What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-04 compared with 2025-03-06 · 108 added, 119 removed, 188 unchanged (55% of the section changed)

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See “Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K for additional discussion of some of these risks and uncertainties.

Unless the context requires otherwise, when we refer to “we,” “us” and “our,” we are describing Orion Group Holdings, Inc.

Unless the context requires otherwise, when we refer to the “Company,” “we,” “us” and “our,” we are describing Orion Group Holdings, Inc.

and its consolidated subsidiaries and affiliates.

Orion Group Holdings, Inc.

and subsidiaries (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine segment and our concrete segment.

Our marine segment provides construction and dredging services including marine transportation facility construction, marine pipeline construction, marine environmental structures construction, dredging of waterways, channels and ports, environmental dredging, design, and specialty services related to marine construction, fabrication, and dredging.

Our concrete segment provides turnkey concrete construction services including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.

We are headquartered in Houston, Texas with regional offices throughout our operating areas.

We are a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine segment and our concrete segment.

Our marine segment provides construction and dredging services, including marine transportation facility construction, marine pipeline construction, construction of marine environmental structures, dredging of waterways, channels, and ports, environmental dredging, engineering and design, and specialty services related to marine construction, fabrication, and dredging.

Our concrete segment provides turnkey concrete construction services, including concrete placement and finishing, site preparation, layout, forming, and rebar placement for large commercial, structural, and other concrete projects.

Our contracts are obtained primarily through competitive bidding in response to “requests for proposals” by federal, state and local agencies and through negotiation and competitive bidding with private parties and general contractors.

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We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past.

Recent Developments

JEM Acquisition

On February 3, 2026, we entered into a Securities Purchase Agreement (the “JEM Purchase Agreement”) and completed an acquisition (the “JEM Acquisition”) of all of the capital stock of J.E.

McAmis, Inc., a California corporation, and all of the membership interests in JEM Marine Leasing, LLC, a Washington limited liability company (collectively, “JEM”).

The purchase price consisted of:

(a) $50.0 million in cash, subject to adjustments pursuant to the purchase agreement;

a $12.0 million unsecured subordinated promissory note issued to the sellers;

and 182,392 shares of Orion’s common stock, and (b) contingent post-closing cash payments dependent upon project profit realized from contracts of JEM under backlog identified in the JEM Purchase Agreement.

The cash consideration and related expenses was funded with cash on hand and borrowings of approximately $46.9 million under the UMB Credit Agreement (as defined below).

JEM is engaged in the business of providing dredging, jetty and breakwater construction, environmental restoration and rehabilitation, and dam and spillway construction.

UMB Credit Agreement

On December 23, 2025, we entered into a five-year $120.0 million Credit Agreement (the “UMB Credit Agreement”) with certain financial institutions from time-to-time party thereto, as lenders, and UMB Bank, N.A., as administrative agent and issuing bank.

The UMB Credit Agreement consists of a $60.0 million revolving loan, a $20.0 million equipment term loan, and a $40.0 million acquisition term loan.

2025 Recap and 2026 Outlook

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$545 million of total revenue was attributable to our marine segment and the remaining $307 million to our concrete segment.

Our net loss was $1.6 million, as compared with net loss of $17.9 million in the prior year.

Our net income was $2.5 million, as compared with net loss of $1.6 million in the prior year.

In addition, we ended 2025 with a consolidated backlog of $640 million.

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Marine segment

Demand for our marine construction services continues, given our differentiated capabilities and service offering within the space.

We continue to see bid opportunities to help maintain and expand the infrastructure that facilitates the movement of goods and people on or over waterways.

Opportunities from local port authorities and private clients are expected to expand over the long-term due to the need to accommodate larger ships and deeper drafts because of the expanded Panama Canal.

In addition, the $1.2 trillion Infrastructure Investment and Jobs Act contains billions of dollars allocated to ports and water infrastructure, bridges, and causeways.

We believe our current equipment fleet will allow us to meet market demand for projects from both our public and private customers.

