What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2024-10-30 · 82 added, 171 removed, 247 unchanged (51% of the section changed)

15 unchanged sentences

Our C&I segment provides services in the United States and in western Canada.

Our C&I customers include facility owners and general contractors.

We strive to maintain our

status as a preferred provider to our T&D and C&I customers.

Our C&I customers include general contractors and facility owners.

We strive to maintain our status as a preferred provider to our T&D and C&I customers.

We believe that we have a number of competitive advantages in both of our segments, including our skilled workforce, extensive centralized fleet, proven safety performance and reputation for timely completion of quality work that allows us to compete favorably in our markets.

In addition, we believe that we are better capitalized than some of our competitors, which provides us with valuable flexibility to take on additional and more complex projects.

We believe legislative actions aimed at supporting infrastructure improvements in the United States may positively impact long-term demand, particularly in connection with electric power infrastructure, transportation and clean energy spending.

We believe the legislative actions are likely to provide greater long-term opportunity in both of our reporting segments.

However, we expect our financial results, in both of our segments, to continue to be affected by delays and cost volatility through 2024, due to supply chain disruptions, inflationary pressures, tariffs and regulatory slowdowns.

These factors will cause us to carry impacted projects at lower margins until their completion and may result in decelerations in project opportunities and awards.

We had consolidated revenues for the nine months ended September 30, 2024 of $2.53 billion, of which 56.5% was attributable to our T&D customers and 43.5% was attributable to our C&I customers.

Our consolidated revenues for the nine months ended September 30, 2023 were $2.64 billion.

For the nine months ended September 30, 2024, our net income and EBITDA (1) were $14.3 million and $72.3 million, respectively, compared to $66.9 million and $135.4 million, respectively, for the nine months ended September 30, 2023.

We believe legislative actions are likely to provide greater long-term opportunity in both of our reporting segments.

However, we may experience unanticipated volatility associated with policy changes and tariffs.

Prolonged uncertainty in the business environment and higher inflation could also impact customer demand and our profitability.

We had consolidated revenues for the three months ended March 31, 2025 of $833.6 million, of which 55.4% was attributable to our T&D customers and 44.6% was attributable to our C&I customers.

Our consolidated revenues for the three months ended March 31, 2024 were $815.6 million.

For the three months ended March 31, 2025, our net income and EBITDA (1) were $23.3 million and $50.2 million, respectively, compared to $18.9 million and $39.8 million, respectively, for the three months ended March 31, 2024.

We believe there is an ongoing need for utilities to sustain investment in their transmission systems to improve reliability, reduce congestion, connect to new clean energy sources and support future load growth.

Consequently, we believe that we will continue to see continued bidding activity on large transmission projects going forward.

Consequently, we believe that we will see continued bidding activity on large transmission projects going forward.

The timing of multi-year transmission project awards and substantial construction activity is difficult to predict due to regulatory requirements and the permitting needed to commence construction.

2 unchanged sentences

We believe there is a need for further investment by utilities on their distribution systems to properly maintain or meet reliability requirements.

We continue to see strong bidding activity in some of our electric distribution markets.

We continue to see strong activity in many of our electric distribution markets.

We believe the increased storm activity and destruction caused by wildfires will cause a push to strengthen utility distribution systems against catastrophic damage.

3 unchanged sentences

Refer to “Non-GAAP Measure—EBITDA” for a discussion of this measure.

Although our C&I bidding opportunities remain strong, we may see impacts due to continued market disruptions and overall market volatility which could result in slower growth of our C&I segment.

We believe that the primary markets we serve such as transportation, data centers, health care, clean energy and warehousing, may be somewhat less vulnerable to an economic slowdown.

We believe the increasing demand for electricity associated with additional power requirements, driven by increased electrification associated with new technologies, including the emergence and adoption of artificial intelligence technologies as well as increased power needs connected to the reshoring of manufacturing, will require significant investment by our customers in both of our reporting segments.

Our C&I bidding opportunities remain strong and we believe we will see continued opportunities in the primary markets we serve such as data centers, transportation, data centers, health care, clean energy and warehousing.

In addition, the United States has experienced decades of underfunded economic expansion and aging infrastructure that have challenged the capacity of public water and transportation infrastructure forcing states and municipalities to seek creative means to fund needed expansion and repair.

4 unchanged sentences

We have maintained a strong balance sheet, while also supporting our organic growth with capital expenditures and working capital and repurchasing our shares.

