CTRI 10-K & 10-Q changes, risk factors and insider trading

•Our business could be negatively affected as a result of actionsaction of activist stockholders.

•We cannot be certain that an active trading market for our common stock will be sustained, and the stockThe price of our common stock may fluctuate significantly.

•Future distributions or sales by Southwestthe GasIcahn Holdings,Group, or sales by other holders of shares of our common stock, or the perception that such distributions and sales may occur, could cause the price of our common stock to decline, potentially materially.

Furthermore, part of our growth strategy is to expand into high-growth service lines. We intend to seek additional clean energy projects that include renewable natural gas, 5G datacom, wind and solar connections, and electric vehicle charging and battery storage related infrastructure. We may not be successful in obtaining new contracts to do this work, and we may expend significant resources exploring opportunities to do so and to prove our capabilities.

WeFrom intendtime to continuetime, towe expandperform furtherwork intowithin the clean energy infrastructure market. Our revenue from offshore wind is project driven which could be more volatile than the recurring maintenance and repair work we do for our utility customers. For example, we currently have an established framework agreement with notices to proceed for tier 1 supply of advance components to support offshore wind projects in the Northeast and Mid-Atlantic regions of the United States. We expect to recognize significant revenue from work under the framework agreement through the fiscal year ending December 28, 2025, but we can provide no assurances that we will continue to work under the contract beyond that time. While we expect the work under the framework agreement will provide us with opportunities to support the offshore wind build out in North America, the work we provide under this agreement is not part of our core business, and we can provide no assurances that we will achieve long-term benefits from this agreement beyond the work we are currently contracted to perform. In the fourth quarter of the fiscal year ended December 31, 2023, we received notice that a customer canceled an offshore wind project under the framework agreement, which contributed to us recognizing a $214.0 million goodwill impairment in the fiscal year ended December 31, 2023. In fiscal 2024, our offshore wind revenue decreased $114.4 million from the prior year due to the cancellation mentioned previously and substantial completion of other offshore wind projects. We can provide no assurances that there will not be future cancellations or delays of existing offshore wind projects. Further expansionExpansion into the clean energy infrastructure market has required, and further expansion will continue to require, additional capital expenditures or raise ourincreased operating costs. Currently, the development of offshore wind energy and other renewable energy facilities is dependent on the existence of renewable portfolio standards and other state incentives and requirements. Renewable portfolio standards are state-specific statutory provisions requiring or encouraging that electric utilities generate a certain amount of electricity from renewable energy sources. These standards have initiated significant growth in the renewable energy industry and potential demand for renewable energy infrastructure construction services. Elimination of, or changes to, existing renewable portfolio standards, tax credits or environmental policies may negatively affect future demand for our services related to renewable energy, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

As part of our growth strategy, we have and may continue to acquire companies that expand, complement or diversify our business. For example, we acquired Connect in 2025, Riggs Distler & Company, Inc. (“Riggs Distler”) in 2021, and Linetec Services, LLC (“Linetec”) in 2018 and New England Utility Constructors, Inc. (“Neuco”) in 2017.2018. We may be unsuccessful in completing acquisition opportunities that we pursue, which would cause us to incur pursuit costs without the commensurate benefit of completing the acquisition. Other interested parties may be more successful than us in executing and closing acquisitions in competitive auctions. Our ability to enter into and complete acquisitions may be restricted by, or subject to, various approvals under U.S., Canadian or other applicable law or may not otherwise be possible, may result in a possible dilutive issuance of our securities, or may require us to seek additional financing. Our ability to pursue certain acquisition transactions may be limited through the end of the two-year period following a Distribution, if effected, in order to help preserve tax-free treatment of such Distribution to Southwest Gas Holdings. The ability to pursue certain acquisitions is also presently limited by Southwest Gas Holdings’ approval rights under the Separation Agreement, which could result in us not pursuing one or more acquisitions that we believe are accretive to our business. Furthermore, completed acquisitions may expose us to operational challenges and risks, including, among others:

Despite these mitigation efforts, the constrained supply conditions may materially and adversely impact our business, financial condition, results of operations and cash flows. Weather-related events, changes in tariff-policyU.S. with the new administration,tariff-policy, inflationary pressure, a fluctuating labor market, and geopolitical instability, among others, have also contributed to and exacerbated this strain within and outside the United States, and there can be no assurance that these impacts on the supply chain will not continue, or worsen, in the future, negatively impacting any of our operating business lines and their results. The current supply chain challenges, including, for example, the recentimposition effortsof to imposeexpansive tariffs on imported goods from certain countries outside ofto the United States, could also result in increased use of cash, engineering design changes, and delays in the completion of projects, each of which could adversely impact our business and results of operations. In the event these supply chain challenges persist for the foreseeable future, these conditions could materially and adversely impact our results of operations and financial condition over an extended period.

Generally, our contracts provide that the customer is responsible for providing the materials for a given project, exposing them to market risk of increases in certain commodity prices of materials, such as copper and steel, which are supplies or materials components utilized in all of our operations. We and our customers are also exposed to the availability of these materials which have been impacted by the supply-chain disruptions arising from geopolitical instability, international sanctions, inflationary pressures, and regulatory slowdowns. In addition, our customers’ capital budgets may be impacted by the prices of certain materials, and reduced customer spending could lead to fewer project awards and more competition. These prices could be materially impacted by general market conditions, inflationary pressures, and other factors, including U.S. trade relationships with other countries or the imposition or future increase of tariffs. Additionally, some of our fixed- and unit-price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to such projects.

We are dependent upon the efforts of our key personnel, and our ability to retain them and hire other qualified employees. The loss of any of our executive officers, or other key personnel, such as our operations managers and the executive leadership teams of any of our operating subsidiaries, among other senior management members, could affect our ability to run our business effectively. Competition for senior management is intense, and we may not be able to adequately incentivize or retain our personnel. For example, we recently appointed a new Chief Executive Officer, who joined the Company on December 3, 2024. The loss of any key person requires the remaining key personnel to divert immediate and substantial attention to seeking a replacement, as well as to performing the departed person’s responsibilities until a replacement is found. If we fail to find a suitable replacement for any departing executive or senior officer on a timely basis, such departure could materially and adversely affect our ability to operate and grow our business.

Our business is capital intensive, and if we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital, and some of these activities could have terms that are unfavorable or could be highly dilutive. We will be required to amend our credit facility upon Southwest Gas Holdings ceasing to beneficially own at least 50% of the total voting power of our outstanding shares. Any such amendment may be costly and may require us to accept unfavorable terms. Furthermore, we may seek to fully refinance our credit facility rather than seeking an amendment. Our ability to obtain additional financing or to refinance our existing indebtedness will depend on the capital markets and our financial condition at such time and there can be no assurance that we will be able to refinance our indebtedness on favorable terms or at all. Any of the above factors could materially and adversely affect our results of operations, cash flows and liquidity.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, or to dispose of material assets or operations, alter our dividend policy (if we pay dividends), seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The instruments that will govern our indebtedness may restrict our ability to dispose of assets and may restrict the use of proceeds from those dispositions. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet debt service obligations when due. Our ability to engage in additional equity fundraising may be limited through the end of the two-year period following any Distribution, if effected, in order to help preserve tax-free treatment of such Distribution to Southwest Gas Holdings. Additionally, our ability to engage in equity fundraising is limited by Southwest Gas Holdings’ approval rights under the Separation Agreement, which may extend beyond two years.

We are currently subject to income and other taxes (including sales, excise, and value-added) in the United States and Canada. Thus, the tax treatment of our company is subject to changes in tax laws or regulations, tax treaties, or positions by the relevant authority regarding the application, administration, or interpretation of these tax laws and regulations. These factors, together with the ambiguity of tax laws and regulations, the subjectivity of factual interpretations, and uncertainties regarding the geographic mix of earnings in any period, can affect our estimates of our effective tax rate and income tax assets and liabilities, result in changes in our estimates and accruals, and have a material adverse effect on our business results, cash flows, or financial condition. We are unable to predict what tax reforms may be proposed or enacted in the future or what effect such changes would have on our business, but such changes could potentially result in higher tax expense and payments, along with increasing the complexity, burden, and cost of compliance. For example, on July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains numerous revisions to the Internal Revenue Code of 1986, as amended (the “Code”), such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027. The OBBBA did not have a material impact on our effective tax rate in 2025, and we do not expect it to have a material impact on our effective tax rate in 2026. While further evaluation is ongoing, the OBBBA is also not expected to have a material impact on our financial position or results of operations.

Additionally, inflationary pricing has had and may continue to have a negative effect on the construction costs necessary for us to complete projects, particularly with respect to fuel, labor, and subcontractor costs discussed above. We have and continue to experience pressures on fuel, materials, and certain labor costs as a result of the inflationary environment and current general labor shortage, which labor shortage has resulted in increased competition for skilled labor and wage inflation. We have not been able to (except in limited circumstances), and may not be able to, fully adjust contract pricing to compensate for these cost increases, which has adversely affected, and may continue to adversely affect, our profitability and cash flows. Inflationary pressures and related recessionary concerns in light of governmental and central bank efforts to mitigate inflation could also cause uncertainty for our customers and affect the level of their project activity, which could also adversely affect our profitability and cash flows.

In recent years, the Board of Governors of the United States Federal Reserve Bank (the “Federal Reserve”) has raised benchmark interest rates to combat continued inflation and may potentially continue to do so,so again in the future, which likely willwould cause our borrowing costs to increase over time. As a result of the inflationary factors discussed above affecting the Company, our business, financial condition, results of operations, cash flows, and liquidity could be materially and adversely affected over time.

There are numerous inherent risks in conducting our business in a different country including, but not limited to, potential instability in markets, political, economic or social conditions, and difficult or additional legal and regulatory requirements applicable to our operations. Limits on our ability to repatriate earnings, exchange controls, and complex U.S. and Canadian laws and treaties including laws related to the U.S. Foreign Corrupt Practices Act and similar laws could also adversely impact our operations. Changes in the value of the Canadian dollar could increase or decrease the U.S. dollar value of our profits earned or assets held in Canada or potentially limit our ability to reinvest earnings from our operations in Canada to fund the financing requirements of our operations in the United States. We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities. In addition, U.S. relations with the rest of the world, including Canada, remains uncertain with respect to taxes, trade policies and tariffs, especially as the political landscape changes due to the recent U.S. presidential and congressional elections.changes. Changes in U.S. administrative policy have led, and may leadcontinue to lead, to significant increases in tariffs for imported goods amongand other possibletrade changes.restrictions. InFor addition,example, Presidentin Donald2025, the Trump hasAdministration imposedannounced aadditional 10% tarifftariffs on imported goods from Chinaall countries pursuant to the International Emergency Economic Powers Act. These tariffs were later found to have exceeded presidential authority and haswere madeinvalidated effortsby the courts. Following such ruling, President Trump implemented a 150-day “global tariff” of 10% effective February 24, 2026, using presidential powers under the Trade Act of 1974, and indicated a desire to imposeincrease significantsuch tariffs onto imported15% goodsand fromto certainseek to extend such tariffs under other countries, including a 25% tariff on all goods entering the United States from Canada.statutes. The imposition of such tariffs may continue to strain international trade relations and increase the risk that foreign governmentsgovernments, such as Canada, implement retaliatory tariffs on goods imported from the United States. IfIn addition, the scope and durability of existing and future tariff onmeasures goodsremain from Canada is effected, Canada may impose retaliatory tariffs, which could adversely affect our Canadian operations.uncertain. These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably and could have a material adverse effect on our results.

Our customer contracts typically include a warranty for the services that we provide against certain defects in workmanship and material. Additionally, materials used in construction are often provided by the customer or are warranted against defects from the supplier. Certain projects have longer warranty periods and include facility performance warranties that may be broader than the warranties we generally provide. If warranty claims occur, it could require us to re-perform the services or to repair or replace the warranted item, at a cost to us, and could also result in other damages if we are not able to adequately satisfy our warranty obligations. In addition, we may be required under contractual arrangements with our customers to warrant any defects or failures in materials we provide that we purchase from third parties. While we generally require suppliers to provide us warranties that are consistent with those we provide to the customers, if any of these suppliers default on their warranty obligations to us, we may incur costs to repair or replace the defective materials for which we are not reimbursed. Warranty claims have historically not been material, but such claims could potentially increase. The costs associated with such warranties, including any warranty-related legal proceedings, could have a material adverse effect on our results of operations, cash flows and liquidity.

Current and potential legislative or regulatory actions may impact demand for our services, requiring utilities to meet reliability standards, and encourage installation of new electric transmission and distribution and renewable energy generation facilities. However, it is unclear whether these initiatives will create sufficient incentives for projects or result in increased demand for our services, or if these incentives will continue to exist under President Trump’s administration.services.

LegislativeFederal, state, and local legislative and regulatory proposals to address greenhouse gas emissions could result in a variety of regulatory programs, additional charges to fund energy efficiency activities, or other regulatory actions. Any of these actions could result in increased costs associated with our operations and impact the prices we charge our customers. If new regulations are adopted regulating greenhouse gas emissions from mobile sources such as cars and trucks, we could experience a significant increase in environmental compliance costs due to our large fleet. In addition, if our operations are perceived to result in high greenhouse gas emissions, our reputation could suffer. The future impact of these actions, and the new administration generally, on existing climate-related regulations cannot be predicted at this time.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and corresponding notes in Item 8 — Financial Statements and Supplementary Data within Part II of this Annual Report on Form 10-K. Unless the context otherwise requires, references to “we,” “is,” “our,” “the Company,” and “our company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. As discussed in “Note 1 — Description of Business” to the consolidated financial statements, all financial information presented herein is the financial information of Centuri Holdings, Inc. and its subsidiaries, including Centuri Group, Inc. (“the Operating Company”). This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A —1A. Risk Factors within part I of this Annual Report on Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements.”

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to monthsmonths, quarters and years throughout relate to fiscal monthsmonths, quarters and years rather than calendar monthsmonths, quarters and years. Fiscal years 2025, 2024, 2023 and 20222023 ended on December 28, 2025, December 29, 2024, and December 31, 2023 and January 1, 2023, respectively, and each year had 52 weeks.

We are a leading North American utility and energy infrastructure services companycompany, thatand partnerswe partner with regulated utilities to maintain, upgrade and expand the energy network that powers millions of homes and businesses. We serve as a long-term strategic partnerspartner to, and an extension of, North America’s electric, gas and combination utility providers, delivering a wide range of infrastructure solutions.solutions to ensure safe, reliable and environmentally sustainable energy operations. Our service offerings primarily consist of the modernization of utility infrastructure through the replacement, maintenance, retrofitting and installation of electric and natural gas distribution and utility-scale transmission networks,networks and building capacity to meet current and future demands. We also serve complementary, attractive and growing end markets such as renewabledistributed energypower associatedprojects with the expected energy transition,and data centers and 5G datacom.centers. Our essential services enable our customers to enhance the safety, reliability and environmental sustainability of the electric and natural gas networks that consumers rely upon to meet their essential and evolving energy needs. Guided by our values and our unwavering commitment to serve as long-term partners to customers and communities, our more than 8,600 employees enable our customers to safely and reliably deliver electricity and natural gas and achieve their goals for environmental sustainability.

We were incorporated in Delaware in June 2023 as a wholly owned subsidiary of Southwest Gas Holdings, Inc. (“Southwest Gas Holdings”). We were formed for the purpose of completing an initial public offering, facilitating the separation of Centuri Group, Inc. (the “Operating Company”) from Southwest Gas Holdings and other related transactions in order to carry on the business of the Operating Company, our predecessor for financial reporting purposes. Prior to April 13, 2024, Southwest Gas Holdings owned 1,000 shares of our common stock, representing 100% of the issued and outstanding shares of our common stock. On April 13, 2024, we issued 71,664,592 shares of common stock to Southwest Gas Holdings as consideration for the transfer of assets and assumption of liabilities of the Operating Company (the “Separation”). Following the completion of the Separation, the Operating Company became our wholly owned subsidiary, and all of our operations are conducted through the Operating Company.

On April 17, 2024, the IPOregistration Registrationstatement Statementrelated to the initial public offering of our common stock was declared effective, and our common stock began trading on the New York Stock Exchange (the “NYSE”) under the ticker “CTRI” (the “Centuri IPO”) on April 18, 2024. On April 22, 2024, the Centuri IPO was completed through the sale of 14,260,000 shares of our common stock, par value $0.01 per share, including the underwriters’ full exercise of their option to purchase 1,860,000 shares to cover over-allotments, at an initial public offering price of $21.00 per share. On the same day, the Icahn Group purchased 2,591,929 shares of our common stock inand a concurrent private placement atwere acompleted price per share equal to the IPO price, for gross proceeds of approximately $54.4 million. Thewith total net proceeds to us from the Centuri IPO and the concurrent private placement, after deducting underwriting discounts and commissions of $18.0 million and offering expenses payable of $8.3 million, were $327.7 million. As of the closing of the Centuri IPO, Southwest Gas Holdings owned 71,665,592 shares of our common stock,stock (“CTRI shares”), or approximately 81% of the total outstanding sharesCTRI of our common stock.shares.

Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, seasonality and severe weather events, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

Rising fuel, labor and material costs have in the past had, and could continuein tothe future have, a negative effect on our results of operations, to the extent we cannot pass these costs through to our customers. While we actively monitor economic, industry and market factors that could adversely impact our business, we cannot predict the effect that changes in such factors could have on our future results of operations, financial position and cash flows.

Generally, our contracts provide that the customer is responsible for supplying the materials for their projects. Fluctuations in the price or availability of materials and equipment that we or our customers utilize could impact (positively or negatively, as applicable) costs to complete projects or result in the postponement of projects. Although certain of our customers have experienced recentprevious disruptions in their supply chain for certain project materials, most of our customers have generally been able to procure the necessary materials in a timely manner.

Generally, our revenue is lowest during the first fiscal quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.

OurUnder the terms of a majority of our MSAs and other customer agreements, materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall, our results for the fiscal year 20242025 were not significantly impacted by inflationincreases whenin comparedprices, including due to priortariffs yearsimplemented (particularlyby fiscalthe yearTrump 2022),Administration. We are currently monitoring the impacts of tariffs on the price and availability of our equipment as wewell haveas begunany potential impacts to seeproject slowerscheduling, growthbut inwe pricesdo innot recentcurrently periods.expect a material effect on our results of operations.

Backlog represents estimates of revenue to be realized under long-term MSAs and bid agreements. Backlog differs from remaining performance obligations disclosed in “Note 3 — Revenue and Related Balance Sheet Accounts” to the consolidated financial statements, as remaining performance obligations are limited to contractually obligated revenue on our contracts that exceed one year, which is typically only bid projects, whereas backlog is inclusive of all contracts regardless of length and includes estimated future work underover the contractual life of MSAs. Generally, customers are not contractually committed to specific volumes of work under MSAs, and MSAs may be terminated by either party upon notice. Revenue estimates for MSAs are based on historical customer trends. As backlog only includes revenue estimates over the contractual life of MSAs, backlog tends to fluctuate based on the timing of MSA renewals. Projects included in backlog can be subject to delays or cancellation as a result of regulatory requirements, adverse weather conditions, customer requirements and other factors that could cause actual revenue to differ significantly from the estimates, or cause revenue to be realized in periods other than originally expected. Backlog as of December 29, 2024 and December 31, 2023 was approximately $3.7 billion and $5.1 billion, respectively. For both periods, approximately 90% of backlog related to MSAs.

Our results of operations, on a consolidated basis and by segment, for the fiscal years ended December 29,28, 20242025 and December 31,29, 20232024 are set forth and compared below. Additionally,For revenueour anddiscussion grossof profitthe results underof our new segment structureoperations for the fiscal yearsyear ended December 29, 2024 compared to the fiscal year ended December 31, 2023 andrefer Januaryto 1,"Management’s 2023 are set forthDiscussion and comparedAnalysis below.of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 which is incorporated by reference herein.

The following tablestable and discussion summarizesummarizes our consolidated results of operations for the fiscal years ended December 29,28, 2024,2025 and December 31,29, 20232024, including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.

The following table summarizes our revenue, gross profitrevenue and gross marginprofit for the periods indicated by segmentsegment, as well as the dollar and percentage change from the prior year period. The discussion that follows highlights key revenue and gross margin changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue and gross margin.revenue.

•Revenue from our U.S. Gas segment totaled $1.3$1,328.1 billionmillion in the fiscal year ended December 29,28, 2024,2025, reflecting aan decreaseincrease of $96.9$67.6 million, or 7.1%,5.4%, compared to the prior year.year period. This decreaseincrease was largelydriven dueby to a reduction inincreased net volumesMSA undervolumes, existingpartially customer MSAs stemming primarily from delayed or unfavorable regulatory decisions facedoffset by keyslightly customers.lower bid revenue year-over-year. As a percentage of revenue, gross profit slightly decreased to 5.5%5.4% in the fiscal year ended December 29,28, 20242025 from 9.1%5.5% in the prior year.year Profitabilityperiod, wasprimarily negatively affecteddriven by lower margins on bid work, as the prior year benefited from a high margin bid job that was substantially complete during the prior year and the fiscal year ended December 29, 2024 included several bid projects with lower margins. Additionally, the fiscal year ended December 31, 2023 reflected higher utilization of fixed costsinefficiencies due to increasedweather-related volumeswork on both MSAstoppages and biddelays projects.in the first fiscal quarter of 2025, partially offset by higher efficiency throughout the remaining fiscal quarters driven by work force improvements. Revenue from Southwest Gas Corporation totaled $106.8$97.6 million forduring the fiscal year ended December 29,28, 20242025 compared to $116.4$106.8 million in the prior year.year period.

•Revenue from our Canadian GasOperations segment totaled $197.9$246.9 million in the fiscal year ended December 29,28, 2024,2025, reflecting aan decreaseincrease of $36.9$49.0 million, or 15.7%,24.8%, compared to the prior year.year period. This decreaseincrease was primarily due to aan decrease in bid revenue which varies from year to year based on project timing, as well as a reductionincrease in net volumes under existing MSAs. As a percentage of revenue, gross profit increased to 15.8%18.6% in the fiscal year ended December 29,28, 20242025 as compared to 14.1%15.8% in the prior year period. This increase was primarily dueattributable to favorableimprovements changeson bid margins, as the prior year period was negatively impacted by performance issues on certain bid projects which did not recur in mixthe ofcurrent work.year period.

•Revenue from our Union Electric segment totaled $693.5$808.3 million in the fiscal year ended December 29,28, 2024,2025, reflecting aan decreaseincrease of $139.6$114.8 million, or 16.8%,16.6%, compared to the prior year.year period. This decreaseincrease was driven by new bid project wins, partially offset by a planned decline in offshore wind revenue of $114.4$38.7 million due to timing of projects,projects as well asand a reductiondecrease in net volumes under certain existing customer MSAs. Emergencystorm restoration services revenue forof the$21.3 Unionmillion Electric segment was $29.6($8.3 million for the fiscal year ended December 29,28, 20242025 compared to $27.2$29.6 million for the prior year.year period). As a percentage of revenue, gross profit increased to 8.4%8.8% in the fiscal year ended December 29,28, 20242025 as compared to 6.9%8.4% in the prior year dueperiod. toThis improvedincrease profitabilitywas driven by improvements in margin on certainbid MSA contractswork and more efficient utilization of fixed costs on higher revenue, partially offset by the $21.3 million decrease in partstorm fromrestoration costservices savings realized due to restructuring activitiesrevenue, which occurredhad earliera innegative fiscalgross 2024.profit impact of approximately $6.2 million.

•Revenue from our Non-Union Electric segment totaled $485.3$599.4 million in the fiscal year ended December 29,28, 2024,2025, reflecting an increase of $11.3$114.1 million, or 2.4%,23.5%, compared to the prior year.year period. This increase was primarily driven by an increase in emergencyvolumes under new and existing MSAs, which was partially offset by a decline in storm restoration services revenue of $47.9$77.0 million (which was $107.1$30.1 million in the fiscal year ended December 29,28, 20242025 compared to $59.2$107.1 million in the prior year period), partially offset by a decrease in volumes under existing MSAs.. As a percentage of revenue, gross profit increaseddecreased to 12.7%9.8% in the fiscal year ended December 29,28, 2024,2025 compared to 12.3%12.7% in the prior year.year period. Profitability benefitedwas fromnegatively increasedimpacted emergencyby the $77.0 million decrease in storm restoration servicesservices, work,which althoughhad thisa benefitnegative gross profit impact of approximately $29.5 million. This decrease was partially offset by unfavorablebetter changesMSA performance in mix of work and underutilization of fixed costs on certain existing MSAs during the first half of fiscal2025 2024.compared to the first half of 2024 due to an increase in crew counts and weekly hours worked per crew under existing MSAs, which allowed for better hourly rates and more efficient utilization of fixed overhead costs.

Our effective tax rate for the fiscal years ended December 29,28, 20242025 and December 31,29, 20232024 was (103.3%55.3%) and (5.4%103.3%), respectively. The effective tax rate for the fiscalcurrent year ended December 29, 2024period was impacted by the allocation of $23.7 million in deferred tax assets from Southwest Gas Holdings. The effective tax rate for the prior year period was impacted by a disproportionate amount of non-deductible expenses in relation to loss before income taxes,taxes. whileAdditionally, differences in theincome prior(loss) yearbefore income taxes by jurisdiction caused fluctuations in the effective tax rate waswhen impactedcomparing by goodwill impairment, a significant portion of which was nondeductible for tax purposes.periods.

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share, Base Revenue, Base Gross Profit and Base Gross Profit Margin, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters. Because these non-GAAP metrics, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP metrics may not be comparable to similarly titled measures of other companies.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation expense,compensation, (ii) acquisition costs, (iii) separation-related costs, (iv) strategic review costs, (iiiv) severance costs, (ivvi) securitization facility transaction fees, (vvii) other professional fees, (viii) CEO transition costscosts, and (viix) goodwill impairment. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBITDA helps investors compare our performance to our peers and gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBITDA provides additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue.

Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategic review costs, (iiiii) severance costs, (iiiiv) amortization of intangible assets, (ivv) securitization facility transaction fees, (vvi) other professional fees, (vii) CEO transition costs, (viviii) loss on debt modification and extinguishment, (viiix) non-cash stock-based compensation expense,compensation, (viiix) tax asset allocation, (xi) acquisition costs, (xii) goodwill impairmentimpairment, and (ixxiii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature. Adjusted Diluted Earnings per Share is defined as Adjusted Net Income divided by weighted average diluted shares outstanding.

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months and quarters throughout relate to fiscal months and quarters rather than calendar months and quarters. The first fiscal quarterssix months of 2026 and 2025 ended on MarchJune 29,28, 2026 and MarchJune 30,29, 2025, respectively, and each period had 26 weeks. The second fiscal quarters of 2026 and 2025 each had 13 weeks.

We report under the following four reportable segments: (i) U.S. Gas Utility Services (“U.S. Gas”); (ii) Canadian Utility Services (“Canadian Operations”); (iii) Union Electric Utility Services (“Union Electric”); and (iv) Non-Union Electric Utility Services (“Non-Union Electric”). Canadian Operations includes the results of Connect Atlantic Utility Services Corporation (“Connect”), which was acquired in November 2025.

Rising fuel, labor and material costs have in the past had, and could in the future have, a negative effect on our results of operations, to the extent we cannot pass these costs through to our customers. While we actively monitor economic, industry and market factors that could adversely impact our business, we cannot predict the effect that changes in such factors could have on our future results of operations, financial position and cash flows. Our results of operations in the firstsecond fiscal quarter of 2026 were not materially impacted by market developments, including elevatedincreased fuel costs.costs, particularly in our U.S. Gas and Non-Union Electric segments. We are continuingcontinue to monitor the impacts of elevated fuel costs,costs butand wewill doassess nottheir expect a material impacteffect on ourfuture resultsperiods ofas operationsmarket atconditions this time.evolve.

Under the terms of a majority of our MSAs and other customer agreements, materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall,Excluding fuel, our results for the firstsecond fiscal quarter of 2026 were not significantly impacted by increases in prices, including due to tariffs implemented by the Trump Administration.

Backlog as of MarchJune 29,28, 2026 was approximately $6.5$6.4 billion, with approximately 85%83% of backlog related to MSAs. Backlog represents contracted revenue on existing bid agreements as well as estimates of revenue to be realized over the contractual life of existing long-term MSAs. The contractual life of an MSA is defined as the stated length of the contract including any renewal options stated in the contract that we believe our customers are reasonably certain to execute.

Our results of operations, on a consolidated basis and by segment, for the fiscal three-monththree- and six-month periods ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 are set forth and compared below.

Fiscal three months ended MarchJune 29,28, 2026 compared to the fiscal three months ended MarchJune 30,29, 2025

The following table summarizes our consolidated results of operations for the fiscal three months ended MarchJune 29,28, 2026, and MarchJune 30,29, 2025, including as a percentage of revenue, as well as the dollar and percentage change period-over-period.

The following table summarizes our revenue and gross profit for the periods indicated by segmentsegment, as well as the dollar and percentage change from the prior year period. Gross margins are calculated by dividing gross profit by revenue. The discussion that follows highlights key revenue changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue.

•Revenue from our UnionU.S. ElectricGas segment totaled $204.1$774.0 million,million in the fiscal six months ended June 28, 2026, reflecting an increase of $28.6$239.5 million, or 16.3%,44.8%, compared to the prior year period. This increase was driven by increased MSA volumes on existing contracts as well as new bid projectand wins.MSA contracts. As a percentage of revenue, gross profit increasedslightly decreased to 8.9%1.8% in the currentfiscal periodsix asmonths comparedended toJune 6.7%28, 2026, from 2.2% in the prior year period. GrossProfitability margin forin the current year period was positivelynegatively impacted by the $9.0 million City of Chicago reversal. Excluding the impacts of this reversal, gross profit as a favorablepercentage changeof revenue was 3.0%, improved from the prior year due to a more efficient performance in estimatedthe costfirst fiscal quarter, partially offset by reduced profitability in the second fiscal quarter due to completecosts onincurred anto offshorescale windup projectnew thatwork, isincluding nearingtraining completion.and temporary equipment rental costs, as well as increased fuel costs in the current year period.

•Revenue from our Non-UnionUnion Electric segment totaled $174.6$428.2 million,million in the fiscal six months ended June 28, 2026, reflecting an increase of $37.4$70.5 million, or 27.3%,19.7%, compared to the prior year periodperiod. dueAs primarilya percentage of revenue, gross profit increased to higher9.0% volumes on new and existing MSAs. Additionally, storm restoration services increased by $6.9 million, accounting for $23.5 million ofin the segment’sfiscal revenuesix formonths theended currentJune period28, 2026 as compared to $16.67.6% million forin the prior year period. StormGross restorationmargin services gross profit was relatively flat (down $0.5 million between periods), as storm work performed infor the current year period was performedpositively forimpacted on-systemby customersa atfavorable slightlychange lowerin margins.estimated cost to complete on an offshore wind project that is nearing completion.

The decrease of $5.4 million in interestInterest expense, net indecreased by $11.6 million during the current period compared to the prior year period was due to a reduction in average debt balance and a reductiondecrease in interest rates on outstanding variable-rate borrowings.

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA,EBIT, Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Loss,Income, Base Revenue, Base Gross ProfitProfit, and Base Gross Profit Margin, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters. Because these non-GAAP measures, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP measures may not be comparable to similarly titled measures of other companies. Management believes that, due to the non-recurring nature of the City of Chicago reversal, its exclusion from certain non-GAAP financial measures provides investors with a better understanding of the current performance of the business.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation and (ii) separation-related costs. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBIT, Adjusted EBIT, and Adjusted EBITDA helpshelp investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBIT and Adjusted EBITDA providesprovide additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue.

Adjusted Net LossIncome is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategy implementation costs, (iii) amortization of intangible assets, (iiiiv) other professional fees, (v) City of Chicago reversal, (vi) non-cash stock-based compensationcompensation, (vii) acquisition costs and (ivviii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net LossIncome helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature.

Base Revenue is defined as total revenue, net adjusted to exclude revenue attributable to storm restoration services.services and the impact of the City of Chicago reversal. Base Gross Profit is defined as gross profit adjusted to exclude gross profit attributable to storm restoration services.services and the City of Chicago reversal. Base Gross Profit Margin is calculated by dividing Base Gross Profit by Base Revenue. U.S. Gas Base Revenue is defined as U.S. Gas segment revenue, net adjusted to exclude the impact of the City of Chicago reversal. U.S. Gas Base Gross Profit is defined as U.S. Gas segment gross profit adjusted to exclude the City of Chicago reversal. U.S. Gas Base Gross Profit Margin is calculated by dividing U.S. Gas Base Gross Profit by U.S. Gas Base Revenue. Revenue derived from storm restoration services varies from period to period due to the unpredictable nature of weather-related events, and when this type of work is performed, it typically generates a higher profit margin than base infrastructure services projects due to higher contractual hourly rates given the nature of services provided and improved operating efficiencies related to equipment utilization and absorption of fixed costs. While storm restoration services remain a key capability of the Company, Managementmanagement believes theseits non-GAAPexclusion measures areprovides more suitable disclosures for evaluating fundamental business performance and for comparison purposes.

Using EBIT, Adjusted EBIT, and Adjusted EBITDA as a performance measuremeasures has material limitations as compared to net loss,income (loss), or other financial measures as defined under GAAP, as itthey excludesexclude certain recurring items, which may be meaningful to investors. EBITDAThese excludesmetrics all exclude interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, these metrics exclude income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. Adjusted EBITDA also excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusionsexclusions, the metrics from EBITDA,which anythey measureare thatexcluded excludes interest expense net of interest income, depreciation and amortization and income taxes hashave material limitations as compared to net loss.income (loss). When using EBITDAthese metrics as a performance measure, management compensates for these limitations by comparing EBITDAthem to net income (loss) in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the Company on a full-cost, after-tax basis.

As to certain of the items related to these non-GAAP measures: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted and; (ii) acquisition costs vary from period to period depending on the level of our acquisition activity; (iii) separation-related costs represent expenses incurred post-IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings’ sale of its holdings of our common stock, which are not reflective of our ongoing operations and will not recur followinggiven thethat fullCenturi separationis fully separated from Southwest Gas Holdings.Holdings; (iv) strategy implementation costs represent non-recurring consulting fees incurred in connection with implementing the Company’s new long-term strategy announced on May 6, 2026; (v) other professional fees are non-recurring costs associated with certain one-time events; and (vi) the City of Chicago reversal relates to a non-recurring reversal of revenue on a legacy contract. The most comparable GAAP financial measuremeasures and information reconciling the GAAP and non-GAAP financial measures are set forth below.

EBITDA,EBIT, Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin

The following table presents reconciliations of net income (loss) to EBITDA,EBIT, Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin for the specified periods:

Adjusted Net LossIncome:

The following table presents reconciliations of net income (loss) to Adjusted Net LossIncome for the specified periods:

(1)Calculated based on a blended statutory tax rate of 25%.25%, except for acquisition costs which are not deductible.

The following tabletables presentspresent reconciliations of revenue, net to Base Revenue and gross profit to Base Gross Profit and Base Gross Profit Margin, as well as U.S. Gas revenue, net to U.S. Gas Base Revenue and U.S. Gas Gross Profit to U.S. Gas Base Gross Profit and U.S. Gas Base Gross Profit Margin.

Our primary liquidity needs have historically related to supporting working capital requirements, funding capital expenditures and servicing our debt. As of MarchJune 29,28, 2026 and December 28, 2025, cash and cash equivalents were $60.3$40.5 million and $126.6 million, respectively. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future.

Net cash (used in) provided by operating activities for the fiscal threesix months ended MarchJune 29,28, 2026 was $(35.0)$15.0 million, compared to $16.7$11.0 million for the fiscal threesix months ended MarchJune 30,29, 2025, representing a decrease in operating cash flows of $51.7$4.0 million, which was driven by the following factors:

•Net lossincome: Our net loss improved $8.4$6.5 million from the prior year period. Non-cash expenses did not vary significantly between periods.

•Accounts receivable and contract assets: Cash flow decreased $31.1$16.2 million. The current year period benefitted from the sale of an additional $40.0 million in accounts receivable under the Securitization Facility. We had a significant increase in revenue between periods,the current year period and the prior year period, including onfrom largecertain bid projects in which billings are subject to completion of milestones, and largecertain MSAs in which customer approval is contractually required before invoices can be issued. TheseOccasionally, these contractual requirements are standard to many of our contracts, and the approval process does not typically result in meaningful adjustments to revenue. However, this process occasionally slowsslow down the billing processprocess, particularly when customers need to review large volumes of work.

Net cash used in investing activities was $20.6$48.9 million in the fiscal threesix months ended MarchJune 29,28, 2026 compared to $23.2$42.6 million for the fiscal threesix months ended MarchJune 30,29, 2025, aan decreaseincrease of $2.6$6.3 million.

The construction industry is capital intensive, and we expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal threesix months ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025, we had capital expenditures of $20.2$48.1 million and $24.4$45.2 million, respectively.