In the long-term, we see positive trends in demand for our services in our end markets, including:

● Continuing need to repair and improve degrading U.S.

Demand for our marine construction services remains strong, supported by our differentiated capabilities, specialized equipment fleet, and diversified service offerings within the marine construction industry.

We continue to pursue opportunities that support the maintenance, repair, and expansion of infrastructure that facilitates the movement of goods and people across waterways.

Long-term demand is driven by the expansion of the Panama Canal, the continued increase in the size of global shipping fleets, and the resulting need for U.S.

ports and private marine infrastructure owners to deepen channels, strengthen wharves, and modernize marine structures to accommodate larger vessels.

In addition to port and navigation-related work, demand for marine construction services continues to be supported by public-sector infrastructure investment, coastal restoration initiatives, and energy-related marine construction.

We believe our current equipment fleet and operating capabilities position us well to compete for and execute projects across both public and private end markets.

Over the long term, we expect favorable demand trends for our marine segment, driven by:

● Ongoing repair, rehabilitation, and modernization needs across aging U.S.

marine infrastructure;

● Navy infrastructure investments;

● Long-term demand from downstream energy-related companies will be driven by larger capital projects, as well as maintenance call-out work;

● Expected increases in cargo volume and future demands from larger ships transiting the Panama Canal will require ports along the Gulf Coast and Atlantic Seaboard to expand port infrastructure as well as perform additional dredging services;

● Possible work opportunities generated by the Water Resources Reform and Development Act (the “WRRDA Act”) authorizing expenditures for the conservation and development of the nation’s waterways as well as addressing funding deficiencies within the Harbor Maintenance Trust Fund;

● Renewed focus on coastal rehabilitation along the Gulf Coast, particularly through the use of RESTORE Act funds based on fines collected related to the 2010 Gulf of Mexico oil spill;

● Funding for highways and transportation under successor Acts to the Fixing America’s Surface Transportation Act;

● Nearly $7 billion of federal funding provided by the US Army Core of Engineers (“USACE”) in connection with disaster recovery in Texas;

● Opportunities related to the Infrastructure Investment and Jobs Act (“IIJA”).

● Continued investment in U.S.

Navy and other federal marine infrastructure;

● Sustained demand from downstream energy-related customers, including large capital projects and recurring maintenance work;

● Increases in cargo volumes and vessel sizes transiting the Panama Canal, requiring Gulf Coast and Atlantic Seaboard ports to expand infrastructure and perform additional dredging;

● Potential project opportunities resulting from the Water Resources Reform and Development Act (“WRRDA Act”), which authorizes funding for the development and maintenance of the nation’s waterways and addresses funding gaps in the Harbor Maintenance Trust Fund;

● A continued focus on coastal restoration and resilience projects along the Gulf Coast, including work funded through the RESTORE Act;

● Federal disaster recovery funding administered by the U.S.

Army Corps of Engineers (“USACE”), including approximately $7 billion allocated for projects in Texas.

Concrete segment

Demand for our concrete segment’s services continues, although timing of certain new project releases could be delayed as a result of inflation, interest rates, labor concerns, supply chain delays and macroeconomic impacts.

We currently see long-term demand for our concrete construction services in the Texas building sector as Texas’s major metropolitan areas,

and expanding suburbs continue to be leading locations for population and business growth.

Population growth throughout our markets continues to drive new distribution centers, education facilities, office expansion, retail and grocery establishments, new multi-family housing units, and structural towers for business, residential or mixed-use purposes.

The diversified Texas economy provides us with multiple sources of bid opportunities.

Additional demand for concrete services in our markets could be provided by work as part of the federal infrastructure bill.

In the long-term, we see positive trends in demands for our services in our end markets, including:

● Population growth in the state of Texas driven by corporate relocations;

● Continued investment in warehouse/distribution and data center space in our core markets;

● Geographic expansion outside of Texas;

● Potential opportunities related to the IIJA.

Demand for our concrete segment’s services remains steady, although the timing of certain project releases may be affected by inflationary pressures, interest rate uncertainty, labor availability, supply chain constraints, and broader macroeconomic conditions.

