What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2025-01-31 · 201 added, 133 removed, 309 unchanged (52% of the section changed)

31 unchanged sentences

The following table presents the percentage of our revenue by client sector:

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Client Sector

4 unchanged sentences

International (2)

37.1 39.6 35.4 39.1

Total 100.0 % 100.0 % 100.0 % 100.0 %

2 unchanged sentences

(2) Includes revenue generated from non-U.S.

clien ts, primarily in United Kingdom, Australia and Canada.

clien ts, primarily in Australia, Canada, and the United Kingdom.

We manage our operations under two reportable segments:

Our Government Services Group reportable segment primarily includes activities with U.S.

government clients (federal, state and local) and all activities with development agencies worldwide.

Our Commercial/International Services Group reportable segment primarily includes activities with U.S.

commercial clients and international clients other than development agencies.

Government Services Group reportable segment and Commercial/International Services Group reportable segment.

Government Services Group ( “ GSG ” ).

9 unchanged sentences

commercial clients, and international clients inclusive of the commercial and government sectors.

CIG supports commercial clients worldwide in renewable energy, industrial, high performance buildings and aerospace markets.

CIG supports commercial clients worldwide in energy, industrial, high performance buildings and aerospace markets.

CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom and South America (primarily Brazil).

The following table presents the percentage of our revenue by reportable segment:

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Reportable Segment

6 unchanged sentences

The following table presents the percentage of our revenue by contract type:

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Contract Type

5 unchanged sentences

Under time-and-materials contracts, we are paid for labor at negotiated hourly billing rates and paid for other expenses.

Under cost-plus contracts, some of which are subject to a contract ceiling amount, we are reimbursed for allowable cost s plus fees, which may be fixed or performance-based.

Under cost-plus contracts, some of which are subject to a contract ceiling amount, we are reimbursed

for allowable cost s plus fees, which may be fixed or performance-based.

Profitability on these contracts is driven by billable headcount and our cost control.

27 unchanged sentences

All acquisitions require the approval of our Board of Directors.

In the second quarter of fiscal 2025, we acquired Carron + Walsh ("CAW"), based in the Republic of Ireland.

CAW delivers project and cost management solutions for large-scale commercial, life science, residential and infrastructure programs across Europe.

CAW is a financially immaterial acquisition and is included in our CIG segment.

In the second quarter of fiscal 2024, we acquired LS Technologies ("LST"), an innovative U.S.

11 unchanged sentences

OVERVIEW OF RESULTS AND BUSINESS TRENDS

In the first quarter of fiscal 2025, our revenue increased 15.7% com pared to the prior-year quarter reflecting increased activity across all of our client sectors, particularly the U.S.

federal and state and local government client sectors.

This revenue growth includes $31 million from our recent acquisitions, that did not have comparable revenue for the year-ago quarter.

Excluding the impact of these acquisitions, our revenue increased 13.1% compared to the first quarter of fiscal 2024.

The table below presents our revenue by client sector (amounts in thousands):

Three Months Ended

December 29, 2024 December 31, 2023 Change

For the first half of fiscal 2025, our 10.6% revenue growth was primarily due to increased activity in the U.S.

state and local and federal government client sectors.

The growth includes $39 million from our recent acquisitions, that did not have comparable revenue for the same period last year.

Excluding the impact of these acquisitions, our revenue increased 9.1% compared to the first half of fiscal 2024.

The t able below presents our revenue by client sector (amounts in thousands):

Six Months Ended

March 30, 2025 March 31, 2024 Change

Client Sector

11 unchanged sentences

Federal Government.

Three Months Ended

December 29, 2024 December 31, 2023 Change

Six Months Ended

March 30, 2025 March 31, 2024 Change

($ in thousands)

Revenue $ 915,270 $ 789,078 $ 126,192 16.0%

The 31.3% growth in U.S.

federal revenue primarily reflects increased international development and federal information technology system modernization activity.

The growth in our international development activity primarily relates to activity in Ukraine to support energy security and other humanitarian need s.

Our international development revenue increased approximately $95 million in the first quarter of fiscal 2025 compared to the same period last year.

The overall revenue growth also includes approximately $29 million of revenue from a recent acquisition that did not have comparable revenue for the prior-year quarter.

federal government revenue for the remainder of fiscal 2025 is dependent upon the ultimate direction of the new U.S.

The 16.0% revenue growth in the U.S.

federal government sector primarily reflects increased international development, disaster response and federal information technology system modernization activity.

The growth in our international development activity primarily relates to activity in Ukraine to support energy security and other humanitarian needs.

