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

Economic downturns, uncertain economic conditions, and capital market fluctuations may affect our customers’ spending on the services we provide. Macroeconomic conditions, including inflation, slower growth or recessionary conditions, changes to fiscal and monetary policy, wars or other geopolitical tensions, availability of credit, and fluctuations in interest rates could materially adversely affect demand for our services and the availability and cost of the materials and equipment we need to deliver our services. During periods of elevated and prolonged economic uncertainty our customers may delay, reduce or eliminate their spending on the services we provide. In addition, volatility in the debt or equity markets may impact our customers’ access to capital and result in the reduction or elimination of spending on the services we provide. Our vendors, suppliers and subcontractors may also be adversely affected by these conditions. These conditions, which can develop rapidly, could adversely affect our revenues, results of operations, and liquidity.

Trade restrictions could be imposed on goods, materials or component parts used in our business that we import from other countries, which could have a materialan adverse effect on our results of operations. Our industry could be impacted by the imposition, or the threat of the imposition of, tariffs placed on products imported from foreign countries that we use in our business, including steel, aluminum, fuel and motor vehicles or their component parts, fiber cable and other components that we utilize to build networks, or any resulting impacts from escalating trade hostilities with the countries from where we import products. There is an ongoing risk of new or additional tariffs being placed on goods, materials or components used in our business that could dramatically increase our costs, require us to increase prices to our customers or, if we are unable to do so, result in lower gross margins. Any escalation of trade tensions, including new or increased tariffs or a “trade war,” or any global supply chain disruption, could have a significant adverse effect on U.S. or world trade, as well as on our results of operations.

We derive a significant portion of our revenues from a small number of customers, and the loss of one or more of these customers could adversely affect our revenues, results of operations, and liquidity. Our customer base is highly concentrated, with our top five customers during fiscal 2025, fiscal 2024, and fiscal 2023 accounting for approximately 55.4%, 57.7%, and 66.7%, of our total contract revenues, respectively.concentrated. Our industry is highly competitive and the revenue we expect from an existing customer in any market could fail to be realized if competitors who offer comparable services to our customers do so on more favorable terms or have a better relationship with a customer. We also continue to expand our opportunities with hyperscaler and data center customers, who are also highly concentrated, as a result of our acquisition of Power Solutions, LLC. Additionally, the continued consolidation of the telecommunications industry could result in the loss of a customer if, as a result of a merger or acquisition involving one or more of our customers, the surviving entity chooses to use one of our competitors for the services we currently provide. Our failure to adequately predict customer demand or otherwise optimize opportunities with our traditional telecommunications customers and our new hyperscaler and data center customers could adversely impact our revenues, backlog and financial condition.

Pandemics and public health emergencies could materially disrupt our business and negatively impact our operating results, cash flows and financial condition. Pandemics and public health emergencies, like the COVID-19 pandemic,emergencies may impact our operating results, cash flows and financial condition in ways that are uncertain, unpredictable and outside of our control. The extent of the impact of such an event depends on the severity and duration of the public health emergency or pandemic, as well as the nature and duration of federal, state and local laws, orders, rules, emergency temporary standards, regulations and mandates, together with protocols and contractual requirements implemented by our customers, that may be enacted or newly enforced in response. Additionally, our ability to perform our work during such an event may be dependent on the governmental or societal responses to these circumstances in the markets in which we operate. A pandemic or public health emergency is likely to heighten and exacerbate the risks described herein.

Seasonality and adverse weather conditions affect demand for our services. Our contract revenues and results of operations exhibit seasonality and are impacted by adverse weather changes as we perform a significant portion of our Communications segment work outdoors.outside. Consequently, adverse weather, which is more likely to occur with greater frequency, severity, and duration during the winter, as well as reduced daylight hours, impact our operations during the fiscal quarters ending in January and April. Additionally, extreme weather conditions such as major or extended winter storms, droughts and tornados, wildfires, and natural disasters, such as floods, hurricanes, tropical storms, whether as a result of climate change or otherwise, could also impact the demand for our services, or impact our ability to perform our services. Also, several holidays fall within the fiscal quarter ending in January, which decreases the number of available workdays in this fiscal quarter. Because of these factors, we are most likely to experience reduced revenue and profitability or losses during the fiscal quarters ending in January and April compared to the fiscal quarters ending in July and October.

Our backlog is subject to reduction or cancellation, and revenues may be realized in different periods than initially reflected in our backlog. Our backlog includes the estimated uncompleted portion of services to be performed under master services agreements and other contractual agreements with our customers. These estimates are based on, among other things, contract terms and projections regarding the timing of the services to be provided. In the case of master service agreements, backlog is calculated using as an input the amount of work performed in the preceding 12 month12-month period, when applicable. Backlog for newly initiated master service agreements and other long and short-term contracts is estimated using the anticipated scope of the contract and information received from the customer in the procurement process.

Generally, our customers are not contractually committed to procure specific volumes of services. Contract revenue estimates reflected in our backlog can be subject to change due to a number of factors, including contract cancellations or changes in the amount of work we expect to be performed under a contract. In addition, contract revenues reflected in our backlog may be realized in different periods from those previously anticipated due to these factors as well as project accelerations or delays due to various reasons, including, but not limited to, changes in customer spending priorities, project cancellations, regulatory interruptions, scheduling changes, commercial issues, such as permitting, engineering revisions, job site conditions and adverse weather. The amount or timing of our backlog can also be impacted by the merger or acquisition activity of our customers. Our estimates of our customers’ requirements during a future period may prove to be inaccurate. As a result, our backlog as of any particular date is an uncertain estimate of the amount of, and timing of,of future revenues and earnings.

Technological change and decreased demand for new or additional digital infrastructure may affect our customers’ spending on the services we provide. We generate a significant majority of our revenues from our Communications segment customers, many of whom provide certain fiber-related services for hyperscaler and data center projects, and from our new Building Systems segment customers inwho thefocus telecommunicationson industry.data Thiscenter industryinfrastructure hasto support AI needs. These customers have been and continuescontinue to be impacted by rapid technological change. TheseWe cannot be certain that global demand for data center capacity, additional digital infrastructure or AI-related projects will remain steady or increase, which could negatively impact our revenues, results of operations and backlog. Also, we may not have the skilled labor necessary to meet our customers’ needs for new data center construction, available power may not be sufficient to complete projects and investment in hyperscaler activity or data center projects could decrease. New technological changes may also affect our customers’ spending on the services we provide. Further, technological change in the telecommunications industry not directly related to the services we provide may affect the ability of one or more of our customers to compete effectively, which could result in a reduction or elimination of their use of our services. Any reduction, elimination or delay of spending by one of our customers on the services we provide could adversely affect our revenues, results of operations, and liquidity.

Our business is dependent on keeping pace with technological developments impacting our services and those of our customers. Our success is dependent on our and our customers’ ability to acquire, develop, adopt and leverage new and existing technologies, including artificial intelligence (“AI”).AI. New technologies can materially impact our business in a number of ways, including affecting the costs, speed and efficiency with which we can provide our services to our customers and our ability to differentiate ourselves from our competitor’s offerings. Our customers may also experience decreased demand for their products or services if they fail to develop new products and technologies to meet consumer demand. Our failure to effectively anticipate or adapt to new technologies and changes in our customer’s expectations and behavior could materially impact our competitive position with our customers and, as a result, our future success and growth.

Our subsidiaries may participate in multiemployer pension plans from time to time under which we could incur significant liabilities. Pursuant to collective bargaining agreements, certain of our subsidiariessubsidiaries, mayincluding Power Solutions, participate in various multiemployer pension plans from time to time that provide defined pension benefits to covered employees. Where applicable, we make periodic contributions to these plans to allow them to meet their pension benefit obligations to participants. Assets contributed by an employer to a multiemployer plan are not segregated into a separate account and are not restricted to providing benefits only to employees of that contributing employer. Under the Employee Retirement Income Security Act (“ERISA”), absent an applicable exemption, a contributing employer to an underfunded multiemployer plan is liable upon withdrawal from the plan for its proportionate share of the plan’s unfunded vested liability. Such underfunding may increase in the event other employers become insolvent or withdraw from the applicable plan or upon the inability or failure of withdrawing employers to pay their withdrawal liability. In addition, if any of the plans in which we participate become significantly underfunded, as defined by the Pension Protection Act of 2006, we may be required to make additional cash contributions in the form of higher contribution rates or surcharges. This has occurred and could occur again in the future because of a shrinking contribution base as a result of insolvency or withdrawal of other companies that currently contribute to these plans, inability or failure of withdrawing companies to pay their withdrawal liability, lower than expected returns on plan assets, or other funding deficiencies. We are also in the process of integrating Power Solutions into our business and could discover liabilities, deficiencies, or other claims associated with its multiemployer plans. Requirements to pay increased contributions or a withdrawal liability could adversely affect our results of operations, financial position, and cash flows.

Our debt obligations impose restrictions that may limit our operating and financial flexibility, and a failure to comply with these obligations could result in the acceleration of our debt. The Company and certain of its subsidiaries are party to ana amendedcredit andagreement restated(as defined below). The credit agreement, thatamong other things, includes a revolving facility with a maximum revolver commitment of $650.0$800.0 million and a term loan A facility in the principal amount of $450.0$1,540.0 million, which mature on December 23, 2030, as well as an $800.0 million term loan B facility, which matures on January 15,27, 2029 (the “Credit Agreement”).2033. The Creditcredit Agreementagreement includes a $200.0$225.0 million sublimit for the issuance of letters of credit and a $50.0 million sublimit for swingline loans. As of January 25,31, 2025,2026, we had $450.0$1,540.0 million outstanding under the term loan A facility, $800.0 million outstanding under the term loan B facility and $47.5$53.6 million of outstanding letters of credit issued under our Credit Agreement. We had no outstanding borrowings under our revolving facility as of January 25,31, 2025.2026. The Creditcredit Agreementagreement contains covenants that restrict or limit our ability to, among other things: make certain payments, including the payment of dividends, redeem or repurchase our capital stock, incur additional indebtedness and issue preferred stock, make investments or create liens, enter into sale and leaseback transactions, merge or consolidate with another entity, sell certain assets, and enter into transactions with affiliates. OurThe Creditcredit Agreementagreement also requires us to comply with certain financial covenants, including a consolidated net leverage ratio and a consolidated interest coverage ratio. These covenants in our Creditcredit Agreementagreement may prevent us from engaging in transactions that benefit us and may limit our flexibility in the execution of our business strategy.

We are a leading provider of specialty contracting services focused on the digital infrastructure, telecommunications and utilities industries throughout the United States. These services include program management, planning, engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services for telecommunications and digital infrastructure providers. Additionally,We wealso provide underground facility locating services for various utilities, including telecommunications providers, as well as other construction and maintenance services for electric and gas utilities. Additionally, we provide comprehensive building infrastructure solutions, including electrical, energy management, security, and fire safety systems for data centers and other critical facilities. We supply the labor, tools, and equipment necessary to provide these services to our customers.

The cyclical nature of the industryindustries we serve affects demand for our services.services, and our contract revenues and results of operations exhibit seasonality as a significant portion of our Communications segment work is performed outdoors. The capital expenditure and maintenance budgets of our customers, and the related timing of approvals and seasonal spending patterns, influence our contract revenues and results of operations. Factors affecting our customers and their capital expenditure budgets include, but are not limited to, overall economic conditions, the introduction of new technologies, our customers’ debt levels and capital structures, our customers’ financial performance, and our customers’ positioning and strategic plans, and any potential effects from public health emergencies or pandemics.plans. Other factors that may affect our customers and their capital expenditure budgets include newthe availability of state and federal funding, the implementation or enforcement of regulations or regulatory actions impacting our customers’ businesses, merger or acquisition activity involving our customers, and the physical maintenance needs of our customers’ infrastructure.

We have established relationships with many leading telecommunications providers, including telephone companies, cable multiple system operators, wireless carriers, telecommunications equipment and infrastructure providers, as well as electric and gas utilities.utilities and many leading general contractors specializing in data center construction. Our customer base is highly concentrated,concentrated. withThe ourfollowing topreflects fivethe percentage of total contract revenues from customers accountingwho forcontributed approximatelyat 55.4%,least 57.7%,10% and 66.7% ofto our total contract revenues during fiscal 2025,2026, fiscal 2024,2025, andor fiscal 2023, respectively.2024:

Fiscal 2024. During August 2023, we acquired Bigham Cable Construction, Inc. (“Bigham”), for $131.2 million ($127.0 million fixed purchase price, plus cash acquired of $8.3 million, less indebtedness of $4.1 million). Bigham provides construction and maintenance services for telecommunications providers in the southeastern United States. This acquisition expands our geographic presence within our existing customer base FiscalResults 2023. Duringof the fourthbusinesses quarteracquired are included in our consolidated financial statements from their respective dates of fiscalacquisition. 2023,The wepurchase price allocation of the company acquired thein fiscal 2026 is preliminary and will be completed when valuations for intangible assets and other amounts are finalized within the 12-month measurement period from the date of a telecommunications construction company for $0.4 million.acquisition.

The following information is presented so that the reader may better understand certain factors impacting our results of operations, and should be read in conjunction with Critical Accounting Policies and Estimates below, as well as Note 2, Significant Accounting Policies & Estimates, in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K. Fiscal 2026 had 53 weeks of operations while fiscal 2025 had 52 weeks.

