What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-05 compared with 2025-11-06 · 177 added, 90 removed, 286 unchanged (48% of the section changed)

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Operational Update

Operating activity increased during the first quarter of fiscal 2026 as revenues showed a 28% increase compared to the first quarter of 2025.

The increase was driven primarily by an increase in activity for LNG storage, LNG peak-shaver, and specialty vessel projects.

Strong project execution on our projects, along with improved overhead cost absorption, generated higher gross margins compared to the same period in prior year.

As we move forward through the coming quarters of fiscal 2026, we believe activity levels will rise for projects currently in backlog.

Project awards during the quarter were $187.8 million, resulting in a current quarter book-to-bill of 0.9x.

Award activity was driven by our Storage and Terminal Solutions segment, and included the award for the construction for the balance of plant supporting a dual service full containment storage tank.

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, data center energy demand, industrial reshoring/onshoring, grid reliability and electrical supply assurance.

While we always strive to maximize efficiency, we commenced an initiative in the fourth quarter of fiscal 2025 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.

During the quarter, we advanced execution on several large, strategically important projects.

These projects are delivering both revenue growth and margin stability, supported by disciplined project management.

As these projects advance through key milestones, they are providing increased visibility into revenue conversion and operating margin performance.

We expect activity to accelerate over the remainder of the fiscal year, driven by our strong backlog as well as a growing opportunity pipeline and healthy demand across our core markets.

Our balance sheet remains a competitive advantage, providing the financial capacity and flexibility to pursue high‑quality opportunities, invest in execution excellence, and manage risk responsibly.

These attributes also position us to continue executing on existing projects and to support long-term growth initiatives.

Looking longer term, structural macrotrends continue to support durable growth in our end markets.

The clean energy transition, rapidly increasing power requirements from data centers, ongoing industrial reshoring and onshoring activity, and heightened focus on grid reliability are all creating sustained demand for the solutions we provide.

These trends reinforce the strength of our strategic positioning and our confidence in the company’s ability to deliver long‑term value for shareholders.

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.

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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 the three months ended September 30, 2025:

The following table provides a summary of changes in our backlog for the three months ended December 31, 2025:

Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Total

(In thousands)

Backlog as of September 30, 2025 $ 796,713 $ 262,388 $ 101,919 $ 1,161,020

Project awards 124,547 15,795 36,219 176,561

Revenue recognized (99,852) (75,406) (35,250) (210,508)

Backlog as of December 31, 2025 $ 821,408 $ 202,777 $ 102,888 $ 1,127,073

Book-to-bill ratio (1)

1.2x 0.2x 1.0x 0.8x

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

The following table provides a summary of changes in our backlog for the six months ended December 31, 2025:

Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Total

(In thousands)

Backlog as of June 30, 2025 $ 770,095 $ 346,384 $ 265,629 $ 1,382,108

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Revenue recognized (209,311) (149,907) (63,174) (422,392)

Backlog as of September 30, 2025 $ 796,713 $ 262,388 $ 101,919 $ 1,161,020

Backlog as of December 31, 2025 $ 821,408 $ 202,777 $ 102,888 $ 1,127,073

Book-to-bill ratio (1)

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(2) Previous project awards removed from backlog.

In the Storage and Terminal Solutions segment, we booked $136.1 million of project awards during the first quarter of fiscal 2026.

Project awards included a large award for the construction for the balance of plant supporting a dual service full containment storage tank.

In the Storage and Terminal Solutions segment, we booked $124.5 million of project awards during the second quarter of fiscal 2026, including an award for the construction of an LNG tank.

During the six months ended December 31, 2025, we booked $260.6 million of project awards, including a large award for the construction for the balance of plant supporting a dual service full containment storage tank.

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

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Bidding activity in these markets has been strong and we expect that to continue.

In the Utility and Power Infrastructure segment, we booked $34.7 million of project awards during the first quarter of fiscal 2026.

Our backlog in this segment was impacted by the removal of an award, originally added to backlog in the fourth quarter of fiscal 2025.

The removal is the result of a change in certain contractual terms and conditions that significantly increased our risk profile on the project.

Considering the strength of the opportunities available in our markets, particularly in this segment, as well as the high quality financial and commercial risk profile of our current backlog, we deemed that it was unnecessary for us to accept an award that deteriorates that position.

Our unwillingness to accept this modified risk profile caused the client to change their award decision.

In the Utility and Power Infrastructure segment, we booked $15.8 million of project awards during the second quarter of fiscal 2026.

During the six months ended December 31, 2025, we booked $50.5 million of project awards.

Our opportunity pipeline for LNG peak shaving projects continues to be promising, with both greenfield facility projects as well as the projects for the upgrade, maintenance, and repair to existing infrastructure.

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The smaller upgrade projects are key measures of our brand power and strength in the market, keeping key resources active while creating opportunities to strengthen execution and engineering teams.

Power generation and delivery infrastructure opportunities are expected to be driven over the long-term by

increasing electrical demand and the related electrical grid requirements.

Power generation and delivery infrastructure 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 across the segment.

In the Process and Industrial Facilities segment, we booked $16.9 million of project awards during the first quarter of fiscal 2026.

Our backlog in this segment was impacted by the removal of an award, originally added to backlog in the third quarter of fiscal 2023.

In the Process and Industrial Facilities segment, we booked $36.2 million of project awards during the second quarter of fiscal 2026.

During the six months ended December 31, 2025, we booked $53.2 million of project awards.

We continue to see increasing opportunities in mining and minerals, chemicals, renewable fuels, refinery maintenance and turnarounds, and thermal vacuum chambers in this segment.

During the first quarter of fiscal 2026, backlog was adjusted to reflect the removal of two projects.

Backlog in the Utility and Power Infrastructure segment was impacted by the removal of an award originally added to backlog in the fourth quarter of fiscal 2025.

The removal was the result of a change in certain contractual terms and conditions that significantly increased our risk profile on the project.

Our unwillingness to accept this modified risk profile caused the client to change their award decision.

Our backlog in the Process and Industrial Facilities segment was impacted by the removal of an award originally added to backlog in the third quarter of fiscal 2023.

Field work on this construction-only project has continued to be delayed as our client and the ultimate customer work to finalize the scope and engineering for the project.

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While we ultimately may perform some of this work, we determined inclusion of the award in backlog was no longer appropriate.

We continue to see increasing opportunities in mining and minerals, chemicals, renewable fuels, refinery maintenance and turnarounds, and thermal vacuum chambers in this segment.

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.

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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.

Three months ended September 30, 2025 Compared to the Three months ended September 30, 2024

The information below is an analysis of our consolidated results for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Three months ended December 31, 2025 Compared to the Three months ended December 31, 2024

The information below is an analysis of our consolidated results for the three months ended December 31, 2025, compared to the three months ended December 31, 2024.

See Results of Operations by Business Segment below for additional information describing the performance of each of our reportable segments.

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Three Months Ended

September 30, 2025 v 2024

December 31, 2025 v 2024

Dollars in thousands 2025 2024 Change %

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Gross profit 13,135 10,892 2,243 21 %

Gross margin % 6.2 % 5.8 % 0.4 % 6.9 %

Selling, general and administrative expenses 15,112 17,286 (2,174) (13) %

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Interest income 1,543 1,578 (35) (2) %

Other 231 61 170 279 %

Other income (expense) 23 (556) 579 104 %

Loss before income tax expense (731) (5,517) 4,786 87 %

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Net loss $ (894) $ (5,533) $ 4,639 84 %

Revenue - The increase in consolidated revenue of $46.3 million, or 28%, was primarily attributable to higher revenue volumes in our Storage and Terminal Solutions and Utility and Power Infrastructure segments.

Gross profit - Gross profit in the first quarter of fiscal 2026 increased $6.4 million, or 82%, compared to the first quarter of fiscal 2025.

The increase was primarily attributable to the Utility and Power Infrastructure and Storage and Terminal Solutions segments.

Gross margin of 6.7% for the first quarter of fiscal 2026 increased compared with gross margin of 4.7% for the first quarter of fiscal 2025.

The increase in gross margin for the quarter is attributable to higher gross margins in our Utility and Power Infrastructure segment.

Selling, general and administrative expenses - The decrease in SG&A expenses of $2.2 million, or 12%, is primarily due to cost reductions resulting from our organizational realignment.

Restructuring costs - The Company incurred $3.3 million of restructuring costs during the first quarter of fiscal 2026 related to organizational restructuring.

See Part I, Item 1.

Financial Statements (Unaudited), Note 8 - Restructuring Costs, for more information about our organizational restructuring plan.

Interest income - The increase in interest income of $0.2 million is primarily due to an increase in our cash balance.

Revenue - The increase in consolidated revenue of $23.3 million, or 12%, was attributable to higher revenue volumes in each of our segments.

Gross profit - Gross profit in the second quarter of fiscal 2026 increased $2.2 million, or 21%, compared to the second quarter of fiscal 2025.

Gross margin was 6.2% for the second quarter of fiscal 2026 compared to gross margin of 5.8% for the second quarter of fiscal 2025.

The increase in gross margin was due to higher revenues which resulted in improved recovery of overhead costs, as well as strong project execution throughout the majority of the business.

However, costs associated with warranty-type items and with third-party commercial matters arising during commissioning of specialty tank work resulted in a $3.6 million reduction of gross profit during the quarter.

Selling, general and administrative expenses - The decrease in selling, general and administrative expenses ("SG&A") of $2.2 million, or 13%, is primarily due to cost reductions resulting from our organizational realignment, including a decrease in salaries and wages of $0.8 million, year over year.

Additionally, SG&A decreased $0.7 million associated with the variable accounting for cash-settled stock-based compensation as a result of fluctuations in our stock price.

Interest income - Interest income during the second quarter of fiscal 2026 was consistent with the second quarter of fiscal 2025.

Other income (expense) - Other income (expense) increased $0.6 million due primarily to a reduction foreign currency transaction losses associated with our Australian and South Korean subsidiaries.

Provision for income taxes - Income tax expense for both periods was insignificant.

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Three Months Ended

September 30, 2025 v 2024

December 31, 2025 v 2024

Dollars in thousands 2025 2024 Change % Favorable (Unfavorable)

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Storage and Terminal Solutions

Storage and Terminal Solutions revenues increased by $31.2 million, or 40%, in the three months ended September 30, 2025 compared to the same period last year, driven by an increased volume of work for LNG storage and specialty vessel projects.

Storage and Terminal Solutions gross profit increased by $1.8 million, or 38%, in the three months ended September 30, 2025 compared to the same period last year.

The segment gross margin of 5.9% for the three months ended September 30, 2025 was consistent with segment gross margin of 6.0% in the same period last year.

Gross margins for this segment continue to be primarily impacted by under-recovery of overhead costs.

Storage and Terminal Solutions revenues increased by $4.3 million, or 5%, in the three months ended December 31, 2025 compared to the same period last year, driven by an increased volume of work for LNG and NGL projects, partially offset by lower volumes for crude oil projects.

Storage and Terminal Solutions gross profit decreased by $2.5 million, or (35)%, in the three months ended December 31, 2025 compared to the same period last year.

The segment gross margin of 4.8% for the three months ended December 31, 2025 was lower than segment gross margin of 7.6% in the same period last year.

During the second quarter of fiscal 2026, costs associated with warranty-type items and with third-party commercial matters arising during commissioning of specialty tank work resulted in a $3.6 million reduction of gross profit.

Additionally, gross margins for this segment continue to be primarily impacted by under-recovery of overhead costs.

We believe overhead cost absorption will improve as activity on awards currently in backlog increases through the remainder of fiscal 2026.

Utility and Power Infrastructure

Utility and Power Infrastructure revenues increased by $18.6 million, or 33%, in the three months ended September 30, 2025 compared to the same period last year.

Utility and Power Infrastructure revenues increased by $14.3 million, or 23%, in the three months ended December 31, 2025 compared to the same period last year.

The increase is primarily attributable to a higher volume of work for power delivery and natural gas peak shaving projects.

Utility and Power Infrastructure gross profit increased by $5.5 million, or 419%, in the three months ended September 30, 2025 compared to the same period last year.

The segment gross margin was 9.1% for the three months ended September 30, 2025 compared to 2.3% in the same period last year, an increase of 6.8% due to strong project execution and improved construction overhead cost absorption as a result of higher revenues.

Utility and Power Infrastructure gross profit increased by $3.8 million, or 112%, in the three months ended December 31, 2025 compared to the same period last year.

The segment gross margin was 9.6% for the three months ended December 31, 2025 compared to 5.6% in the same period last year, an increase of 4.0% due to strong project execution and improved construction overhead cost absorption as a result of higher revenues.

Process and Industrial Facilities

Process and Industrial Facilities revenues decreased by $3.5 million, or 11%, in the three months ended September 30, 2025 compared to the same period last year.

The decrease is primarily attributable to lower revenue volumes for the engineering and construction of thermal vacuum chambers.

Process and Industrial Facilities gross profit decreased by $0.6 million, or 28%, in the three months ended September 30, 2025 compared to the same period last year.

The segment gross margin was 5.1% for the three months ended September 30, 2025 compared to 6.4% in the same period last year.

The decrease is primarily attributable to mix of work.

Segment gross margins in both periods were impacted by under-recovery of construction overhead costs due to lower revenue volumes.

Process and Industrial Facilities revenues increased by $4.7 million, or 15%, in the three months ended December 31, 2025 compared to the same period last year.

The increase is primarily attributable to higher revenue volumes for refinery turnarounds and maintenance work.

Process and Industrial Facilities gross profit increased by $0.8 million, or 229%, in the three months ended December 31, 2025 compared to the same period last year.

The segment gross margin was 3.5% for the three months ended December 31, 2025 compared to 1.2% in the same period last year.

The increase is primarily attributable to improved construction overhead cost absorption as a result of higher revenues.

Six months ended December 31, 2025 Compared to the Six months ended December 31, 2024

The information below is an analysis of our consolidated results for the six months ended December 31, 2025, compared to the six months ended December 31, 2024.

See Results of Operations by Business Segment below for additional information describing the performance of each of our reportable segments.

Consolidated Results of Operations

Six Months Ended

December 31, 2025 v 2024

Dollars in thousands 2025 2024 Change %

Revenue $ 422,392 $ 352,748 $ 69,644 20 %

Cost of revenue 395,075 334,043 61,032 18 %

Gross profit 27,317 18,705 8,612 46 %

Gross margin % 6.5 % 5.3 % 1.2 % 22.6 %

Selling, general and administrative expenses 31,446 35,866 (4,420) (12) %

Restructuring costs 3,550 — 3,550 — %

Operating loss (7,679) (17,161) 9,482 55 %

Other income (expense):

Interest expense (245) (234) (11) (5) %

Interest income 3,345 3,150 195 6 %

Other income (expense) 254 (495) 749 (151) %

Loss before income tax expense (4,325) (14,740) 10,415 71 %

Provision for federal, state and foreign income taxes 232 16 216 — %

Net loss $ (4,557) $ (14,756) $ 10,199 71 %

Revenue - The increase in overall revenue of $69.6 million, or 20%, was primarily attributable to increased revenue volumes in our Storage and Terminal Solutions and Utility and Power Infrastructure segments.

Gross profit - Gross profit in the six months ended December 31, 2025 increased $8.6 million, or 46%, compared to the same period prior year.

Gross margin increased to 6.5% for the six months ended December 31, 2025 compared to 5.3% for the same period prior year.

The increase in gross margin for the quarter is attributable to higher gross margins in our Utility and Power Infrastructure and Process and Industrial Facilities segments, partially offset by lower margins in our Storage and Terminal Solutions segment.

Selling, general and administrative expenses - The decrease in SG&A expenses of $4.4 million, or 12%, is due in part to cost reductions resulting from our organizational realignment, including a decrease in salaries and wages of $1.3 million.

Additionally, facilities costs decreased $1.2 million, and SG&A decreased $1.0 million associated with the variable accounting for cash-settled stock-based compensation as a result of fluctuations in our stock price.

Interest income - The increase in interest income of $0.2 million is primarily due to an increase in our cash balance, partially offset by lower average interest rates.

Other income (expense) - Other income increased $0.7 million in the six months ended December 31, 2025 as compared to the same period prior year due primarily to a reduction foreign currency transaction losses associated with our Australian and South Korean subsidiaries.

Provision for income taxes - Income tax expense for both periods was insignificant.

The effective tax rates during both periods were impacted by valuation allowances of $0.6 million and $3.1 million, respectively, placed on deferred tax assets generated during the quarters.

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.

Results of Operations by Business Segment

Six Months Ended

December 31, 2025 v 2024

Dollars in thousands 2025 2024 Change % Favorable (Unfavorable)

Storage and Terminal Solutions $ 209,311 $ 173,746 $ 35,565 20 %

Utility and Power Infrastructure 149,907 116,988 32,919 28 %

Process and Industrial Facilities 63,174 62,014 1,160 2 %

Total revenue (1)

$ 422,392 $ 352,748 $ 69,644 20 %

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $1.6 million for the six months ended December 31, 2025.

Gross profit (loss)

Storage and Terminal Solutions $ 11,251 $ 11,969 $ (718) (6) %

Utility and Power Infrastructure 14,012 4,716 9,296 197 %

Process and Industrial Facilities 2,648 2,367 281 12 %

Corporate (594) (347) (247) (71) %

Total gross profit $ 27,317 $ 18,705 $ 8,612 46 %

Gross margin %

Storage and Terminal Solutions 5.4 % 6.9 % (1.5)% (22) %

Utility and Power Infrastructure 9.3 % 4.0 % 5.3% 133 %

Process and Industrial Facilities 4.2 % 3.8 % 0.4% 11 %

Corporate — % — % —% — %

Total gross margin % 6.5 % 5.3 % 1.2% 23 %

Operating income (loss)

Storage and Terminal Solutions $ (1,598) $ 833 $ (2,431) (292) %

Utility and Power Infrastructure 8,119 (2,821) 10,940 388 %

Process and Industrial Facilities (1,008) (1,076) 68 6 %

Corporate (13,192) (14,097) 905 6 %

Total Operating Loss $ (7,679) $ (17,161) $ 9,482 55 %

Storage and Terminal Solutions

Storage and Terminal Solutions revenues increased by $35.6 million, or 20%, in the six months ended December 31, 2025 compared to the same period last year, driven by increased volume of work for LNG peak shaving, partially offset by decreases in tanks and terminal work.

Storage and Terminal Solutions gross profit decreased by $0.7 million, or 6%, in the six months ended December 31, 2025 compared to the same period last year.

The segment gross margin was 5.4% for the six months ended December 31, 2025 compared to segment gross margin of 6.9% in the same period last year.

During the second quarter of fiscal 2026, costs associated with warranty-type items and third-party commercial matters arising during commissioning of specialty tank work resulted in a $3.6 million reduction of gross profit.

Additionally, gross margins for this segment continue to be primarily impacted by under-recovery of overhead costs.

We believe overhead cost absorption will improve as activity on awards currently in backlog increases through the remainder of fiscal 2026.

Utility and Power Infrastructure

Utility and Power Infrastructure revenues increased by $32.9 million, or 28%, in the six months ended December 31, 2025 compared to the same period last year.

The increase is primarily attributable to higher volumes of work for LNG peak shaving projects and power delivery work.

Utility and Power Infrastructure gross profit increased by $9.3 million, or 197%, in the six months ended December 31, 2025 compared to the same period last year.

The segment gross margin was 9.3% for the six months ended December 31, 2025 compared to 4.0% in the same period last year due to strong project execution and improved construction overhead cost absorption as a result of higher revenues.

Process and Industrial Facilities

Process and Industrial Facilities revenues increased by $1.2 million, or 2%, in the six months ended December 31, 2025 compared to the same period last year.

The increase is primarily attributable to higher revenue volumes for refinery work, partially offset by lower volumes of work for thermal vacuum chambers.

Process and Industrial gross profit increased by $0.3 million, or 12%, in the six months ended December 31, 2025 compared to the same period last year.

The segment gross margin was 4.2% for the six months ended December 31, 2025 compared to segment gross margin of 3.8% in the same period last year.

Improved overhead cost absorption associated with reallocation of resources to other segments was partially offset by reductions in gross margin due to mix of work.

LIQUIDITY AND CAPITAL RESOURCES

We assess liquidity based on 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 September 30, 2025 were unrestricted cash and cash equivalents on hand, capacity under our ABL Facility, and cash generated from operations.

Our primary sources of liquidity at December 31, 2025 were unrestricted cash and cash equivalents on hand, capacity under our ABL Facility, and cash generated from operations.

Our primary operational uses of capital are expenditures required 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 September 30, 2025 totaled $192.3 million and availability under the ABL Facility totaled $56.6 million, resulting in total liquidity of $248.9 million.

During the first quarter of fiscal 2026, liquidity decreased $35.5 million primarily as a result of cash used by operating activities.

Unrestricted cash and cash equivalents at December 31, 2025 totaled $199.0 million and availability under the ABL Facility totaled $58.6 million, resulting in total liquidity of $257.6 million.

During the second quarter of fiscal 2026, liquidity increased $8.7 million primarily as a result of changes in working capital.

During the six months ended December 31, 2025, liquidity decreased by $26.9 million as a result of changes in working capital, as well as payments made for tax withholdings for stock compensation and capital expenditures.

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

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Total Liquidity $ 257,579 $ 248,924 $ 284,456

The following table provides a summary of changes in our liquidity for the three months ended September 30, 2025 (in thousands):

Liquidity at June 30, 2025 $ 284,456

Cash used by operating activities (25,899)

Capital expenditures (2,011)

Proceeds from asset sales 222

Decrease in availability under ABL Facility (3,198)

Cash used by financing activities (4,329)

Effect of exchange rate changes on cash (317)

The following table provides a summary of changes in our liquidity for the three months ended December 31, 2025 (in thousands):

Liquidity at September 30, 2025 $ 248,924

The following table provides a summary of changes in our liquidity for the three months ended September 30, 2024 (in thousands):

Liquidity at June 30, 2024 $ 169,603

Cash provided by operating activities 7,454

Capital expenditures (1,176)

Proceeds from sale of assets 262

Increase in availability under ABL Facility 1,998

Cash provided by financing activities 55

Effect of exchange rate changes on cash 62

Liquidity at December 31, 2025 $ 257,579

The following table provides a summary of changes in our liquidity for the six months ended December 31, 2025 (in thousands):

Liquidity at June 30, 2025 $ 284,456

Cash used by operating activities (18,445)

Capital expenditures (3,187)

Proceeds from sale of assets 484

Decrease in availability under ABL Facility (1,200)

Cash used by financing activities (4,274)

Effect of exchange rate changes on cash (255)

Liquidity at September 30, 2024 $ 181,252

Liquidity at December 31, 2025 $ 257,579

Factors that routinely impact our short-term liquidity and may impact our long-term liquidity include, but are not limited to:

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• the mix of work can impact liquidity.

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

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;

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

The borrowing base is recalculated on a monthly basis and at September 30, 2025, our borrowing base was $61.4 million.

The borrowing base is recalculated on a monthly basis and at December 31, 2025, our borrowing base was $63.1 million.

We had no borrowings outstanding and $4.5 million in letters of credit outstanding, which resulted in availability of $58.6 million under the ABL Facility.

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

Three Months Ended

September 30,

Six Months Ended

Cash flows provided (used) by operating activities $ (18,445) $ 45,516

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

Three Months Ended

September 30,

Six Months Ended

Net loss $ (4,557) $ (14,756)

Loss (gain) on disposal of property, plant and equipment (217) 68

Depreciation and amortization 4,693 5,025

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Operating lease impairment due to restructuring 1,529 —

Loss on disposal of property, plant and equipment (327) (64)

Other non-cash expenses 339 (19)

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Net cash provided (used) by operating activities $ (18,445) $ 45,516

The significant components of the $28.0 million change in operating assets and liabilities for the three months ended September 30, 2025 are summarized as follows:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts

classified as non-current, increased by $15.1 million which decreased cash flows from operating activities.

The significant components of the $24.2 million change in operating assets and liabilities for the six months ended December 31, 2025 are summarized as follows:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased by $77.0 million which decreased cash flows from operating activities.

The increases are primarily attributable to the timing of billing and collections.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") increased $8.1 million which decreased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") decreased $6.0 million which decreased cash flows from operating activities.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $4.5 million which increased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased $59.3 million which increased cash flows from operating activities.

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

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and other timing differences.

The significant components of the $16.2 million change in operating assets and liabilities for the three months ended September 30, 2024 are summarized as follows:

The significant components of the $50.8 million change in operating assets and liabilities for the six months ended December 31, 2024 are summarized as follows:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased by $18.9 million which decreased cash flows from operating activities.

The increases are primarily attributable to the timing of billing and collections.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $2.1 million which increased cash flows from operating activities.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") increased $0.8 million which decreased cash flows from operating activities.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased $66.2 million which increased cash flows from operating activities.

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

• Accounts payable decreased by $3.9 million which decreased cash flows from operating activities.

• Accounts payable increased by $14.5 million which increased cash flows from operating activities.

These operating liabilities can fluctuate based on business volumes;

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Cash Flows Used by Investing Activities

Investing activities used $1.8 million and $1.9 million of cash primarily due to capital expenditures in the three months ended September 30, 2025 and 2024, respectively.

Investing activities used $2.7 million and $2.6 million of cash primarily due to capital expenditures in the six months ended December 31, 2025 and 2024, respectively.

Cash Flows Used by Financing Activities

Financing activities used $4.3 million and $1.2 million of cash in the three months ended September 30, 2025 and 2024, respectively, primarily due to payments of $4.2 million and $1.2 million, respectively, to satisfy tax withholding obligations associated with stock-based compensation.

Financing activities used $4.3 million and $1.1 million of cash in the six months ended December 31, 2025 and 2024, respectively, primarily due to payments of $4.2 million and $1.2 million, respectively, to satisfy tax withholding obligations associated with stock-based compensation.

Dividend Policy

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The program will continue unless and until it is modified or revoked by the Board of Directors.

We made no repurchases under the program in the three months ended September 30, 2025 and have no current plans to repurchase stock.

As of September 30, 2025, there were 1,349,037 shares available for repurchase under the Stock Buyback Program.

We made no repurchases under the program in the three months ended December 31, 2025 and have no current plans to repurchase stock.

As of December 31, 2025, there were 1,349,037 shares available for repurchase under the Stock Buyback Program.

The terms of our ABL Facility limit share repurchases to $2.5 million per fiscal year provided that we meet certain availability thresholds and do not violate our Fixed Charge Coverage Ratio financial covenant.

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Such amounts can also fluctuate from period to period based upon the mix and level of our bonded operating activity.

As of September 30, 2025, there were $186.2 million of surety bonds in force, of which we expect $126.9 million to expire within the next 12 months.

As of December 31, 2025, there were $274.8 million of surety bonds in force, of which we expect $125.6 million to expire within the next 12 months.

Of the bonds in force, $116.1 million related to performance bonds for ongoing projects and the remainder related to contractor licensing, liens, and other bonds.

In October 2025, we obtained an additional surety bond to support a recent award, bringing our total surety bonds in force to $277.1 million.

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.

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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 September 30, 2025, we had $4.8 million of letters of credit outstanding.

As of December 31, 2025, we had $4.5 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.

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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