Our international development revenue increased approximately $75 million in the first half of fiscal 2025 compared to the same period last year.

Additionally, our overall growth includes activities related to our disaster response programs for the Palisades and Eaton fires in Southern California, which occurred in early January 2025.

The revenue growth also includes approximately $35 million of revenue from a recent acquisition that did not have comparable revenue for the prior-year period.

On the day of his inauguration, January 20, 2025, President Trump signed Executive Order 14169, titled "Reevaluating and Realigning United States Foreign Aid", which initiated a 90-day pause on all U.S.

foreign development assistance programs to assess their alignment with U.S.

foreign policy objectives with few exemptions.

Following a six-week review, on February 27, 2025, U.S.

Secretary of State Rubio announced the cancellation of 83% of United States Agency for International Development ("USAID") programs, totaling approximately 5,200 contracts.

Subsequently, we were notified that virtually all of our contracts with USAID were terminated for convenience with immediate effect.

federal government revenue included $409.3 million for USAID in the first half of fiscal 2025 compared to $334.1 million in the same period last year.

federal government revenue for the remainder of fiscal 2025 is dependent upon the ultimate direction of the current U.S.

administration;

however, excluding USAID, we expect our U.S.

federal revenue to grow in the second half of fiscal 2025 compared to the same period of fiscal 2024.

State and Local Government.

Three Months Ended

December 29, 2024 December 31, 2023 Change

Six Months Ended

March 30, 2025 March 31, 2024 Change

($ in thousands)

Revenue $ 410,425 $ 298,476 $ 111,949 37.5%

state and local government revenue grew 34.5% compared to the fiscal 2024 quarter largely due to increased disaster response activity primarily related to Hurricanes Helene and Milton.

Excluding our disaster response work for the hurricanes, our U.S.

state and local government revenue increased 10.8% in the first quarter of fiscal 2025 compared to last year's first quarter.

Excluding the hurricane response activity, the growth was due to continued investment by our clients in clean drinking water.

state and local government revenue grew 37.5% compared to the first half of fiscal 2024 due to increased disaster response activity primarily related to Hurricanes Helene and Milton.

Excluding this disaster response work, our U.S.

state and local government revenue increased 15.6% in the first half of fiscal 2025 compared to fiscal 2024 first half;

was due to continued investment by our clients in clean drinking water.

Most of our work for the U.S.

state and local governments relates to critical water and environmental programs, which we expect to continue to grow for the remainder of fiscal 2025.

Three Months Ended

December 29, 2024 December 31, 2023 Change

Six Months Ended

March 30, 2025 March 31, 2024 Change

($ in thousands)

Revenue $ 444,676 $ 423,837 $ 20,839 4.9%

commercial revenue growth of 5.0% in the first quarter of fiscal 2025 was primarily due to increased activity for environmental services and high performance buildings.

commercial revenue growth of 4.9% in the first half of fiscal 2025 was primarily due to increased activity for environmental services.

We expect our revenue growth to continue in our U.S.

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International.

Three Months Ended

December 29, 2024 December 31, 2023 Change

Six Months Ended

March 30, 2025 March 31, 2024 Change

($ in thousands)

Revenue $ 972,303 $ 968,492 $ 3,811 0.4%

Our international revenue increased 2.0% compared to last year's first quarter primarily due to increased water consulting in the United Kingdom, partially offset by lower infrastructure work in Australia.

Our international revenue increased 0.4% compared to the first half of fiscal 2024.

On a constant currency basis, our international revenue increased 2.1% primarily due to increased planning and design activities in the United Kingdom, partially offset by lower infrastructure work in Australia.

We expect the growth in our international work to continue for the remainder of fiscal 2025, on a constant currency basis.

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Consolidated Results of Operations

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30, 2025 March 31, 2024 Change

($ in thousands, except per share data)

6 unchanged sentences

Selling, general and administrative expenses (84,094) (89,798) 5,704 6.4 (168,411) (169,251) 840 0.5

Legal contingency costs (115,000) — (115,000) NM

Legal contingency costs — — — NM (115,000) — (115,000) NM

Contingent consideration - fair value adjustments 1,931 (14) 1,945 NM 2,297 22 2,275 NM

Impairment of goodwill (92,416) — (92,416) NM (92,416) — (92,416) NM

Income from operations 39,603 117,683 (78,080) (66.3) 62,129 228,764 (166,635) (72.8)

14 unchanged sentences

NM = not meaningful

Our 15.7% revenue growth reflects increases in both of our reportable segments.