During the nine months ended September 30, 2024, the Company repurchased 643,549 shares of its common stock under our repurchase program at a weighted-average price of $116.54 per share, exhausting substantially all of the authorized funds under our share repurchase program.

During the three months ended March 31, 2025, the Company repurchased 639,207 shares of its common stock under our repurchase program at a weighted-average price of $117.33 per share, exhausting substantially all of the authorized funds under our share repurchase program.

We believe the borrowing availability under our $490 million revolving credit facility and future cash flow from operations will enable us to support the organic growth of our business, pursue acquisitions and opportunistically repurchase shares.

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Additional information related to our remaining performance obligations is provided in Note 6–Revenue Recognition in the accompanying notes to our Consolidated Financial Statements.

Our backlog was $2.60 billion at September 30, 2024, compared to $2.51 billion at December 31, 2023 and $2.62 billion at September 30, 2023.

Our backlog at September 30, 2024 increased $54.4 million from June 30, 2024.

Backlog in the T&D segment decreased $32.0 million and C&I backlog increased $86.3 million compared to June 30, 2024.

Our backlog as of September 30, 2024 included our proportionate share of joint venture backlog totaling $186.2 million, compared to $188.7 million at June 30, 2024.

Our backlog was $2.64 billion at March 31, 2025, compared to $2.58 billion at December 31, 2024 and $2.43 billion at March 31, 2024.

Our backlog at March 31, 2025 increased $63.8 million from December 31, 2024.

Backlog in the T&D segment increased $54.4 million and C&I backlog increased $9.4 million compared to December 31, 2024.

Our backlog as of March 31, 2025 included our proportionate share of joint venture backlog totaling $169.2 million, compared to $172.3 million at December 31, 2024.

The following table summarizes that amount of our backlog that we believe to be firm as of the dates shown and the amount of our current backlog that we reasonably estimate will not be recognized within the next twelve months, and the amount estimated to be recognized after the next twelve months:

Backlog at September 30, 2024

Backlog at March 31, 2025

(in thousands) Total Amount estimated to be

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Three months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

(dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent

(dollars in thousands) Amount Percent Amount Percent

Contract revenues $ 833,620 100.0 % $ 815,562 100.0 %

8 unchanged sentences

Interest expense (1,414) (0.2) (1,054) (0.1)

Other income (expense), net 112 — (91) — (421) — (61) —

Other expense, net (300) — (263) —

Income before provision for income taxes 32,767 3.9 23,096 2.9

1 unchanged sentence

Net income $ 23,308 2.8 % $ 18,939 2.3 %

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Revenues decreased $51.5 million or 5.5%, to $888.0 million for the three months ended September 30, 2024 from $939.5 million for the three months ended September 30, 2023.

The decrease was primarily due to a decrease of $81.0 million in revenue on transmission projects, offset by an increase of $15.3 million in C&I revenue, and an increase of $14.3 million in revenue on distribution projects.

Gross margin.

Gross margin for the three months ended September 30, 2024 decreased to 8.7% compared to 9.8% for the three months ended September 30, 2023.

The decrease in gross margin was primarily impacted by significant changes in our estimated gross profit on certain projects resulting in a net gross margin decrease of 3.9% for the three months ended September 30, 2024, compared to a net decrease of 1.3% for the three months ended September 30, 2023.

During the three months ended September 30, 2024, significant estimate changes negatively impacted gross margin by 4.7%, primarily related to clean energy projects in T&D, the unfavorable impact of a C&I project, as well as an increase in costs associated with unfavorable job closeouts, and labor and project inefficiencies.

In addition, significant estimate changes in gross profit positively impacted gross margin by 0.8% and largely related to better-than-anticipated productivity and a favorable change order.

Gross profit.

Gross profit was $77.3 million for the three months ended September 30, 2024 compared to $92.4 million for the three months ended September 30, 2023.

The decrease of $15.1 million, or 16.3%, was due to lower margin and lower revenues.

Selling, general and administrative expenses.

Selling, general and administrative expenses (“SG&A”) were $57.5 million for the three months ended September 30, 2024 compared to $59.9 million for the three months ended September 30, 2023.

The period-over-period decrease of $2.4 million was primarily due to a decrease in employee incentive compensation costs and a decrease of $1.1 million of contingent compensation expense related to a prior acquisition, partially offset by an increase in employee-related expenses to support future growth.

Gain on sale of property and equipment .

Gains from the sale of property and equipment for the three months ended September 30, 2024 were $1.8 million compared to $0.8 million for the three months ended September 30, 2023.

