What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-09-03 compared with 2025-09-10 · 129 added, 151 removed, 285 unchanged (50% of the section changed)

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Actual results could differ from these estimates under different assumptions or conditions.

Note 1 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Part II, Item 8 - Financial Statements and Supplementary Data in this Annual Report on Form 10-K, contains a comprehensive summary of our significant accounting policies.

The following is a discussion of our most critical accounting policies, estimates, judgments and uncertainties that are inherent in our application of GAAP.

Note 1 - Business, Basis of Presentation and Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Part II, Item 8 - Financial Statements and Supplementary Data in this Annual Report on Form 10-K, contains a comprehensive summary of our significant accounting policies.

RESULTS OF OPERATIONS

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• Storage and Terminal Solutions :

primarily consists of engineering, procurement, fabrication, and construction services related to cryogenic and other specialty tanks and terminals for LNG, NGLs, hydrogen, ammonia, propane, butane, liquid nitrogen/liquid oxygen, and liquid petroleum.

We also perform work related to traditional aboveground crude oil and refined product storage tanks and terminals.

This segment also includes terminal balance of plant work, truck and rail loading/offloading facilities, and marine structures as well as storage tank and terminal maintenance and repair.

Finally, we manufacture and sell precision engineered specialty tank products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems and floating roof seals.

delivers integrated engineering, procurement and construction ("EPC") services, along with repair, maintenance and fabrication services for bulk liquid, cryogenic, and refrigerated storage and terminal facilities supporting both traditional and emerging energy markets, including LNG, NGLs, petroleum products, chemicals, hydrogen, and ammonia.

We also manufacture and sell specialty, precision-engineered tank products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems and floating roof seals.

• Utility and Power Infrastructure :

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

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.

delivers comprehensive construction, maintenance, upgrades and fabrication services for power generation facilities and power infrastructure systems for a variety of customers, including public and private utilities, energy producers and data center customers.

We also deliver integrated EPC, fabrication, and upgrade services for LNG peak shaving facilities.

• Process and Industrial Facilities :

primarily consists of plant maintenance, repair, and turnarounds in the downstream and midstream markets for energy clients including refining and processing of crude oil, fractionating, and marketing of natural gas and natural gas liquids.

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 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.

delivers engineering, construction, maintenance, and repair services across diverse heavy industrial and energy transition markets, including midstream and downstream energy, chemicals, mining and minerals, renewable fuels, and hydrogen.

We also engineer and construct highly specialized infrastructure, notably thermal vacuum test chambers for the aerospace and defense sectors.

Significant period to period changes in revenue, gross profits and operating results between fiscal 2026 and fiscal 2025 are discussed below on a consolidated basis and for each segment.

A discussion of results of operations changes between fiscal 2025 and fiscal 2024 is included in Item 7.

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Operational Update

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.

Effective July 1, 2026, Shawn P.

Payne assumed the role of President and Chief Executive Officer.

His appointment reflects the Board's commitment to improving performance and delivering sustainable growth and profitability.

While we believe Matrix is well positioned to benefit from significant investment across its core and emerging markets, the Company's historical results have not consistently reflected the strength of its capabilities, customer relationships, and market opportunities.

To address this, Mr.

Payne led the development and implementation of Matrix's WIN, EXECUTE, DELIVER strategic framework, which is designed to accelerate growth, strengthen project execution, enhance organizational efficiency, and deliver sustainable profitability.

Under his leadership, Matrix is focused on converting its competitive advantages into stronger financial performance, improved operational outcomes, and long-term shareholder value.

Under our Win strategy, we continue to focus on securing projects that align with our capabilities, experience, and demonstrated track record of execution.

We are focused on growing and diversifying our revenue base through expansion into attractive end markets, broadening relationships with existing customers, and accelerating new customer acquisition efforts across North America.

We are pursuing opportunities across our traditional energy and industrial infrastructure markets, including LNG and NGL storage and terminal infrastructure, while selectively expanding into attractive growth markets such as power generation, utility infrastructure, data center-related power infrastructure, and mining and minerals.