Our GSG segment's revenue and revenue, net of subcontractor costs, increased $176.7 million, or 30.7%, and $158.5 million, or 35.8%, respectively, in the first quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Our CIG segment's revenue increased $19.1 million, or 2.9%, and revenue, net of subcontractor costs, increased $23.7 million, or 4.1% in the first quarter of fiscal 2025 compared to the year-ago quarter.

The results for GSG and CIG segments are described below under "Government Services Group" and "Commercial/International Group", respectively.

Our revenue growth in the second quarter and first half of fiscal 2025 reflects increases in both of our reportable segments.

For the second quarter of fiscal 2025, our GSG segment's revenue and revenue, net of subcontractor costs, increased $64.3 million, or 10.8%, and $54.5 million, or 11.7%, respectively, compared to the same quarter last year.

Our CIG segment's revenue increased $7.7 million, or 1.1%, and revenue, net of subcontractor costs, decreased $3.4 million, or 0.6% in the second quarter of fiscal 2025 compared to the prior-year quarter.

For the first half of fiscal 2025, our GSG segment's revenue and revenue, net of subcontractor costs, increased $241.0 million, or 20.6%, and $212.9 million, or 23.4%, respectively, compared to the same period last year.

Our CIG segment's revenue and revenue, net of subcontractor costs, increased $26.8 million, or 2.0%, and $20.3 million, or 1.8%, respectively, compared to the fiscal 2024 period.

The second quarter and first half results for GSG and CIG segments are described below under "Government Services Group" and "Commercial/International Group", respectively.

The following table reconciles our reported results to non-U.S.

GAAP adjusted results.

For the first quarter of fiscal 2025, our adjusted results exclude a non-recurring charge of $115.0 million related to legal contingencies as described in Note 17, " Commitments and Contingencies " of the “Notes to Consolidated Financial Statements”.

We determined that there is no tax benefit for $31.3 million of the legal contingency charge.

The effective tax rate applied to the remaining $83.7 million adjustment to arrive at the adjusted EPS w as 25.0%.

For the second quarter and first half of fiscal 2025, our adjusted results exclude a non-cash goodwill impairment charge of $92.4 million related to our GDS reporting unit, which resulted from the aforementioned cancellation of USAID programs in the second quarter of fiscal 2025.

This charge is further described in Note 5 , " Goodwill and Intangible Assets " of the “Notes to Consolidated Financial Statements” .

Our adjusted results also exclude adjustments to contingent consideration liabilities for the second quarter and first half of fiscal 2025.

Additionally, for the first half of fiscal 2025, our adjusted results exclude a non-recurring charge of $115.0 million related to legal contingencies as described in Note 17, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statem ents”.

We determined that there is no tax benefit for $31.3 million of the legal contingency charge and $58.3 million of the goodwill impairment charge.

The effective tax rate applied to the remaining adjustments to arrive at the adjusted earnings per share ("EPS") was 25.0%.

We applied the relevant marginal statutory tax rate based on the nature of the adjustment and the tax jurisdiction in which it occurred.

Both EPS and adjusted EPS were calculated using the diluted weighted-average common shares outstanding for the respective periods as reflected in our consolidated statements of income.

Three Months Ended

2024 December 31,

Both EPS and adjusted EPS were calculated using the diluted weighted-average common shares outstanding for the respe ctive periods as reflected in our Consolidated Statements of Income.

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30, 2025 March 31, 2024 Change

($ in thousands, except per share data)

Income from operations $ 39,603 $ 117,683 $ (78,080) (66.3)% $ 62,129 $ 228,764 $ (166,635) (72.8)%

Legal contingency costs 115,000 — 115,000 NM

Legal contingency costs — — — NM 115,000 — 115,000 NM

Earn-out adjustments (1,931) 14 (1,945) NM (2,297) (22) (2,275) NM

Impairment of goodwill 92,416 — 92,416 NM 92,416 — 92,416 NM

Adjusted income from operations (1)

1 unchanged sentence

EPS $ 0.02 $ 0.28 $ (0.26) (92.9)% $ 0.02 $ 0.56 $ (0.54) (96.4)%

Legal contingency costs 0.35 — 0.35 NM

Legal contingency costs — — — NM 0.35 — 0.35 NM

Impairment of goodwill 0.31 — 0.31 NM 0.31 — 0.31 NM

Adjusted EPS (1)

2 unchanged sentences

(1) Non-GAAP financial measure

Our operating income for the first quarter of fiscal 2025 includes a non-recurring charge of $115.0 million related to legal contingencies .

Excluding this non-recurring charge , our adjusted operating income increased $26.4 million, or 23.8% in the first quarter of fiscal 2025 compared to the prior-year quarter.

Excluding the non-recurring charges and the earn-out gains, our adjusted operating income increased $12.4 million, or 10.5% in the second quarter of fiscal 2025 and $38.5 million, or 16.8%, in the first half of fiscal 2025 compared to the same periods last year.

The increase reflects improved results in both of our reportable segments, which are described below under "Government Services Group" and "Commercial/International Group", respectively.

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30,

2025 March 31,

($ in thousands)

Net interest expense $ 8,491 $ 9,883 $ (1,392) (14.1)% $ 15,709 $ 19,461 $ (3,752) (19.3)%

Net interest expense decreased due to lower average borrowings and interest rates compared to the first quarter of fiscal 2024.

Three Months Ended

2024 December 31,

Net interest expense decreased in the second quarter and first half of fiscal 2025, due to lower average borrowings and interest rates compared to the same periods in fiscal 2024.

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30,

2025 March 31,

($ in thousands)

Income tax expense $ 25,700 $ 31,341 $ (5,641) (18.0)% $ 40,230 $ 57,864 $ (17,634) (30.5)%

The effective tax rates for the first quarters of fiscal 2025 and 2024 were 94.9% and 26.1%, respectively.

In the first quarter of fiscal 2025, we recognized a $115 million non-recurring charge related to legal contingencies as described in Note 17, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statements”.

We also determined that $31.3 million of this charge is not tax deductible, which increased our effective tax rate this quarter.

Excluding the impact of the legal contingency charge, our effective tax rate was 27.2% for the first quarter of fiscal 2025.

In December 2021, the Organisation for Economic Cooperation and Development ("OECD") released Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each jurisdiction in which they operate.

The effective tax rates for the first halves of fiscal 2025 and 2024 were 86.7% and 27.6%, respectively.

Income tax expense was reduced by $1.0 million and $1.9 million of excess tax benefits on share-based payments in the first halves of fiscal 2025 and 2024, respectively.

In addition, in the first half of fiscal 2025, we recognized a $92.4 million goodwill impairment as described in Note 5, “Goodwill and Intangible Assets” of the “Notes to Consolidated Financial Statements”.

We determined that $58.3 million of goodwill impairment is not deductible for income tax purposes.

We also recognized a $115.0 million non-recurring charge related to legal contingencies as described in Note 17, " Commitments and Contingencies " of the “Notes to Consolidated Financial Statements”.

We determined that $31.3 million of this charge is not tax deductible.

Furthermore, income tax expense in the first half of fiscal 2024 (all in the second quarter) included $2.8 million of expense for the settlement of various tax positions that were under audit for fiscal years 2018 through 2021.

Excluding the impact of the excess tax benefits on share-based payments, the goodwill impairment and the legal contingency charge in the first half of fiscal 2025 and the settlement amounts in the first half of 2024, our effective tax rates in the first halves of fiscal 2025 and 2024 were 27.8% and 27.1%, respectively.

In December 2021, the Organisation for Economic Cooperation and Development released Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure large multinational enterprises pay a minimum 15% level of tax on the income arising in each jurisdiction in which they operate.

Several jurisdictions in which we operate have enacted these rules, which are effective for the first quarter of fiscal 2025.

3 unchanged sentences

Government Services Group

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30, 2025 March 31,

($ in thousands)

5 unchanged sentences

(1) Non-GAAP financial measure

The revenue growth of 30.7% primarily reflects higher U.S.

federal government activities related to international development and U.S.

The revenue growth in the second quarter and first half of fiscal 2025 of 10.8% and of 20.6%, respectively, compared to the same periods last year primarily reflects higher U.S.

federal government activities related to international development and the previously described U.S.

state and local government activities related to disaster response.

The revenue growth in the first quarter of fiscal 2025 includes $87 million and $37 million increases in revenue from the aforementioned international development activities in Ukraine and hurricane disaster response activities, respectively, compared to the first quarter of fiscal 2024.

The revenue growth slowed in the second quarter of fiscal 2025 compared to the first quarter of this year due to the aforementioned cancellation of contracts with USAID.

Operating income increased primarily due to the aforementioned revenue growth.

Our operating margin, based on revenue, net of subcontractor costs, for the first quarter of fiscal 2025 was 13.9% compared to 14.3% for the same quarter last year.

The lower operating margin reflects the mix of revenue as this fiscal year's first quarter included a higher amount of international development activity, which operates at a lower margin compared to the other activities in the GSG segment.

Our operating margin, based on revenue, net of subcontractor costs, for the first half of fiscal 2025 was 13.8% compared to 14.0% in the first half of fiscal 2024.

The lower operating margin reflects the mix of revenue as this fiscal year's first half included a higher amount of international development activity, which operates at a lower margin compared to the other activities in the GSG segment.

Commercial/International Group

Three Months Ended

2024 December 31,

Three Months Ended Six Months Ended

2025 March 31,

2024 Change March 30, 2025 March 31,

($ in thousands)

5 unchanged sentences

(1) Non-GAAP financial measure

The revenue growth of 2.9% primarily reflects increased activities for water consulting services in the United Kingdom and for high performance buildings.

These revenue increases were partially offset by a revenue decrease due to completion of a large infrastructure project for an international government client.

The revenue growth in the second quarter and first half of fiscal 2025 of 1.1% and 2.0%, respectively, compared to the same periods last year primarily reflects increased planning and design activities in the United Kingdom, partially offset by lower infrastructure activities in Australia and foreign currency exchange rates.

On a constant currency basis, our revenue growth in the second quarter and first half of fiscal 2025 was 3.6% and 3.2%, respectively, compared to the same periods of fiscal 2024.

Our operating income increased due to the aforementioned revenue growth.

Our operating margin, based on revenue, net of subcontractor costs, for the first quarter of fiscal 2025 was 13.0% compared to 12.5% for the fiscal 2024 q uarter.

Our operating margin, based on revenue, net of subcontractor costs, for the first half of fiscal 2025 was 13.1% compared to 12.7% for the fiscal 2024 period.

The improved operating margin was primarily due to our continued focus on high-end consulting services and improved project execution.

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Specifically, our backlog does not consider the potential impact of termination for convenience clauses within the contracts.

The contract term and thus remaining performance obligation on certain of our operations and maintenance contracts,

are limited to the notice period required for contract termination (usually 30, 60, or 90 day s).

The differences between our backlog and RUPO at December 29, 2024 and September 29, 2024 were immaterial (see the table below):

The contract term and thus remaining performance obligation on certain of our operations and maintenance contracts, are limited to the notice period required for contract termination (usually 30, 60, or 90 day s).

The differences between our backlog and RUPO at March 30, 2025 and September 29, 2024 were immaterial (see the table below):

2025 September 29,

2 unchanged sentences

Backlog 4,306 5,376

At March 30, 2025, our backlog decreased $1.07 billion, or 19.9%, compared to fiscal 2024 year-end primarily due to the aforementioned cancellation of USAID contracts.

Financial Condition, Liquidity and Capital Resources

Capital Requirements.

At December 29, 2024, we h ad $248.1 million of cash and cash equivalents and access to an additional $724.3 million of borrowings available under our credit facility.

During the first quarter of fiscal 2025, we generated $13.1 million of cash from operations.

At March 30, 2025, we h ad $179.4 million of cash and cash equivalents and access to an additional $599.3 million of borrowings available under our credit facility.

During the first half of fiscal 2025, we generated $7.2 million of cash from operations.

Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities.

5 unchanged sentences

Cash and cash equivalents $ 179,433 $ 232,689 $ (53,256) (22.9) %

Three Months Ended

2024 December 31,

Six Months Ended

2025 March 31,

Net cash provided by (used in):

3 unchanged sentences

Effect of exchange rate changes (10,291) 2,810 (13,101) (466.2)

Net increase in cash and cash equivalents $ 15,415 $ 29,858 $ (14,443) (48.4) %

Net increase (decrease) in cash $ (53,256) $ 41,463 $ (94,719) (228.4) %

Operating Activities .

Our cash from operations increased $3.8 million compared to the prior-year quarter primarily due to higher earnings, excluding the aforementioned legal contingency charge that was accrued (non-cash) in the current quarter.

For the first half of fiscal 2025, our cash flows from operating activities decreased due to the timing on cash collections on USAID programs and additional working capital required to support our business growth.

This decrease also reflects a $57 million payment for the aforementioned legal contingency in the second quarter of fiscal 2025.

Investing Activities .

Our cash flows from investing activities for the first quarters of fiscal year 2025 and 2024 reflect capital expenditures of $3.4 million for each period.

Our cash used in investing activities for the first half of fiscal 2025 includes net payments of $6 million for the CAW acquisition, compared to $72 million for the LST acquisition completed in the second quarter of fiscal 2024.

Financing Activities .

Net cash provided by financing activities of approximately $19 million in the first quarter of fiscal 2025 was substantially the same as the prior-year first quarter.

However, our net borrowings increased $10 million in this year's first quarter to partially fund the $25 million share repurchases as our share repurchase program was reactivated this quarter.

Our financing activities in the fiscal 2024 first quarter included contingent earn-out payments of $18.9 million compared to essentially none this quarter.

In the first half of fiscal 2025, our cash used from financing activities reflects the $175 million share repurchases as our share repurchase program was reactivated this fiscal year.

These share repurchases were partially funded by our net borrowings, which increased $130 million in the first half of fiscal 2025 compared to the same period in the prior year.

Debt Financing.

On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement that provides for an additional $500 million senior secured term loan facility (the "New Term Loan Facility") increasing our total borrowing capacity to $1.55 billion.

On January 23, 2023, we drew the entire amount of the New Term Loan Facility to partially finance the RPS acquisition.

The New Term Loan Facility is not subject to any amortization payments of principal and matures in January 2026 .

On February 18, 2022, we entered into Amendment No.

2 to our Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.05 billion that will mature in February 2027.

The Amended Credit Agreement is a $750 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”) and a $500 million revolving credit facility (the “Amended Revolving Credit Facility”).

In addition, the Amended Credit Agreement includes a $300 million accordion feature that allows us to increase the Amended Credit Agreement to $1.05 billion subject to lender approval.

The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated as of July 30, 2018;

2 to our Second Amended and Restated Credit Agreement (“Second Amended Credit Agreement”) with a total borrowing capacity of $1.05 billion that will mature in February 2027.

The Second Amended Credit Agreement is a $750 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”) and a $500 million revolving credit facility (the “Amended Revolving Credit Facility”).

In addition, the Second Amended Credit Agreement includes a $300 million accordion feature that allows us to increase the Second Amended Credit Agreement to $1.05 billion subject to lender approval.

The Second Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated as of July 30, 2018;

(ii) finance open market repurchases of common stock, acquisitions and cash dividends and distributions;

and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.

The Amended Credit Agreement provides for a reduction in the interest grid for meeting certain sustainability targets related to the (i) reduction of greenhouse gas emissions through the Company’s projects and operational sustainability initiatives and (ii) improvement of peoples’ lives as a result of the Company’s projects that provide environmental, social and governance benefits.

The Second Amended Credit Agreement provides for a reduction in the interest grid for meeting certain sustainability targets related to the (i) reduction of greenhouse gas emissions through the Company’s projects and operational sustainability initiatives and (ii) improvement of peoples’ lives as a result of the Company’s projects that provide environmental, social and governance benefits.

The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans and a $300 million sublimit for multicurrency borrowings and letters of credit.

5 unchanged sentences

The Amended Term Loan Facility is subject to the same interest rate provisions.

The Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations .

The Second Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations .

In fiscal 2023, we repaid the Amended Term Loan Facility in full from the Convertible Notes proceeds.

On August 22, 2023, we issued $575.0 million in the Convertible Notes that bear interest at 2.25% per annum payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024 with a maturity date of August 15, 2028.

On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement (“Third Amended Credit Agreement”) that provides for an additional $500 million senior secured term loan facility (the "New Term Loan Facility") increasing our total borrowing capacity to $1 .55 billion.

On January 23, 2023, we drew the entire amount of the New Term Loan Facility to partially finance the RPS acquisition.

The New Term Loan Facility is not subject to any amortization payments of principal and matures in January 2026.

On August 22, 2023, we issued $575.0 million in Convertible Notes that bear interest at 2.25% per annum payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024 with a maturity date of

August 15, 2028.

The net proceeds from the Convertible Notes were $560.5 million, $51.8 million of which were used to purchase related capped call transactions on the issue date.

1 unchanged sentence

See Note 15, "Long-Term Debt" of the "Notes to Consolidated Financial Statements" for further discussion.

At December 29, 2024, we had $325 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $250 million under the New Term Loan Facility and $75 million under the Amended Revolving Credit Facility.

For the first quarter of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the Amended Credit Agreement was 5.98%.

In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement.

At December 29, 2024, we had $424.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default.

The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.25 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement).

Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including t hose subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers.

At December 29, 2024, we were in compliance with these covenants with a consolidated leverage ratio of 1.77x and a consolidated interest coverage ratio of 12.33x.

In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.

At December 29, 2024, there were no borrowings un der these facilities, and the aggregate amount of standby letters of credit outstandin g was $40.2 million.

At December 29, 2024, we had no bank overdrafts related to our disbursement bank accounts.

