Shimmick (SHIM) risk factors, FY2025 10-K

Risks Related to the Securities Markets and Ownership of Our Common Stock

1. 01our disclosure controls and procedures may not prevent or detect all errors or acts of fraud, and
2. 57Our controlling stockholder is able to exert substantial influence
3. 58Because we are relying on the exemptions from corporate governance requirements as a result of being a “controlled company” within the meaning of the Nasdaq listing standards, you do not have the same protections afforded to stockholders of companies that are subject to such requirementsNew
4. 59Future sales or other dilution of our equity could adversely affect the market price of our common stockNew
5. 60We do not anticipate paying any cash dividends in the foreseeable future. Therefore, if our share price does not appreciate, our investors may not experience gains and could potentially lose on their investment in our shares
6. 61Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
7. 62In addition, these provisions would apply even if we were to receive an offer that some stockholders may consider beneficial90% rewritten
8. 63of Delaware) will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or stockholdersNew
9. 64reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basisNew
10. 65Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
11. 66exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved

Risks Related to Our Projects

1. 02If we are unable to accurately estimate the overall risks, requirements or costs when we bid on or negotiate a contract that is ultimately awarded to us, we may achieve a lower than anticipated profit or incur a loss on the contract
2. 03mechanical problems with our machinery or equipment
3. 04Our customers may be adversely affected by market conditions and economic downturns, which could impair their ability to pay for our services23% rewritten
4. 05Many of our customers are regulated by federal, state and local government agencies, and the addition of new regulations or changes to existing regulations may adversely impact the demand and profitability of our services25% rewritten
5. 06Our business depends on our ability to qualify as an eligible bidder under federal, state or local government contract criteria and to compete successfully against other qualified bidders in order to obtain federal, state or local government contracts
6. 07Government contracts generally are subject to a variety of governmental regulations, requirements and statutes, the violation or alleged violation of which could have a material adverse effect on our business44% rewritten
7. 08Government contractors are subject to suspension or debarment from government contracting
8. 09Our success depends on attracting and retaining qualified personnel, joint venture partners, advisors and subcontractors in a competitive environment83% rewritten
9. 10Our failure to meet the schedule or performance requirements of our contracts could adversely affect us
10. 11Adverse weather conditions may cause delays, which could slow completion of our contracts and negatively affect our revenue and cash flows
11. 12Design-build contracts subject us to the risk of design errors and omissions
12. 13If we are unable to attract and retain qualified managers and skilled employees or if we were to lose the benefit of the experience, efforts and abilities of one or more certain key personnel, we will be unable to operate efficiently, which could reduce our revenue, profitability and liquidity
13. 14Our failure to adequately collect for extra or change order work or recover on claims brought by us against customers or other project participants for additional contract costs could have a negative impact on our liquidity and future operations
14. 15Our operations are subject to hazards that may cause personal injury or property damage. Failure to maintain safe work sites could subject us to liabilities and possible losses, which may not be covered by insurance92% rewritten
15. 16We could incur material costs and losses as a result of claims that our materials do not meet regulatory requirements or contractual specifications
16. 17We may incur higher costs to lease, acquire and maintain equipment necessary for our operations, and the market value of our owned equipment may decline
17. 18Force majeure events, such as natural disasters, epidemics, pandemics and terrorists' actions, could negatively impact our business, which may affect our financial condition, results of operations or cash flows
18. 19We may choose, or be required, to pay our subcontractors even if our customers do not pay, or delay paying us for the related services
19. 20Our subcontractors may fail to satisfy their obligations to us or other parties, or we may be unable to maintain these relationships, either of which may have a material adverse effect on our business, financial condition, results of operations, profitability, cash flows and growth prospects

Risks Related to Our Business and Industry

1. 21Our business has been affected by numerous economic factors, including inflation, volatile financial markets, supply chain disruptions, evolving tariff and trade policies and shortages of materials and labor33% rewritten
2. 22An inability to obtain bonding could limit the aggregate dollar amount of contracts that we are able to pursue
3. 23Although the infrastructure market is relatively less susceptible to fluctuations in the market, economic downturns or reductions in government funding of infrastructure projects could reduce our revenue and profits and have a material adverse effect on our results of operations57% rewritten
4. 24We generate a significant portion of our revenue in California and adverse changes to the economy and business environment in the state has had an adverse effect on, and could continue to adversely affect, our operations, which could lead to lower revenue and reduced profitability42% rewritten
5. 25We work in a highly competitive marketplace
6. 26The cancellation of significant contracts or our disqualification from bidding for new contracts could reduce our revenue and profits and have a material adverse effect on our results of operations
7. 27We have a limited operating history as an independent company and have been historically dependent on our prior owner, AECOM
8. 28We may be required to make additional payments to our prior owner pursuant to contractual arrangements
9. 29If our prior owner defaults on its contractual obligations under agreements in which we are a beneficiary, our business could be materially and adversely impacted33% rewritten
10. 30Timing of the award and performance of new contracts could have an adverse effect on our results of operations and cash flows
11. 31Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures of our partners
12. 32Our dependence on a limited number of customers could adversely affect our business and results of operations
13. 33Strikes or work stoppages could have a negative impact on our operations and results
14. 34We rely on third-party subcontractors to perform some of the work on many of our contracts. We also rely on third-party suppliers to provide most of the materials (including aggregates, cement, asphalt, concrete, steel, pipe, oil and fuel) for our contracts
15. 35An inability to secure sufficient aggregates could have a negative impact on our future results of operations
16. 36Unavailability of insurance coverage could have a negative effect on our operations and results
17. 37Acquisition activity presents certain risks to our business, operations and financial condition, and we may not realize the financial and strategic goals contemplated at the time of a transaction
18. 38challenges in complying with newly applicable laws and regulations, including obtaining or retaining required approvals, licenses and permits
19. 39Amounts included in our backlog may not result in actual revenue or translate into profits. Our backlog is subject to cancellation and unexpected adjustments and therefore is an uncertain indicator of future results of operations
20. 40The method of recognizing revenue over time using an input method based on costs incurred relative to total expected costs involves significant estimates which may result in material adjustments, which could result in a charge against our earnings
21. 41We may be required to make significant future contributions to multiemployer pension plans in which we participate
22. 42We may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which could impair our ability to operate our business or achieve our growth objectives
23. 43We must manage our liquidity carefully to fund our working capital
24. 44the amounts owed to suppliers and subcontractors
25. 45Because our industry is capital-intensive and we have significant fixed and semi-fixed costs, our profitability is sensitive to changes in volume
26. 46We rely on IT systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations
27. 47Cybersecurity attacks on or breaches of our information technology environment could result in business interruptions, remediation costs and/or legal claims39% rewritten
28. 48Our business is seasonal and is affected by adverse weather conditions and the spending patterns of our customers, exposing us to variable quarterly results
29. 49Pandemics and public health emergencies could materially disrupt our business and negatively impact our results of operations, cash flows and financial condition

Risks Related to Legal and Governmental Regulation

1. 50Environmental laws and regulations and any changes to, or liabilities arising under, such laws and regulations could have a material adverse effect on our financial condition, results of operations and liquidity30% rewritten
2. 51Our failure to comply with the regulations of EPA, OSHA and state and local agencies that oversee safety compliance could adversely affect our business, financial condition, results of operations, profitability, cash flows and growth prospects
3. 52A change in tax laws or regulations of any federal or state jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our business, financial condition, results of operations and cash flows48% rewritten
4. 53From time to time, we are involved in litigation proceedings, potential liability claims and contract disputes which may reduce our profits
5. 54Although climate change and increasing regulations often drive demand for infrastructure, climate change, and related legislative and regulatory responses to climate change, may have a long-term impact on our business27% rewritten
6. 55Focus by stakeholders on policies and practices related to corporate responsibility could result in additional costs and could adversely impact our reputation, investor perception, employee retention and willingness of third parties to do business with us
7. 56Deterioration of the United States economy could have a material adverse effect on our business, financial condition and results of operations