What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-09-10 compared with 2024-09-10 · 175 added, 124 removed, 261 unchanged (53% of the section changed)

17 unchanged sentences

primarily consists of engineering, procurement, fabrication, and construction services to support growing demand for LNG utility peak shaving facilities.

We also perform traditional electrical work for public and private utilities, including construction of new substations, upgrades of existing substations, transmission and distribution line installations, and upgrades and maintenance including live wire work.

Work may also include emergency and storm restoration services.

We also perform power delivery work for public and private utilities, including construction of new substations, upgrades of existing substations, and maintenance.

We also provide construction services to a variety of power generation facilities, including natural gas fired facilities in simple or combined cycle configurations.

2 unchanged sentences

We also perform engineering, procurement, fabrication, and construction for refinery upgrades and retrofits for renewable fuels, including hydrogen processing, production, loading and distribution facilities.

We also construct thermal vacuum test chambers for aerospace and defense industries and other infrastructure for industries including petrochemical, sulfur, mining and minerals primarily in the extraction of non-ferrous metals, cement, agriculture, wastewater treatment facilities and other industrial customers.

We also engineer and construct thermal vacuum test chambers for aerospace and defense industries and other infrastructure for industries including chemicals, petrochemical, sulfur, mining and minerals primarily in the extraction of non-ferrous metals, cement, agriculture, wastewater treatment facilities and other industrial customers.

Significant period to period changes in revenue, gross profits and operating results between fiscal 2025 and fiscal 2024 are discussed below on a consolidated basis for each segment.

5 unchanged sentences

Operational Update

During fiscal 2024, our markets and project opportunities remained strong, driving $1.1 billion of awards added to backlog during the year, and producing a total backlog of $1.4 billion and a book-to-bill ratio of 1.5.

Many of these project awards are large construction projects that we expect to generate revenues and efficiently utilize our cost structure over a multi-year period with expected gross margins at our pre-pandemic historical gross margin range.

The time to convert these awards to revenue is dependent on a variety of factors, many outside of our control.

Despite these challenges, the company generated positive cash flows from operations during fiscal year 2024, which improved our overall cash balance by $60.8 million, reflecting our ability to efficiently manage capital and maintain financial stability.

Combining expected forthcoming revenues from effective project execution and conversion of our historic backlog, we believe we are on a trajectory of upward growth and profitability.

Operating activity increased each quarter during fiscal 2025 as quarterly revenues grew from $165.6 million in the first quarter of fiscal 2025 to $216.4 million in the fourth quarter of fiscal 2025, an increase of 31% and the highest levels since the third quarter of fiscal 2020, which marked the beginning of the COVID-19 pandemic.

The increase was the result of advancing work on several multiyear projects currently in backlog.

Project awards during fiscal 2025 were $726.0 million, resulting in a current year book-to-bill ratio of 0.9x, and maintaining our backlog at near-record levels of $1.4 billion.

Award activity was driven by our Storage and Terminal solutions segment, and included the award of a large specialty storage project.

The market drivers for each of our segments are strong and include increased oil and gas demand, the clean energy transition, low-cost feed stock, increased power demands associated with data centers, industrial reshoring/onshoring, grid reliability and electrical supply assurance.

As a result, we believe we will have strong award activity in the coming year.

While our award activity during the year was strong, heightened macroeconomic uncertainty and the evolving impact of U.S.

trade policy on infrastructure economics has impacted the timing of customer decisions in the near term.

We believe customer delays in project starts and final investment decisions to be a short-term disruption, while an overall favorable regulatory environment for our customers underpins long-term momentum for our business.

We continue to sharpen and better align our business for the current and coming marketplace.

Accordingly, we have consolidated certain aspects of the business to further improve our performance and create a flatter, leaner management structure.

In addition, we continue to evaluate our business lines and, where appropriate, reallocate resources to those businesses that present the best opportunities.

We remain focused on delivering sustainable, long-term shareholder value by building a resilient, growth-oriented platform aligned with the evolving needs of our customers.

We believe actions taken in the fourth quarter of fiscal 2025 and the first quarter of fiscal 2026 will reduce our overall cost structure, improving our overhead recovery and operating leverage.

We define backlog as the total dollar amount of revenue that we expect to recognize as a result of performing work that has been awarded to us through a signed contract, limited notice to proceed ("LNTP") or other type of assurance that we consider firm.

6 unchanged sentences

For all other arrangements, we calculate backlog as the estimated contract amount less revenue recognized as of the reporting date.

Backlog differs from the amount of our remaining performance obligations, which are described in Note 2 - Revenue in the notes to the audited consolidated financial statements.

Differences are due primarily to the inclusion within our backlog of estimates of future revenue under long-term maintenance contracts;

future revenue for the full scope of work for certain arrangements where we have received an LNTP;

and future revenue for arrangements where we have received assurance that we consider firm, but the associated contract has not been fully executed.