We continue to see favorable long-term demand fundamentals for our concrete construction services, supported by population growth, business expansion, and infrastructure investment across our core and expanding markets.

In Texas, major metropolitan areas and surrounding suburban corridors continue to experience strong population and commercial growth, supporting demand for warehouse and distribution facilities, education and institutional projects, office and retail development, grocery stores, multi-family housing, and structural concrete work for business, residential, and mixed-use developments.

Texas also continues to see growth in data center construction, supported by the availability of developable land and access to power and fiber infrastructure.

In addition, we are seeing increasing opportunities in other high-growth markets, including Florida, which supports our strategy to selectively expand our geographic footprint and diversify our revenue base.

Over the long term, we expect favorable demand trends for our concrete segment, driven by:

● Continued population growth in Texas and other high-growth states, supported by corporate relocations and in-migration;

● Ongoing investment in warehouse, distribution, and data center facilities across our core and expanding markets;

● Selective geographic expansion beyond Texas, including increased activity in Florida and other attractive regional markets.

Beginning in the first quarter of fiscal 2026,we will update our reportable segments to better align with how management evaluates performance and allocates resources.

Specifically, we will no longer allocate our corporate expenses to our operating segments.

Rather, corporate expenses will be reported as a separate non-operating segment.

Consolidated results of operations

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Given the typical duration of our contracts, which is generally less than a year, our backlog at any point in time usually represents only a portion of the revenue that we expect to realize during a twelve-month period.

We have not been adversely affected by contract cancellations or modifications in the past;

not been adversely affected by contract cancellations or modifications in the past;

however, we may be in the future, especially in periods of economic uncertainty.

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December 31, 2025

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2024

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Concrete segment

We are optimistic in our end-markets and in the opportunities that are emerging across our various marketplaces as evidenced by the $1.2 billion of quoted bids outstanding at quarter end.

Of this amount, approximately $248 million was either awarded to us and contracted, or awarded and pending contract, subsequent to December 31, 2024.

These estimates are subject to fluctuations based upon the scope of services to be provided, as well as factors affecting the time required to complete the project.

Backlog is not necessarily indicative of future results.

In addition to our backlog under contract, we also have a substantial number of projects in negotiation or pending award at any given time.

Delays in decisions on pending awards also have a negative impact on the timing and amount by which we are able to increase backlog.

Income statement comparisons

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Intangible asset impairment loss

Operating income (loss)

Operating income from operations

Other (expense) income:

Interest income

Interest expense

Loss on extinguishment of debt

Other expense, net

Loss before income tax expense

Income (loss) before income taxes

Income tax expense

Net income (loss)

Year ended December 31, 2025 compared with year ended December 31, 2024

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Contract revenues for the year ended December 31, 2025 of $852.3 million increased $55.9 million or 7% as compared to $796.4 million in the prior year period.

The increase was primar ily due to an increase in marine segment revenue related to the Pearl Harbor drydock project, partially offset by lower concrete segment revenue due to disciplined bidding standards to win quality work at attractive margins.

The increase was primar ily due to new awards and higher volume across the business.

Gross profit.

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Gross profit in the year ended December 31, 2025 was 12% of total contract revenues as compared to 11% in the prior year period.

The increase in gross profit dollars and margin was primarily driven by improved pricing of projects in both segments stemming from higher quality projects and improved execution.

The increase was primarily driven by strong project execution and increased utilization.

Selling, general and administrative expense.

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As a percentage of total contract revenues, SG&A expenses increased from 10% to 11%.

The increase in SG&A dollars and percentage reflect an increase in IT, compensation, business development spending, and higher legal costs related to pursuing project-related claims.

The increase in SG&A expense was primarily driven by spending to support business growth.

Gain on disposal of assets, net.

During the year ended December 31, 2025 and 2024 we realized $2.5 million and $2.9 million, respectively, of net gains on disposal of assets.

The year ended December 31, 2023, included a gain of $5.2 million related to the sale-leaseback of our Port Lavaca South Yard property in Texas.

Other Expense, net.