Gains from the sale of property and equipment are attributable to routine sales of property and equipment no longer useful or valuable to our ongoing operations.

Interest expense.

Interest expense was $2.0 million for three months ended September 30, 2024 compared to $1.3 million for the three months ended September 30, 2023.

This increase was attributable to higher average outstanding debt balances during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Income tax expense.

Income tax expense was $7.9 million for the three months ended September 30, 2024, with an effective tax rate of 42.5%, compared to the expense of $9.3 million for the three months ended September 30, 2023, with an effective tax rate of 30.3%.

The increase in the tax rate for the three months ended September 30, 2024 was primarily due to higher permanent difference items mostly related to deductibility limits of contingent compensation, associated with a prior acquisition, which was successfully achieved during the third quarter of 2024, as well as higher U.S.

taxes on Canadian income.

Net income was $10.6 million for the three months ended September 30, 2024 compared to net income of $21.5 million for the three months ended September 30, 2023.

The decrease was primarily due to the reasons stated earlier.

Segment Results

The following table sets forth, for the periods indicated, statements of operations data by segment, segment net sales as percentage of total net sales and segment operating income as a percentage of segment net sales:

Three months ended September 30,

(dollars in thousands) Amount Percent Amount Percent

Contract revenues:

Transmission & Distribution $ 481,876 54.3 % $ 548,595 58.4 %

Commercial & Industrial 406,167 45.7 390,881 41.6

Total $ 888,043 100.0 % $ 939,476 100.0 %

Operating income:

Transmission & Distribution $ 17,568 3.6 % $ 36,262 6.6 %

Commercial & Industrial 20,309 5.0 13,932 3.6

Total 37,877 4.3 50,194 5.3

General Corporate (17,516) (2.0) (18,167) (1.9)

Consolidated $ 20,361 2.3 % $ 32,027 3.4 %

Transmission & Distribution

Revenues for our T&D segment for the three months ended September 30, 2024 were $481.9 million compared to $548.6 million for the three months ended September 30, 2023, a decrease of $66.7 million, or 12.2%.

The decrease in revenue was related to a decrease of $81.0 million in revenue on transmission projects offset by an increase of $14.3 million in revenue on distribution projects.

Revenues from transmission projects represented 57.4% and 65.2% of T&D segment revenue for the three months ended September 30, 2024 and 2023, respectively.

Operating income for our T&D segment for the three months ended September 30, 2024 was $17.6 million, a decrease of $18.7 million, or 51.6%, from the three months ended September 30, 2023.

As a percentage of revenues, operating income for our T&D segment was 3.6% for the three months ended September 30, 2024 compared to operating income of 6.6% for the three months ended September 30, 2023.

Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 5.0% for the three months ended September 30, 2024, compared to a net decrease of 1.9% for the three months ended September 30, 2023.

During the three months ended September 30, 2024, significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 5.8% with 5.5% of the impact related to losses on certain clean energy projects.

Losses on these projects were primarily related to unfavorable weather conditions, labor and project inefficiencies, higher labor and contract related costs and contractual disputes.

In addition, schedule extensions caused by owner-furnished panel delays led to increased costs on two clean energy projects.

Many of these projects have reached mechanical completion and the remaining projects are anticipated to reach mechanical completion in the fourth quarter of 2024.

Significant estimated gross profit changes were also negatively impacted by an unfavorable job closeout.

These decreases were partially offset by positive significant estimated gross profit changes totaling 0.8% and largely related to better-than-anticipated productivity.

Additionally, T&D operating income margin was negatively impacted by a decrease in work in progress.

Commercial & Industrial

Revenues for our C&I segment for the three months ended September 30, 2024 were $406.2 million compared to $390.9 million for the three months ended September 30, 2023, an increase of $15.3 million, or 3.9%.

The increase in revenue was related to an increase of $11.6 million in revenue on fixed priced contracts, an increase of $6.8 million on T&E contracts, offset by a decrease of $3.1 million in revenues on unit price work.

Operating income for our C&I segment for the three months ended September 30, 2024 was $20.3 million, an increase of $6.4 million, over the three months ended September 30, 2023.

As a percentage of revenues, operating income for our C&I segment was 5.0% for the three months ended September 30, 2024 compared to 3.6% for the three months ended September 30, 2023.

Operating income margin was positively impacted during the three months ended September 30, 2024, by the continued benefit of higher margins on certain projects nearing completion, due to better-than-anticipated productivity and previous favorable change orders.

Operating income margin was also impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 2.6% for the three months ended September 30, 2024, compared to a net decrease of 0.3% for the three months ended September 30, 2023.

Significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 3.5%, with 2.9% of the impact from a single project that is anticipated to reach substantial completion during the fourth quarter of 2024.

The loss from this project was primarily due to scope additions, increased labor costs related to schedule compression and lower productivity due to access and workflow issues.

Significant estimated gross profit changes were also negatively impacted by an unfavorable job closeout and labor and project inefficiencies.

These decreases were partially offset by positive significant estimated gross profit changes totaling 0.9% and largely related to better-than-anticipated productivity and favorable change orders.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Revenues decreased $107.2 million or 4.1%, to $2.53 billion for the nine months ended September 30, 2024 from $2.64 billion for the nine months ended September 30, 2023.

The decrease was primarily due to a decrease of $105.0 million in revenue on transmission projects and a decrease of $40.1 million in C&I revenue, partially offset by an increase of $37.8 million in revenue on distribution projects.

Gross margin.

Gross margin for the nine months ended September 30, 2024 decreased to 8.1% compared to 10.1% for the nine months ended September 30, 2023.

The decrease in gross margin was primarily impacted by significant changes in our estimated gross profit on certain projects resulting in a net gross margin decrease of 4.4% for the nine months ended September 30, 2024, compared to a net decrease of 1.2% for the nine months ended September 30, 2023.

During the nine months ended September 30, 2024, significant estimate changes negatively impacted gross margin by 5.7%, primarily related to clean energy projects in T&D, the unfavorable impact of a C&I project, labor and project inefficiencies, an increase in costs associated with schedule compression on certain projects, an unfavorable change order and an unfavorable job closeout.

In addition, significant estimate changes in gross profit positively impacted gross margin by 1.3% and mainly related to better-than-anticipated productivity, favorable change orders and favorable job closeouts.

Gross margin also benefited by approximately 0.2% from favorable joint venture results during the nine months ended September 30, 2024.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenues increased $18.0 million, or 2.2%, to $833.6 million for the three months ended March 31, 2025 from $815.6 million for the three months ended March 31, 2024.

The increase was primarily due to an increase of $46.7 million in C&I revenue, and an increase of $15.5 million in revenue on distribution projects, offset by a decrease of $44.1 million in revenue on transmission projects, primarily related to clean energy.

Gross margin for the three months ended March 31, 2025 increased to 11.6% compared to 10.6% for the three months ended March 31, 2024.

The increase in gross margin was primarily due to a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion, during the three months ended March 31, 2025.

Gross margin was also impacted by significant changes in our estimated gross profit on certain projects resulting in a net gross margin decrease of 1.1% for the three months ended March 31, 2025, compared to a net decrease of 1.2% for the three months ended March 31, 2024.

During the three months ended March 31, 2025, significant estimate changes negatively impacted gross margin by 2.1% and largely related to an increase in costs associated with labor and project inefficiencies and unfavorable change orders.

In addition, significant estimate changes in gross profit positively impacted gross margin by 1.0%, primarily related to favorable change orders, better-than-anticipated productivity and a favorable job closeout.

Gross profit.

Gross profit was $204.4 million for the nine months ended September 30, 2024 compared to $266.9 million for the nine months ended September 30, 2023.

The decrease of $62.5 million, or 23.4% was due to lower margin and lower revenues.

Selling, general and administrative expenses.

SG&A was $181.5 million for the nine months ended September 30, 2024 compared to $174.6 million for the nine months ended September 30, 2023.

The period-over-period increase of $6.9 million was primarily due to an increase of $4.2 million of contingent compensation expense related to a prior acquisition and an increase in employee-related expenses to support future growth, partially offset by a decrease in employee incentive compensation costs.

Gain on sale of property and equipment.

Gains from the sale of property and equipment for the nine months ended September 30, 2024 were $4.7 million compared to $3.3 million for the nine months ended September 30, 2023.

Gains from the sale of property and equipment are attributable to routine sales of property and equipment no longer useful or valuable to our ongoing operations.

Interest expense.

Interest expense was $4.3 million for the nine months ended September 30, 2024 compared to $3.1 million for the nine months ended September 30, 2023.

This increase was primarily attributable to higher average debt balances during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Income tax expense.

Income tax expense was $5.2 million for the nine months ended September 30, 2024, with an effective tax rate of 26.6%, compared to the expense of $22.6 million for the nine months ended September 30, 2023, with an effective tax rate of 25.2%.

The change in the tax rate for the nine months ended September 30, 2024 was primarily due to lower pretax income and higher other permanent difference items, offset by lower stock compensation excess tax benefits.

The increase in permanent difference items primarily related to deductibility limits of contingent compensation, associated with a prior acquisition, as well as higher U.S.

taxes on Canadian income.

Net income was $14.3 million for the nine months ended September 30, 2024 compared to $66.9 million for the nine months ended September 30, 2023.

The decrease was primarily due to the reasons stated earlier.

Gross profit was $96.9 million for the three months ended March 31, 2025 compared to $86.2 million for the three months ended March 31, 2024.

The increase of $10.7 million, or 12.4%, was due to higher margin and revenues.

Selling, general and administrative expenses were $62.5 million for the three months ended March 31, 2025 compared to $62.2 million for the three months ended March 31, 2024.

The period-over-period increase of $0.3 million was primarily due to an increase in in employee-related expenses to support future growth and an increase in employee incentive compensation costs.

These increases were partially offset by $3.2 million of contingent compensation expense, related to a prior acquisition, recognized during the three months ended March 31, 2024.

Interest expense was $1.4 million for three months ended March 31, 2025 compared to $1.1 million for the three months ended March 31, 2024.

This increase was attributable to higher average outstanding debt balances partially offset by lower interest rates during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Income tax expense was $9.5 million for the three months ended March 31, 2025, with an effective tax rate of 28.9%, compared to the income tax expense of $4.2 million for the three months ended March 31, 2024, with an effective tax rate of 18.0%.

The increase in the tax rate for the three months ended March 31, 2025 was primarily due to no stock compensation excess tax benefits.

Net income was $23.3 million for the three months ended March 31, 2025 compared to net income of $18.9 million for the three months ended March 31, 2024.

The increase was primarily due to the reasons stated earlier.

Segment Results

Nine months ended September 30,

Three months ended March 31,

(dollars in thousands) Amount Percent Amount Percent

10 unchanged sentences

Transmission & Distribution

Revenues for our T&D segment for the nine months ended September 30, 2024 were $1.43 billion compared to $1.50 billion for the nine months ended September 30, 2023, a decrease of $67.2 million.

The decrease in revenue was related to a decrease of $105.0 million in revenue on transmission projects, offset by an increase of $37.8 million in revenue on distribution projects.

Revenues from transmission projects represented 61.0% and 65.3% of T&D segment revenue for the nine months ended September 30, 2024 and 2023, respectively.

Operating income for our T&D segment for the nine months ended September 30, 2024 was $39.1 million, a decrease of $67.7 million, or 63.4%, from the nine months ended September 30, 2023.

As a percentage of revenues, operating income for our T&D segment was 2.7% for the nine months ended September 30, 2024 compared to 7.1% for the nine months ended September 30, 2023.

Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 6.0% for the nine months ended September 30, 2024, compared to a net decrease of 1.1% for the nine months ended September 30, 2023.

During the nine months ended September 30, 2024, significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 6.3% with 6.1% of the impact related to losses on certain clean energy projects.

Losses on these projects were primarily related to contractual disputes, labor and project inefficiencies, higher labor and contract related costs and unfavorable weather conditions.

In addition, schedule extensions caused by owner-furnished panel delays led to increased costs on two clean energy projects.

Many of these projects have reached mechanical completion and the remaining projects are anticipated to reach mechanical completion in the fourth quarter of 2024.

Significant estimated gross profit changes were also negatively impacted by an unfavorable job closeout and labor and project inefficiencies.

These decreases were partially offset by positive significant estimated gross profit changes totaling 0.3% of revenues mostly related to better-than-anticipated productivity.

Additionally, T&D operating income margin was negatively impacted by higher fleet depreciation and maintenance expenses.

Revenues for our T&D segment for the three months ended March 31, 2025 were $461.8 million compared to $490.4 million for the three months ended March 31, 2024, a decrease of $28.6 million, or 5.8%.

The decrease in revenue was related to a decrease of $44.1 million in revenue on transmission projects, primarily related to clean energy projects, offset by an increase of $15.5 million in revenue on distribution projects.

Operating income for our T&D segment for the three months ended March 31, 2025 was $36.2 million, an increase of $6.4 million, or 21.4%, from the three months ended March 31, 2024.

As a percentage of revenues, operating income for our T&D segment was 7.8% for the three months ended March 31, 2025 compared to operating income of 6.1% for the three months ended March 31, 2024.

Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 0.9% for the three months ended March 31, 2025, compared to a net decrease of 2.5% for the three months ended March 31, 2024.

During the three months ended March 31, 2025, significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 1.5%, primarily related to labor and project inefficiencies.

These decreases were partially offset by positive significant estimated gross profit changes totaling 0.6% and largely related to favorable change orders and better-than-anticipated productivity.

Commercial & Industrial

Revenues for our C&I segment for the nine months ended September 30, 2024 were $1.10 billion compared to $1.14 billion for the nine months ended September 30, 2023, a decrease of $40.1 million, or 3.5%, which was primarily due to the delayed start of certain projects in 2024.

The decrease in revenue was related to a decrease of $36.0 million in revenue on fixed priced contracts and a decrease of $9.1 million in revenues on unit price work, offset by an increase of $5.0 million on T&E contracts.

Operating income for our C&I segment for the nine months ended September 30, 2024 was $33.3 million, a decrease of $3.9 million, over the nine months ended September 30, 2023.

As a percentage of revenues, operating income for our C&I segment was 3.0% for the nine months ended September 30, 2024, compared to 3.3% for the nine months ended September 30, 2023.

Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 2.4% for the nine months ended September 30, 2024, compared to a net decrease of 1.4% for the nine months ended September 30, 2023.

Significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 5.1% with 2.3% of the impact from a single project that is anticipated to reach substantial completion during the fourth quarter of 2024.

The loss from this project was primarily due to scope additions, increased labor costs related to schedule compression and lower productivity due to access and workflow issues.

Significant estimated gross profit changes were also negatively impacted by an increase in costs associated with labor and project inefficiencies, schedule compression on certain projects and an unfavorable change order.

These decreases were partially offset by positive significant estimated gross profit changes totaling 2.7% and largely related to better-than-anticipated productivity, some of which related to clean energy projects, favorable change orders and favorable job closeouts.

Additionally, C&I operating income margin was positively impacted by approximately 0.5% due to favorable joint venture results.

This increase was partially offset by higher contingent compensation expense related to a prior acquisition, a decrease in work in progress and higher fleet depreciation and maintenance expenses.

Revenues for our C&I segment for the three months ended March 31, 2025 were $371.9 million compared to $325.2 million for the three months ended March 31, 2024, a increase of $46.7 million, or 14.4%.

The increase in revenue was related to an increase of $29.0 million in revenue on fixed priced contracts, an increase of $16.4 million on T&E contracts and an increase of $1.3 million in revenues on unit price work.

Operating income for our C&I segment for the three months ended March 31, 2025 was $17.4 million, an increase of $6.0 million, over the three months ended March 31, 2024.

As a percentage of revenues, operating income for our C&I segment was 4.7% for the three months ended March 31, 2025 compared to 3.5% for the three months ended March 31, 2024.

Operating income margin was positively impacted during the three months ended March 31, 2025, by a larger portion of our C&I projects progressing at higher contractual margins, some of which are nearing completion.

Additionally, C&I operating income for the three months ended March 31, 2024, was negatively impacted by contingent compensation expense related to a prior acquisition, that did not recur during the three months ended March 31, 2025.

C&I operating income margin during the three months ended March 31, 2025, was also positively impacted by favorable joint venture results which improved operating income margin by 0.4%.

Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 1.2% for the three months ended March 31, 2025, compared to a net increase of 0.8% for the three months ended March 31, 2024.

Significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 2.9%, primarily related to an increase in costs associated with labor and project inefficiencies and unfavorable change orders.

These decreases were partially offset by positive significant estimated gross profit changes totaling 1.7% and largely related to favorable change orders, a favorable job closeout and better-than-anticipated productivity.

Non-GAAP Measure—EBITDA

17 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in thousands) 2025 2024

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Three months ended

September 30, Nine months ended

September 30,

(in thousands) 2025 2024

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Liquidity, Capital Resources and Material Cash Requirements

As of September 30, 2024, we had working capital of $269.2 million.

As of March 31, 2025, we had working capital of $229.5 million.

We define working capital as current assets less current liabilities.

During the nine months ended September 30, 2024, operating activities of our business provided net cash of $66.0 million, compared to $28.4 million of cash provided for the nine months ended September 30, 2023.

During the three months ended March 31, 2025, operating activities of our business provided net cash of $83.3 million, compared to $7.7 million of cash provided for the three months ended March 31, 2024.

Cash flow from operations is primarily influenced by operating margins, timing of contract performance and the type of services we provide to our customers.

The $37.6 million year-over-year increase in cash provided by operating activities was primarily due to favorable net changes in operating assets and liabilities of $86.5 million, offset by a decrease of $52.6 million in net income.

The $75.6 million year-over-year increase in cash provided by operating activities was primarily due to favorable net changes in operating assets and liabilities of $70.6 million, and an increase of $4.4 million in net income.

The favorable change in operating assets and liabilities was primarily due to the net favorable year-over-year changes in various working capital accounts that relate primarily to construction activities (accounts receivable, contract assets, accounts payable and contract liabilities) of $44.4 million and the favorable change of $27.2 million in other liabilities.

The net favorable changes of $44.4 million in cash provided by working capital accounts, mainly related to construction activities, was due to the timing of billings and payments under our contracts.

The favorable change of $9.4 million in other liabilities was primarily due to the timing of employee related wage and tax payments.

In the nine months ended September 30, 2024, we used net cash of $56.8 million in investing activities consisting of $63.6 million for capital expenditures, partially offset by $6.8 million of proceeds from the sale of equipment.

In the nine months ended September 30, 2024, financing activities used net cash of $26.0 million, consisting primarily of $75.0 million of share repurchases under our share repurchase program, $7.0 million of payments under our equipment notes and $5.9 million of shares repurchased to satisfy tax obligations under our stock compensation programs, partially offset by $64.0 million of net borrowings under our revolving line of credit.

We believe our $375.5 million borrowing availability under our revolving line of credit as of September 30, 2024, future cash flow from operations and our ability to utilize short-term and long-term leases will provide sufficient liquidity for our short-term and long-term needs.

The favorable change of $27.2 million in other liabilities was primarily due to the timing of employee related wage and tax payments and changes in our employee incentive compensation accruals.

In the three months ended March 31, 2025, we used net cash of $10.9 million in investing activities consisting of $13.1 million for capital expenditures, partially offset by $2.2 million of proceeds from the sale of equipment.

In the three months ended March 31, 2025, financing activities used net cash of $65.0 million, consisting primarily of $75.0 million of share repurchases under our share repurchase program, $2.5 million of shares repurchased to satisfy tax obligations under our stock compensation programs and $2.2 million of payments under our equipment notes, partially offset by $14.9 million of net borrowings under our revolving line of credit.

We believe our $379.4 million borrowing availability under our revolving line of credit as of March 31, 2025, future cash flow from operations and our ability to utilize short-term and long-term leases will provide sufficient liquidity for our short-term and long-term needs.

Our primary short-term liquidity needs include cash for operations, debt service requirements, capital expenditures, and acquisition and joint venture opportunities.

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The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of September 30, 2024.

We had $77.2 million and $13.2 million of borrowings outstanding under the Facility as of September 30, 2024 and December 31, 2023, respectively.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of March 31, 2025.

We had $73.3 million and $58.4 million of borrowings outstanding under the Facility as of March 31, 2025 and December 31, 2024, respectively.

Letters of Credit

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Currently, we do not believe it is likely that any claims will be made under any letter of credit.

As of September 30, 2024, we had $37.3 million in letters of credit outstanding under our Credit Agreement, including $32.6 million related to the Company's payment obligation under its insurance programs and $4.7 million related to contract performance obligations.

As of March 31, 2025, we had $34.5 million in letters of credit outstanding under our Credit Agreement, including $29.8 million related to the Company's payment obligation under its insurance programs and $4.7 million related to contract performance obligations.

As of December 31, 2024, we had $37.3 million in letters of credit outstanding under our Credit Agreement, including $32.6 million related to the Company's payment obligations under its insurance programs and $4.7 million related to contract performance obligations.

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Each Equipment Note constitutes a separate, distinct and independent financing of equipment and contractual obligation.

As of September 30, 2024, we had one outstanding Equipment Note collateralized by equipment and vehicles owned by us.

As of December 31, 2023, we had two outstanding Equipment Notes collateralized by equipment and vehicles owned by us.

As of September 30, 2024 and December 31, 2023, we also had one other equipment note outstanding collateralized by a vehicle owned by us.

The outstanding balance of all equipment notes was $16.0 million as of September 30, 2024 and $23.0 million as of December 31, 2023.

As of September 30, 2024, we had outstanding short-term and long-term equipment notes of approximately $4.4 million and $11.6 million, respectively.

As of March 31, 2025 and December 31, 2024, we had one outstanding Equipment Note collateralized by equipment and vehicles owned by us.

As of March 31, 2025 and December 31, 2024, we also had one other equipment note outstanding collateralized by a vehicle owned by us.

The outstanding balance of all equipment notes was $13.8 million as of March 31, 2025 and $16.0 million as of December 31, 2024.

As of March 31, 2025, we had outstanding short-term and long-term equipment notes of approximately $4.5 million and $9.4 million, respectively.

As of December 31, 2024, we had outstanding short-term and long-term equipment notes of approximately $4.4 million and $11.6 million, respectively.

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These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them.

The Company’s leases have remaining terms ranging from one to nine years, some of which may include options to extend the leases for up to ten years, and some of which may include options to terminate the leases within one year.

The Company’s leases have remaining terms ranging from less than one to nine years, some of which may include options to extend the leases for up to ten years, and some of which may include options to terminate the leases within one year.

Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements.

The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive.

The outstanding balance of operating lease obligations was $40.6 million as of September 30, 2024, consisting of short-term and long-term operating lease obligations of approximately $11.1 million and $29.5 million, respectively.

The outstanding balance of operating lease obligations was $42.3 million as of March 31, 2025, consisting of short-term and long-term operating lease obligations of approximately $12.2 million and $30.1 million, respectively.

The outstanding balance of operating lease obligations was $42.6 million as of December 31, 2024, consisting of short-term and long-term operating lease obligations of approximately $12.1 million and $30.5 million, respectively.

The outstanding balance of finance lease obligations was $3.5 million as of September 30, 2024, consisting of short-term and long-term finance lease obligations of approximately $1.2 million and $2.3 million, respectively.

The outstanding balance of finance lease obligations was $2.6 million as of March 31, 2025, consisting of short-term and long-term finance lease obligations of approximately $0.9 million and $1.7 million, respectively.

As of December 31, 2024, we had $3.0 million outstanding finance lease obligations, consisting of short-term and long-term finance lease obligations of approximately $1.1 million and $1.9 million, respectively.

Purchase Commitments for Construction Equipment

As of September 30, 2024, we had approximately $5.5 million in outstanding purchase obligations for certain construction equipment to be paid with cash outlays scheduled to occur in 2024 and 2025.

As of March 31, 2025, we had approximately $14.2 million in outstanding purchase obligations for certain construction equipment to be paid with cash outlays scheduled to occur in 2025.

Performance and Payment Bonds and Parent Guarantees

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We believe that it is unlikely that we will have to fund significant claims under our surety arrangements.

As of September 30, 2024, an aggregate of approximately $2.83 billion in original face amount of bonds issued by our sureties were outstanding.

Our estimated remaining cost to complete these bonded projects was approximately $741.6 million as of September 30, 2024.

As of March 31, 2025, an aggregate of approximately $2.40 billion in original face amount of bonds issued by our sureties were outstanding.

Our estimated remaining cost to complete these bonded projects was approximately $684.2 million as of March 31, 2025.

From time to time, we guarantee the obligations of our wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses.

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Under certain circumstances such as foreclosures or negotiated settlements, we may take title to the underlying assets in lieu of cash in settlement of receivables.

As of September 30, 2024 and 2023, none of our customers individually exceeded 10% of consolidated accounts receivable.

As of March 31, 2025 and 2024, none of our customers individually exceeded 10% of consolidated accounts receivable.

Management believes the terms and conditions in its contracts, billing and collection policies are adequate to minimize the potential credit risk.

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• Our industry is highly competitive.

• Negative economic and market conditions including tariffs on materials, interest rates and recessionary conditions have in the past and may in the future adversely impact our customers’ spending and, as a result, our operations and growth.

• Negative economic and market conditions including tariffs and inflation on materials, interest rates and recessionary conditions have in the past and may in the future adversely impact our customers’ spending and, as a result, our operations and growth.

• We may be unsuccessful in generating internal growth, which could impact the projects available to the Company.

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• Risks associated with operating in the Canadian market could impact our profitability.

• Changes in tax laws or our interpretations of tax laws could materially impact our income tax liabilities.

• Changes in tax laws or our interpretations of tax laws could materially impact our tax liabilities.

• The nature of our business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.

• Pandemic outbreaks of disease, such as the COVID-19 pandemic, have in the past had and may in the future have an adverse impact on our business, employees, liquidity, financial condition, results of operations and cash flows.

• Our dependence on suppliers, subcontractors and equipment manufacturers has in the past and may in the future expose us to the risk of loss in our operations.

• Our dependence on customers, suppliers, subcontractors and equipment manufacturers has in the past and may in the future expose us to the risk of loss in our operations.

• Our participation in joint ventures and other projects with third parties may expose us to liability for failures of our partners.

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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