Loss on Debt Extinguishment. Loss on debt extinguishment for fiscal 2026 of $7.3 million and fiscal 2025 of $1.0 million includes the write-off of deferred debt issuance costs in connection with the Credit Agreement amendment.amendments. See “Liquidity and Capital Resources - Compliance with Credit Agreement” for more information.

Seasonality and Fluctuations in Operating Results. Our contract revenues and results of operations exhibit seasonality and are impacted by adverse weather changes as we perform a significant portion of our Communications segment work outdoors.outside. Consequently, adverse weather, which is more likely to occur with greater frequency, severity, and duration during the winter, as well as reduced daylight hours, impact our operations during the fiscal quarters ending in January and April. Additionally, extreme weather conditions such as major or extended winter storms, droughts and tornados, wildfires, and natural disasters, such as floods, hurricanes, tropical storms, whether as a result of climate change or otherwise, could also impact the demand for our services, or impact our ability to perform our services. Also, several holidays fall within the fiscal quarter ending in January, which decreases the number of available workdays in this fiscal quarter. Because of these factors, we are most likely to experience reduced revenue and profitability or losses during the fiscal quarters ending in January and April compared to the fiscal quarters ending in July and October.

Revenue Recognition. We perform a significant amount of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing, each based on a specific unit of measure. A contractual agreement exists when each party involved approves and commits to the agreement, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. Our services are performed for the sole benefit of our customers, whereby the assets being created or maintained are controlled by the customer and the services we perform do not have alternative benefits for us. Contract revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits we provide. Output measures, such as units,units delivereddelivered, are utilized to assess progress against specific contractual performance obligations for the majority of our services. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. For us, the output method using units delivered best represents the measure of progress against the performance obligations incorporated within the contractual agreements. This method captures the amount of units delivered pursuant to contracts and is used only when our performance does not produce significant amounts of work in process prior to complete satisfaction of the performance obligation. For a portion of contract items, units to be completed consist of multiple tasks. For these items, the transaction price is allocated to each task based on relative standalone measurements, such as selling prices for similar tasks, or in the alternative, the cost to perform the tasks. Contract revenue is recognized as the tasks are completed as a measurement of progress in the satisfaction of the corresponding performance obligation.

For certain contracts, representing less than 5% of contract revenues during fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023,2024, we use the cost-to-cost measure of progress. These contracts are generally projects that are completed over a period of less than 12 months or less and for which payment ismay be received based on project milestones or in a lump sum at the end of the project. Under the cost-to-cost measure of progress, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs. Contract costs include direct labor, direct materials, and subcontractor costs, as well as an allocation of indirect costs. Contract revenues are recorded as costs are incurred. We accrue the entire amount of a contract loss, if any, at the time the loss is determined to be probable and can be reasonably estimated.

We accrue the entire amount of a contract loss, if any, at the time the loss is determined to be probable and can be reasonably estimated. There were no material amounts of unapproved change orders or claims recognized during fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023.2024.

Goodwill and Intangible Assets. Goodwill and other indefinite-lived intangible assets are assessed for impairment annually, or more frequently, if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. We perform our annual impairment review of goodwill at the reporting unit level. Each of our operating segments with goodwill represents a reporting unit for the purpose of assessing impairment. If we determine the fair value of the reporting unit’s goodwill or other indefinite-lived intangible assets is less than their carrying value as a result of an annual or interim test, an impairment loss is recognized and reflected in operating income or loss in the consolidated statements of operations during the period incurred. The following table sets forth goodwill and other intangible assets, net by reportable segment as of January 31, 2026 (dollars in millions):

We performed our annual impairment assessment for fiscal 2025,2026, fiscal 2024,2025, and fiscal 2023,2024, and concluded that no impairment of goodwill or the indefinite-lived intangible asset was indicated at any reporting unit for any of the periods. In each of these periods, qualitative assessments were performed on reporting units that comprise a significant portion of our consolidated goodwill balance. For the Company’s indefinite-lived intangible asset we performed a qualitative assessment for fiscal 2026, fiscal 2025 and 2024 and a quantitative analysis for fiscal 2023.2024. A qualitative assessment includes evaluating all identified events and circumstances that could affect the significant inputs used to determine the fair value of a reporting unit or indefinite-lived intangible asset for the purpose of determining whether it is more likely than not that these assets are impaired. We consider various factors while performing qualitative assessments, including macroeconomic conditions, industry and market conditions, financial performance of the reporting units, changes in market capitalization, and any other specific reporting unit considerations. These qualitative assessments indicated that it was more likely than not that the fair value exceeded carrying value for those reporting units. For the remaining reporting units, we performed the quantitative analysis described in ASC Topic 350 in each of these periods. When performing the quantitative analysis, we determine the fair value of our reporting units using an equal weighting of fair values derived from the income approach and market approach valuation methodologies. Under the income approach, the key valuation assumptions used in determining the fair value estimates of our reporting units for each annual test were: (a) expected cash flow for a period of seven years based on our best estimate of revenue growth rates and projected operating margins; (b) terminal value based upon terminal growth rates; and (c) a discount rate based on the Company’s best estimate of the weighted average cost of capital adjusted for certain risks for the reporting units.

The discount rate reflects risks inherent within each reporting unit operating individually. These risks are greater than the risks inherent in the Company as a whole. Determination of discount rates included consideration of market inputs such as the risk-free rate, equity risk premium, industry premium, and cost of debt, among other assumptions. The discount rate for fiscal 20252026 isincreased consistentcompared withto the rate used in fiscal 2024.2025. While theThe cost of debtequity decreased,increased thereas was a decrease indid the marketweighting participantfor debt-to-capital ratiosequity which resulted in an increase in the same weighted average cost of capital as prior year. The decrease in the discount rate for fiscal 2024 from fiscal 2023 was largely due to lower cost of equity capital and an increase in the market participant debt-to-capital ratios which results in more allocationcompared to the costprior of debt, which is lower than the cost of equity.year. We believe the assumptions used in the impairment analysis each year are reflective of the risks inherent in the business models of our reporting units and our industry. Under the market approach, the guideline company method develops valuation multiples by comparing our reporting units to similar publicly traded companies. Key valuation assumptions used in determining the fair value estimates of our reporting units rely on: (a) the selection of similar companies and (b) the selection of valuation multiples as they apply to the reporting unit characteristics.

Implementation Costs – Cloud Computing Arrangements. In accordance with ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Internal-Use Software, to the extent costs incurred in a cloud computing arrangement are capitalizable, the corresponding costs are recorded in other assets and the related amortization is included in general and administrative expense in the consolidated statements of operations. The amount of capitalized cloud computing implementation costs included in other non-current assets was $29.8$61.7 million and $7.2$29.8 million as of January 25,31, 20252026 and January 27,25, 2024,2025, respectively. The amortization of capitalized implementation costs related to cloud computing arrangements was not$2.4 materialmillion and $1.7 million during fiscal 2025,2026 and fiscal 2024, or fiscal 2023.2025.

Accrued Insurance Claims. For claims within our insurance program, we retain the risk of loss, up to certain annual stop-loss limits, for matters related to automobile liability, general liability (including damages associated with underground facility locating services), workers’ compensation, and employee group health. Losses for claims beyond our retained risk of loss are covered by insurance up to our coverage limits. Our Building Systems segment is fully insured for these risks through third-party insurance policies, and we do not retain the risk of loss for claims related to those operations.

For automobile liability and general liability losses during fiscal 2025 and 2024,2026, we retained the risk of loss up to $1.0$2.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage. We also retained the risk of loss for the next $10.0$5.0 million on a per-occurrence basis for losses between $5.0 million and $15.0$10.0 million, if any. Additionally, during fiscal 2024 we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0 million, if any.

For automobile liability and general liability losses during fiscal 2023,2025, we retained the risk of loss up to $1.0$2.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage.coverage and we retained the risk of loss up to $1.0 million for general liability losses during fiscal 2025. We also retained the risk of loss for the next $5.0 million on a per-occurrence basis with aggregate stop loss limits of $11.5 million within this layer of retention for the period of fiscal 2023. Additionally, we retained $5.0 million risk of loss on a per occurrence basis for losses between $5.0 million and $15.0 million, if any, and we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0$10 million, if any.

Compensation expense for stock-based awards is based on fair value at the measurement date. The fair value of RSUs and Performance RSUs is estimated on the date of grant and is equal to the closing market price per share of our common stock on that date. RSUs generallyvest vestratably over a three-year period starting in fiscal 2026 and prior grants vested ratably over a four-year period. Performance RSUs vest ratably over a three-year period, if certain performance measures are achieved. Each RSU and Performance RSU is settled in one share of our common stock upon vesting. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. This valuation is affected by the Company’s stock price as well as other inputs, including the expected common stock price volatility over the expected life of the options, the expected term of the stock option, risk-free interest rates, and expected dividends, if any. Our outstanding stock options generally vest ratably over a four-year period and are generally exercisable over a period of up to ten years.

Contract Revenues. Contract revenues were $5.546 billion during fiscal 2026 compared to $4.702 billion during fiscal 2025 compared to $4.176 billion during fiscal 2024.2025. Contract revenues from acquired businesses were $379.7$563.8 million during fiscal 20252026 and $102.7$109.1 million during fiscal 2024.2025. Acquired revenues represent contract revenues from acquired businesses that were not owned for the full period in both the current and comparable prior periods. Excluding amounts generated by the acquired businesses, contract revenues increased by $389.2 million during fiscal 2026 compared to fiscal 2025, primarily due to net increases in fiber-to-the-home deployments, including rural fiber deployment programs.

Costs of Earned Revenues.Revenues, excluding Depreciation and Amortization. Costs of earned revenues increased to $4.406 billion, or 79.4% of contract revenues, during fiscal 2026 compared to $3.770 billion, or 80.2% of contract revenues, during fiscal 2025 compared to $3.362 billion, or 80.5% of contract revenues, during fiscal 2024.2025. The primary component of the increase was a $403.0$492.3 million aggregate increase in direct labor and subcontractor costs. The increase was further due to a $21.0$78.3 million increase in direct materials, a $52.0 million increase in other direct costs and a $1.4$13.3 million increase in equipment maintenance and fuel costs combined, partially offset by a $17.3 million decrease in direct materials.combined.

Costs of earned revenues as a percentage of contract revenues decreased 0.3%0.7% during fiscal 20252026 compared to fiscal 2024.2025. As a percentage of contract revenues, direct materials decreasedincreased 1.1%0.6% primarily as a result of our mix of work in which we provide materials for our customers and other direct costs decreased 0.2% as a percentage of contract revenues during fiscal 2025.customers. Equipment maintenance and fuel costs combined decreased 0.4%0.3% as a percentage of contract revenues. Labor and subcontracted labor costs increaseddecreased 1.4%1.0% as a percentage of contract revenues, primarily due to the mix of work performed.

General and Administrative Expenses. General and administrative expenses increased to $445.5 million, or 8.0% of contract revenues, during fiscal 2026 compared to $393.0 million, or 8.4% of contract revenues, during fiscal 2025 compared to $327.7 million, or 7.8% of contract revenues, during fiscal 2024.2025. The increase in total general and administrative expenses primarily resulted from increased administrative, payroll, performance based compensation, $11.4$18.8 million incremental stock based compensation expense resulting from the CEO transition,of acquisition costs,and integration costs during fiscal 2026 (compared to $4.2 million acquisitionduring integrationfiscal costs2025) and other costs, including incremental general administrative expenses from acquired businesses. This increase was partially offset by lower stock-based compensation expense in the current year, as the prior year included $11.4 million incremental stock-based compensation expense resulting from the CEO transition. See Note 19, Stock-Based Awards, for additional information regarding the CEO transition.

Depreciation and Amortization. Depreciation expense was $200.8 million, or 3.6% of contract revenues, during fiscal 2026, compared to $167.2 million, or 3.6% of contract revenues, during fiscal 2025, compared to $143.3 million, or 3.4% of contract revenues, during fiscal 2024.2025. The increase in depreciation expense during fiscal 20252026 was primarily due to higherincremental capital expenditures to support our growth in operations, normal replacement cycle of fleet assets, and depreciation from acquired businesses. Amortization expense was $31.4$68.8 million and $19.8$31.4 million during fiscal 20252026 and fiscal 2024,2025, respectively. The increase in amortization expense during fiscal 20252026 is due to the increase in amortizing intangibles from acquired businesses.

Interest Expense, Net. Interest expense, net increased to $66.5 million during fiscal 2026 from $61.0 million during fiscal 2025 from $52.6 million during fiscal 2024 as a result of higher outstanding borrowings during the current periodperiod, andwhich lowerwas partially offset by higher interest income on invested cash balances.

Loss on Debt Extinguishment. Loss on debt extinguishment during fiscal 2026 of $7.3 million and fiscal 2025 of $1.0 million includes the write-off of deferred debt issuance costs in connection with the Credit Agreement amendment.amendments. See “Liquidity and Capital Resources - Compliance with Credit Agreement” for more information.

Non-GAAP Adjusted EBITDA. Adjusted EBITDA is a Non-GAAP measure, as defined by Regulation G of the SEC.measure. We define Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense, and certain non-recurring items. Management believes Adjusted EBITDA is a helpful measure for comparing the Company’s operating performance with prior periods as well as with the performance of other companies with different capital structures or tax rates. The following table provides a reconciliation of net income to Non-GAAP Adjusted EBITDA (totals may not add due to rounding) (dollars in thousandsmillions):

A discussion of our financial results for fiscal 20242025 compared to our financial results for fiscal 20232024 can be found in the “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” section in our Annual Report on Form 10-K for the fiscal year ended January 27,25, 2024,2025, filed on MarchFebruary 1,28, 2024.2025.

Cash Provided by Operating Activities. During fiscal 2025,2026, net cash provided by operating activities was $349.1$642.5 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $114.6$35.8 million of operating cash flow during fiscal 2025.2026. Working capital changes that provided operating cash flow during fiscal 2026 included an increase in accounts payable of $223.2 million. Working capital changes that used operating cash flow during fiscal 20252026 included an increase in contract assets, net of $111.3 million, an increase in other assets of $50.2 million, a decrease in income tax payable of $46.8 million, a decrease in accrued liabilities of $41.7 million, an increase in accounts receivable, net of $117.8 million, a decrease in accrued liabilities of $21.0 million, an increase in other assets of $21.0$0.8 million, and a decrease in accounts payable of $16.8 million. Working capital changes that provided operating cash flow during fiscal 2025 included an increase in contract liabilities, net of $31.2 million, an increase in income tax payable of $26.5 million, and a decrease in other current assets and inventory of $4.3$8.2 million.

DaysOur days sales outstanding (“DSO”) was 101 days and 114 days as of January 31, 2026 and January 25, 2025, respectively. DSO is calculated based on the ending balance of total current and non-current accounts receivable (including unbilled accounts receivable), net of the allowance for credit losses, and current contract assets, net of contract liabilities, divided by the average daily revenue for the most recently completed quarter. Long-term contract assets are excluded from the calculation of DSO, as these amounts represent payments made to customers pursuant to long-term agreements and are recognized as a reduction of contract revenues over the period for which the related services are provided to the customers. Including these balances in DSO is not meaningful to the average time to collect accounts receivable and current contract asset balances. Our DSO was 114 days and 120 days as of January 25,31, 20252026 andis Januarycalculated 27,on 2024,a respectively.pro forma basis by adjusting contract revenues during the fourth quarter of fiscal 2026 to include the historical contract revenues of the business acquired in fiscal 2026 as if such acquisition had occurred as of the beginning of the fiscal quarter.

We are a leading provider of specialty contracting services focused on the digital infrastructure, telecommunications and utilities industries throughout the United States. These services include program management, planning, engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services for telecommunications and digital infrastructure providers. We also provide underground facility locating services for various utilities, including telecommunications providers, as well as other construction and maintenance services for electric and gas utilities. Additionally, we provide comprehensive building infrastructure solutions, including electrical, energy management, inside-plant structured cabling, and advanced audio-visual, security, and fire safety systems for data centers and other critical facilities. We supply the labor, tools, and equipment necessary to provide these services to our customers.

Our customer base is highly concentrated. The following reflects the percentage of total contract revenues from customers who contributed at least 10% to our total contract revenues during the three and six months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025:

We perform a majority of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks. We generally possess multiple agreements with each of our significant customers. To the extent that such agreements specify exclusivity, there are often exceptions, including the ability of the customer to issue work orders valued above a specified dollar amount to other service providers, the performance of work with the customer’s own employees, and the use of other service providers when jointly placing facilities with another utility. In many cases, a customer may terminate an agreement for convenience. Historically, multi-year master service agreements have been awarded primarily through a competitive bidding process; however, occasionally we are able to negotiate extensions to these agreements. We provide the remainder of our services pursuant to contracts for specific projects. These contracts may be long-term (with terms greater than one year) or short-term (with terms less than one year) and at times include retainage provisions under which the customer may withhold 5% to 10% of the invoiced amounts pending project completion and closeout. Contract revenues from multi-year master service agreements and other long-term contracts, as a percentage of contract revenues, was 95.5%94.0% and 92.5%92.3% for the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025

Results of the businessbusinesses acquired are included in our condensed consolidated financial statements from thetheir daterespective dates of acquisition and representsrepresent the newly formed Building Systems reportable segment. For additional information on our reportable segments, including the results of the Building Systems segment, see Note 20, Segment Reporting..Reporting.

For certain contracts, representing 22% and 1%,2%, respectively, of contract revenues during each of the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, we use the cost-to-cost measure of progress. These contracts are generally projects that are completed over a period of less than twelve months. Under the cost-to-cost measure of progress, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs. Contract costs include direct labor, direct materials, and subcontractor costs, as well as an allocation of indirect costs. Contract revenues are recorded as costs are incurred. We accrue the entire amount of a contract loss, if any, at the time the loss is determined to be probable and can be reasonably estimated. Our estimates of total contract revenue and total contract costs are subject to ongoing evaluation and revision throughout the life of the contract. Changes in these estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in prior periods. Conversely, revisions may result in the reversal of previously recognized revenue if the currently estimated total revenue is less than the previous estimate, or if estimated total contract costs increase. During the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, the net impact of such changes in estimates on our recognized revenue was not material to our condensed consolidated financial statements. There were no material amounts of unapproved change orders included in revenue during the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025.

Other Income, Net. Other income, net, primarily consists of gains or losses from sales of fixed assets. Other income, net also includes discount fee expense associated with the collection of accounts receivable underwhich have been sold pursuant to a customer-sponsorednon-recourse vendorsale paymentto program.a bank partner.

Contract Revenues. Contract revenues were $1.965$2.006 billion during the three months ended MayAugust 2,1, 2026 compared to $1.259$1.378 billion during the three months ended AprilJuly 26, 2025. Contract revenues from acquired businesses were $395.4$397.5 million for the three months ended MayAugust 2,1, 2026. Acquired revenues represent contract revenues from an acquired businessbusinesses that were not owned for the full period in both the current and comparable prior periods. Excluding amounts generated by the acquired business,businesses, contract revenues increased by $310.8$230.5 million during the three months ended MayAugust 2,1, 2026 compared to the three months ended AprilJuly 26, 2025, primarily due to net revenue increases in fiber-to-the-home deployments, including rural fiber deployment programs.

Costs of Earned Revenues. Costs of earned revenues increased to $1.578$1.565 billion, or 80.3%78.0% of contract revenues, during the three months ended MayAugust 2,1, 2026 compared to $1.011$1.070 billion, or 80.3%77.7% of contract revenues, during the three months ended AprilJuly 26, 2025. The primary components of the increase were a $397.6$363.1 million aggregate increase in direct labor and subcontractor costs, a $130.4$92.3 million increase in direct materials expense, a $20.9$19.9 million increase in equipment and fuel costs, and a $18.1$19.7 million increase in other direct costs.

Costs of earned revenues as a percentage of contract revenues remainedincreased flat0.3% during the three months ended MayAugust 2,1, 2026 compared to the three months ended AprilJuly 26, 2025. Labor and subcontracted labor costs decreased 3.0% primarily due to the mix of work performed during the three months ended May 2, 2026. Direct material costs increased 4.7%2.9% primarily as a result of our mix of work in which we provide materials for customers.customers during the three months ended August 1, 2026. Labor and subcontracted labor costs decreased 1.5% primarily due to the mix of work performed. Other costs decreased 1.7%1.1% on a net basis as a percentage of contract revenues for the three months ended MayAugust 2,1, 2026 compared to the three months ended AprilJuly 26, 2025.

General and Administrative Expenses. General and administrative expenses increased to $131.3$132.9 million, or 6.7%6.6% of contract revenues, during the three months ended MayAugust 2,1, 2026 compared to $103.7$106.8 million, or 8.2%7.8% of contract revenues, during the three months ended AprilJuly 26, 2025. The increase in total general and administrative expenses during the three months ended MayAugust 2,1, 2026 is primarily due to increased administrative, payroll, performance based compensation, and other costs, including incremental general administrative expenses from acquired businesses.

DepreciationGeneral and Amortization.administrative Depreciationexpenses expenseincreased wasto $53.4$264.3 million, or 2.7%6.7% of contract revenues, during the threesix months ended MayAugust 2,1, 2026 compared to $46.4$210.5 million, or 3.7%8.0% of contract revenues, during the threesix months ended AprilJuly 26, 2025. The increase in depreciationtotal expensegeneral and administrative expenses during the threesix months ended MayAugust 2,1, 2026 is primarily due to higherincreased capitaladministrative, expenditurespayroll, toperformance supportbased our growth in operations, the normal replacement cycle of fleet assets,compensation, and depreciationother costs, including incremental general administrative expenses from acquired businesses.

Amortization expense was $58.3$60.5 million and $12.0$11.9 million during the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, respectively and $118.8 million and $23.9 million during the six months ended August 1, 2026 and July 26, 2025, respectively. The increase in amortization expense during the three and six months ended MayAugust 2,1, 2026 is due to the increase in amortizing intangibles from acquired businesses.

Interest Expense, Net. Interest expense, net was $35.5$38.0 million and $14.0$15.6 million during the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, respectively and $73.5 million and $29.6 million during the six months ended August 1, 2026 and July 26, 2025, respectively, as a result of higher outstanding borrowings and lower market interest rates during the current period.

Other (Expense) Income, Net. Other expense, net was $1.5$0.1 million and $1.6 million during the three and six months ended MayAugust 2,1, 20262026, respectively, and other income, net was $7.3$6.8 million and $14.1 million, respectively, during the three and six months ended AprilJuly 26, 2025. Gain on sale of fixed assets, net was $2.0$2.3 million and $9.8$10.1 million during the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, respectively and $4.3 million and $19.9 million during the six months ended August 1, 2026 and July 26, 2025, respectively. The change in other (expense) income, net is primarily a function of the number of assets sold and prices obtained for those assets during each respective period. Other (expense) income, net also reflects $5.1$3.2 million and $3.6$4.2 million of expense during the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025 respectively and $8.3 million and $7.8 million of expense during the six months ended August 1, 2026 and July 26, 2025, respectively, associated with the non-recourse salecollection of accounts receivable underwhich have been sold pursuant to a customer-sponsorednon-recourse vendorsale paymentto program.a bank partner.

Income Taxes. The following table presents our income tax provision and effective income tax rate for the three and six months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025 (dollars in millions):

Our effective income tax rate was 14.5%24.9% and 22.3%25.7% for the three months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, respectively.respectively, and 20.6% and 24.4% for the six months ended August 1, 2026 and July 26, 2025. The interim income tax provisions are based on the effective income tax rate expected to be applicable for the full fiscal year, adjusted for specific items that are required to be recognized in the period in which they occur. The effective tax rate differs from the statutory rate primarily due to the difference in income tax rates from state to state where work was performed, non-deductible and non-taxable items, tax credits recognized, the tax effects of the vesting and exercise of share-based awards, and changes in unrecognized tax benefits. Deferred tax assets and liabilities are based on the enacted tax rate that will apply in future periods when such assets and liabilities are expected to be settled or realized.

Through October 25, 2025, we reported our results under a single reportable segment. During the fourth quarter of fiscal 2026, in connection with the acquisition of Power Solutions, we reevaluated our reportable segments which resulted in the transition from a single reportable segment to two reportable segments: Communications and Building Systems. See Note 20, Segment Reporting for additional information. Common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs. Certain corporate costs are not allocated, including certain acquisition and integration costs, credit agreement and senior notes interest expenseexpense, (interest income) on invested balances and loss on debt extinguishment. The following table sets forth segment and consolidated contract revenues, segment and consolidated income before income taxes and segment and consolidated Non-GAAP Adjustment EBITDA for the periods indicated and the amounts as a percentage of segment and consolidated contract revenues, respectively, as well as the dollar and percentage change from the prior period (totals may not add due to rounding) (dollars in millions):

Contract Revenues. The increase in contract revenues for the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 was primarily due to net increases in fiber-to-the-home deployments, including rural fiber deployment programs.

Income before income taxes. The increasedecrease in income before income taxes for the three months ended MayAugust 2,1, 2026 compared to the three months ended AprilJuly 26, 2025 was primarily due to the mix of work performed, general and administrative costs to scale our operations and lower gain on sales of fixed assets. The increase in income before income taxes for the six months ended August 1, 2026 compared to the six months ended July 26, 2025 was primarily due improved operating leverage resulting from higher contract revenues.

Non-GAAP Adjusted EBITDA. The increase in Non-GAAP Adjusted EBITDA for the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 was primarily due improved operating leverage resulting fromto higher contract revenues.

Contract Revenues. The increase in contract revenues for the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 was due to revenues from the businessbusinesses acquired in fiscal 2026.2026 and fiscal 2027.

Income before income taxes. The increase in income before income taxes for the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 was due to the businessbusinesses acquired in fiscal 2026.2026 and fiscal 2027. Income before income taxes is impacted by amortization expense resulting from the application of acquisition accounting for the acquired business,businesses, which resulted in $45.9$48.1 million and $94.0 million of amortization expense for the three and six months ended August 1, 2026 associated with finite-lived intangible assets related to customer relationships, backlog and trade names identified during the preliminary purchase price allocation. We expect these non-cash charges to continue to impact segment operating results in future periods as the economic value of the acquired intangibles is realized.

Non-GAAP Adjusted EBITDA. The increase in Non-GAAP Adjusted EBITDA for the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 was due to the results of the businessbusinesses acquired in fiscal 2026.2026 and fiscal 2027.

The increase in corporate and non-allocated costs during the three and six months ended MayAugust 2,1, 2026 compared to the three and six months ended AprilJuly 26, 2025 resulted from increased interest expense.

We are subject to concentrations of credit risk relating primarily to our cash and equivalents, accounts receivable, and contract assets. Cash and equivalents primarily include balances on deposit with banks and totaled $538.8$340.1 million as of MayAugust 2,1, 2026 compared to $709.2 million as of January 31, 2026. We maintain our cash and equivalents at financial institutions we believe to be of high credit quality. For all periods presented, we have not experienced any loss or lack of access to cash in our operating accounts.

Sources of Cash. Our sources of cash are operating activities, long-term debt, equity offerings, bank borrowings, proceeds from the sale of idle and surplus equipment and real property, and stock option proceeds. Cash flow from operations is primarily influenced by demand for our services and operating margins, but can also be influenced by working capital needs associated with the services that we provide. In particular, working capital needs may increase when we have growth in operations and where project costs, primarily associated with labor, subcontractors, equipment, and materials, are required to be paid before the related customer balances owed to us are invoiced and collected. Our working capital (total current assets less total current liabilities, excluding the current portion of debt) was $1,827.0$1,780.8 million as of MayAugust 2,1, 2026 compared to $1,754.0 million as of January 31, 2026.

Net Cash Flows. The following table presents our net cash flows for the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025 (dollars in millions):

Cash usedProvided inby Operating Activities. Depreciation and amortization, non-cash lease expense, stock-based compensation, amortization of debt issuance costs, deferred income taxes, gain on sale of fixed assets and provision for (recovery of) bad debt were the primary non-cash items in cash flows from operating activities during the current and prior periods.

During the threesix months ended MayAugust 2,1, 2026, net cash usedprovided inby operating activities was $24.6$79.1 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $265.2$428.1 million of operating cash flow during the threesix months ended MayAugust 2,1, 2026. Changes that used operating cash flow during the threesix months ended MayAugust 2,1, 2026 included increases in accounts receivable, contract assets, net, other current assets and inventories and other assets of $283.9$520.8 million, $80.5$30.3 million, $25.0$27.3 million, and $5.0$10.9 million, respectivelyrespectively. andThe a decreaseincrease in accruedaccounts liabilitiesreceivable ofis $42.4attributable million.to growth in the business, including acquired balances. Changes that provided cash flow during the threesix months ended MayAugust 2,1, 2026 included an increase in accounts payable and accrued liabilities, of $169.4$117.5 million and $41.5 million, respectively, and a decrease in income taxes receivable of $2.2$2.0 million.

Days sales outstanding (“DSO”) is calculated based on the ending balance of total current and non-current accounts receivable (including unbilled accounts receivable), net of the allowance for credit losses, and current contract assets, net of contract liabilities, divided by the average daily revenue for the most recently completed quarter. Our DSO was 96101 as of MayAugust 2,1, 2026 compared to 111108 as of AprilJuly 26, 2025. DSO as of August 1, 2026 is calculated on a pro forma basis by adjusting contract revenues during the second quarter of fiscal 2027 to include the historical contract revenues of the business acquired in fiscal 2027 as if such acquisition had occurred as of the beginning of the fiscal quarter.

See Note 6, Accounts Receivable, Contract Assets, and Contract Liabilities, for further information on our customer credit concentration as of MayAugust 2,1, 2026 and January 31, 2026 and Note 19, Customer Concentration and Revenue Information, for further information on our significant customers. We believe that none of our significant customers were experiencing financial difficulties that would materially impact the collectability of our total accounts receivable and contract assets, net as of MayAugust 2,1, 2026 or January 31, 2026.

During the threesix months ended AprilJuly 26, 2025, net cash usedprovided inby operating activities was $54.0$3.5 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $186.1$335.7 million of operating cash flow during the threesix months ended AprilJuly 26, 2025. Changes that used operating cash flow during the threesix months ended AprilJuly 26, 2025 included an increaseincreases in accounts receivable, inincome taxes receivables, contract assets, net, inother assets, and other current assets and inventories, and in other assetsinventories of $154.1$216.0 million, $20.1$63.5 million, $16.5$59.9 million, $23.6 million, and $11.7$7.1 million, respectively and a decrease in accrued liabilities, net of $42.0$15.2 million. Changes that provided operating cash flow during the threesix months ended AprilJuly 26, 2025 included an increase in accounts payable and net increase in income taxes payable of $40.9$49.6 million and $17.4 million, respectively.million.

Cash Used in Investing Activities. Net cash used in investing activities was $80.4$371.6 million during the threesix months ended MayAugust 2,1, 2026 compared to $68.6$107.7 million during the threesix months ended AprilJuly 26, 2025. During the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, capital expenditures were $70.3$139.8 million and $79.5$131.2 million, respectively, and cash paid for current and previous acquisitions during the threesix months ended MayAugust 2,1, 2026 was $12.8$238.3 million. These expenditures were offset in part by proceeds from the sale of assets of $2.8$6.5 million and $10.9$23.5 million during the threesix months ended MayAugust 2,1, 2026 and AprilJuly 26, 2025, respectively.

Cash (Used in) Provided by Financing Activities. Net cash used in financing activities was $65.4$76.6 million during the threesix months ended MayAugust 2,1, 2026. During the threesix months ended MayAugust 2,1, 2026, we repurchased 100,000 shares of our common stock in open market transactions, at an average price of $359.63 per share, for $36.0 million. We also paid $29.3$29.4 million, net to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during the threesix months ended MayAugust 2,1, 2026. In addition, we repaid debt assumed in acquisitions of $8.4 million, and we paid $2.7 million, net, to tax authorities for payroll tax withholding obligations on the exercise of stock options and $0.1 million in issuance costs and third party fees related to our financing transactions.

Net cash provided by financing activities was $45.9$39.9 million during the threesix months ended AprilJuly 26, 2025. During the threesix months ended AprilJuly 26, 2025, borrowings and repayments under our creditCredit agreementAgreement were $285.0$629.0 million and $196.0$544.0 million, respectively. In addition, we repurchased 200,000 shares of our common stock in open market transactions, at an average price of $150.93 per share, for $30.2 million, during the threesix months ended AprilJuly 26, 2025. We also paid $12.9$13.0 million to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during the threesix months ended AprilJuly 26, 2025. In addition, we paid $1.9 million, net, to tax authorities for payroll tax withholding obligations on the exercise of stock options.

Compliance with Credit Agreement. The Company and certain of its subsidiaries are party to a credit agreement (defined below). The Company, the Guarantors (as defined therein) party thereto, the Term Loan B lender (as defined therein) party thereto and Bank of America, N.A. (“Bank of America”) as administrative and collateral agent (in such capacities and together with its successors and permitted assigns, the “Administrative Agent”), entered into that certain First Amendment to the Third Amended and Restated Credit Agreement (the “Amendment”), which amends that Third Amended and Restated Credit Agreement, dated as of December 23, 2025 (as amended by that certain First Amendment to the Third Amended and Restated Credit Agreement, dated as of January 27, 2026, the “Credit Agreement”) by and among, the Company, the Guarantors (as defined therein) from time to time party thereto, the Lenders (as defined therein) from time to time party thereto and theBank L/Cof IssuesAmerica, (N.A., as defined therein) from time to time party theretoadministrative and thecollateral Administrative Agentagent (thein “Existingsuch Credit Agreement”, and, the Existing Credit Agreement, as amended by the Amendment,capacities, the “CreditAdministrative AgreementAgent”). On December 23, 2025, we amended and restated the Credit Agreement to, among other things, establish a $600.0 million 364 day secured bridge loan facility (the “Bridge Facility”), increase the existing senior secured term loan A facility from $440.0 million to $1,540.0 million (the “Term Loan A Facility”), increase the commitments under the senior secured revolving credit facility from $650.0 million to $800.0 million (the “Revolving Credit Facility”) and extend the maturity date of the Term Loan A Facility and the Revolving Credit Facility. On January 27, 2026, we entered into the First Amendment to, among other things, establish an $800 million senior secured term loan B facility (the “Term Loan B Facility”), the proceeds of which were used to (i) refinance the Bridge Facility, (ii) pay the fees and expenses incurred in connection therewith and (iii) fund cash to the balance sheet of the Company. The Credit Agreement includes a revolving facility with a maximum revolver commitment of $800.0 million,million(the “Revolving Credit Facility”), a term loan A facility (the “Term Loan A Facility”) in the original principal amount of $1,540.0 million, and a term loan B facility (the “Term Loan B Facility”) in the original principal amount of $800.0 million. The Credit Agreement also includes a $225.0 million sublimit for the issuance of letters of credit and a $50.0 million sublimit for swingline loans. The maturity of the Revolving Credit Facility and Term Loan A Facility is December 23, 2030. The maturity of the Term Loan B Facility is January 27, 2033.

Subject to certain conditions, the Credit Agreement provides us with the ability to enter into one or more incremental facilities either by increasing the revolving commitments under the Credit Agreement and/or by establishing one or more additional term loans, up to the sum of (i) $927.0 million and (ii) an aggregate amount such that, after giving effect to such incremental facilities on a pro forma basis (assuming that the amount of the incremental commitments are fully drawn and funded), the consolidated senior secured net leverage ratio does not exceed 3.50 to 1.00. The consolidated senior secured net leverage ratio is the ratio (a)(i) of our consolidated senior secured indebtedness reduced by (iii) unrestricted cash and equivalents in excess of $25.0 million to (b) to our trailing four-quarter consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”),amortization, as defined by the Credit Agreement,Agreement (ii“EBITDA”) subordinated indebtedness, as defined in the Credit Agreement and (iii) unsecured indebtedness, as defined in the Credit Agreement.. Borrowings under the Credit Agreement are guaranteed by substantially all of our domestic subsidiaries and secured by substantially all of the assets of the Borrowers and the Guarantors (subject to customary exceptions).

Under our Credit Agreement, borrowings bear interest at the rates described below based upon our consolidated net leverage ratio, which is the ratio of our consolidated total funded debt reduced by unrestricted cash and equivalents in excess of $25.0 million to our trailing four-quarter consolidated EBITDA, as defined by our Credit Agreement.EBITDA. In addition, we incur certain fees for unused balances and letters of credit at the rates described below, also based upon our consolidated net leverage ratio. The weighted average interest rates and fees for balances under our Credit Agreement as of MayAugust 2,1, 2026 and January 31, 2026 were as follows:

(1) Base rate is described in the Credit Agreement as the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the administrativeAdministrative agent’sAgent’s prime rate, and (iii) the Term Secured Overnight Financing Rate (“SOFR”) plus 1.00% and, if such rate is less than zero, such rate shall be deemed zero. There were no outstanding borrowings under our revolving facility as of MayAugust 2,1, 2026 and January 31, 2026.

Standby letters of credit of approximately $53.6 million issued as part of our insurance program, were outstanding under our Credit Agreement as of both MayAugust 2,1, 2026 and January 31, 2026.

Our Credit Agreement contains a financial covenant that requires us to maintain a maximum consolidated net leverage ratio of not greater than (A) until the last day of the first fiscal quarter ending after the second anniversary of December 23, 2025, 4.50 to 1.00, and (B) thereafter, 4.00:1.00, as measured at the end of each fiscal quarter, and provides for certain increases to this ratio in connection with permitted acquisitions. The consolidated net leverage ratio is the ratio of our consolidated indebtedness reduced by unrestricted cash and cash equivalents in excess of $25.0 million to our trailing four-quarter consolidated earnings before interest, taxes, depreciation, and amortization as defined by our Credit Agreement. The agreement also contains a financial covenant that requires us to maintain a minimum consolidated interest coverage ratio, which is the ratio of our trailing four-quarter consolidated EBITDA to our consolidated interest expense, each as defined by our Credit Agreement, of not less than 2.50 to 1.00, as measured at the end of each fiscal quarter. At MayAugust 2,1, 2026 and January 31, 2026, we were in compliance with the financial covenants of our Credit Agreement and had borrowing availability under our revolving facility of $746.4 million, as determined by the most restrictive covenant. For calculation purposes, applicable cash on hand is netted against the funded debt amount as permitted in the Credit Agreement.million.

Performance and Payment Bonds and Guarantees. We have obligations under performance and other surety contract bonds related to certain of our customer contracts. Performance bonds generally provide a customer with the right to obtain payment and/or performance from the issuer of the bond if we fail to perform our contractual obligations. We had $1,054.5$1,215.8 million and $917.9 million of outstanding performance and other surety contract bonds, as of MayAugust 2,1, 2026 and January 31, 2026, respectively. The estimated cost to complete projects secured by our outstanding performance and other surety contract bonds was approximately $653.0$716.1 million as of MayAugust 2,1, 2026. In addition to performance and other surety contract bonds, as part of our insurance program we also provide surety bonds that collateralize our obligations to our insurance carriers. AtAs bothof MayAugust 2,1, 2026 and January 31, 2026, we had $43.6$43.8 million and $31.0 million, respectively, of outstanding surety bonds related to our insurance obligations. Additionally, we have periodically guaranteed certain obligations of our subsidiaries, including obligations in connection with obtaining state contractor licenses and leasing real property and equipment.

Letters of Credit. We have standby letters of credit issued under our Credit Agreement as part of our insurance program. These letters of credit collateralize obligations to our insurance carriers in connection with the settlement of potential claims. In connection with these collateral obligations, we had $53.6 million outstanding standby letters of credit issued under our Credit Agreement as of MayAugust 2,1, 2026 and January 31, 2026.

Our backlog is an estimate of the uncompleted portion of services to be performed under contractual agreements with our customers and totaled $11.906$12.242 billion and $9.542 billion at MayAugust 2,1, 2026 and January 31, 2026, respectively. We expect to complete 53.7%52.9% of the MayAugust 2,1, 2026 total backlog during the next twelve months (dollars in millions).