We believe demand in these markets is supported by increasing domestic electricity demand, growth in data center development, investment in power generation and related infrastructure, and continued demand for critical minerals essential to energy, technology, defense, and AI-related infrastructure.

We are also expanding our geographic reach across strategically important regions and pursuing additional construction-only opportunities that complement our full-service capabilities and broaden the range of project delivery models we offer customers.

We believe these efforts, combined with our focus on strengthening existing customer relationships and expanding our customer base, contributed to fiscal 2026 revenue growth of 14% to $873.6 million compared to $769.3 million in fiscal 2025.

Under our Execute strategy, our focus remains on delivering projects safely, efficiently, and with a high degree of quality while strengthening profitability and operational performance.

During fiscal 2026, we advanced a variety of initiatives designed to improve project execution and drive greater consistency across the enterprise, including enhancing project proposal and contracting discipline, strengthening project controls and change management processes, improving engineering and construction execution, reinforcing quality management systems, and further developing our safety culture and performance.

We also continued efforts to streamline internal processes, refine organizational workflows, support continuous improvement initiatives across the enterprise, and reinforce accountability throughout the organization with a continued focus on execution, performance, and measurable outcomes.

We believe these initiatives contributed to improved project outcomes and operating performance, as evidenced by an increase in gross margin to 7.3% in fiscal 2026 from 5.2% in fiscal 2025.

Under our Deliver strategy, we remain committed to converting profitable growth and operational improvements into sustainable value creation for shareholders.

During fiscal 2026, we continued to benefit from actions taken to simplify the organization, streamline operations, and create a flatter and more efficient operating structure.

These efforts contributed to a more efficient operating structure and improved performance across the enterprise.

As a result, selling, general and administrative expenses declined 11% to $63.6 million in fiscal 2026 compared to $71.2 million in fiscal 2025.

Combined with revenue growth and improved profitability, we believe these results demonstrate meaningful progress in executing our strategy, strengthening financial performance, and positioning the Company to pursue both organic and acquisition-related growth opportunities.

Supported by a strong balance sheet and liquidity, we believe Matrix remains well positioned to create sustainable value for all stakeholders.

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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For long-term maintenance contracts with no minimum commitments and other established customer agreements, we include only the amounts that we expect to recognize as revenue over the next 12 months.

For arrangements in which we have received a LNTP, we include the entire scope of work in our backlog if we conclude that the likelihood of the full project proceeding is high.

For arrangements in which we have received a LNTP, we include the entire scope of work in our backlog if we conclude that the likelihood of the full project proceeding has a high probability.

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

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

(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.

(2) Previous project awards removed from backlog.

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.

Our unwillingness to accept an increased 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.

The project was removed from backlog as the ultimate customer is now planning to change the project execution and sourcing strategy for the project.

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

In the Storage and Terminal Solutions segment, we booked $329.4 million of project awards during fiscal 2026.

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.

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

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.

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

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

In the Utility and Power Infrastructure segment, we booked $127.0 million of project awards in fiscal 2026.

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 $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.

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, expansion, maintenance, and repair to existing infrastructure.

The timing between the major greenfield and expansion awards can be extended due to client activity and bidding diligence.

However, their addition to backlog is significant and we expect it to drive long-term sustainable growth in the segment.

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 associated with data centers and other demands.

Project opportunities and bidding activity are strong across the segment.

In the Process and Industrial Facilities segment, we booked $185.3 million of project awards in fiscal 2026, including a major mining construction project in the western United States.

We continue to see increasing opportunities in chemicals, renewable fuels, and refinery maintenance and turnarounds.

Additionally, after an extended period of limited investment, activity in the U.S.

non-ferrous mining sector has increased significantly, supported by demand growth in copper and higher gold prices, as well as policy initiatives related to critical minerals.

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.

It is common for awards to shift from one period to another as the timing of awards is dependent upon a number of factors including changes in market conditions, permitting, off take agreements, project financing and other factors.

Backlog volatility may increase for some segments from time to time when individual project awards are less frequent, but more significant.

volatility may increase for some segments from time to time when individual project awards are less frequent, but more significant.

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

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Selling, general and administrative expenses 63,607 71,173 (7,566) (11) %

Restructuring costs 3,572 501 3,071 613 %

Restructuring costs and other 9,963 3,572 6,391 179 %

Operating loss (9,618) (35,068) 25,450 73 %

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Net loss $ (2,580) $ (29,462) $ 26,882 91 %

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.

Revenue - The increase in overall revenue of $104.3 million, or 14%, was attributable to higher revenue volumes in our Storage and Terminal Solutions and Utility and Power Infrastructure segments, partially offset by lower revenue volumes in our Process and Industrial Facilities segment.

Gross profit - Gross profit during fiscal 2026 increased by $24.3 million, or 61%, compared to fiscal 2025.

Gross margin of 7.3% for fiscal 2026 increased compared with gross margin of 5.2% for fiscal 2025.

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

Overall, gross margins during the year benefitted from strong project execution and improved overhead recovery.

Selling, general and administrative expenses - The decrease in selling, general and administrative ("SG&A") expenses of $7.6 million, or 11%, is due in part to cost reductions resulting from our organizational restructuring plan, which decreased salaries and wages expense as well as facilities costs.

Stock compensation also decreased by $1.8 million, due in part to certain executive separations occurring during the third quarter of fiscal 2026.

Additionally, SG&A decreased $1.8 million associated with the variable accounting for cash-settled stock-based compensation, primarily as a result of declines in our stock price.

Restructuring costs and other - The Company incurred $10.0 million of costs during fiscal 2026 related to organizational restructuring and other related costs.

This included $3.6 million of expense related to the CEO and CFO transitions, as well as severance for other personnel and lease impairments for exited leases.

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.

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.

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

Interest income - The increase in interest income of $1.1 million is primarily due to an increase in our average cash balance during the year.

Provision for income taxes - Income tax expense for both fiscal 2026 and 2025 was insignificant.

The effective tax rates during both periods were impacted by changes in valuation allowances of ($1.3) million and $6.5 million, respectively, placed on deferred tax asset changes during the fiscal years.

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

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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.

We received $2.5 million in net proceeds from the sale.

During the second quarter of fiscal 2024, we recognized a gain of $2.0 million from the sale of a facility in Catoosa, Oklahoma for $2.7 million in net proceeds.

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

Results of Operations by Business Segment

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Process and Industrial Facilities 131,946 154,704 (22,758) (15) %

Corporate — 1,233 (1,233) — %

Total Revenue (1)

$ 873,632 $ 769,286 $ 104,346 14 %

(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.

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $3.1 million for the year ended June 30, 2026.

Gross profit (loss)

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Storage and Terminal Solutions

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 revenues increased by $92.4 million, or 25%, in fiscal 2026 compared to fiscal 2025, driven by an increased volume of work for specialty storage projects.

Storage and Terminal Solutions gross profit increased by $13.2 million, or 90%, in fiscal 2026 compared to fiscal 2025.

The segment gross margin was 6.1% for fiscal 2026 compared to 4.0% for fiscal 2025.

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.

Higher revenue volumes improved overhead recovery.

In addition, in the fourth quarter of fiscal 2025, we lowered our recovery expectations on a legacy project completed in fiscal 2021 that was in arbitration which resulted in a $6.4 million decrease to gross margin.

The matter was fully resolved in fiscal 2026.

Utility and Power Infrastructure

Utility and Power Infrastructure revenues increased by $34.7 million, or 14%, in fiscal 2026 compared to fiscal 2025.

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

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 $14.7 million, or 87%, in fiscal 2026 compared to fiscal 2025.

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.

The segment gross margin was 11.1% for fiscal 2026 compared to 6.8% in fiscal 2025, an increase of 4.3% 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 $22.8 million, or 15%, in fiscal 2026 compared to fiscal 2025.

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.

The decrease is primarily attributable to lower revenue volumes for refineries, thermal vacuum chambers, and industrial facilities.

Process and Industrial Facilities gross profit decreased by $4.4 million, or 49% in fiscal 2026 compared to fiscal 2025.

The segment gross margin was 3.4% for fiscal 2026 compared to 5.8% for fiscal 2025.

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.

Gross margins decreased primarily due to mix of work.

Unallocated corporate gross profit was $0.03 million during fiscal 2026 compared to a loss of $0.8 million in fiscal 2025, an increase of $0.8 million primarily due to a reduction in cost for certain support functions as a result of our organizational restructuring.

LIQUIDITY AND CAPITAL RESOURCES

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Our primary sources of liquidity at June 30, 2026 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.

Financial Statements 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.

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Unrestricted cash and cash equivalents at June 30, 2026 totaled $223.0 million and availability under the ABL Facility totaled $60.9 million, resulting in total liquidity of $283.9 million.

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

During fiscal 2026, liquidity decreased by $0.6 million.

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, as well as availability and total liquidity (in thousands):

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Cash provided by operating activities 6,907

Capital expenditures (7,685)

Proceeds from asset sales 240

Increase in availability under ABL Facility 5,827

Cash used by investing activities (3,541)

Cash used by financing activities (4,170)

Effect of exchange rate changes on cash (871)

Increase in availability under ABL Facility 1,095

Liquidity at June 30, 2026 $ 283,876

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Cash provided by operating activities 117,471

Capital expenditures (6,994)

Proceeds from asset sales (1)

Increase in availability under ABL Facility 16,246

Cash used by investing activities (7,445)

Cash used by financing activities (1,040)

Effect of exchange rate changes on cash 40

Increase in availability under ABL Facility 5,827

Liquidity at June 30, 2025 $ 284,456

(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.

Item 8, Financial Statements, Note 3 - Property, Plant and Equipment, for more information.

The remaining asset sales comprised of equipment sold in the normal course of business.

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

Factors that routinely impact our short-term liquidity and may impact our long-term liquidity include:

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

• some fixed-price customer contracts allow for 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;

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We had no borrowings outstanding and $4.5 million in letters of credit outstanding, which resulted in availability of $60.9 million under the ABL Facility.

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

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

Our borrowing base availability has ranged from $55.6 million to $65.0 million during fiscal 2026.

Subsequent to June 30, 2026, we issued an additional $20.0 million project-related letter of credit.

The letter of credit resulted in a release of $20.0 million of contract retention, which we collected in August 2026.

For additional information regarding our ABL Facility, see Part II, Item 8.

Financial Statements and Supplementary Data, Note 5 - Debt.

CASH FLOW ANALYSIS

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Net loss $ (2,580) $ (29,462)

Gain on sale of property, plant and equipment (1)

Loss (gain) on sale of property, plant and equipment (606) 8

Depreciation and amortization 8,640 10,012

Stock-based compensation expense 7,145 8,904

Operating lease impairment due to restructuring 2,935 —

Other non-cash expenses 146 234

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Net cash provided by operating activities $ 6,907 $ 117,471

(1) Gain on sale of property, plant and equipment includes a $4.5 million total gain on the sale of our Burlington, Ontario facility and Catoosa, Oklahoma facility that were disposed of in the first quarter of fiscal 2024 and the second quarter of fiscal 2024, respectively.

(see Part II.

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.

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:

The significant components of the $8.8 million cash effect of changes in operating assets and liabilities for the fiscal year ended June 30, 2026 are summarized as follows:

• Accounts receivable, excluding credit losses recognized during the period and including retention amounts classified as non-current, increased $11.3 million from fiscal 2025, which decreased cash flows from operating activities.

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

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

The increase in accounts receivable was partially offset by the collection of $19.5 million of accounts receivable associated with matters that had been in litigation.

• Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased $0.5 million from fiscal 2025, 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.

Billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") decreased $23.6 million from fiscal 2025, which decreased 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.

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

• Accounts payable increased by $27.7 million from fiscal 2025, 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.

• 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;

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 $3.3 million from fiscal 2024, 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;

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

and other timing differences.

• Changes in other operating assets and liabilities decreased cash flows from operating activities by $2.1 million.

These operating assets and liabilities can fluctuate based on business volumes and timing of certain cash receipts and payments.

The significant components of the $127.8 million change 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 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.

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 $4.1 million from fiscal 2024, 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 $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;

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

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

and other timing differences.

• Changes in other operating assets and liabilities increased cash flows from operating activities by $5.3 million.

These operating assets and liabilities can fluctuate based on business volumes and timing of certain cash receipts and payments.

Cash Flows Used by Investing Activities

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.

In the second quarter of fiscal 2024, we sold a facility in Catoosa, Oklahoma.

We closed these previously utilized facilities as they were no longer strategic to the future of the business.

In the third quarter of fiscal 2024 we purchased a fabrication facility in Bakersfield, California for $4.1 million to replace a facility currently being leased by the Company.

Investing activities used $3.5 million and $7.4 million of cash in fiscal 2026 and fiscal 2025, respectively.

Capital expenditures were $5.5 million and $7.7 million in fiscal 2026 and fiscal 2025, respectively.

During fiscal 2026, we also received $1.9 million of proceeds from the sale of property, plant and equipment, primarily associated with our transmission and distribution service line which we began winding down in the fourth quarter of fiscal 2025.

Cash Flows Used by Financing Activities

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.

Financing activities used $4.2 million and $1.0 million of cash in fiscal 2026 and fiscal 2025, 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

We have never paid cash dividends on our common stock and the terms of our Credit Agreement prohibit us from paying cash dividends.

We have never paid cash dividends on our common stock and the terms of our ABL Facility prohibit us from paying cash dividends.

Any future dividend payments will depend on the terms of our ABL Facility, our financial condition, capital requirements and earnings as well as other relevant factors.

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Under the program, the aggregate number of shares repurchased may not exceed 2,707,175 shares.

We may repurchase our stock from time to time in the open market at prevailing market prices or in privately negotiated transactions and are not obligated to purchase any shares.

We may repurchase our stock from time to time in the open market at prevailing market prices or in privately negotiated transactions and

are not obligated to purchase any shares.

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

We made no repurchases under the program during fiscal 2025 and have no current plans to repurchase stock.

We made no repurchases under the program during fiscal 2026.

As of June 30, 2026, 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.

Treasury Shares

We had 277,731 treasury shares as of June 30, 2025 and intend to utilize these treasury shares in connection with equity awards under our stock incentive plans and for sales to the Employee Stock Purchase Plan.

The terms of our ABL Facility limit share repurchases to $2.5 million per fiscal year provided that we meet certain availability thresholds.

Material Cash Requirements from Contractual and Other Obligations

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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.

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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 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.

As of June 30, 2026, 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.

Subsequent to June 30, 2026, we issued an additional $20.0 million project-related letter of credit.

The letter of credit resulted in a release of $20.0 million of contract retention, which we collected in August 2026.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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See Part II, Item 8.

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

Financial Statements 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.

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As a result, actual results may differ from the estimates utilized in our income approach.

For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA (as defined in Note 4 - Goodwill) and our forecasted EBITDA (as defined in Note 4 - Goodwill).

For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA (as defined in Note 4 - Goodwill and Other Intangible Assets) and our forecasted EBITDA (as defined in Note 4 - Goodwill and Other Intangible Assets).

The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of additional impairment charges in the financial statements.

As a test for reasonableness, we also consider the combined fair values of our reporting units to our market capitalization.

As a test for reasonableness, we also compare the combined fair values of our reporting units to our market capitalization.

We performed our annual goodwill impairment test as of May 31, 2026, which resulted in no impairment.

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Reporting Unit 4 $ 4,156 391% 376% 333% 366%

We use the asset and liability approach for financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances based on our judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized in future operating results.

Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances, with the help of professional tax advisors.

Therefore, we estimate and provide for amounts of additional income taxes that may be assessed by the various taxing authorities.

Deferred Income Tax Assets

The Company regularly evaluates the need for valuation allowances related to deferred tax assets for which future realization is uncertain.

The Company performs this evaluation quarterly.

In assessing the realizability of deferred tax assets, it must consider whether it is more likely than not some portion, or all, of the deferred tax assets will not be realized.

The Company considers all available evidence, both positive and negative, in determining whether a valuation allowance is required.

Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence.

Loss Contingencies

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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-K

Item 7. Management’s Discussion and Analysis