What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-12 · 213 added, 213 removed, 422 unchanged (50% of the section changed)

85 unchanged sentences

As a result, our volume of business may be adversely affected by where our customers are in the cycle and thereby their financial condition as to their capital needs and access to capital to finance those needs.

Three and Six Months Ended March 31, 2025 and 2024 Overview

The following is an overview of results from operations for the three and six months ended March 31, 2025 and 2024:

Three and Nine Months Ended June 30, 2025 and 2024 Overview

The following is an overview of results from operations for the three and nine months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of revenue

Selling and administrative expenses

(Loss) income from operations

Income (loss) from operations

Other income (expense)

Proceeds from lawsuit judgement

Other nonoperating expense

1 unchanged sentence

(Loss) gain on sale of equipment

(Loss) gain before income taxes

Income tax (benefit) expense

Net (loss) income

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Weighted average shares outstanding-basic

Weighted average shares-diluted

(Loss) earnings per share available to common shareholders

(Loss) earnings per share-diluted available to common shareholders

Results of Operations for the Three and Six Months Ended March 31, 2025 Compared to the Three and Six Months Ended March 31, 2024

A table comparing the Company’s revenues for the three and six months ended March 31, 2025 compared to the three and six months ended March 31, 2024 is below:

Earnings (loss) per share available to common shareholders

Earnings (loss) per share-diluted available to common shareholders

Results of Operations for the Three and Nine Months Ended June 30, 2025 Compared to the Three and Nine Months Ended June 30, 2024

A table comparing the Company’s revenues for the three and nine months ended June 30, 2025 compared to the three and nine months ended June 30, 2024 is below:

Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Gas & Water Distribution

1 unchanged sentence

Electrical, Mechanical, & General

Six Months Ended

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

Gas & Water Distribution

1 unchanged sentence

Electrical, Mechanical, & General

Total revenues increased by $5.6 million to $76.7 million for the three months ended March 31, 2025, as compared to $71.1 million for the three months ended March 31, 2024.

The increase was a result of a $12.8 million increase in Gas & Water Distribution, partially offset by a $6.4 million decrease in Gas & Petroleum Transmission work and a $908,000 decrease in Electrical, Mechanical, & General construction services for the three months ended March 31, 2025 as compared to the same period in 2024.

Total revenues increased by $16.0 million to $177.3 million for the six months ended March 31, 2025, as compared to $161.3 million for the six months ended March 31, 2024.

The increase was a result of a $27.0 million increase in Gas & Water Distribution and a $5.5 million increase in Electrical, Mechanical, & General construction services, partially offset by a $16.5 million decrease in Gas & Petroleum Transmission work for the six months ended March 31, 2025 as compared to the same period in 2024.

Gas & Water Distribution revenues totaled $27.1 million for the three months ended March 31, 2025, a $12.8 million increase from $14.3 million for the three months ended March 31, 2024.

Gas & Water Distribution revenues totaled $58.4 million for the six months ended March 31, 2025, a $27.0 million increase from $31.4 million for the six months ended March 31, 2024.

The revenue increases were primarily related to increased water distribution services performed during the three and six months ended March 31, 2025, as compared to the same period in 2024.

Gas & Petroleum Transmission revenues totaled $3.4 million for the three months ended March 31, 2025, a $6.4 million decrease from $9.8 million for the three months ended March 31, 2024.

Gas & Petroleum Transmission revenues totaled $21.9 million for the six months ended March 31, 2025, a $16.5 million decrease from $38.3 million for the six months ended March 31, 2024.

Total revenues increased by $17.7 million to $103.6 million for the three months ended June 30, 2025, as compared to $85.9 million for the three months ended June 30, 2024.

The increase was a result of a $16.0 million increase in Gas & Water Distribution and a $3.5 million increase in Electrical, Mechanical, & General construction services, partially offset by a $1.8 million decrease in Gas & Petroleum Transmission work for the three months ended June 30, 2025 as compared to the same period in 2024.

Total revenues increased by $33.7 million to $280.9 million for the nine months ended June 30, 2025, as compared to $247.2 million for the nine months ended June 30, 2024.

The increase was a result of a $43.1 million increase in Gas & Water Distribution and a $8.9 million increase in Electrical, Mechanical, & General construction services, partially offset by an $18.3 million decrease in Gas & Petroleum Transmission work for the nine months ended June 30, 2025 as compared to the same period in 2024.

Gas & Water Distribution revenues totaled $38.6 million for the three months ended June 30, 2025, a $16.0 million increase from $22.5 million for the three months ended June 30, 2024.

Gas & Water Distribution revenues totaled $97.0 million for the nine months ended June 30, 2025, a $43.1 million increase from $53.9 million for the nine months ended June 30, 2024.

The revenue increases were primarily related to increased water distribution services performed during the three and nine months ended June 30, 2025, as compared to the same periods in 2024.

Electrical, Mechanical, & General construction services revenues totaled $49.7 million for the three months ended June 30, 2025, a $3.5 million increase from $46.2 million for the three months ended June 30, 2024.

Electrical, Mechanical, & General construction services revenues totaled $146.8 million for the nine months ended June 30, 2025, a $8.9 million increase from $137.9 million for the nine months ended June 30, 2024.

The revenue increases were primarily related to an increase in electrical & mechanical services performed during the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

Gas & Petroleum Transmission revenues totaled $15.3 million for the three months ended June 30, 2025, a $1.8 million decrease from $17.1 million for the three months ended June 30, 2024.

Gas & Petroleum Transmission revenues totaled $37.2 million for the nine months ended June 30, 2025, an $18.3 million decrease from $55.5 million for the nine months ended June 30, 2024.

The revenue decreases were primarily due to more transmission work being completed by the end of fiscal year 2024 and not extending into the first half of fiscal year 2025.

Additionally, bid opportunities and project awards on transmission work are being received later compared to previous fiscal years.

Electrical, Mechanical, & General construction services revenues totaled $46.2 million for the three months ended March 31, 2025, a $908,000 decrease from $47.1 million for the three months ended March 31, 2024.

The decrease was primarily due to less general construction work during the three months ended March 31, 2025 as compared to the same period in the prior year.

Electrical, Mechanical, & General construction services revenues totaled $97.1 million for the six months ended March 31, 2025, a $5.5 million increase from $91.6 million for the six months ended March 31, 2024.

The revenue increase was primarily related to an increase in electrical & mechanical services performed during the six months ended March 31, 2025, as compared to the same period in the prior year.

Additionally, bid opportunities and project awards on transmission work were received later compared to previous fiscal years.

Cost of Revenues.

A table comparing the Company’s costs of revenues for the three and six months ended March 31, 2025, compared to the three and six months ended March 31, 2024, is below:

A table comparing the Company’s costs of revenues for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, is below:

Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Gas & Water Distribution

2 unchanged sentences

Unallocated Shop Expenses

Six Months Ended

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

Gas & Water Distribution

2 unchanged sentences

Unallocated Shop Expense

Total cost of revenues increased by $11.7 million to $76.6 million for the three months ended March 31, 2025, as compared to $64.9 million for the three months ended March 31, 2024.