The following table provides a summary of changes in our backlog for fiscal 2025:

11 unchanged sentences

(1) Calculated by dividing project awards by revenue recognized.

(2) Backlog was reduced primarily to account for a reduction of work available to us under an existing refinery maintenance program.

In the Storage and Terminal Solutions segment, backlog increased by 194.9% as we booked $804.4 million of project awards during fiscal 2024.

This segment includes significant opportunities for storage infrastructure projects related to natural gas, LNG, ammonia, hydrogen, NGLs and other forms of renewable energy.

We believe LNG and hydrogen projects in particular will be key growth drivers for this segment.

Bidding activity on LNG projects has been strong and we expect that to continue.

(2) Backlog was reduced as a result of the closure of a customer's facility.

This customer has historically represented less than 1% of our consolidated revenues.

In the Storage and Terminal Solutions segment, we booked $337.7 million of project awards during fiscal 2025.

Project awards included a project for the engineering and construction of large refrigerated propane and butane tanks as well as spheres for related NGL products.

This segment includes significant opportunities for storage infrastructure projects related to natural gas, LNG, ammonia, NGLs and other forms of low carbon energy.

We believe LNG and ammonia projects in particular will be key growth drivers for this segment.

Bidding activity on LNG and ammonia projects has been strong and we expect that to continue.

In the Utility and Power Infrastructure segment, we booked $215.4 million of project awards in fiscal 2025.

Our opportunity pipeline for LNG peak shaving projects continues to be promising, however those awards, while significant, can be less frequent.

Power delivery opportunities are expected to be driven over the long-term by increasing electrical demand and the

related electrical grid requirements.

Our opportunity pipeline for LNG peak shaving projects continues to be promising;

however those awards, while significant, can be less frequent.

Power delivery opportunities are expected to be driven over the long-term by increasing electrical demand and the related electrical grid requirements.

Project opportunities and bidding activity are strong for both the power delivery portion of the business and LNG peak shaving.

In the Process and Industrial Facilities segment, we booked $182.4 million of project awards in fiscal 2024.

Included in project awards is contract growth on a capital project at a biodiesel facility.

Backlog in this segment was adjusted during the year to account for a reduction of work available under an existing refinery maintenance program.

Client spending related to refinery maintenance and turnaround operations has continued to be strong, which also contributed significantly to project awards during the year.

We continue to see demand for thermal vacuum chambers in the coming quarters, as well as increasing opportunities in mining and minerals, chemicals, and renewables.

In the Process and Industrial Facilities segment, we booked $172.9 million of project awards in fiscal 2025, and were notified of a five-year renewal of a refinery maintenance contract.

We continue to see demand for thermal vacuum chambers in the coming quarters, as well as increasing opportunities in mining and minerals, chemicals, low carbon projects and refinery turnarounds.

Project awards in all segments are cyclical and are typically the result of a sales process that can take several months or years to complete.

2 unchanged sentences

There is an inherent lag between the time a project is awarded and when it begins to have a material impact on revenue.

This lag normally extends up to six months or longer in unique circumstances, depending on finalization of scopes, contracts, permits, and facility process requirements.

This lag can vary and can extend up to six months or longer in unique circumstances, depending on finalization of scopes, contracts, permits, and facility process requirements.

Additionally, awards for larger construction projects may be recognized as revenue over a multi-year period as the projects may take a few years to complete.

2 unchanged sentences

Consolidated Results of Operations

Fiscal Years Ended June 30,

2024 2023 $ %

Fiscal Years Ended June 30, 2025 v 2024

2025 2024 Change %

(In thousands)

3 unchanged sentences

Selling, general and administrative expenses 71,173 70,085 1,088 2 %

Goodwill impairment — 12,316 (12,316) (100) %

Restructuring costs 3,572 501 3,071 613 %

Operating loss (35,068) (30,113) (4,955) (16) %

(30,113) (52,887) 22,774 (43) %

Other income (expense):

3 unchanged sentences

Loss before income tax expense (28,998) (25,012) (3,986) (16) %

Provision for federal, state and foreign income taxes (36) (400) 364 (91) %

Provision (benefit) for federal, state and foreign income taxes 464 (36) 500 1389 %

Net loss $ (29,462) $ (24,976) $ (4,486) (18) %

Revenue - The decrease in overall revenue of $66.8 million, or 8%, was primarily attributable to reduced revenue volumes in our Process and Industrial Facilities segment partially offset by increases in the Storage and Terminal Solutions and Utility and Power Infrastructure segments.

Gross profit - Gross profit during fiscal 2024 increased by $9.7 million, or 31%.

Gross margin was 5.6% compared to 3.9% in fiscal 2023.

Strong project execution and improved margin opportunity on projects in progress during fiscal 2024 was partially offset by the under-recovery of construction overhead costs due to low revenue.

The gross margin in fiscal 2023 was also negatively impacted by the under-recovery of construction overhead costs, as well as unfavorable changes in the estimated recovery of change orders, increased forecasted costs to complete certain midstream gas processing projects, and continued work on previously-booked projects with reduced gross margins awarded in a highly competitive time period.

Selling, general and administrative expenses - The increase in SG&A expenses of $1.8 million, or 3%, is primarily due to an increase in cash-settled stock-based compensation of $3.5 million, which increased due to a substantially higher stock price year over year.

The increase was partially offset by a decrease in project pursuit costs of $2.2 million due to the timing of project

pursuits, however, we remain active in the market as we pursue additional project opportunities.

We continue to focus on cost control in a high inflationary period as we work to leverage our cost control structure.

Goodwill Impairment - The Company did not record any goodwill impairment during fiscal 2024.

In fiscal 2023 we recorded a goodwill impairment of $12.3 million.

Financial Statements, Note 4 - Goodwill and Other Intangible Assets, for more information about the impairment.

Restructuring cost s - The Company incurred $0.5 million of restructuring costs during fiscal 2024.

During fiscal 2023, we incurred $3.1 million of restructuring costs, which included severance and other personnel-related costs in connection with our restructuring plan and our closure of an underperforming office.

Financial Statements, Note 14 - Restructuring Costs, for more information about our business improvement plan.

Revenue - The increase in overall revenue of $41.1 million, or 6%, was primarily attributable to higher revenue volumes in our Storage and Terminal Solutions and Utility and Power Infrastructure segments, partially offset by reduced revenue volumes in Process and Industrial Facilities.

Gross profit - Gross profit during fiscal 2025 decreased by $(0.8) million, or (2)%, compared to fiscal 2024.

Gross margin of 5.2% for fiscal 2025 decreased compared with gross margin of 5.6% for fiscal 2024.

The decrease in gross margin for the year is attributable to lower gross margins in our Process and Industrial segment, partially offset by higher gross margins in our Utility and Power Infrastructure segment.

Selling, general and administrative expenses - SG&A expenses were consistent with prior year.

Restructuring cost s - The Company incurred $3.6 million of restructuring costs during fiscal 2025 related to organizational restructuring.

See Part II, Item 8.

Financial Statement and Supplementary Data, Note 14 - Restructuring Costs, for more information about our organizational restructuring plan.

Interest expense - The decrease in interest expense of $0.6 million, or 54%, is primarily due to lower average outstanding borrowings as the Company repaid all outstanding borrowings under its revolving credit facility during fiscal 2024.

Interest income - The increase in interest income of $5.3 million is primarily due to an increase in our cash balance.

In fiscal 2024 we invested excess cash balances in interest-bearing cash accounts.

Provision for income taxes - Our effective tax rates for the fiscal years 2024 and 2023 were 0.1% and 0.8%, respectively The effective tax rates during both periods were impacted by valuation allowances of $8.5 million and $12.6 million, respectively, placed on deferred tax assets generated during the fiscal year.

We will continue to place valuation allowances on newly generated deferred tax assets and will realize the benefit associated with the deferred tax assets for which the valuation allowance has been provided to the extent we generate taxable income in the future.

Other income - The increase in other income of $3.0 million, is primarily due to gains on sales of assets recorded during the year.

Provision for income taxes - Our effective tax rates for the fiscal years 2025 and 2024 were (1.6)% and 0.1%, respectively.

The effective tax rates during both periods were impacted by valuation allowances of $6.5 million and $8.5 million, respectively, placed on deferred tax assets generated during the fiscal year.

We placed a valuation allowance on our deferred tax assets due to the existence of a cumulative loss over a three-year period.

Currently, we place valuation allowances on newly generated deferred tax assets.

We will realize the benefit associated with the deferred tax assets for which the valuation allowance has been provided as we generate taxable income.

Other income - The decrease in other income of $5.0 million, is primarily due to gains on sales of assets recorded during fiscal 2024.

In the first quarter of fiscal 2024, we recognized a gain of $2.5 million on the sale of a previously utilized facility in Burlington, Ontario.

2 unchanged sentences

The facility was previously utilized for our industrial cleaning business, which was sold during the fourth quarter of fiscal 2023.

We recorded a $2.9 million gain on the sale of our industrial cleaning business in the fourth quarter of fiscal 2023.

Results of Operations by Business Segment

Fiscal Years Ended June 30, 2025 v 2024

2024 2023 $ %

2025 2024 Change %

Revenue (In thousands)

5 unchanged sentences

$ 769,286 $ 728,213 $ 41,073 6 %

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $2.4 million for the year ended June 30, 2024.

(1) Total revenues are net of inter-segment revenues which are primarily Process and Industrial Facilities and were $2.1 million for the year ended June 30, 2025.

Gross profit (loss)

4 unchanged sentences

Total Gross Profit $ 39,677 $ 40,473 $ (796) (2) %

Gross margin %

Storage and Terminal Solutions 4.0 % 4.1 % (0.1) % (2.4) %

Utility and Power Infrastructure 6.8 % 5.0 % 1.8 % 36.0 %

Process and Industrial Facilities 5.8 % 8.2 % (2.4) % (29) %

Total gross margin % 5.2 % 5.6 % (0.4) % (7.1) %

Operating income (loss)

5 unchanged sentences

Storage and Terminal Solutions

Storage and Terminal Solutions revenues increased by $21.1 million, or 8%, in fiscal 2024 compared to fiscal 2023.

The increase is primarily attributable to increases in work performed for specialty vessel projects awarded in previous fiscal years.

Storage and Terminal Solutions gross profit increased by $0.8 million, or 8%, in the fiscal 2024 compared to fiscal 2023.

The segment gross margin was 4.1% for both fiscal years 2024 and 2023.

Project execution was strong for the segment;

however, the segment continues to be impacted by the under-recovery of construction overhead costs.

Storage and Terminal Solutions revenues increased by $89.1 million, or 32%, in fiscal 2025 compared to fiscal 2024, driven by an increased volume of work for specialty vessel and LNG storage projects, partially offset by decreases in tank repair and maintenance work.

In addition, we lowered our recovery expectations on a legacy project completed in fiscal 2021 that is currently in arbitration which resulted in a $6.4 million decrease to revenue during fiscal 2025.

Storage and Terminal Solutions gross profit increased by $3.4 million, or 30%, in fiscal 2025 compared to fiscal 2024.

The segment gross margin was 4.0% for fiscal 2025 compared to 4.1% for fiscal 2024.

Gross margin in fiscal 2025 compared to fiscal 2025 reflects improved operating leverage resulting from higher revenues.

This improved leverage was offset in fiscal 2025 by lower than anticipated labor productivity on a crude terminal project, which resulted in a reduction in gross profit during the year of $5.1 million.

This project was completed in early fiscal 2026.

Additionally, gross profit was negatively impacted by a $6.4 million reduction in revenue related to a legacy project completed in fiscal 2021 discussed above.

Utility and Power Infrastructure

Utility and Power Infrastructure revenues increased by $64.8 million, or 35%, in fiscal 2025 compared to fiscal 2024.

The increase is primarily attributable to higher volumes of work from peak shaving projects, partially offset by lower volumes of power delivery.

Utility and Power Infrastructure gross profit decreased by $1.5 million, or 6%, in fiscal 2024 compared to fiscal 2023.

The segment gross margin was 5.0% for the fiscal 2024 compared to 6.3% in fiscal 2023.

During fiscal 2024, project execution was strong for the segment;

however, margin was impacted by the under-recovery of construction overhead costs as we have shifted resources to this segment to support large construction projects which are in their early stages.

The segment gross margin for fiscal 2023 was negatively impacted by work on now-completed projects with previously reduced gross margins and projects that were bid competitively.

These negative impacts were partially offset by strong execution of cost reimbursable power delivery work.

The increase is primarily attributable to higher volumes of work for LNG peak shaving projects, partially offset by decreases in power delivery work.

Utility and Power Infrastructure gross profit increased by $7.7 million, or 83%, in fiscal 2025 compared to fiscal 2024.

The segment gross margin was 6.8% for fiscal 2025 compared to 5.0% in fiscal 2024, an increase of 1.8% due to mix of work.

Process and Industrial Facilities

Process and Industrial Facilities revenues decreased by $111.6 million, or 42%, in fiscal 2025 compared to fiscal 2024.

The decrease is primarily attributable to lower revenue volumes for midstream gas processing projects, mining and minerals, industrial facilities and refinery maintenance and turnarounds.

These decreases were offset by revenue increases for a renewable energy facility in addition to increases in revenue associated with thermal vacuum chambers.

Process and Industrial Facilities gross profit increased by $11.1 million, or 103% in fiscal 2024 compared to fiscal 2023.

The decrease is primarily attributable to lower revenue volumes for a now completed large renewable diesel project and lower revenue volumes for thermal vacuum chambers.

We believe this reduction in revenue is temporary given our strong backlog, including a significant gas processing construction project that is expected to commence in fiscal 2026.

Process and Industrial Facilities gross profit decreased by $12.9 million, or 59% in fiscal 2025 compared to fiscal 2024.

The segment gross margin was 5.8% for fiscal 2025 compared to 8.2% for fiscal 2024.

The segment gross margin for the fiscal 2024 was positively impacted by strong project execution.

The segment gross margin for fiscal 2023 was negatively impacted by unfavorable changes in the estimated recovery of change orders and increased forecasted costs to complete certain midstream gas processing construction projects, which resulted in the projects reducing gross profit by $12.6 million for the year.

Unallocated corporate revenue and expenses net to $33.2 million during fiscal 2024 compared to $28.5 million in fiscal 2023.

The increase was primarily due to higher cash-settled stock-based compensation due to an increase in the price of our stock, higher stock compensation expense, and legal costs related to a jury trial that resulted in a verdict in our favor, partially offset by the recognition of $1.2 million of revenue due to the favorable resolution of that dispute, see Note 7 - Commitments and Contingencies, Litigation, for more information.

The segment gross margin in fiscal 2025 was impacted by increased under-recovery of construction overhead costs due to lower revenue volumes.

Unallocated corporate gross profit (loss) was $0.8 million during fiscal 2025 compared to a loss of $1.9 million in fiscal 2024, an increase of $1.1 million primarily due to lower legal costs associated with a jury trial in fiscal 2024 that resulted in a verdict in our favor.

See Note 7 - Commitments and Contingencies, Litigation, for more information.

LIQUIDITY AND CAPITAL RESOURCES

We define liquidity as the ongoing ability to pay our liabilities as they become due, fund business operations and meet all monetary contractual obligations.

Our primary sources of liquidity at June 30, 2024 were unrestricted cash and cash equivalents on hand, capacity under our ABL Facility (see "ABL Credit Facility" in this Liquidity and Capital Resources section and Item 8.

Financial Statements and Supplementary Data, Note 5 - Debt, for more information), and cash generated from operations.

We assess liquidity as the ongoing ability to pay our liabilities as they become due, fund business operations and meet all monetary contractual obligations.

Our primary sources of liquidity at June 30, 2025 were unrestricted cash and cash equivalents on hand, capacity under our ABL Facility (see "ABL Credit Facility" in this Liquidity and Capital Resources section and See Part II, Item 8.

Financial Statement and Supplementary Data, Note 5 - Debt, for more information), and cash generated from operations.

Our primary operational uses of capital are expenditures to execute our projects, fund business operations and fulfill our contractual obligations.

We believe that for at least the next 12 months, our cash position, anticipated cash generated by operating activities, along with our availability under the ABL Facility, is sufficient to support our operating requirements.

Unrestricted cash and cash equivalents at June 30, 2025 totaled $224.6 million and availability under the ABL Facility totaled $59.8 million, resulting in total liquidity of $284.5 million.

During fiscal 2025, liquidity increased $114.9 million, primarily as a result of cash provided by operations.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets to the total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows (in thousands):

June 30, 2025 June 30, 2024

2 unchanged sentences

Unrestricted Cash 224,641 115,615

Availability 53,988 37,742

Availability under ABL Facility 59,815 53,988

Total Liquidity $ 284,456 $ 169,603

5 unchanged sentences

Increase in availability under ABL Facility 5,827

Cash used by other financing activities (10,372)

Cash used by financing activities (1,040)

Effect of exchange rate changes on cash 40

Liquidity at June 30, 2025 $ 284,456

The following table provides a summary of changes in our liquidity for the fiscal year ended June 30, 2024 (in thousands):

Liquidity at June 30, 2023 $ 92,554

Cash provided by operating activities 72,571

Capital expenditures (6,994)

Proceeds from asset sales (1)

Increase in availability under ABL Facility 16,246

Cash used by financing activities (10,372)

Effect of exchange rate changes on cash (451)

Liquidity at June 30, 2024 $ 169,603

(1) Includes $5.4 million of net proceeds in total from the sale of our Burlington, Ontario facility and Catoosa, Oklahoma facility that were disposed of in the first and second quarter of fiscal 2024, respectively.

3 unchanged sentences

• changes in costs and estimated earnings in excess of billings on uncompleted contracts and billings on uncompleted contracts in excess of costs due to contract terms that determine the timing of billings to customers and the collection of those billings:

◦ some cost-plus and fixed price customer contracts are billed based on milestones which may require us to incur significant expenditures temporarily prior to collections from our customers;

◦ some fixed-price customer contracts allow for significant upfront billings at the beginning of a project, which temporarily increases liquidity near term;

• some fixed-price customer contracts allow for significant upfront billings at the beginning of a project, which increases liquidity near term;

• some cost-plus and fixed-price customer contracts are billed based on milestones which may increase or decrease liquidity in the near term depending on the timing of when we incur significant expenditures and when we collect from our customers;

• time and material contracts are normally billed in arrears.

Therefore, we are routinely required to carry these costs until they can be billed and collected;

◦ some of our large construction projects may require security in the form of letters of credit or significant retentions.

• some of our large construction projects may require security in the form of significant retentions.

Retentions are normally held until certain contractual milestones are achieved;

therefore, collection may extend beyond one year;

• the mix of work can impact liquidity.

In periods where fixed-price contracts comprise a larger portion of revenue, liquidity may increase depending on the timing of the billing schedule in relation to project cash outflows.

In periods where time and material contracts comprise a larger portion of revenue, liquidity may decrease;

• other changes in working capital, including the timing of tax payments and refunds;

• release of contract retentions;

• capital expenditures.

2 unchanged sentences

• collection issues, including those caused by weak commodity prices, economic slowdowns or other factors which can lead to credit deterioration of our customers;

• strategic investments in new operations;

• borrowing constraints under our ABL Facility and maintaining compliance with all covenants contained in the ABL Facility;

• letters of credit.

We have certain contracts with customers, and may have future contracts, that permit the customer to obtain, at the customer's expense, letters of credit as a form of security under the contract.

Letters of credit reduce our borrowing availability under the Company's ABL Facility;

• acquisitions and disposals of businesses or assets;

1 unchanged sentence

ABL Credit Facility

On September 9, 2021, the Company and our primary U.S.

and Canada operating subsidiaries entered into an asset-based credit agreement, which was most recently amended on May 3, 2024 (as amended, the "ABL Facility"), with Bank of Montreal, as Administrative Agent, Swing Line Lender and a Letter of Credit Issuer, and the lenders named therein.

We have an asset-based credit agreement, which was most recently amended on August 22, 2025 (as amended, the "ABL Facility"), with Bank of Montreal, as Administrative Agent, Swing Line Lender and a Letter of Credit Issuer.

The maximum amount of loans under the ABL Facility is limited to $90.0 million.

The ABL Facility's available borrowings may be increased by an amount not to exceed $15.0 million, subject to certain conditions, including obtaining additional commitments.

The ABL Facility is intended to be used for working capital, capital expenditures, issuances of letters of credit and other lawful purposes.

2 unchanged sentences

The ABL Facility matures, and any outstanding amounts become due and payable, on September 9, 2029.

The maximum amount that we may borrow under the ABL Facility is subject to a borrowing base, which is based on restricted cash plus a percentage of the value of certain accounts receivable, inventory and equipment, reduced for certain reserves.

We are required to maintain a minimum of $25.0 million of restricted cash at all times, but such amounts are also included in the borrowing base.

The borrowing base is recalculated on a monthly basis and at June 30, 2025, our borrowing base was $64.6 million.

During fiscal 2024, the Company repaid all outstanding borrowings under the ABL Facility.

The Company had $6.9 million in letters of credit outstanding, which resulted in availability of $54.0 million under the ABL Facility.

We had no borrowings outstanding and $4.8 million in letters of credit outstanding, which resulted in availability of $59.8 million under the ABL Facility.

Our borrowing base has ranged from $57.8 million to $73.8 million during fiscal 2025.

Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, an annual rate of either a base rate (“Base Rate”), an Adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR"), or at the Canadian Prime Rate, plus an applicable margin.

The Adjusted Term SOFR is defined as (i) the SOFR plus (ii) 11.448 basis points for a one-month tenor and 26.161 basis points for a three-month tenor;

provided that the Adjusted Term SOFR cannot be below zero.

The Base Rate is defined as a fluctuating interest rate equal to the greater of:

(i) rate of interest announced by Bank of Montreal from time to time as its prime rate;

(ii) the U.S.

federal funds rate plus 0.50%;

(iii) Adjusted Term SOFR for one month period plus 1.00%;

or (iv) 1.00%.

Depending on the amount of average availability, the applicable margin is between 1.00% to 1.50% for Base Rate and Canadian Prime Rate borrowings, which includes either U.S.

or Canadian prime rate, and between 2.00% and 2.50% for Adjusted Term SOFR borrowings.

Interest is payable either (i) monthly for Base Rate or Canadian Prime Rate borrowings or (ii) the last day of the interest period for Adjusted Term SOFR borrowings, as set forth in the ABL Facility.

The fee for undrawn amounts is 0.25% per annum and is due quarterly.

The ABL Facility contains customary conditions to borrowings, events of default and covenants, including, but not limited to, covenants that limit our ability to sell assets, engage in mergers and acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay cash dividends, issue equity instruments, make distribution or redeem or repurchase capital stock.

In the event that our availability is less than the greater of (i) $15.0 million and (ii) 15.00% of the commitments under the ABL Facility then in effect, a consolidated Fixed Charge Coverage Ratio of at least 1.00 to 1.00must be maintained.

We were in compliance with all covenants of the ABL Facility as of June 30, 2024

For additional information regarding our ABL Facility, see Item I of Part I, "Financial Statements - Note 5 - Debt."