Other expense primarily reflects interest on our borrowings of $13.4 million and $11.7 million in the years ended December 31, 2024 and 2023, respectively, partially offset by interest income and non-operating gains or losses.

Other income, net of expense.

Other expense primarily reflects interest on our borrowings and expenses related to the extinguishment of debt, partially offset by interest income and non-operating gains or losses.

Income tax expense.

We recorded tax expense of $0.3 million in both the year ended December 31, 2024 and in the prior year period.

Our effective tax rate for the year ended December 31, 2024 was (26.9)%, which differs from the federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, the statue expiration of an uncertain tax position, state income taxes and the non-deductibility of other permanent items.

We recorded tax expense of $0.4 and $0.3 million in the years ending December 31, 2025 and 2024, respectively.

Year ended December 31, 2024 compared with year ended December 31, 2023

Contract revenues.

Contract revenues for the year ended December 31, 2023 of $711.8 million decreased $36.5 million or 4.9% as compared to $748.3 million in the prior year period.

The decrease was primarily due to weather and customer delays in both businesses in the first quarter of 2023 and a reduction of concrete segment revenue in central Texas, partially offset by an increase in marine revenue primarily related to the Pearl Harbor Project.

Contract revenues for the year ended December 31, 2024 of $796.4 million increased $84.6 million or 11.9% as compared to $711.8 million in the prior year period.

Gross profit.

Gross profit was $91.2 million for the year ended December 31, 2024 compared to $61.7 million in the prior year period, an increase of $29.5 million or 47.8%.

Gross profit was 8.7% of total contract revenues in the year ended December 31, 2023, compared to 6.8% in the prior year period.

The increase in gross profit dollars and margin was primarily due to actions to manage costs during project delays, including reallocating equipment, reducing the size of the fleet, headcount reductions, and realizing margin improvements in the concrete business that reflected our margin improvement initiatives.

Selling, General and Administrative Expenses.

Gross profit in the year ended December 31, 2024 was 11.4% of total contract revenues as compared to 8.7% in the prior year period.

The increase in gross profit dollars and margin was primarily driven by improved pricing of projects in both segments stemming from higher quality projects and improved execution.

Selling, general and administrative expense.

SG&A expenses were $82.5 million for the year ended December 31, 2024 compared to $69.4 million in the prior year period, an increase of $13.1 million or 18.9%.

As a percentage of total contract revenues, SG&A expenses increased from 8.4% to 9.8% for the year ended December 31, 2023 and December 31, 2022, respectively.

The increase in SG&A dollars and percentage was primarily due to the decrease in concrete segment revenue, an increase in bonus expense as a result of our strong performance relative to the budget and the addition of strategic new leadership positions in the year ended December 31, 2023, partially offset by lower consulting expense related to the completion of the management transition.

As a percentage of total contract revenues, SG&A expenses increased from 9.8% to 10.4%.

The increase in SG&A dollars and percentage reflect an increase in IT, compensation, business development spending, and higher legal costs related to pursuing project-related claims.

Gain on disposal of assets, net.

During the year ended December 31, 2024 and 2023 we realized $2.9 million and $8.5 million, respectively, of net gains on disposal of assets.

Included in the current year amount is a net gain of $5.2 million related to the sale-leaseback of our Port Lavaca South Yard property in Texas.

See Note 11 of the Notes to the Financial Statements in this Form 10-K for a further description of the sale of property.

Intangible Asset Impairment Loss.

During the year ended December 31, 2023, we recorded a $6.9 million intangible asset impairment loss due to our strategic decision to rebrand the concrete segment under the Orion banner.

The segment had previously operated under its prior name, TAS Concrete Construction, since its acquisition in 2015.

The rebranding reflects a strategic initiative to integrate our different service offerings under one banner to leverage Orion’s brand reputation and to deliver greater value and seamless execution for our customers.

See Note 8 of the Notes to the Financial Statements in this Form 10-K for a further discussion of the intangible asset impairment loss.

The year ended December 31, 2023 included a gain of $5.2 million related to the sale-leaseback of our Port Lavaca South Yard property in Texas.

Other expense, net.

Other expense, net primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.

Interest expense for the year ended December 31, 2023 of $11.7 million increased $7.2 million, as compared to $4.5 million in the prior year period.

This increase was primarily due to an increase in the weighted average interest rate from 6.23% in the prior year period to 12.00% in the current year period as a result of the terms of our new Credit Agreement with White Oak and an increase in the weighted average debt outstanding in the current year period as compared to the prior year period.

Income tax expense.

We recorded tax expense of $0.3 million in the year ended December 31, 2023, compared to tax expense of $0.4 million in the prior year period.

Our effective tax rate for the year ended December 31, 2023 was (1.9)%, which differs from the federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.

We recorded tax expense of $0.3 million in both the year ended December 31, 2024 and in the prior year period.

Segment results

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Revenues for our marine segment for the year ended December 31, 2025 were $544.8 million compared to $521.3 million for the year ended December 31, 2024, an increase of $23.5 million, or 5%.

The increase was primarily due to new awards and higher volume on our marine construction contracts.

Operating income for our marine segment for the year ended December 31, 2025 was $29.9 million, compared to $2.3 million for the year ended December 31, 2024, an increase in operating income of $27.6 million.

This increase in operating income was primarily driven by increased revenue, strong project execution, and favorable utilization .

Concrete Segment

Revenues for our concrete segment for the year ended December 31, 2025 were $307.4 million compared to $275.1 million for the year ended December 31, 2024, an increase of $32.3 million, or 12%.

The increase was primarily due to new awards and higher volume on our concrete contracts.

Operating loss for our concrete segment for the year ended December 31, 2025 was $15.3 million, compared to an operating income of $9.2 million for the year ended December 31, 2024, a decrease of $24.5 million.

The decrease was primarily driven by seasonal weather delays and favorable concrete project close-outs in 2024 that did not reoccur in 2025.

Year ended December 31, 2024 compared with year ended December 31, 2023

Marine Segment

Revenues for our marine segment for the year ended December 31, 2024 were $521.3 million compared to $395.9 million for the year ended December 31, 2023, an increase of $125.4 million, or 31.7%.

The increase was primarily related to the Pearl Harbor Project.

Operating income for our marine segment for the year ended December 31, 2024 was $2.3 million, compared to $3.7 million for the year ended December 31, 2023, a decrease in operating income of $1.4 million.

Adjusted for the gain on the Port Lavaca South Yard property sale-leaseback in Texas that occurred during the year ended December 31, 2023, operating loss for the year ended December 31, 2023 was $1.5 million.

Excluding the gain on the Port Lavaca South Yard property sale-leaseback in Texas that occurred during the year ended December 31, 2023, operating loss for the year ended December 31, 2023 was $1.5 million.

This $3.8 million increase in operating income was primarily due to margin improvements stemming from higher quality projects and improved execution.

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This increase was primarily due to winning higher margin jobs due to disciplined bidding standards and improved execution.

Year ended December 31, 2023 compared with year ended December 31, 2022

Marine Segment

Revenues for our marine segment for the year ended December 31, 2023 were $395.9 million compared to $339.2 million for the year ended December 31, 2022, an increase of $56.7 million, or 16.7%.

The increase was primarily related to the Pearl Harbor Project.

Operating income for our marine segment for the year ended December 31, 2023 was $3.7 million, compared to operating income of $9.8 million for the year ended December 31, 2022, a decrease of $6.1 million.

Adjusted for the $5.2 million gain on the Port Lavaca South Yard property sale-leaseback in Texas, operating loss for the year ended December 31, 2023 was $1.5 million or a decrease of $11.3 million.

This decrease in operating income was primarily due to lower equipment utilization, and higher SG&A in the current year.

Concrete Segment

Revenues for our concrete segment for the year ended December 31, 2023 were $315.9 million compared to $409.1 million for the year ended December 31, 2022, a decrease of $93.2 million, or 22.8%.

This decrease was primarily due to a reduction of revenue resulting from winding down operations in Central Texas.

Operating loss for our concrete segment for the year ended December 31, 2023 was $10.3 million, compared to $17.8 million for the year ended December 31, 2022, a decrease in operating loss of $7.5 million.

Adjusted for the $6.9 million intangible asset impairment loss on the TAS Commercial Concrete tradename, operating loss for the year ended December 31, 2023 was $3.4 million, or a decrease in operating loss of $14.4 million.

This decrease in operating loss was primarily due to lower indirect costs due to winding down operations in Central Texas.

Liquidity and capital resources

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As of December 31, 2025, we had unrestricted cash on hand of $1.6 million.

Our borrowing availability under our revolving portion of our Credit Agreement at December 31, 2024 was approximately $26.7 million.

Our borrowing availability under our revolving portion of our UMB Credit Agreement at December 31, 2025 was approximately $60.0 million.

Our primary liquidity needs are to finance our working capital and fund capital expenditures.

Historically, our source of liquidity has been cash provided by our operating activities, sale of underutilized assets, and borrowings under our credit facilities.

Historically, our sources of liquidity have been cash provided by our operating activities, sale of underutilized assets, borrowings under our credit facilities, and equity issuances.

The assessment of our liquidity requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate.

Significant assumptions used in our forecasted model of liquidity include forecasted sales, costs, and capital expenditures, as well as expected timing and proceeds of planned real estate transactions.

Recent Developments

On September 12, 2024, we completed the sale of 5,589,000 shares of common stock, including 729,000 shares of common stock pursuant to an option granted to the underwriters, in an underwritten public offering.

We received net proceeds of approximately $26.4 million, after deducting underwriting discounts and other estimated offering expenses payable by us.

The net proceeds were used for working capital and for general corporate purposes, including repayment of borrowings under the Credit Agreement.

As of December 31, 2025, management believes the Company will have adequate liquidity for its operations for at least the next 12 months.

In connection with the JEM Acquisition, we borrowed $46.9 million under the UMB Credit Agreement and issued a $12.0 million promissory note to the sellers.

The promissory note bears interest at an annual rate of 6.0%, with five equal payments of principal and interest on each anniversary of the closing of the Purchase Agreement.

The following table provides information regarding our cash flows and our capital expenditures for the years ending December 31, 2025, 2024 and 2023:

Net income (loss)

Adjustments to remove non-cash and non-operating items

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Cash flows (used in) provided by financing activities

Capital expenditures (included in investing activities above)

Capital expenditures (included in financing activities above)

Operating activities.

During 2025, we generated approximately $28.1 million from cash in our operating activities.

The net cash inflow is comprised of $43.9 million of cash inflows from net income, after adjusting for non-cash items, partially offset by $15.8 million of outflows related to changes in net working capital.

The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $67.1 million cash outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period, a $7.3 million decrease in operating lease liabilities, and a $3.7 million cash outflow related to an increase in prepaid expenses, partially offset by $55.1 million of cash inflows pursuant to the relative timing and significance of project progression and billings during the period and a $6.5 million inflow from landlord lease incentives received, primarily related to our corporate office consolidation.

During 2024, we generated approximately $12.7 million from cash in our operating activities.

The net cash inflow is comprised of $34.4 million of cash inflows from net income, after adjusting for non-cash items and $21.7 million of cash outflows related to changes in net working capital.

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The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $21.4 million inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities during the period, partially offset by a $11.3 million outflow pursuant to the relative timing and significance of project progression and billings during the period, a $6.8 million decrease in operating lease liabilities during the period, and $0.9 million of other cash outflows.

During 2022, we generated approximately $9.6 million in cash from our operating activities.

The net cash inflow is comprised of $14.8 million of cash inflows from net income, after adjusting for non-cash items and $5.2 million of cash outflows related to changes in net working capital.

The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $4.7 million decrease in operating lease liabilities during the period and a $4.7 million outflow pursuant to the relative timing and significance of project progression and billings during the period, partially offset by a $4.1 million inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities during the period and $0.1 million of other cash inflows.

Investing activities.

During the year ended December 31, 2025, we used approximately $13.7 million of cash in our investing activities.

Capital asset additions and betterments to our fleet were $38.9 million in 2025, as compared with $14.1 million and $8.9 million in 2024 and 2023, respectively.

Proceeds from the sale of property and equipment were $25.2 million in 2025, as compared with $2.6 million and $11.1 million in 2024 and 2023, respectively.

Included in the year ended December 31, 2023 is $8.1 million of proceeds related to the sale-leaseback of the Port Lavaca South Yard property in Texas.

Financing activities.

During the year ended December 31, 2025, we used approximately $39.4 million of cash in our financing activities.

We had borrowings and repayments of $185.5 million on the White Oak revolving credit line, repayments of $23.0 million on the White Oak term loan, payments on finance lease liabilities of $10.4 million, payments made on deemed financing obligations of $8.2 million, a $1.1 million make-whole payment on debt extinguishment and $1.6 million outflow related to loan costs related to the new UMB Credit Agreement.

These amounts were partially offset by an inflow of $4.5 million of proceeds from deemed financing obligation for build-to-suit equipment to be placed in service in 2026.

During the year ended December 31, 2024, we had proceeds from an offering of common stock of $26.4 million, borrowings and repayments of $72.6 million on the White Oak revolving credit line, repayments of $15.0 million on the White Oak term loan, payments on finance lease liabilities of $8.9 million, payments made on failed sale-leaseback arrangements of $5.8 million, $0.5 million of payments related to tax withholding for share-based compensation, repayments of $0.5 million on other debt, loan costs of $0.4 million and a cash inflow of $0.9 million for proceeds from the exercise of stock options.

During the year ended December 31, 2023, we had borrowings of $5.0 million from our prior credit agreement, $38.0 million from the term loan portion of our new Credit Agreement and borrowings of $64.0 million on the revolving credit line under our new Credit Agreement, repayments of $40.0 million on our prior credit agreement, repayments of $64.0 million on the revolving credit line under our new Credit Agreement, proceeds from failed sales-leasebacks of $14.7 million, proceeds of $2.4 million related to the Port Lavaca land sale-leaseback financing, loan costs of $6.5 million, payments on finance lease liabilities of $4.8 million and a cash outflow of $0.5 million for payments related to tax withholdings for share-based compensation.

During the year ended December 31, 2022, we drew down $24.0 million from our revolving line of credit under our prior credit agreement.

During the year ended December 31, 2022, we repaid $28.0 million on our revolving line of credit under our prior credit agreement, had payments of $3.0 million on finance lease liabilities and incurred $0.7 million of loan costs related to the ninth amendment to our prior credit agreement.

million on the revolving credit line under our new Credit Agreement, proceeds from failed sales-leasebacks of $14.7 million, proceeds of $2.4 million related to the Port Lavaca land sale-leaseback financing, loan costs of $6.5 million, payments on finance lease liabilities of $4.8 million and a cash outflow of $0.5 million for payments related to tax withholdings for share-based compensation.

Sources of capital

On May 15, 2023, we entered into a new three-year $103.0 million Credit Agreement with White Oak, which includes a $65.0 million asset based revolving credit line and a $38.0 million fixed asset term loan.

On December 23, 2025, we entered into the five-year $120 million UMB Credit Agreement, which includes a $60.0 million asset based revolving credit line, a $20.0 million equipment term loan, and a $40 million acquisition term loan.

The UMB Credit Agreement replaced our $103.0 million Credit Agreement with White Oak, which was a $65.0 million asset based revolving credit line and a $38.0 million fixed asset term loan.

Please s ee Note 9 of the Notes to the Consolidated Financial Statements for further discussion.

Amendment No.

6 to the Credit Agreement

Please see “Note 21 – Subsequent Event” in our audited consolidated financial statements for a detailed description of Amendment No.

6 to the Credit Agreement.

Bonding Capacity

We are often required to provide various types of surety bonds that provide additional security to our customers for our performance under certain government and private sector contracts.

Our ability to obtain surety bonds depends on our capitalization, working capital, past performance and external factors, including the capacity of the overall surety market.

At December 31, 2024, the capacity under our current bonding arrangement was at least $1.1 billion, with approximately $588 million of projects being bonded.

While we believe that our current bonding capacity is sufficient to satisfy current demand for our services, any new major project opportunities may require us to seek additional bonding capacity in the future.

We believe our balance sheet and working capital position will allow us to access additional bonding capacity as needed in the future.

Effect of inflation

We are subject to the effects of inflation through increases in the cost of raw materials, and other items such as fuel, concrete and steel.

Due to the relative short-term duration of our projects, we are generally able to include anticipated cost increases in the pricing of our bids.

Due to the relatively short-term duration of our projects, we are generally able to include anticipated cost increases in the pricing of our bids.

Off balance sheet arrangements

Currently our only off-balance sheet arrangements are those discussed above under “Bonding Capacity” and those which arise in the normal course of business.

Currently our only off-balance sheet arrangements are related to providing surety bonds on certain government and private sector contracts and those which arise in the normal course of business.

These arrangements are not reasonably likely to have an effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

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These estimates are subject to uncertainties and require judgment.

Estimates of contract costs include all direct costs, such as material and labor, and those indirect costs incurred that are related to contract performance such as payroll taxes and insurance.

Estimates of contract costs include all direct costs, such as material and

labor, and those indirect costs incurred that are related to contract performance such as payroll taxes and insurance.

General and administrative costs are charged to expense as incurred.

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Fixed assets are carried at cost and are depreciated over their estimated useful lives, ranging from one to 30 years, using the straight-line method for financial reporting purposes and accelerated methods for tax reporting purposes.

The carrying value of our long-lived assets is evaluated periodically based on utilization of the asset and physical condition of the asset, as well as the useful life of the

asset to determine if adjustment to the depreciation period or the carrying value is warranted.

The carrying value of our long-lived assets is evaluated periodically based on utilization of the asset and physical condition of the asset, as well as the useful life of the asset to determine if adjustment to the depreciation period or the carrying value is warranted.

If events and circumstances such as poor utilization or deteriorated physical condition indicate that the asset(s) should be reviewed for possible impairment, we use projections to assess whether future cash flows, including disposition, on a non-discounted basis related to the tested assets are likely to exceed the recorded carrying amount of those assets to determine if an impairment exists.

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The factors used to assess the likelihood of realization include our forecast of future taxable income exclusive of reversing temporary differences and carryforwards, future reversals of existing taxable temporary differences and available tax planning strategies that could be implemented to realize the net deferred tax assets.

We consider both positive and negative evidence when evaluating the need for a valuation allowance on our deferred tax assets in accordance with ASC 740.

We consider both positive and negative evidence when evaluating the need for a valuation allowance on our deferred tax assets in accordance with Accounting Standards Codification (“ASC”) 740.

Available evidence includes historical financial information supplemented by currently available information about future years.

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We consider cumulative losses in the most recent twelve quarters to be significant negative evidence that is difficult to overcome in considering whether a valuation allowance is required.

Conversely, we consider a cumulative income position over the most resent twelve quarters, to be significant positive evidence that a valuation allowance may not be required.

Conversely, we consider a cumulative

income position over the most resent twelve quarters, to be significant positive evidence that a valuation allowance may not be required.

Actual operating results and the underlying amount and category of income in future years could render current assumptions, judgments and estimates of recoverable net deferred taxes inaccurate, thus impacting our financial position and results of operations.

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Under the liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We account for uncertain tax positions in accordance with the provisions of the FASB’s ASC 740-10, which prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken, on our consolidated tax return.

We account for uncertain tax positions in accordance with the provisions of the Financial Accounting Standards Board’s ASC 740-10, which prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken, on our consolidated tax return.

We evaluate and record any uncertain tax positions based on the amount that management deems is more likely than not to be sustained upon ultimate settlement with the tax authorities in the tax jurisdictions in which we operate.

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