Total cost of revenues increased by $22.8 million to $167.0 million for the six months ended March 31, 2025, as compared to $144.2 million for the six months ended March 31, 2024.

The cost of revenues increases was partially the result of increased work in the Gas & Water Distribution and Electrical, Mechanical, & General business categories, partially offset by a decrease in Gas & Petroleum Transmission work.

Gas & Water Distribution cost of revenues totaled $28.0 million for the three months ended March 31, 2025, a $16.1 million increase from $11.9 million for the three months ended March 31, 2024.

Gas & Water Distribution cost of revenues totaled $54.1 million for the six months ended March 31, 2025, a $29.2 million increase from $25.0 million for the six months ended March 31, 2024.

The cost of revenues increase was primarily related to increased water distribution services performed during the three and six months ended March 31, 2025, as compared to the same periods in 2024.

Additionally, the three months ended March 31, 2025 was heavily impacted by inclement weather that resulted in a significant amount of lost workdays and lower productivity on projects.

Gas & Petroleum Transmission cost of revenues totaled $4.6 million for the three months ended March 31, 2025, a $4.9 million decrease from $9.5 million for the three months ended March 31, 2024.

Gas & Petroleum Transmission cost of revenues totaled $22.1 million for the six months ended March 31, 2025, a $12.6 million decrease from $34.7 million for the six months ended March 31, 2024.

The cost of revenues decreases was primarily due to more transmission work being completed by the end of fiscal year 2024 and not extending into the first quarter of fiscal year 2025 and bid opportunities and project awards on transmission work are being received later compared to previous fiscal years.

Additionally, Gas & Petroleum work was more impacted by inclement weather in the first and second fiscal quarters of 2025, as compared to the same periods in the prior fiscal year.

This resulted in less efficient production and more costs than expected.

Electrical, Mechanical, & General construction services cost of revenues totaled $42.4 million for the three months ended March 31, 2025, a $54,000 increase from $42.4 million for the three months ended March 31, 2024.

Electrical, Mechanical, & General construction services cost of revenues totaled $88.5 million for the six months ended March 31, 2025, a $5.0 million increase from $83.4 million for the six months ended March 31, 2024.

Electrical, Mechanical, & General construction services were less impacted by inclement weather during the three months ended March 31, 2025, and results were comparable to the same periods in the prior year.

The cost of revenues increase for the six months ended March 31, 2025 was primarily related to an increase in Electrical, Mechanical, & General construction services performed during the first half of fiscal year 2025, as compared to the same periods in the prior year.

Unallocated shop expenses totaled $1.6 million for the three months ended March 31, 2025, a $451,000 increase from $1.1 million for the three months ended March 31, 2024.

Unallocated shop expenses totaled $2.2 million for the six months ended March 31, 2025, a $1.1 million increase from $1.1 million for the six months ended March 31, 2024.

The increases in unallocated shop expenses were primarily due to a decrease in the amount of internal equipment charged to projects for the three and six months ended March 31, 2025, as compared to the same periods in the prior year.

Total cost of revenues increased by $21.0 million to $91.6 million for the three months ended June 30, 2025, as compared to $70.6 million for the three months ended June 30, 2024.

Total cost of revenues increased by $43.8 million to $258.6 million for the nine months ended June 30, 2025, as compared to $214.8 million for the nine months ended June 30, 2024.

The cost of revenues increased primarily as the result of increased work in the Gas & Water Distribution and Electrical, Mechanical, & General business categories and, additionally, due to less efficient work across all models of business.

Gas & Water Distribution cost of revenues totaled $31.9 million for the three months ended June 30, 2025, a $15.7 million increase from $16.1 million for the three months ended June 30, 2024.

Gas & Water Distribution cost of revenues totaled $86.0 million for the nine months ended June 30, 2025, a $44.9 million increase from $41.1 million for the nine months ended June 30, 2024.

The cost of revenues increase was primarily related to increased water distribution services performed during the three and nine months ended June 30, 2025, as compared to the same periods in 2024.

Additionally, the second quarter of fiscal year 2025 was heavily impacted by inclement weather that resulted in a significant amount of lost workdays and lower productivity on projects.

Electrical, Mechanical, & General construction services cost of revenues totaled $44.4 million for the three months ended June 30, 2025, a $4.2 million increase from $40.2 million for the three months ended June 30, 2024.

Electrical, Mechanical, & General construction services cost of revenues totaled $132.9 million for the nine months ended June 30, 2025, a $9.3 million increase from $123.7 million for the nine months ended June 30, 2024.

The cost of revenues increases for the three and nine months ended June 30, 2025 were primarily related to an increase in services performed, as compared to the same periods in the prior year.

Gas & Petroleum Transmission cost of revenues totaled $14.2 million for the three months ended June 30, 2025, a $1.7 million increase from $12.5 million for the three months ended June 30, 2024.

The increase in cost of revenues was primarily due to less efficient production on work performed and less work to cover fixed project management costs for the three months ended June 30, 2025, as compared to the same period in the prior year.

Gas & Petroleum Transmission cost of revenues totaled $36.3 million for the nine months ended June 30, 2025, a $10.9 million decrease from $47.2 million for the nine months ended June 30, 2024.

The decrease in cost of revenues was primarily due to more transmission work being completed by the end of fiscal year 2024 and not extending into the first half of fiscal year 2025 and bid opportunities and project awards on transmission work being received later compared to previous fiscal years.

Unallocated shop expenses totaled $1.1 million for the three months ended June 30, 2025, a $600,000 decrease from $1.7 million for the three months ended June 30, 2024.

Unallocated shop expenses totaled $3.3 million for the nine months ended June 30, 2025, a $500,000 increase from $2.8 million for the nine months ended June 30, 2024.

The variances in unallocated shop expenses were primarily due to changes in the amount of internal equipment charged to projects and small tool purchases which are allocated to projects over time based on a percentage of labor costs during the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

Gross Profit (Loss) .

A table comparing the Company’s gross profit for the three and six months ended March 31, 2025, compared to the three and six months ended March 31, 2024, is below:

A table comparing the Company’s gross profit for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, is below:

Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Gas & Water Distribution

2 unchanged sentences

Unallocated Shop Expense

Six Months Ended

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

Gas & Water Distribution

2 unchanged sentences

Unallocated Shop Expense

Total gross profit decreased by $6.1 million to $78,000 for the three months ended March 31, 2025, as compared to $6.2 million for the three months ended March 31, 2024.

Total gross profit decreased by $6.7 million to $10.3 million for the six months ended March 31, 2025, as compared to $17.1 million for the six months ended March 31, 2024.

Gas & Water Distribution gross loss totaled ($911,000) for the three months ended March 31, 2025, a $3.3 million decrease from a $2.4 million gross profit for the three months ended March 31, 2024.

Gas & Water Distribution gross profit totaled $4.3 million for the six months ended March 31, 2025, a $2.1 million decrease from $6.4 million for the six months ended March 31, 2024.

The gross profit decreases were primarily related to a decrease in productivity for water distribution services performed, primarily related to inclement weather, and a decrease in the volume efficiency of water-related paving services during the three and six months ended March 31, 2025, as compared to the same period in 2024.

Water-related paving services were impacted by both inclement weather and a temporary shift in a customer’s spending cycle which caused crews in Lexington, Kentucky to be temporarily assigned to Charleston, West Virginia, which increased costs for the Company.

Gas & Petroleum Transmission gross loss totaled ($1.2 million) for the three months ended March 31, 2025, a $1.4 million decrease from a gross profit of $231,000 for the three months ended March 31, 2024.

Gas & Petroleum Transmission gross loss totaled $271,000 for the six months ended March 31, 2025, a $3.9 million decrease from a gross profit of $3.6 million for the six months ended March 31, 2024.

The gross profit decreases were primarily due to a lower volume of transmission work being performed during the three and six months ended March 31, 2025, as compared to the same periods in the prior year.

Transmission work under contract was impacted by inclement weather during the three and six months ended March 31, 2025.

Additionally, new transmission work is being sent out for bid and awarded later as compared to previous fiscal years.

Electrical, Mechanical, & General construction services gross profit totaled $3.8 million for the three months ended March 31, 2025, a $962,000 decrease from $4.7 million for the three months ended March 31, 2024.

The gross profit decrease was primarily related to a mechanical services project performed in Kokomo, Indiana during the three months ended March 31, 2024 that was not replaced in fiscal year 2025.

Electrical, Mechanical, & General construction services gross profit totaled $8.6 million for the six months ended March 31, 2025, a $416,000 increase from $8.2 million for the six months ended March 31, 2024.

The gross profit increase was primarily related to an increase in mechanical and electrical services performed during the first fiscal year quarter of 2025, as compared to the same period in the prior fiscal year.

Gross loss attributable to unallocated shop expenses totaled ($1.6 million) for the three months ended March 31, 2025, a $451,000 increase from ($1.1 million) for the three months ended March 31, 2024.

Gross loss attributable to unallocated shop expenses totaled ($2.2 million) for the six months ended March 31, 2025, a $1.1 million increase from ($1.1 million) for the six months ended March 31, 2024.

The increase in gross loss related to unallocated shop expenses was primarily due to a decrease in the amount of internal equipment charged to projects for the three and six months ended March 31, 2025, as compared to the same periods in the prior year.

Total gross profit decreased by $3.3 million to $12.0 million for the three months ended June 30, 2025, as compared to $15.3 million for the three months ended June 30, 2024.

Total gross profit decreased by $10.1 million to $22.3 million for the nine months ended June 30, 2025, as compared to $32.4 million for the nine months ended June 30, 2024.

The decreases in gross profit were primarily related to less efficient performance during the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

The Company was significantly impacted by inclement weather during the second quarter of fiscal year 2025 and Gas & Petroleum Transmission work starting later in fiscal year 2025 as compared to the prior fiscal year.

Gas & Water Distribution gross profit totaled $6.7 million for the three months ended June 30, 2025, a $284,000 increase from a $6.4 million gross profit for the three months ended June 30, 2024.

The increase in gross profit was primarily due to an increase in water work performed;

however, gross profit decreased as a percentage of revenue.

Gas & Water Distribution gross profit totaled $10.9 million for the nine months ended June 30, 2025, a $1.9 million decrease from $12.8 million for the nine months ended June 30, 2024.

The decrease in gross profit was primarily due to less efficient production during the nine months ended June 30, 2025 and significantly more inclement weather during the second quarter of fiscal year 2025, as compared to the same periods in the prior fiscal year.

Electrical, Mechanical, & General construction services gross profit totaled $5.3 million for the three months ended June 30, 2025, a $754,000 decrease from $6.0 million for the three months ended June 30, 2024.

Electrical, Mechanical, & General construction services gross profit totaled $13.9 million for the nine months ended June 30, 2025, a $338,000 decrease from $14.2 million for the nine months ended June 30, 2024.

The decreases in gross profit were primarily related to a large electrical project nearing completion during the three months ended June 30, 2024 which was more profitable than expected while profit margins during the three and nine months ended June 30, 2025 have been in line with expected profit margins over a larger volume of revenue.

Gas & Petroleum Transmission gross profit totaled $1.1 million for the three months ended June 30, 2025, a $3.5 million decrease from a gross profit of $4.6 million for the three months ended June 30, 2024.

Gas & Petroleum Transmission gross profit totaled $852,000 for the nine months ended June 30, 2025, a $7.4 million decrease from a gross profit of $8.2 million for the nine months ended June 30, 2024.

The decreases in gross profit were primarily due to a lower volume of transmission work being performed during the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

Transmission work under contract was significantly impacted by inclement weather during the second quarter of fiscal year 2025.

Additionally, new transmission work was sent out for bid and awarded later as compared to previous fiscal years.

Gross loss attributable to unallocated shop expenses totaled ($1.1 million) for the three months ended June 30, 2025, a $610,000 decrease from ($1.7 million) for the three months ended June 30, 2024.

Gross loss attributable to unallocated shop expenses totaled ($3.3 million) for the nine months ended June 30, 2025, a $509,000 increase from ($2.8 million) for the nine months ended June 30, 2024.

Selling and administrative expenses .

Total selling and administrative expenses increased by $848,000 to $8.2 million for the three months ended March 31, 2025, as compared to $7.3 million for the same period in the prior year.

Total selling and administrative expenses increased by $2.3 million to $16.8 million for the six months ended March 31, 2025, as compared to $14.5 million for the same period in the prior year.

Total selling and administrative expenses increased by $2.0 million to $8.8 million for the three months ended June 30, 2025, as compared to $6.8 million for the same period in the prior year.

Total selling and administrative expenses increased by $4.3 million to $25.6 million for the nine months ended June 30, 2025, as compared to $21.3 million for the same period in the prior year.

The increases were primarily related to additional personnel hired to secure and manage work for expected growth and increased consulting and audit fees due to becoming an accelerated filer which requires a separate internal controls audit.

The Company’s latest acquisition, Tribute, also accounted for $273,000 and $553,000 of the increase, respectively, for the three and six months ended March 31, 2025, as compared to the same periods in the prior year.

The Company’s latest acquisition, Tribute, also accounted for $600,000 and $1.2 million of the increase, respectively, for the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

Other non-operating expense .

Other non-operating expenses totaled $21,000 for the three months ended March 31, 2025, as compared to $81,000 for the same period in the prior year.

The decrease for the three months ended March 31, 2025 was primarily due to a reduction in contributions and sponsorships, as compared the same period in the prior year.

Other non-operating expenses totaled $69,000 for the six months ended March 31, 2025, as compared to $6,000 for the same period in the prior year.

The increase for the six months ended March 31, 2025, as compared to the same period in the prior year, was primarily related to a minor legal settlement received during the first quarter of fiscal year 2024 that recouped employee benefit costs expended in a prior period.

Other non-operating expenses totaled $36,000 for the three months ended June 30, 2025, as compared to $27,000 for the same period in the prior year.

Other non-operating expenses totaled $105,000 for the nine months ended June 30, 2025, as compared to $34,000 for the same period in the prior year.

The increase for the nine months ended June 30, 2025, as compared to the same period in the prior year, was primarily related to a minor legal settlement received during the first quarter of fiscal year 2024 that recouped employee benefit costs expended in a prior period.

Interest expense .

Interest expense totaled $876,000 for the three months ended March 31, 2025, an increase of $253,000 from $623,000 for the same period in the prior year.

Interest expense totaled $1.4 million for the six months ended March 31, 2025, an increase of $135,000 from $1.2 million for the same period in the prior year.

Interest expense totaled $781,000 for the three months ended June 30, 2025, an increase of $234,000 from $547,000 for the same period in the prior year.

Interest expense totaled $2.1 million for the nine months ended June 30, 2025, an increase of $369,000 from $1.8 million for the same period in the prior year.

The increases were primarily related to financing the acquisition of Tribute.

(Loss) gain on sale of equipment .

Loss on sale of equipment totaled ($17,000) for the three months ended March 31, 2025, a decrease of $322,000 from a gain of $305,000 for the same period in the prior year.

Gain on sale of equipment totaled $179,000 for the six months ended March 31, 2025, a decrease of $112,000 from $292,000 for the same period in the prior year.

Loss on sale of equipment totaled ($128,000) for the three months ended June 30, 2025, compared to a gain on sale of $1,000 for the same period in the prior year.

Gain on sale of equipment totaled $51,000 for the nine months ended June 30, 2025, a decrease of $242,000 from $292,000 for the same period in the prior year.

The Company sold certain underutilized or non-working pieces of equipment during the first quarter of fiscal year 2024, with no comparable sale occurring during the same period in 2025.

Net (loss) income .

Loss before income taxes was ($9.0 million) for the three months ended March 31, 2025, as compared to ($1.5 million) for the same period in the prior year.

Loss before income taxes was ($7.7 million) for the six months ended March 31, 2025, as compared to a net income of $1.6 million for the same period in the prior year.

Income from lawsuit judgement .

During the three and nine months ended June 30, 2024, the Company received and recognized $15.6 million from a previously disclosed lawsuit judgement.

No such event occurred during the three and nine months ended June 30, 2025.

Net income (loss) .

Income before income taxes was $2.2 million for the three months ended June 30, 2025, as compared to $23.6 million for the same period in the prior year.

Loss before income taxes was ($5.5 million) for the nine months ended June 30, 2025, as compared to a net income of $25.2 million for the same period in the prior year.

The decreases were primarily related to the items mentioned above.

Income tax (benefit) expense for the three months ended March 31, 2025, was ($2.5 million) compared to ($373,000) for the same period in the prior year.

Income tax (benefit) expense for the six months ended March 31, 2025, was ($2.0 million) compared to $685,000 for the same period in the prior year.

The increase in income tax benefit and the decrease in income tax expense for the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year were due to a decrease in taxable income during the three and six months ended March 31, 2025, as compared to the same periods in the prior year.

Net (loss) income for the three months ended March 31, 2025, was ($6.5 million), as compared to ($1.1 million) for the same period in the prior year.

Net (loss) income for the six months ended March 31, 2025, was ($5.7 million), as compared to $933,000 for the same period in the prior year.

Comparison of Financial Condition at March 31, 2025, and September 30, 2024

The Company had total assets of $170.2 million at March 31, 2025, an increase of $12.0 million from the prior fiscal year end balance of $158.2 million.

The Company had net property, plant and equipment of $52.3 million at March 31, 2025, an increase of $14.2 million from the prior fiscal year end balance of $38.1 million.

Income tax expense (benefit) for the three months ended June 30, 2025, was $683,000 compared to $6.0 million for the same period in the prior year.

Income tax (benefit) expense for the nine months ended June 30, 2025, was ($1.1 million) compared to $6.7 million for the same period in the prior year.

The decrease in income tax expense and the increase in income tax benefit for the three and nine months ended June 30, 2025, respectively, as compared to the same periods in the prior year were due to a decrease in taxable income during the three and nine months ended June 30, 2025, as compared to the same periods in the prior year.

Net income for the three months ended June 30, 2025, was $1.5 million, as compared to $17.5 million for the same period in the prior year.

Net (loss) income for the nine months ended June 30, 2025, was ($4.4 million), as compared to $18.4 million for the same period in the prior year.

Comparison of Financial Condition at June 30, 2025, and September 30, 2024

The Company had total assets of $189.1 million at June 30, 2025, an increase of $30.9 million from the prior fiscal year end balance of $158.2 million.

The Company had net property, plant and equipment of $54.1 million at June 30, 2025, an increase of $16.0 million from the prior fiscal year end balance of $38.1 million.

The increase was due to $14.9 million in asset additions related to the Tribute acquisition, $10.4 million in other asset additions, partially offset by $8.7 million in depreciation and net equipment disposals of $674,000.

Accounts receivable, net of allowance for doubtful accounts, totaled $51.5 million at March 31, 2025, a decrease of $4.6 million from the prior fiscal year end balance of $56.1 million.

The decrease was primarily due to the timing of cash collections and project invoicing since September 30, 2024, partially offset by $3.8 million in accounts receivable related to Tribute at March 31, 2025.

Cash and cash equivalents totaled $9.9 million at March 31, 2025, a decrease of $3.0 million from the prior fiscal year end balance of $12.9 million.

The decrease was primarily due to a net $10.0 million provided by operating activities, and a net $12.3 million

provided by financing activities, partially offset by a $20.8 million investment in the acquisition of Tribute and a net $4.5 million investment in equipment, less proceeds from the sale of equipment.

Retainage receivable totaled $13.9 million at March 31, 2025, an increase of $2.2 million from the prior fiscal year end balance of $11.7 million.

The increase was primarily due to $3.2 million in retainage receivables related to the acquisition of Tribute at March 31, 2025, partially offset by net retainages received as of March 31, 2025.

Goodwill totaled $7.4 million at March 31, 2025, an increase of $3.3 million from the prior fiscal year end balance of $4.1 million.

Accounts receivable, net of allowance for doubtful accounts, totaled $57.7 million at June 30, 2025, an increase of $1.6 million from the prior fiscal year end balance of $56.1 million.

The increase was primarily due to the timing of cash collections and project invoicing since September 30, 2024.

Cash and cash equivalents totaled $15.3 million at June 30, 2025, an increase of $2.4 million from the prior fiscal year end balance of $12.9 million.

The increase was primarily due to a net $13.4 million provided by operating activities, and a net $18.2 million provided by financing activities, partially offset by a $20.8 million investment in the acquisition of Tribute and a net $8.4 million investment in equipment, less proceeds from the sale of equipment.

Retainage receivable totaled $16.3 million at June 30, 2025, an increase of $4.6 million from the prior fiscal year end balance of $11.7 million.

The increase was primarily due to the timing of retention collections and project invoicing since September 30, 2024.

Goodwill totaled $7.4 million at June 30, 2025, an increase of $3.3 million from the prior fiscal year end balance of $4.1 million.

The increase was due to the acquisition of Tribute.

Other receivables totaled $1.1 million at March 31, 2025, an increase of $23,000 from the prior fiscal year end balance of $1.0 million.

Intangible assets, net totaled $3.8 million at March 31, 2025, an increase of $705,000 from the prior fiscal year end balance of $3.1 million.

The increase was primarily due to intangible assets acquired as part of the Tribute acquisition, partially offset by the amortization of intangible assets during the six months ended March 31, 2025.

Right-of-use assets totaled $2.5 million at March 31, 2025, a decrease of $31,000 from the prior fiscal year end balance.

The decrease was primarily due to the amortization of operating leases, partially offset by an increase in leased vehicles during the six months ended March 31, 2025.

Contract assets totaled $22.7 million at March 31, 2025, a decrease of $1.9 million from the prior fiscal year end balance of $24.6 million.

The decrease was due to a difference in the timing of project billings at March 31, 2025, compared to September 30, 2024.

Prepaid expenses and other totaled $5.1 million at March 31, 2025, an increase of $1.0 million from the prior fiscal year end balance of $4.1 million.

The increase was primarily due to prepaid insurance payments, partially offset by insurance expensed during the six months ended March 31, 2025.

The Company had total liabilities of $116.4 million at March 31, 2025, an increase of $16.9 million from the prior fiscal year end balance of $99.6 million.

The aggregate balance of current maturities of long-term debt and long-term debt totaled $40.4 million at March 31, 2025, an increase of $16.8 million from the prior fiscal year-end balance of $23.6 million.

The increase was primarily due to $16.0 million related to financing the acquisition of Tribute and assumption of $3.8 million of Tribute equipment debt, $200,000 in additional equipment financing and $1.3 million in line of credit borrowings, partially offset by $4.5 million in long-term debt payments.

Contract liabilities totaled $22.9 million at March 31, 2025, an increase of $6.0 million from the prior fiscal year end balance of $17.0 million.

The increase was due to a difference in the timing of project billings at March 31, 2025, as compared to September 30, 2024.

Accounts payable totaled $22.6 million at March 31, 2025, a decrease of $1.1 million from the prior fiscal year end balance of $23.7 million.

The decrease was due to the timing of accounts payable payments as compared to September 30, 2024.

Income tax payable totaled $304,000 at March 31, 2025, a decrease of $1.9 million from the prior fiscal year end balance of $2.2 million.

The decrease was primarily related to income tax payments made during the first six months of fiscal year 2025 and a taxable loss generated during the six months ended March 31, 2025.

Current and long-term operating lease liabilities totaled $2.5 million at March 31, 2025, a decrease of $28,000 from the prior fiscal year end balance.

The decrease was primarily due to payments made during the six months ended March 31, 2025, partially offset by an increase in leased vehicles.

Lines of credit and short-term borrowings totaled $10.3 million at March 31, 2025, an increase of $50,000 from the prior fiscal year end balance.

Other receivables totaled $1.1 million at June 30, 2025, an increase of $47,000 from the prior fiscal year end balance of $1.0 million.

Intangible assets, net totaled $3.6 million at June 30, 2025, an increase of $541,000 from the prior fiscal year end balance of $3.1 million.

The increase was primarily due to intangible assets acquired as part of the Tribute acquisition, partially offset by the amortization of intangible assets during the nine months ended June 30, 2025.

Right-of-use assets totaled $2.4 million at June 30, 2025, a decrease of $153,000 from the prior fiscal year end balance of $2.5 million.

The decrease was primarily due to the amortization of operating leases, partially offset by an increase in leased vehicles during the nine months ended June 30, 2025.

Contract assets totaled $26.7 million at June 30, 2025, an increase of $2.1 million from the prior fiscal year end balance of $24.6 million.

The increase was due to a difference in the timing of project billings at June 30, 2025, compared to September 30, 2024.

Prepaid expenses and other totaled $4.6 million at June 30, 2025, an increase of $474,000 from the prior fiscal year end balance of $4.1 million.

The increase was primarily due to prepaid insurance payments, partially offset by insurance expensed during the nine months ended June 30, 2025.

The Company had total liabilities of $134.6 million at June 30, 2025, an increase of $35.0 million from the prior fiscal year end balance of $99.6 million.

The aggregate balance of current maturities of long-term debt and long-term debt totaled $48.7 million at June 30, 2025, an increase of $25.2 million from the prior fiscal year-end balance of $23.6 million.

The increase was primarily due to $16.0 million related to financing the acquisition of Tribute and assumption of $3.8 million of Tribute equipment debt, $5.0 million in additional equipment financing and $7.1 million in line of credit borrowings, partially offset by $6.8 million in long-term debt payments.

Contract liabilities totaled $27.7 million at June 30, 2025, an increase of $10.7 million from the prior fiscal year end balance of $17.0 million.

The increase was due to a difference in the timing of project billings at June 30, 2025, as compared to September 30, 2024.

Accounts payable totaled $24.4 million at June 30, 2025, an increase of $679,000 from the prior fiscal year end balance of $23.7 million.

The increase was due to the timing of accounts payable payments as compared to September 30, 2024.

Income tax payable totaled $413,000 at June 30, 2025, a decrease of $1.8 million from the prior fiscal year end balance of $2.2 million.

The decrease was primarily related to income tax payments made during the first nine months of fiscal year 2025 and a taxable loss generated during the nine months ended June 30, 2025.

Current and long-term operating lease liabilities totaled $2.4 million at June 30, 2025, a decrease of $152,000 from the prior fiscal year end balance.

The decrease was primarily due to payments made during the nine months ended June 30, 2025, partially offset by an increase in leased vehicles.

Lines of credit and short-term borrowings totaled $10.4 million at June 30, 2025, an increase of $75,000 from the prior fiscal year end balance.

The increase was due to interest accrued on PPP Loans.

Refer to Note 3 “Accounting for PPP Loans” in the accompanying consolidated financial statements for additional details.

Accrued expenses and other current liabilities totaled $12.7 million at March 31, 2025, a decrease of $1.1 million from the prior fiscal year end balance of $13.9 million.

The decrease was due to the timing of accrued expense payments, as compared to September 30, 2024.

Deferred tax liabilities totaled $4.7 million at March 31, 2025, a decrease of $1.8 million from the prior fiscal year end balance of $6.5 million.

The decrease was primarily related to a $3.1 million decrease related to an increase in federal and state NOL carryforwards, partially offset by a $1.6 million increase due to timing differences for depreciation expense.

Shareholders’ equity was $53.8 million at March 31, 2025, a decrease of $4.9 million from the prior fiscal year end balance of $58.7 million.

The decrease was primarily due to net loss of $5.9 million for the six months ended March 31, 2025 and $501,000 in quarterly dividends paid and $502,000 in accrued quarterly dividends that were paid on April 15, 2025, partially offset by $2.0 million in common stock issued as part of the Tribute acquisition.

Accrued expenses and other current liabilities totaled $15.9 million at June 30, 2025, an increase of $2.1 million from the prior fiscal year end balance of $13.9 million.

The increase was due to the timing of accrued expense payments, as compared to September 30, 2024.

Deferred tax liabilities totaled $4.7 million at June 30, 2025, a decrease of $1.8 million from the prior fiscal year end balance of $6.5 million.

The decrease was primarily related to a $3.4 million decrease related to an increase in federal and state NOL carryforwards and a net $470,000 decrease in other timing differences, partially offset by a $2.1 million increase due to timing differences for depreciation expense.

Shareholders’ equity was $54.5 million at June 30, 2025, a decrease of $4.2 million from the prior fiscal year end balance of $58.7 million.

The decrease was primarily due to net loss of ($3.9 million) for the nine months ended June 30, 2025 and $1.0 million in quarterly dividends paid and $502,000 in accrued quarterly dividends that were paid on July 15, 2025 and common share repurchases of $844,000, partially offset by $2.0 million in common stock issued as part of the Tribute acquisition.

Liquidity and Capital Resources

Operating Line of Credit

On August 8, 2024, the Company renewed its $30.0 million line of credit with a maturity date of June 28, 2026.

In July 2025 the Company renewed its $30.0 million line of credit effective June 28, 2025 with a maturity date of June 28, 2027.

The interest rate on the line of credit is the “ Wall Street Journal ” Prime Rate (the index) with a floor of 4.99%.

The line of credit is limited to a borrowing base calculation as summarized below:

March 31, 2025

June 30, 2025

September 30, 2024

3 unchanged sentences

Interest rate

The Company’s $5.8 million and $4.5 million line of credit borrowings are recorded as a long-term debt as of March 31, 2025 and September 30, 2024, respectively.

The Company’s $11.6 million and $4.5 million line of credit borrowings are recorded as a long-term debt as of June 30, 2025 and September 30, 2024, respectively.

The financial covenants required by the Company’s lender are below:

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The Company’s lender has agreed to omit the effect of the PPP loan restatement from the Company’s covenant compliance calculations while a final decision on PPP loan forgiveness remains in question.

Thus, the Company was in compliance with all covenants at March 31, 2025.

The Company was not in compliance with all covenants at June 30, 2025 and received a waiver from its lender.

The Company projects to meet all covenant requirements for the next twelve months.

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Treasury yield, adjusted to a constant maturity of three years as published by the Federal Reserve weekly.

As of March 31, 2025, the Company had made principal payments of $463,000.

As of June 30, 2025, the Company had made principal payments of $476,000.

The loan is collateralized by the building purchased under this agreement.

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The unsecured five-year term note requires annual payments of at least $500,000 with a fixed interest rate of 3.25% on the $3.0 million sellers’ note, which equates to 5.35% on the carrying value of the note.

As of March 31, 2025, the Company had made annual installment payments of $2,500,000.

As of June 30, 2025, the Company had made annual installment payments totaling $2,500,000.

On April 2, 2021, the Company entered into a $3.5 million Non-Revolving Note agreement with United Bank.

2 unchanged sentences

The loan is collateralized by the Company’s equipment and receivables.

As of March 31, 2025, the Company had made principal payments of $2.7 million.

As of June 30, 2025, the Company had made principal payments of $2.9 million.

On April 29, 2022, the Company entered into a $7.5 million Non-Revolving Note agreement with United Bank.

This five-year agreement was used to finance the purchase of Tri-State Paving and has monthly payments of $129,910 with a fixed interest rate of 4.25%.

As of March 31, 2025, the Company had made principal payments of $3.8 million.

As of June 30, 2025, the Company has made principal payments of $4.2 million.

On April 29, 2022, the Company entered into a $1.0 million promissory note agreement with Corns Enterprises, a related party, as partial consideration for the purchase of Tri-State Paving.

2 unchanged sentences

Interest payments due shall be calculated on the principal balance remaining and shall be at the stated rate of 3.5% per year.

The Company has made $750,000 in principal payments on this note as of March 31, 2025.

The Company has made $750,000 in principal payments on this note as of June 30, 2025.

David Corns retired as president of Tri-State Paving & Sealcoating, Inc.

On October 10, 2022, the Company entered into a $3.1 million promissory note agreement with United Bank.

2 unchanged sentences

The loan is collateralized by the Company’s equipment and receivables.

As of March 31, 2025, the Company had made principal payments of $1.4 million.

As of June 30, 2025, the Company had made principal payments of $1.5 million.

On June 1, 2023, the Company entered into a $9.3 million Non-Revolving Note agreement with United Bank.

2 unchanged sentences

The loan is collateralized by the equipment purchased under this agreement.

As of March 31, 2025, the Company had borrowed $9.3 million against this line of credit and made $2.4 million in principal payments.

On August 8, 2024, the Company renewed its $30.0 million line of credit with a maturity date of June 28, 2026.

As of June 30, 2025, the Company had borrowed $9.3 million against this line of credit and made $2.9 million in principal payments.

In July 2025, the Company renewed its $30.0 million line of credit effective June 28, 2025 with a maturity date of June 28, 2027.

The interest rate on the line of credit is the “ Wall Street Journal ” Prime Rate (the index) with a floor of 4.99%.

The outstanding balance on the operating line of credit at March 31, 2025 was $5.8 million with an interest rate of 7.5%.

The outstanding balance on the operating line of credit at June 30, 2025 was $11.6 million with an interest rate of 7.5%.

On August 8, 2024, the Company entered into a $5.0 million Non-Revolving Note agreement with United Bank.

3 unchanged sentences

The loan is collateralized by the equipment purchased under this agreement.

As of March 31, 2025, the Company had not borrowed against this line of credit.

As of June 30, 2025, the Company had borrowed $3.7 million against this line of credit and made no principal payments.

On December 2, 2024, the Company entered into a $16.0 million loan agreement with United Bank to finance the acquisition of Tribute.

This six-year agreement has monthly payments of $272,000 including a fixed interest rate of 6.9%.

As of March 31, 2025, the Company had made $723,000 in principal payments.

As of June 30, 2025, the Company had made $1.3 million in principal payments.

Operating Leases

3 unchanged sentences

The Company has two right-of-use operating leases acquired on April 29, 2022, as part of the Tri-State Paving, LLC transaction.

The first operating lease, for the Hurricane, West Virginia facility, had a net present value of $236,000 at inception, and a carrying value of $7,000 at March 31, 2025.

The first operating lease, for the Hurricane, West Virginia facility, had a net present value of $236,000 at inception, and a carrying value of $0 at June 30, 2025.

The 4.5% interest rate on the operating leases is based on the Company’s incremental borrowing rate at inception.

The Company intends to sign a one-year renewal and is evaluating the intent to renew for additional periods.

The second operating lease, for the Chattanooga, Tennessee facility, had a net present value of $144,000 at inception, and expired on August 31, 2024.

The lease was renewed for a two-year period with a net present value of $140,000 and had a carrying value of $88,000 at March 31, 2025.

The lease was renewed for a two-year period with a net present value of $140,000 and had a carrying value of $81,000 at June 30, 2025.

The 8.5% interest rate on the operating leases is based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease with Enterprise Fleet Management, Inc.

The Company had eighty - three vehicles on lease at March 31, 2025.

The right-of-use operating lease has a carrying value of $2.3 million at March 31, 2025.

The Company had eighty-six vehicles on lease at June 30, 2025.

The right-of-use operating lease has a carrying value of $2.2 million at June 30, 2025.

Each vehicle leased under the master lease program has its own implicit rate ranging from 12.8% to 15.6%.

3 unchanged sentences

The Company has a right-of-use operating lease acquired on March 28, 2023.

This lease, for the Winchester, Kentucky facility, had a net present value of $290,000 at inception and a carrying value of $111,000 at March 31, 2025.

This lease, for the Winchester, Kentucky facility, had a net present value of $290,000 at inception and a carrying value of $72,000 at June 30, 2025.

The 7.75% interest rate on the operating lease is based on the Company’s incremental borrowing rate at inception.

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Rental expense can vary by reporting period due to equipment requirements on construction projects and the availability of Company owned equipment.

Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $3.9 million and $3.3 million, respectively, for the three months ended March 31, 2025 and 2024.

Rental expense was $9.0 million and $8.7 million, respectively, for the six months ended March 31, 2025 and 2024.

Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $4.8 million and $2.5 million, respectively, for the three months ended June 30, 2025 and 2024.

Rental expense was $13.8 million and $6.8 million, respectively, for the nine months ended June 30, 2025 and 2024.

Letters of Credit

Certain customers or vendors may require letters of credit to secure payments that the vendors are making on our behalf or to secure payments to subcontractors and vendors on various customer projects.

At March 31, 2025, the Company did not have any letters of credit outstanding.

At June 30, 2025, the Company did not have any letters of credit outstanding.

Performance Bonds

8 unchanged sentences

The Company does not anticipate any claims in the foreseeable future.

At March 31, 2025, the Company had $76.4 million in performance bonds outstanding.

At June 30, 2025, the Company had $86.9 million in performance bonds outstanding.

Concentration of Credit Risk

In the ordinary course of business, the Company grants credit under normal payment terms, generally without collateral, to our customers, which include natural gas and oil companies, general contractors, and various commercial and industrial customers located within the United States.

Consequently, the Company is subject to potential credit risk related to business and economic factors that

would affect these companies.

However, the Company generally has certain statutory lien rights with respect to services provided.

Consequently, the Company is subject to potential credit risk related to business and economic factors that would affect these companies.

However, the Company generally has certain statutory lien rights with respect to the services provided.

Under certain circumstances such as foreclosure, the Company may take title to the underlying assets in lieu of cash in settlement of receivables.

Please see the tables below for customers that represent 10.0% or more of the Company’s revenue for the three and six months ended March 31, 2025 and 2024:

Please see the tables below for customers that represent 10.0% or more of the Company’s revenue for the three and nine months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

Nine Months Ended

TransCanada Corporation

NiSource and subsidiaries

American Water

* Less than 10.0% and included in “All other” if applicable

There were no customers that represented 10.0% or more of the Company’s accounts receivable, net of retention at March 31, 2025 and September 30, 2024.

Customers that represented 10.0% or more of the Company’s accounts receivable, net of retention at June 30, 2025 and September 30, 2024:

Accounts receivable, net of retention

at June 30, 2025

at September 30, 2024

Board of Education

* Less than 10.0% and included in “All other” if applicable

On November 12, 2021, the Company received a withdrawal liability claim from a pension plan to which the Company made pension contributions for union construction employees performing covered work in a particular jurisdiction.

6 unchanged sentences

The Company has expensed all $164,000 in payments made through September 30, 2022 and does not expect any future liabilities related to this claim.

The Company did not make any payments during the three and six months ended March 31, 2025.

Other than described above, at March 31, 2025, the Company was not involved in any legal proceedings other than in the ordinary course of business.

The Company did not make any payments during the three and nine months ended June 30, 2025.

Other than described above, at June 30, 2025, the Company was not involved in any legal proceedings other than in the ordinary course of business.

The Company is a party from time to time to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.

1 unchanged sentence

With respect to all such lawsuits, claims, and proceedings, we record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

At March 31, 2025, the Company does not believe that any of these proceedings, separately or in aggregate, would be expected to have a material adverse effect on our financial position, results of operations or cash flows.

At June 30, 2025, the Company does not believe that any of these proceedings, separately or in aggregate, would be expected to have a material adverse effect on our financial position, results of operations or cash flows.

Related Party Transactions

2 unchanged sentences

This four-year agreement requires $250,000 principal installment payments on or before the end of each twelve (12) full calendar month period beginning April 29, 2022.

Interest payments due shall be calculated on the principal balance remaining and shall be at the stated rate of 3.5% per year.

The Company has made $750,000 in principal payments on this note as of March 31, 2025.

Interest payments due shall be calculated on

the principal balance remaining and shall be at the stated rate of 3.5% per year.

The Company has made $750,000 in principal payments on this note as of June 30, 2025.

David Corns retired as president of Tri-State Paving & Sealcoating, Inc.

Subsequent to the April 29, 2022 acquisition of Tri-State Paving, the Company entered into an operating lease for facilities in Hurricane, West Virginia with Corns Enterprises.

This thirty-six-month lease is treated as a right to use asset and has payments of $7,000 per month.

The total net present value at inception was $236,000 with a carrying value of $7,000 at March 31, 2025.

The total net present value at inception was $236,000 with a carrying value of $7,000 at June 30, 2025.

The Company intends to sign a one-year renewal and is evaluating the intent to renew for additional periods.

David Corns retired as president of Tri-State Paving & Sealcoating, Inc.

SQP made an equity investment of $156,000 in 1030 Quarrier Development, LLC (“Development”) in August 2022.

13 unchanged sentences

CJ Hughes is not obliged to rent any equipment and does so only when CJ Hughes does not have equipment available of its own and would otherwise need to rent such equipment as the demand increases throughout the construction season.

During the three months ended March 31, 2025 and 2024, the rental amounts were $123,000 and $194,000, respectively.

During the six months ended March 31, 2025 and 2024, the rental amounts were $176,000 and $213,000, respectively.

Other than mentioned above, there were no new material related party transactions entered into during the quarter ended March 31, 2025.

During the three months ended June 30, 2025 and 2024, the rental amounts were $74,000 and $144,000, respectively.

During the nine months ended June 30, 2025 and 2024, the rental amounts were $250,000 and $357,000, respectively.

Other than mentioned above, there were no new material related party transactions entered into during the quarter ended June 30, 2025.

Certain Energy Services subsidiaries routinely engage in transactions in the normal course of business with each other, including sharing employee benefit plan coverage, payment for insurance and other expenses on behalf of other affiliates, and other services incidental to business of each of the affiliates.

4 unchanged sentences

Significant inflation or supply chain issues could cause customers to delay or cancel planned projects;

however, inflation did not have a significant effect on our results for the three and six months ended March 31, 2025 and 2024.

however, inflation did not have a significant effect on our results for the three and nine months ended June 30, 2025 and 2024.

Critical Accounting Estimates

35 unchanged sentences

Generally, unearned project-related costs will be earned over the next twelve months.

The following table presents our costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings at March 31, 2025 and September 30, 2024:

March 31, 2025

The following table presents our costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings at June 30, 2025 and September 30, 2024:

June 30, 2025

September 30, 2024

10 unchanged sentences

Additionally, frequently changing reserves could be an indication of risky or unreliable customers.

At March 31, 2025, the management review deemed that the allowance for doubtful accounts was adequate.

Please see the allowance for doubtful accounts table below as of and for the six months ended March 31, 2025 and as of and for the fiscal year ended September 30, 2024:

March 31, 2025

At June 30, 2025, the management review deemed that the allowance for doubtful accounts was adequate.

Please see the allowance for doubtful accounts table below as of and for the nine months ended June 30, 2025 and as of and for the fiscal year ended September 30, 2024:

June 30, 2025

September 30, 2024

7 unchanged sentences

If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment.

The Company did not have a goodwill impairment at March 31, 2025.

The Company did not have a goodwill impairment at June 30, 2025.

Materially incorrect estimates could cause an impairment of goodwill or intangible assets and result in a loss in profitability for the Company.

11 unchanged sentences

at September 30,

Ended March 31,

Ended June 30,

at September 30,

25 unchanged sentences

The definite-lived identifiable intangible assets recognized as part of the Company’s business combinations are initially recorded at their estimated fair value.

The Company’s depreciation expenses for the three months ended March 31, 2025 and 2024 were $3.0 million and $2.1 million, respectively.

The Company’s depreciation expenses for the six months ended March 31, 2025 and 2024 were $5.6 million and $4.2 million, respectively.

The Company’s depreciation expenses for the three months ended June 30, 2025 and 2024 were $3.1 million and $2.1 million, respectively.

The Company’s depreciation expenses for the nine months ended June 30, 2025 and 2024 were $8.7 million and $6.3 million, respectively.

In general, depreciation is included in “cost of revenues” on the Company’s consolidated statements of income.

The Company’s amortization expenses for the three months ended March 31, 2025 and 2024 were $164,197 and $108,842, respectively.

The Company’s amortization expenses for the six months ended March 31, 2025 and 2024 were $295,060 and $216,284, respectively.

The Company’s amortization expenses for the three months ended June 30, 2025 and 2024 were $164,199 and $108,142, respectively.

The Company’s amortization expenses for the nine months ended June 30, 2025 and 2024 were $459,259 and $324,426, respectively.

In general, amortization is included in “cost of revenues” on the Company’s consolidated statements of income.

4 unchanged sentences

The Company’s provision for income taxes is computed by applying a federal rate of 21.0% and a blended state rate of approximately 5.0% to 6.0% to taxable income or loss after consideration of non-taxable and non-deductible items.

The effective income tax rate for the three months ended March 31, 2025 was (24.5)%, as compared to (25.2)%, for the same period in 2024.

The effective income tax rate for the six months ended March 31, 2025 was (22.8)%, as compared to 42.3%, for the same period in 2024.

The effective income tax rate for the three months ended June 30, 2025 was 6.2%, as compared to 25.6%, for the same period in 2024.

The effective income tax rate for the nine months ended June 30, 2025 was (29.5)%, as compared to 26.7%, for the same period in 2024.

Effective income tax rates are estimates and may vary from period to period due to changes in the amount of taxable income and non-deductible expenses.

2 unchanged sentences

A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company had $12.8 million and $0 million of federal net operating loss carryforwards at March 31, 2025 and September 30, 2024, respectively.

The Company had $52.0 million and $20.5 million of state net operating loss carryforwards at March 31, 2025 and September 30, 2024, respectively.

The Company had $13.5 million and $0 million of federal net operating loss carryforwards at June 30, 2025 and September 30, 2024, respectively.

The Company had $84.5 million and $20.5 million of state net operating loss carryforwards at June 30, 2025 and September 30, 2024, respectively.

The state net operating loss carryforwards begin to expire in 2025.

1 unchanged sentence

The Company does not believe that it has any unrecognized tax benefits included in its consolidated financial statements that require recognition.

The Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax

benefits as a result of a lapse of the applicable statute of limitations.

The Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result of a lapse of the applicable statute of limitations.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in general and administrative expenses.

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Refer to Note 3 “Accounting for PPP Loans” in the accompanying consolidated financial statements for additional details.

New Accounting Pronouncements

On October 28, 2021, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The amendments of this ASU require entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.

The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination.

The amendments are effective for public business entities for the fiscal years, including interim periods within those the fiscal years, beginning after December 15, 2022.

For all other entities they are effective for the fiscal years, including interim periods within those the fiscal years, beginning after December 15, 2023.

Entities should apply the amendments prospectively to business combinations that occur after the effective date.

Early adoption is permitted, including in any interim period, for public business entities for periods for which financial statements have not yet been issued, and for all other entities for periods for which financial statements have not yet been made available for issuance.

ASU 2021-08 has not had a significant impact on the Company’s results of operations, financial position or cash flows.

Subsequent Events

On April 15, 2025, the Company paid $502,000 in quarterly dividends to holders of record as of March 31, 2025.

In April 2025, the Company repurchased 106.392 common shares of stock at an average price of $7.99.

On July 15, 2025, the Company paid $502,000 in quarterly dividends to holders of record as of July 3, 2025.

Management has evaluated all subsequent events for accounting and disclosure.

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These statements are forward-looking, and actual results may differ materially.

The Company received significant bid opportunities for water and wastewater projects and electrical, mechanical, and general construction projects during the first six months of fiscal year 2025.

The Company received significant bid opportunities for water and wastewater projects and electrical, mechanical, and general construction projects during the first nine months of fiscal year 2025.

At June 30, 2025, the Company had an unaudited backlog of $133.0 million in electrical, mechanical, and general construction projects and $125.0 million in water projects.

A significant amount of natural gas bid opportunities and project awards are occurring later than previous years.

The Company has started to see increased bid opportunities for natural gas projects during the Company’s third fiscal quarter.

The Company’s unaudited backlog at March 31, 2025, was $280.7 million, as compared to $222.8 million and $243.2 million at March 31, 2024, and September 30, 2024, respectively.

The Company had an unaudited backlog of $30.0 million in transmission projects at June 30, 2025.

The Company’s unaudited backlog at June 30, 2025, was $304.4 million, as compared to $250.9 million and $243.2 million at June 30, 2024, and September 30, 2024, respectively.

While adding additional projects appears likely, no assurances can be given that the Company will be successful in bidding on projects that become available.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis