Everus Construction Group (ECG) risk factors, FY2024 10-K

Other

1. 01We operate in a highly competitive industry
2. 02Our business is seasonal, which could adversely affect our operations, revenues and the timing of cash flows
3. 03Operating results may vary significantly from period to period
4. 04We may be unsuccessful at generating internal growth, which could adversely affect operations
5. 05Our operations may be negatively affected if we are unable to retain our current customers and obtain new customer contracts
6. 06The loss of, or reduction in business from, certain significant customers could have a material adverse effect on our business
7. 07We currently generate, and expect to continue to generate, a significant portion of our revenues from fixed-price contracts. Our dependence upon fixed-price contracts could adversely affect our business, financial position, results of operations, and cash flows
8. 08Our participation in joint ventures may have a negative impact on our reputation, business operations, revenues, results of operations, liquidity and cash flows
9. 09A material portion of our business depends on our ability to provide surety bonds
10. 10Our backlog may not accurately represent future revenue
11. 11We may fail to adequately recover on contract change orders or claims which could negatively affect our business
12. 12Our business may be exposed to warranty claims
13. 13We are exposed to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties
14. 14We may pursue acquisitions and other strategic transactions that could have a negative effect on our results of operations
15. 15Supply chain disruptions may adversely affect our operations
16. 16Volatility in the prices or availability of certain materials and equipment used in our business and those of our customers, including as a result of inflation, geopolitical instability, and protectionist trade measures, could adversely affect our business, financial position, results of operations, and cash flows
17. 17Our operations could be adversely impacted by severe weather events as a result of climate change or otherwise
18. 18The insurance industry may be adversely affected by severe weather events that may impact availability of insurance coverage, insurance premiums and insurance policy terms
19. 19Technology disruptions or cyberattacks could adversely impact our operations
20. 20Pandemics, including COVID-19, may have a negative impact on our business operations, revenues, results of operations, liquidity and cash flows
21. 21We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters
22. 22Economic volatility affects our operations, as well as the demand for our products and services
23. 23We are subject to capital market and interest rate risks

Financial and Accounting Risks

1. 24Our financial results and projections are based upon estimates and assumptions that may cause our actual results to materially differ from such projections, which may adversely affect our future results of operations, cash flows and stock price
2. 25We recognize revenue for the majority of construction projects based on estimates; therefore, variations of actual results from assumptions may reduce profitability
3. 26Reductions in our credit ratings could increase financing costs
4. 27In connection with the Separation from MDU Resources, we incurred debt obligations that could adversely affect our business, our profitability and our ability to meet obligations
5. 28Our results of operations could be adversely affected as a result of goodwill and identifiable intangible asset impairments

Legal and Regulatory Risks

1. 29We may be negatively impacted by pending and/or future litigation, claims or investigations
2. 30Changes in tax law may negatively affect our business
3. 31Our operations could be negatively impacted by import tariffs and/or other government mandates
4. 32Our business is based in part on government-funded infrastructure projects and building activities, and any associated regulatory changes or requirements in these areas could have an adverse affect on us
5. 33If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business, financial condition and results of operations
6. 34Our operations are subject to environmental laws and regulations that may increase costs of operations, impact or limit business plans, or expose us to environmental liabilities

Human Capital and Labor Risks

1. 35Our operations may be negatively affected if we are unable to obtain, develop and retain key personnel and skilled labor forces
2. 36Our unionized workforce may adversely affect operations
3. 37We participate in multiemployer pension plans (“MEPPs”) for employees represented by certain unions. We are required to make contributions to these plans in amounts established under numerous collective bargaining agreements between the operating subsidiaries and those unions
4. 38Increasing costs associated with health care plans and changes in employment laws or regulations may adversely affect our results of operations
5. 39We have minimal history of operating as an independent, public company and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results
6. 40letter ruling and/or the opinion(s) of tax advisors, the IRS private letter ruling and/or the opinion(s) of tax advisors may be invalid and the conclusions reached therein could be jeopardized
7. 41U.S. federal income tax consequences may restrict our ability to engage in certain desirable strategic or capital-raising transactions after the Separation
8. 42As an independent, publicly traded company, we may not enjoy the same benefits that we did as a segment of MDU Resources
9. 43We may not achieve some or all of the expected benefits of the Separation, and the Separation may materially and adversely affect our financial position, results of operations and cash flows
10. 44We or MDU Resources may fail to perform under various transaction agreements that were executed as part of the Separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire
11. 45Our inability to resolve favorably any disputes that arise between us and MDU Resources with respect to our past and ongoing relationships may adversely affect our operating results
12. 46The agreements we entered into with MDU Resources may be amended upon mutual agreement between the parties
13. 47Certain members of management and directors hold our stock and stock in MDU Resources and may face actual or potential conflicts of interest
14. 48Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could materially and adversely affect us

Common Stock Risks

1. 49The trading market of our common stock has existed only for a minimal period of time following the Separation and Distribution, and our stock price and trading volume may fluctuate significantly
2. 50If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline
3. 51Your percentage of ownership in us may be diluted in the future
4. 52We cannot guarantee the timing, declaration, amount or payment of dividends, if any, on our common stock
5. 53Provisions in our certificate of incorporation and bylaws and Delaware law may prevent or delay an acquisition of us, which could decrease the trading price of our common stock
6. 54These and other provisions of our certificate of incorporation, bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on our business, financial condition and results of operations