CASH FLOW ANALYSIS

The following table summarizes our changes in cash flow activities for the periods indicated (in thousands):

Fiscal Years Ended June 30,

Cash flows provided by operating activities $ 117,471 $ 72,571

Cash flows provided by operating activities for the fiscal year ended June 30, 2024 totaled $72.6 million.

Major components of cash flows provided by operating activities for the year ended June 30, 2024 are as follows:

Net Cash Provided by Operating Activities

(In thousands)

Fiscal Year Ended

June 30, 2024

Cash flows used by investing activities (7,445) (945)

Cash flows used by financing activities (1,040) (10,372)

Effect of exchange rate changes on cash 40 (451)

Change in cash and cash equivalents 109,026 60,803

Cash and cash equivalents at beginning of period 140,615 79,812

Cash and cash equivalents at end of period $ 249,641 $ 140,615

Cash Flows Provided by Operating Activities

The following table summarizes the components of cash flows provided by operating activities for the periods indicated (in thousands):

Fiscal Years Ended June 30,

Net loss $ (29,462) $ (24,976)

8 unchanged sentences

Item 8-Financial Statements and Supplementary Data, Note 3 - Property, Plant and Equipment, for more information.) The remaining gain on the sale of property, plant and equipment comprised of equipment sold in the normal course of business.

Cash effect of changes in operating assets and liabilities at June 30, 2024 in comparison to June 30, 2023 include the following:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased $12.1 million during fiscal 2024, which decreased cash flows from operating activities.

The significant components of the $127.8 million cash effect of changes in operating assets and liabilities for the fiscal year ended June 30, 2025 include the following:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased $48.8 million from fiscal 2024, which decreased cash flows from operating activities.

The variance is primarily attributable to the timing of billing and collections.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $11.0 million, which increased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased $85.9 million, which increased cash flows from operating activities.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $4.1 million from fiscal 2024, which increased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased $152.3 million from fiscal 2024, which increased cash flows from operating activities.

CIE and BIE balances can experience significant fluctuations based on business volume and the timing of when job costs are incurred and the timing of customer billings and payments.

• Accounts payable decreased by $10.4 million during the fiscal year ended June 30, 2024, which decreased cash flows from operating activities.

Some fixed-price customer contracts allow for significant upfront billings at the beginning of a project.

• Accounts payable increased by $14.8 million from fiscal 2024, which increased cash flows from operating activities.

These operating liabilities can fluctuate based on the timing of vendor payments;

2 unchanged sentences

and other timing differences.

• Inventories, income taxes receivable, prepaid expenses, other current assets, operating right-of-use lease assets and other assets, non-current, decreased $4.9 million, during fiscal year 2024, which increased cash flows from operating activities.

• Inventories, income taxes receivable, prepaid expenses, other current assets, operating right-of-use lease assets and other assets, non-current, decreased $2.1 million from fiscal 2024, which increased cash flows from operating activities.

These operating assets can fluctuate based on the timing of inventory builds and draw-downs, accrual and receipt of income taxes receivable;

3 unchanged sentences

and other timing differences.

• Accrued wages and benefits, accrued insurance, operating lease liabilities, other accrued expenses, and other liabilities, non-current increased by $3.0 million during fiscal year 2024, which increased cash flows from operating activities.

• Accrued wages and benefits, accrued insurance, operating lease liabilities, other accrued expenses, and other liabilities, non-current increased $3.3 million from fiscal 2024, which increased cash flows from operating activities.

These operating liabilities can fluctuate based on the timing of vendor payments;

2 unchanged sentences

and other timing differences.

The significant components of the $82.3 million change in operating assets and liabilities for the fiscal year ended June 30, 2024 include the following:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased $12.1 million from fiscal 2023, which decreased cash flows from operating activities.

The increase is primarily attributable to the timing of billing and collections, partially offset by $16.8 million we received as full payment for the favorable resolution of a legal matter.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $11.0 million from fiscal 2023, which increased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased $85.9 million from fiscal 2023, which increased cash flows from operating activities.

CIE and BIE balances can experience significant fluctuations based on business volume and the timing of when job costs are incurred and the timing of customer billings and payments.

Some fixed-price customer contracts allow for significant upfront billings at the beginning of a project, which increases liquidity near term.

• Accounts payable decreased $10.4 million from fiscal 2023, which decreased cash flows from operating activities.

These operating liabilities can fluctuate based on the timing of vendor payments;

lease commencement, lease payments, expiration, or termination of operating leases;

business volumes;

and other timing differences.

• Inventories, income taxes receivable, prepaid expenses, other current assets, operating right-of-use lease assets and other assets, non-current, decreased $4.9 million from fiscal 2023, which increased cash flows from operating activities.

These operating assets can fluctuate based on the timing of inventory builds and draw-downs, accrual and receipt of income taxes receivable;

prepayments of certain expenses;

lease commencement, passage of time, expiration, or termination of operating leases;

business volumes;

and other timing differences.

• Accrued wages and benefits, accrued insurance, operating lease liabilities, other accrued expenses, and other liabilities, non-current increased $3.0 million from fiscal 2023, which increased cash flows from operating activities.

These operating liabilities can fluctuate based on the timing of vendor payments;

lease commencement, lease payments, expiration, or termination of operating leases;

business volumes;

and other timing differences.

Cash Flows Used by Investing Activities

Investing activities used $0.9 million of cash in the fiscal 2024 primarily due to capital expenditures, offset by proceeds from asset sales.

Investing activities used $7.4 million of cash in fiscal 2025 due to capital expenditures associated with improvements at a fabrication facility in Bakersfield, California that we purchased in fiscal 2024, as well as the purchase of construction equipment to support our projects.

Investing activities used $0.9 million of cash in fiscal 2024 due to capital expenditures partially offset by proceeds from asset sales.

In the first quarter of fiscal 2024, we sold a previously utilized facility in Burlington, Ontario for $2.7 million in net proceeds.

3 unchanged sentences

Cash Flows Used by Financing Activities

Financing activities used $10.4 million of cash in the fiscal 2024 primarily due to $10.0 million in advances and $20.0 million in repayments under our ABL facility.

As of June 30, 2024 we had no outstanding borrowings under our ABL facility.

Financing activities used $1.0 million of cash in fiscal 2025 primarily due to the repurchase of common stock for payment of statutory taxes due on equity-based compensation.

Financing activities used $10.4 million of cash in fiscal 2024 primarily due to $10.0 million in advances and $20.0 million in net repayments under our ABL facility.

As of June 30, 2024 and June 30, 2025, we had no outstanding borrowings under our ABL facility.

Dividend Policy

19 unchanged sentences

Off-Balance Sheet Arrangements and Other Commitments

We enter into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected on our balance sheet.

The following represents transactions, obligations or relationships that could be considered material off-balance sheet arrangements.

• Surety bonds :

The terms of our construction contracts frequently require that we obtain from surety companies, and provide to our customers, surety bonds as a condition to the award of such contracts.

These surety bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance obligations under such contracts.

These surety bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance

obligations under such contracts.

We have agreed to indemnify the surety companies for amounts, if any, paid by them in respect of surety bonds issued on our behalf.

4 unchanged sentences

We are not aware of any losses in connection with surety bonds that have been posted on our behalf, and we do not expect to incur significant losses in the foreseeable future.

• Multiemployer pension plan s:

We contribute to a number of multiemployer defined benefit pension plans in the U.S.

and Canada under the terms of collective-bargaining agreements that cover our union-represented employees, who are represented by more than 100 local unions.

The related collective-bargaining agreements between those organizations and us, which specify the rate at which we must contribute to the multi-employer defined pension plan, expire at different times between 2025 and 2028.

Benefits under these plans are generally based on compensation levels and years of service.

Under federal legislation regarding multiemployer pension plans, in the event of a withdrawal from a plan or plan termination, companies are required to continue funding their proportionate share of such plan’s unfunded vested benefits.

Withdrawal liabilities or requirements for increased future contributions could negatively impact our results of operations and liquidity.

See Note 12 - Employee Benefit Plans for further discussion.

• Letters of credit:

We issue letters of credit under our ABL Facility in the normal course of business to support workers' compensation insurance programs or certain construction contracts.

As of June 30, 2024, we had $6.9 million of letters of credit outstanding, nearly all of which expire within the next 12 months.

The letters of credit that support our workers’ compensation programs are expected to renew annually through the term of our credit facility.

The letters of credit that support construction contracts carry expiration dates that expire in fiscal 2025.

As of June 30, 2025, we had $4.8 million of letters of credit outstanding.The letters of credit that support our workers’ compensation programs are expected to renew annually through the term of our credit facility.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s accounting policies are more fully described in Note 1 of the Consolidated Financial Statements.

As disclosed in Note 1, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ significantly from those estimates.

The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Revenue Recognition

13 unchanged sentences

Due to the various estimates inherent in contract accounting, actual results could differ from those estimates, which could result in material changes to the Company’s Consolidated Financial Statements and related disclosures.

See Note 2 - Revenue for further discussion.

See Part II, Item 8.

Financial Statement and Supplementary Data, Note 2 - Revenue for further discussion.

Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired.

12 unchanged sentences

We performed our annual goodwill impairment test as of May 31, 2025, which resulted in no impairment.

The fiscal 2024 test indicated that two reporting units with a combined total of $16.6 million of goodwill as of June 30, 2024 were at higher risk of future impairment.

If our view of project opportunities or gross margins deteriorates, particularly for the higher risk reporting units, then we may be required to record an impairment of goodwill.

We considered the amount of headroom for each reporting unit when determining whether an impairment existed.

23 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis