liquidity of $59 million. The liquidity position will continue to strengthen in 2024 with the proceeds from the GGB project settlement.

接下來是資產負債表。截至 2024 年 9 月 27 日，無限制現金和現金等價物總額為 2,600 萬美元，循環信貸額度和信貸額度下的可用資金總額分別為 1,800 萬美元和 1,500 萬美元，總流動資金為 5,900 萬美元。隨著 GGB 項目結算收益的增加，流動性狀況將在 2024 年持續增強。

Our backlog remains strong and was $834 million at the end of the third quarter. The mix of our backlog continues to improve as Shimmick Project represent 85% of the backlog at the end of the third quarter versus the 80% a quarter ago. This reinforces our team's commitment to be selective during the bidding process and focus on more profitable jobs that drive margins higher in our business.

我們的積壓訂單仍然強勁，截至第三季末為 8.34 億美元。我們的積壓訂單結構持續改善，因為 Shimmick 專案在第三季末佔積壓訂單的 85%，而上一季為 80%。這加強了我們團隊在投標過程中進行選擇性的承諾，並專注於更有利可圖的工作，從而提高我們業務的利潤率。

For the fiscal year ending January 3, 2025, after excluding non-core foundations project, we now expect that Shimmick Project's revenues to remain generally flat with growth margin between 4% to 7%. Legacy Project's revenue of $90 million to $95 million with a negative gross margin of 40% to 50% due to the Legacy Loss Project settlement. Additional costs recorded for Legacy Loss Project relating to pending change orders and other cost overruns.

截至 2025 年 1 月 3 日的財政年度，在排除非核心基礎項目後，我們現在預計 Shimmick 項目的收入將保持基本平穩，增長率在 4% 至 7% 之間。由於遺留損失項目的解決，遺留項目的收入為 9,000 萬至 9,500 萬美元，毛利率為負 40% 至 50%。記錄了與未決變更單和其他成本超支有關的遺留損失項目的額外成本。

The guidance reflects our execution on our strategy, our robust pipeline, the improving quality of our backlog, and our continued operational excellence, as well as our efforts to work off our Legacy Projects. As we work to close out these jobs and with the transformation plan effort, we believe we will show growth in 2025.

該指引反映了我們的策略執行情況、強勁的庫存管道、不斷提升的積壓訂單品質、持續的卓越營運以及我們為完成遺留項目所做的努力。隨著我們努力完成這些工作並實施轉型計劃，我們相信我們將在 2025 年實現成長。

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

現在，我想將發言權交給史蒂夫，請他發表一些補充意見。

Thanks, Amanda. In conclusion, we're pleased to have resolved the last major outstanding claim and are encouraged to move forward by putting these distractions behind us. We're excited to enter this next phase in our strategic transformation and we're confident in our team's capabilities to source water related projects that fit well into our portfolio.

謝謝，阿曼達。總而言之，我們很高興解決了最後一個重大懸而未決的索賠問題，並鼓勵我們拋開這些幹擾，繼續前進。我們很高興進入策略轉型的下一階段，我們相信我們的團隊有能力尋找適合我們投資組合的水相關項目。

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. Operator, you may now open the line for questions.

我們要再次感謝我們的團隊不懈的努力，致力於將 Shimmick 打造成為美國最好的水基礎設施公司之一。接線員，您現在可以開通問答線路了。

(Operator Instructions)

（操作員指令）

Gerry Sweeney, Roth Capital Partners.

羅斯資本合夥公司的格里‧斯威尼 (Gerry Sweeney)。

Good morning. Thanks for taking my call. I just want to start on the Shimmick revenue side, right? So gross margin 6% heading in the right direction. Should we -- all things being equal, I understand projects are all different, but as we move through the rest of this year into next year, should we see this gross margin increase? My sense would be the backlog is -- contains, I guess, higher margin or higher bid margin projects. Is that a fair assumption?

早安.感謝您接聽我的電話。我只是想從 Shimmick 收入方面開始談，對嗎？因此毛利率6%是朝著正確的方向發展的。我們應該——在其他條件相同的情況下，我明白專案都是不同的，但是隨著今年剩餘時間進入明年，我們應該看到毛利率增加嗎？我的感覺是，積壓訂單包含利潤率較高或投標利潤率較高的項目。這是一個合理的假設嗎？

I can start and you jump in. Yeah, Gerry, I think that as we get through the backlog and especially as we add new backlog, higher margin work, I think, yeah, the math will tell you that we should see improvements. Amanda, anything?

我可以開始，你參與。是的，格里，我認為，隨著我們處理完積壓工作，特別是隨著我們增加新的積壓工作，利潤更高的工作，我想，是的，數學會告訴你，我們應該看到進步。阿曼達，有什麼事嗎？

Yeah, that's exactly right. We'll continue to see the Legacy Projects wind down in '25 and replace that with higher margin work to increase the margins.

是的，完全正確。我們將繼續看到遺留項目在'25年逐漸減少，並用利潤更高的工作取而代之，以提高利潤率。

How is bid activity progressing? I believe a lot of work out there, but maybe some bids have been pulled on occasion because they're only single bidders, et cetera. That work is not necessarily going away, but I think people were looking for additional bidders per se, but -- or a larger amount than just one. But could you give us an idea as to how the opportunities are sort of amassing in the background?

競標活動進度如何？我相信有很多工作要做，但也許有些投標有時會被撤回，因為他們只是單一投標人，等等。這項工作不一定會消失，但我認為人們正在尋找更多的競標者，或者不僅僅是一個。但您能否向我們介紹一下這些機會在幕後是如何累積的？

Yeah. The [bid] continues to increase. We are loading up our estimating resources, we've heard more estimators and that's a reflection of the number of opportunities out there. And I'd say to your point, we still see as we filter the projects through our system of what's best for Shimmick, we still see a lot of good water projects, for example, that are in the one, two, three bidders and with our increased estimating resources, I see that absolutely will capitalize on our opportunities.

是的。[出價] 持續上漲。我們正在增加我們的估算資源，我們聽取了更多估算人員的意見，這反映了存在的機會數量。我想說的是，我們仍然看到，當我們透過我們的系統篩選最適合 Shimmick 的項目時，我們仍然看到很多好的水利項目，例如，一、二、三個投標人的項目，隨著我們估算資源的增加，我看到這些項目絕對會利用好我們的機會。

Got you. And are those projects sort of fitting your criteria? I know historically, I think you mentioned looking around for 15% gross margin, but I want to see those projects are meeting that criteria.

明白了。這些項目符合您的標準嗎？我知道從歷史上看，我想你提到過尋找 15% 的毛利率，但我想看看這些項目是否符合該標準。

Yeah, when we filter jobs to make a go decision on the bid, certainly we're looking at those that have the best opportunity and definitely seeing projects that are still in that upper teens from an opportunity standpoint.

是的，當我們篩選工作以對投標做出決定時，我們肯定會尋找那些擁有最佳機會的項目，並且從機會的角度來看，肯定會看到那些仍處於十幾歲後期的項目。

Got it. Shifting gears a little bit, Legacy Projects, great to see the Golden Gate Bridge settled. The question I had was, I think just doing the math, there's about $125 million left on Legacy Projects. How much of that is Golden Gate? How much of that is, I think, the Loss Project? And maybe how much of that is maybe some other loose tag ends of other projects?

知道了。稍微轉換一下話題，遺產項目，很高興看到金門大橋得以建成。我的問題是，只要算一下，遺產項目就還剩下約 1.25 億美元。其中有多少是金門大橋？我認為，其中有多少是「損失項目」？其中有多少可能是其他項目的鬆散標籤末端？

Go ahead, Amanda.

繼續吧，阿曼達。

Yeah. Currently we're about 80% done on GGB. There's about $40 million of backlog remaining. We'll reach substantial completion this year in 2025 and continue to be on there with a little running through 2026 as well.

是的。目前，GGB 的工作已完成約 80%。仍有約 4,000 萬美元的積壓訂單。我們將於 2025 年基本完工，並將持續到 2026 年。

Okay. And this is the remainder, so that would be about $85 million for the Loss Project, give or take?

好的。這就是剩餘的部分，那麼損失項目的花費大約是 8500 萬美元，是左右嗎？

Yes, that's correct.

是的，正確。

Okay. Got it. And then will those projects carry that negative gross margin that you projected for the rest of this year? Or will that gross margin have a potential to improve in 2025? Because some of the costs have been allocated, et cetera. I think some of the margins are get hit by period costs that sort of updated within the -- update costs within a specific quarter. But I think you understand what I'm asking.

好的。知道了。那麼這些項目是否會帶來您預計的今年剩餘時間內的負毛利率？或者該毛利率在 2025 年是否有可能提高？因為部分費用已經分配了，等等。我認為部分利潤會受到期間成本的影響，這些成本會在特定季度內更新。但我想你明白我在問什麼。

Yeah. Those are loss jobs that currently have zero margin on them. And you're right, we do recognize period cost primarily legal as we've been incurring those costs to go after these claims. And so going forward, we shouldn't -- we won't have those high legal costs with the settlement of these behind us.

是的。這些都是虧損工作，目前利潤為零。您說得對，我們確實認識到期間成本主要是合法的，因為我們一直在承擔這些成本來追償這些索賠。因此，展望未來，在解決這些問題之後，我們將不再需要承擔高昂的法律費用。

So that should help improve that sort of negative gross margin.

這應該有助於改善這種負毛利率。

It would. We would estimate that would be zero margin on those loss jobs going forward.

會的。我們估計，未來這些失業崗位的利潤將為零。

Okay, got it. And then one last question on the cash on the balance sheet for the end of the quarter, does that include the lock settlement? Had that been received or recorded?

好的，明白了。最後一個問題是關於本季末資產負債表上的現金，其中包括鎖定結算嗎？已經收到或記錄了嗎？

That was received during the quarter and those proceeds were used to pay down some of the debt on the credit facility.

這是本季收到的款項，這些收益用於償還部分信貸債務。

Perfect. Okay. I'll jump back in line. Thanks.

完美的。好的。我會重新排好隊。謝謝。

Thank you.

謝謝。

Aaron Spychalla, Craig-Hallum.

亞倫·斯皮查拉、克雷格·哈勒姆。

Yeah, good morning, Steve and Amanda. Thanks for taking the questions. First for me, just as part of the transformation plan and reducing the cost structure, can you just talk about where OpEx could go as you kind of focus on that with the ERP system costs? It sounds like the legal costs are more on the cost of good sold line, but just talk about how that could trend as we look towards 2025.

是的，早上好，史蒂夫和阿曼達。感謝您回答這些問題。首先，對我來說，作為轉型計劃和降低成本結構的一部分，您能否談談 OpEx 可以去哪裡，因為您關注的是 ERP 系統成本？聽起來法律成本更多的是在產品銷售成本上，但我們只需談論一下展望 2025 年這種趨勢會如何。

You're talking to the SG&A and how we look at that?

您正在談論銷售、一般及行政費用，我們如何看待這個問題？

Yep.

是的。

Yeah. We still see more efficiencies coming as we focus our work on California. I mentioned earlier, we have made an investment in estimating resources so that's a positive. If you will from a cost standpoint, it is negative, but definitely add some resources to gaining new work.

是的。當我們將工作重點放在加州時，我們仍會看到更多的效率。我之前提到過，我們在估算資源方面進行了投資，這是一件正面的事。如果從成本角度來看，這是負面的，但肯定會增加一些資源來獲得新的工作。

As we grow the top line a little bit, SG&A as a percentage will go down. Other, we do have other transformation items as the other backlog of work burns off some of the Legacy Projects burn off, our Foundations business will burn off soon. And so we should see some margin or some SG&A improvements with that as well.

隨著我們營業收入略有成長，銷售、一般及行政開支所佔比例將會下降。另外，我們確實還有其他轉型項目，因為其他積壓工作會消耗一些遺留項目，我們的基礎業務也會很快消耗掉。因此，我們應該也看到一些利潤或銷售、一般及行政開支的改善。

All right. And then appreciate the commentary on the election and kind of regulatory environment. Can you just talk a little bit about on that pipeline? I know you've hired some estimators, but just how are you kind of thinking that transitions into backlog here moving forward? Can we -- do you expect some projects later this year or is it kind of more first half of '25? Or just curious if you can elaborate a little bit on the pipeline dynamics.

好的。然後欣賞對選舉和監管環境的評論。能稍微談一下該管道嗎？我知道您已經聘請了一些估算師，但您認為下一步該如何解決積壓問題呢？您預計今年稍後會有一些項目嗎，還是會更早一些在 2025 年上半年？或者只是好奇您是否可以詳細說明一下管道動態。

Yeah. We really don't see work being seasonal for us. And so we definitely have some nice projects that we're bidding in Q4 that are in the pipeline right now. And so look to see win our share would be the theme as we finish off the year. And definitely the projects continue to come in at a nice rate in early '25 as well.

是的。我們確實不認為我們的工作具有季節性。因此，我們確實有一些不錯的項目正在第四季度競標，並且目前正在籌備中。因此，期待贏得我們的份額將成為我們今年年底的主題。而且在 25 年初，專案肯定也會繼續以良好的速度湧現。

So don't see any decline in bidding activity for sure. And with the new money coming in, whether it be Prop 4 or other things, that definitely a lot more opportunities in the pipeline.

因此可以肯定地說，競標活動不會有任何下降。隨著新資金的流入，無論是提案 4 或其他，無疑會帶來更多的機會。

All right, thanks for that. And then maybe last for me just on the balance sheet with getting the Golden Gate proceeds by year end. Can you talk about how you're thinking about capital allocation in 2025? It sounds like there's some that goes to that project, but just what are some of the priorities for that large cash balance that you should see by year end?

好的，謝謝你。然後也許對我來說最後的資產負債表就是在年底前獲得金門的收益。能談談您對 2025 年資本配置的看法嗎？聽起來好像有一些資金用於該項目，但是到年底時您應該看到的大量現金餘額的優先事項是什麼？

I'll start and then Amanda can jump in. But definitely, the GGB settlements is fantastic for the company. It takes a load off of the liquidity needs that we have to finish the job. I want to point out that the job, it'll largely finish the the work in the field, the suicide nets themselves and the access work to the suicide nets will be completed in late '25.

我先開始，然後阿曼達加入。但毫無疑問，GGB 的和解對公司來說是件好事。它減輕了我們完成工作所需的流動性需求。我想指出的是，這項工作將基本完成現場工作，自殺網路本身以及自殺網路的接觸工作將於 2025 年底完成。

And then from then on, it's subcontracted activity off site to complete the fabrication of the travelers. The installation of that work has been eliminated from the contract through the settlement agreement with the district. So it's a positive from the company as far as the risk going forward on the GGB. But Amanda, do you want to address Aaron's question on use of funds?

從那時起，它就將場外分包活動來完成旅行者的製造。透過與該區達成的和解協議，該項工程的安裝已從合約中刪除。因此，就 GGB 未來的風險而言，這對公司來說是件好事。但是阿曼達，你想回答亞倫關於資金使用的問題嗎？

Yeah. So it's positive on the liquidity for the company as well to -- we get the cash in and we've use those to pay down the debt as well as use for just ongoing operations, as well as just continuing to close out and finish these legacy jobs.

是的。因此，這對公司的流動性也有積極作用——我們獲得現金並用其償還債務以及用於持續運營，以及繼續完成這些遺留工作。

All right. I appreciate the color. Thanks for taking the questions. I'll turn it over.

好的。我很欣賞這個顏色。感謝您回答這些問題。我把它翻過來。

Okay, thank you.

好的，謝謝。

Thank you. Looks like there are no further questions at this time. We'd like to thank everyone for your participation. This does conclude today's teleconference. You may disconnect your lines at this time.

謝謝。目前似乎沒有其他問題了。我們感謝大家的參與。今天的電話會議到此結束。現在您可以斷開您的線路。