Everus Construction Group (ECG) risk factors, FY2025 10-K

Other

1. 01We operate in a highly competitive industry
2. 02We are exposed to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties
3. 03We may fail to adequately recover on contract change orders or claims which could negatively affect our business
4. 04Operating results may vary significantly from period to period
5. 05We may be unsuccessful at generating internal growth, which could adversely affect operations
6. 06Our operations may be negatively affected if we are unable to retain our current customers and obtain new customer contracts
7. 07The loss of, or reduction in business from, one or more significant customers could have a material adverse effect on our business73% rewritten
8. 08We 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 flows53% rewritten
9. 09Supply chain disruptions may adversely affect our operations
10. 10Volatility 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
11. 11We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters
12. 12A material portion of our business depends on our ability to provide surety bonds
13. 13Our business may be exposed to warranty claims
14. 14We may pursue acquisitions and other strategic transactions that could have a negative effect on our results of operations
15. 15Our participation in joint ventures may have a negative impact on our reputation, business operations, revenues, results of operations, liquidity and cash flows
16. 16Technology disruptions or cyberattacks could adversely impact our operations53% rewritten
17. 17adversely impact operations by imposing substantial capital expenditures, creating delays or outages, or experiencing difficulties transitioning to new systems. System disruptions, if not anticipated and appropriately mitigated, could adversely affect usNew
18. 18Artificial intelligence ("AI") technologies present a growing range of risks to our business. Threat actors are using AI to execute increasingly sophisticated fraud schemes as well as advanced cyber attacksNew
19. 19Our business is seasonal, which could adversely affect our operations, revenues and the timing of cash flows25% rewritten
20. 20Our operations could be adversely impacted by severe weather events as a result of climate change or otherwise
21. 21The insurance industry may be adversely affected by severe weather events that may impact availability of insurance coverage, insurance premiums and insurance policy terms
22. 22Pandemics, may have a negative impact on our business operations, revenues, results of operations, liquidity and cash flows
23. 23Economic volatility affects our operations, as well as the demand for our products and services
24. 24Our 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 effect on us
25. 25Our 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
26. 26We recognize revenue for the majority of construction projects based on estimates; therefore, variations of actual results from assumptions may reduce profitability
27. 27Our backlog may not accurately represent future revenue
28. 28Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could materially and adversely affect us
29. 29We are subject to capital market and interest rate risks
30. 30In 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
31. 31Our results of operations could be adversely affected as a result of goodwill and identifiable intangible asset impairments47% rewritten

Legal and Regulatory Risks

1. 32We may be negatively impacted by pending and/or future litigation, claims or investigations
2. 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 operations56% rewritten
3. 34There can be no assurance that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulationsNew
4. 35Changes in tax law may negatively affect our business
5. 36Our operations could be negatively impacted by import tariffs and/or other government mandates
6. 37Our 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. 38Our operations may be negatively affected if we are unable to obtain, develop and retain key personnel and skilled labor forces
2. 39Our unionized workforce may adversely affect operations31% rewritten
3. 40Increasing costs associated with health care plans and changes in employment laws or regulations may adversely affect our results of operations34% rewritten
4. 41We 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

Common Stock Risks

1. 42The trading market of our common stock has existed only for a limited period of time following the Separation and Distribution, and our stock price and trading volume may fluctuate significantly
2. 43If 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. 44Your percentage of ownership in us may be diluted in the future23% rewritten
4. 45Provisions 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 stock70% rewritten
5. 46We cannot guarantee the timing, declaration, amount or payment of dividends, if any, on our common stock77% rewritten
6. 47We have limited history of operating as an independent, public company and our historical financial information prior to the Separation 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 results46% rewritten
7. 48U.S. federal income tax consequences may restrict our ability to engage in certain desirable strategic or capital-raising transactions after the Separation
8. 49As an independent, publicly traded company, we may not enjoy the same benefits that we did as a segment of MDU Resources
9. 50We 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. 51We 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. 52Our 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. 53The agreements we entered into with MDU Resources may be amended upon mutual agreement between the parties
13. 54Certain members of management and directors hold our stock and stock in MDU Resources and may face actual or potential conflicts of interest