At March 30, 2025, we had $450 million in outstanding borrowings under the Third Amended Credit Agreement, which consisted of $250 million under the New Term Loan Facility and $200 million under the Amended Revolving Credit Facility.

For the first half of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the Third Amended Credit Agreement was 5.78%.

In addition, we had $0.7 million in standby letters of credit under the Third Amended Credit Agreement.

At March 30, 2025, we had $299.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

The Third Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default.

The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.25 to 1.00 (total funded debt/EBITDA, as defined in the Third Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Third Amended Credit Agreement).

Our obligations under the Third Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Third Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers.

At March 30, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.63x and a consolidated interest coverage ratio of 15.81x.

In addition to the Third Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.

At March 30, 2025, there were no borrowings under these facilities, and the aggregate amount of standby letters of credit outstanding was $39.9 million.

At March 30, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Subsequent Event.

On May 5, 2025, we entered into a Fourth Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.5 billion that will mature in May 2030.

The Amended Credit Agreement is a $1.1 billion senior secured, five-year facility that provides for a $250 million 3-year term loan facility (the “3Y Term Loan Facility”), a $250 million 5-year term loan facility (“the 5Y Term Loan Facility”), and a $600 million revolving credit facility (the “New Am ended Revolving Credit Facility”).

In addition, the Amended Credit Agreement includes a $400 million accordion feature that allows us to increase the Amended Credit Agreement to $1.5 billion subject to lender approval.

The 3Y Term Loan Facility will not be subject to any scheduled amortization of principal.

The 5Y Term Loan Facility will be subject to quarterly amortization of principal, based upon the annual percentages of the original stated amount thereof (Year 1:

0.0%, Year 2:

0.0%, Year 3:

5.0%, Year 4:

10.0%, Year 5:

10.0%), with the first payment being due at the end of the first full fiscal quarter following the second anniversary of the Amendment Effective Date.

The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Third Amended Credit Agreement;

(ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions;

and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.

The Amended Credit Agreement provides for a reduction in the pricing levels of the Consolidated Leverage Ratio and the removal of the SOFR credit spread adjustment.

The New Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $400 million sublimit for multicurrency borrowings and letters of credit.

The entire 3Y Term Loan Facility and 5Y Term Loan Facility were drawn on May 5, 2025.

The proceeds from these term loans were used to pay down our New Term Loan Facility and the Amended Revolving Credit Facility in full on May 5, 2025.

We may borrow on the New Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S.

dollars (the highest of the U.S.

federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum).

In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly.

The 5Y Term Loan Facility is subject to the same interest rate provisions.

The 3Y Term Loan Facility is subject to a benchmark rate plus a margin that ranges from 0.875% to 1.625% per annum.

The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.

We believe our operations have not been, and, in the foreseeable future, are not expected to be, materially adversely affected by inflation or changing prices due to the average duration of our projects and our ability to negotiate prices as contracts end and new contracts begin.

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On October 5, 2021, our Board of Directors authorized a stock repurchase program under which we could repurchase up to $400 million of our common stock.

In the first quarter of fiscal 2025, we repurchased and settled 600,007 shares with an average price of $41.67 per share for a total cost of $25.0 million in the open market.

We did not repurchase any shares of our common stock in the first quarter of fiscal 2024.

At December 29, 2024, we had a remaining balance of $322.8 million under our stock repurchase program.

In the first half of fiscal 2025, we repurchased and settled 5,165,715 shares with an average price of $33.87 per share for a total cost of $175.0 million in the open market.

We did not repurchase any shares of our common stock in the first half of fiscal 2024.

At March 30, 2025, we had a remaining balance of $172.8 million under our stock repurchase program.

Our Board of Directors has authorized the following dividends in fiscal 2025:

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November 11, 2024 $ 0.058 November 27, 2024 $ 15,549 December 13, 2024

January 27, 2025 0.058 February 12, 2025 NA February 26, 2025

January 27, 2025 0.058 February 12, 2025 15,351 February 26, 2025

Subsequent E vents.

On January 27, 2025, our Board of Directors declared a quarterly cash dividend of $0.058 per share payable on February 26, 2025 to stockholders of record as of the close of business on February 12, 2 025.

On May 5, 2025, our Board of Directors declared a quarterly cash dividend of $0.065 per share payable on June 5, 2025 to stockholders of record as of the close of business on May 23, 2025.

On May 5, 2025, our Board of Directors also authorized an additional $500 million stock repurchase program.

We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjust the allowance, if necessary.

1 unchanged sentence

The ability or failure to achieve the forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets.

Based on future oper ating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months.

At December 29, 2024 and September 29, 2024, the liability for income taxes associated with uncertain tax positions w as $51.1 million and $50.1 million , respectively.

Based on future operating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months.

At March 30, 2025 and September 29, 2024, the liability for income taxes associated with uncertain tax positions was $52.2 million and $50.1 million, respectively.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may not significantly decrease within the next 12 months.

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We are required to reimburse the issuers of letters of credit and bank guarantees for any payments they make under the outstanding letters of credit or bank guarantees.

Our Amended Credit Agreement and additional letter of credit facilities cover the issu ance of our standby letters of credit and bank guarantees and are critical for our normal operations.

If we default on the A mended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit and bank guarantees would impair our ability to maintain normal operations.

At December 29, 2024, we had $0.7 million in standby letters of credit outstanding under our Amended Credit Agreement and $40.2 million in standby lett ers of credit outstanding under our additional letter of credit facilities.

Our Third Amended Credit Agreement and additional letter of credit facilities cover the issu ance of our standby letters of credit and bank guarantees and are critical for our normal operations.

If we default on the Third Amended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit and bank guarantees would impair our ability to maintain normal operations.

At March 30, 2025, we had $0.7 million in standby letters of credit outstanding under our Third Amended Credit Agreement and $39.9 million in standby letters of credit outstanding under our additional letter of credit facilities.

• From time to time, we provide guarantees and indemnifications related to our services.

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In the normal course of business, we have exposure to both interest rate risk and foreign currency transaction and translation risk, primarily related to the Canadian and Australian dollars, the Euro, and the British Pound.

We are exposed to interest rate risk under our Amended Credit Agreement.

We are exposed to interest rate risk under our Third Amended Credit Agreement.

We can borrow, at our option, under both the Amended Term Loan Facility and Amended Revolving Credit Facility.

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federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%) plus a margin that ranges from 0% to 0.875% per annum.

In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly.

In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterl y.

The Amended Term Loan Facility is subject to the same interest rate provisions.

Borrowings at the base rate have no design ated term and may be repaid without penalty any time prior to the Facility’s maturity date.

Borrowings at a SOFR rate have a term no le ss than 30 days and no greater than 180 days and may be prepaid without penalty.

Borrowings at the base rate have no designated term and may be repaid without penalty any time prior to the Facility’s maturity date.

Borrowings at a SOFR rate have a term no less than 30 days and no greater than 180 days and may be prepaid without penalty.

Typically, at the end of such term, such borrowings may be rolled over at our discretion into either a borrowing at the base rate or a borrowing at a SOFR rate with similar terms, not to exceed the maturity date of the Facility.

The Facility matures on February 18, 2027.

At December 29, 2024, we had $325 million in outstanding borrowings under the Amended Credit Agreement, which was consisted of $250 million under the New Term Loan Facility and $75 million under the Amended Revolving Credit Facility.

For the first quarter of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the Amended Credit Agreement was 5.98%.

For the first half of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the Third Amended Credit Agreement was 5.78%.

The majority of our transactions are in U.S.

3 unchanged sentences

We report our foreign currency gains and losses in “Selling, general and administrative expenses” on our consolidated statements of income.

The impact of the foreign currency gains and losses was immaterial for the first quarters of fiscal 2025 and 2024.

We have foreign currency exchange rate exposure in our results of operation s and equity primarily because of the currency translation related to our foreign subsidiaries where the local currency is the functional curre ncy.

For the first half of fiscal 2025, we reported $0.7 million of foreign currency loss.

The impact of the foreign currency gain and loss was immaterial for the first half of fiscal 2024.

We have foreign currency exchange rate exposure in our results of operations and equity primarily because of the currency translation related to our foreign subsidiaries where the local currency is the functional currency.

To the extent the U.S.

2 unchanged sentences

dollar weakens against foreign currencies.

For the first quarters of fiscal 2025 and 2024, 33.9% and 38.5% of our consolidated revenue, respectively, was generated by our international business.

For the first quarter of fiscal 2025, the effect of foreign exchange rate translation on our consolidated balance sheet was a decrease in equity of $108.8 million compared to an increase of $63.1 million in the prior-year period.

For the first halves of fiscal 2025 and 2024, 35.4% and 39.1% of our consolidated revenue, respectively, was generated by our international business.

For the first half of fiscal 2025, the effect of foreign exchange rate translation on our consolidated balance sheet was a decrease in equity of $74.3 million compared to an increase of $38.8 million in the prior-year period.

These amounts were recognized as adjustments to equity through other comprehensive income.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis