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

•increases in design, construction and operating costs, due to inflationinflation, tariffs or other unforeseen causes, that we are unable to pass through to our customers;

•supply chain interruptions, including as a result of natural disasters, wildfires, weather, labor disputes, tariffs, government shutdowns, wars, pandemic outbreak of disease, fire or explosions and power outages;

Changes to U.S. policies related to global trade and tariffs, as well as retaliatory trade measures implemented by other countries, have resulted in uncertainty surrounding the future of the global economy. Increases in the cost of imported raw materials or finished goods as a result of tariffs or trade policies may impact customer spending, indirect inflationary impacts, and reductions in customer spending could lead to fewer project awards and more competitioncompetition. We cannot predict the outcome of these changing trade policies or other unanticipated political conditions, nor can we predict the timing or strength of any economic recovery or downturn worldwide or its impact on our customers’ markets.

Many projects involve challenging engineering, procurement and construction phases that may occur over several years. We have in the past and may in the future encounter difficulties that impact our ability to complete the project in accordance with the original delivery schedule. These difficulties have in the past been and may continue to be the result of delays in designs; engineering information or materials provided by the customer or a third party; delays or difficulties in equipment and material delivery; schedule changes; delays from our customer’s failure to timely obtain permits, rights-of-way or to meet other regulatory requirements; weather-related delays; delays caused by difficult worksite environments; delays caused by government shutdowns; delays caused by inefficiencies and not achieving expected labor performance and other factors, some of which are beyond our control. Any delay or failure by suppliers or by third-party contractors or subcontractors in the completion of their portion of the project may result in delays in the overall progress of the project or may cause us to incur additional costs, or both. We also may encounter project delays due to local opposition, which may include injunctive actions as well as public protests, to the siting of electric transmission lines, clean energy projects, or other facilities. We may not be able to recover the costs we incur that are caused by delays. Certain contracts have guarantee provisions regarding project completion by a scheduled acceptance date or achievement of certain acceptance and performance testing levels. Failure to meet any of our schedules or performance requirements could also result in additional costs or penalties, including liquidated damages, and such amounts could exceed expected project profit. In extreme cases, the above-mentioned factors could cause project cancellations. Delays or cancellations may impact our reputation or relationships with customers and adversely affect our ability to secure new contracts. Larger projects present additional performance risks due to complexity of the work and duration of the project.

Our ability to maintain our productivity and our operating results may be limited by our ability to employ, train and retain qualified personnel necessary to operate efficiently and to support our growth strategy. We have from time to timetime-to-time experienced shortages of certain types of qualified personnel, such as linemen, wiremen, field supervisors, project managers and engineers, in certain regions. In addition, our projects are sometimes located in remote areas, which can make recruitment and deployment of our personnel challenging. Delays in the completion of a project could impact the labor available for other projects, reducing our productivity and causing an increase in our labor costs. Additionally, during periods with large volumes of storm restoration services work, linemen are frequently recruited across geographic regions to satisfy demand. Many linemen are willing to travel to earn premium wages for such work, which from time to timetime-to-time makes it difficult for us to retain these workers for ongoing projects when storm conditions persist. The commencement of any new, large-scale infrastructure projects or increased demand for infrastructure improvements, as well as the shrinking electricskilled utilityelectrical workforce, may reduce the pool of skilled workers available to us. Labor shortages could materially increase our cost or impair our ability to maintain our business or grow our revenues. If we are unable to hire personnel with the requisite skills, we may also be forced to incur significant training expenses.

We have operations in the United States and Canada and are subject to the jurisdiction of multiple federal and state taxing authorities. The income earned in these various jurisdictions is taxed on different bases which are subject to change by the taxing authorities. The final determination of our income tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each jurisdiction, as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Our interpretation of these tax laws has in the past and may in the future differ from the interpretation of taxing authorities. Changes in the operating environment, including changes in tax laws, as well as differences in the interpretation of tax laws, could materially impact our income tax liabilities. Furthermore, our income tax assets and liabilities could be adversely affected by numerous other factors, including operating income earned and tax rates in various jurisdictions being different than anticipated as well as changes in the valuation of deferred income tax assets and liabilities.

Legislative or regulatory actions relating to utility, electricity transmission andtransmission, clean energy or our business activities may impact demand for our services.

The most significant estimates we use are related to costs to complete contracts, variable consideration inclusive of pending change orders and claims, shared savings, useful lives of property and equipment, insurance reserves, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax reserves,positions, estimates surrounding stock-based compensation, acquisition-related contingent earn-out consideration liabilities, the recoverability of goodwill and intangibles,intangibles and accountsallowance receivablefor reserves.doubtful accounts.

Many of our contracts require that we provide security to our customers for the performance of their projects in the form of bonds, letters of credit, bank guarantees or other financial assurances. Current or future market conditions, including losses incurred in the construction industry or as a result of large corporate bankruptcies, as well as changes in our sureties’ assessment of our operating and financial risk, could cause our surety providers and lenders to decline to issue or renew,renew or substantially reduce the amount of,of bid or performance bonds for our work and could increase our costs associated with collateral. These actions could be taken on short notice. If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would include seeking capacity from other sureties and lenders,lenders or finding more business that does not require bonds or allows for other forms of collateral for project performance, such as cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all, which could affect our ability to bid for or work on future projects requiring financial assurances.

We have also granted security interests in various assets to collateralize our obligations to our sureties and lenders. Furthermore, under standard terms in the surety market, sureties issue or continue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing any bonds. If we were to experience an interruption or reduction in the availability of bonding capacity as a result of these or any other reasons, we may be unable to compete for or work on certain projects that would require bonding.

Actual events, concerns or speculation about disruption or instability in the banking and financial services industry, such as liquidity constraints, the failure of individual institutions, or the inability of individual institutions or the banking and financial service industry generally to meet their contractual obligations, could significantly impair our access to capital, delay access to deposits or other financial assets, or cause actual loss of funds subject to cash management arrangements. Similarly, these events, concerns or speculation could result in less favorable financing terms such as higher interest rates or costs and stricter covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Additionally, our customers also could be adversely affected by these risks, which in turn could result in their committing a breach or default under their contractual agreements with us, their insolvency or bankruptcy, or other adverse effects. Any decline in available funding, limitation on access to our cash and liquidity resources, or non-compliance of banking and financial services counterparties with their contractual commitments to us could, among other risk, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Increased IT security threats and other more sophisticated computer crimes, including the use of new and emerging technologies such as artificial intelligence, advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing and social engineering schemes designed to provide access to our networks or data, pose a potential risk to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data. If the IT systems, networks or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of sensitive information, we may suffer interruptions in our ability to manage operations, be subject to government enforcement actions, litigation, and reputational, competitive and business harm which may adversely impact our business, financial position, results of operations and cash flows, competitive position and reputation.

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the fiscal years ended December 31, 20242025 and 2023.2024. For a discussion of changes fromfor the fiscal year ended December 31, 20232024 to the fiscal year ended December 31, 2022,2023, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 20232024 (filed February 28,26, 20242025).

Commercial and Industrial segment. Our C&I segment provides a wide range of services including design, installation, maintenance and repair of commercial and industrial wiring, the installation of intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general contractors in the C&I industry as well as directly to facility owners. We have a diverse customer base with many long-standing relationships. We concentrate our efforts on projects where our technical and project management expertise is critical to successful and timely execution. The majority of C&I contracts cover electrical contracting services for data centers, airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure.

We believe legislative actions aimed at supporting infrastructure improvements in the United States may positively impact long-term demand, and opportunity in both of our reporting segments, particularly in connection with electric power infrastructure, transportationexpansion of domestic manufacturing, and clean energytransportation spending. WeHowever, believewe legislativemay actionsexperience areunanticipated likelyvolatility toassociated providewith greaterpolicy long-termchanges opportunityand tariffs. Prolonged uncertainty in boththe ofbusiness environment and higher inflation could also impact customer demand and our reporting segments.profitability.

We believe there is an ongoing need for utilities to sustain investment in their transmission systems to improve reliability, reduce congestion, connect to new cleanpower energygeneration sources and support future load growth. Consequently, we believe we will continue to see continued bidding activity on large transmission projects going forward. The timing of multi-year transmission project awards and substantial construction activity is difficult to predict due to regulatory requirements and the permitting needed to commence construction. Significant construction on anyAny large, multi-year projects awarded in 20252026 will not likely have a large impact on our 20252026 results.results because significant construction activity would not occur until 2027 or later. Bidding and construction activity for small to medium-size transmission projects and upgrades remainremains active, and we expect this trend to continue.

We believe there is a need for further investment by utilities on their distribution systems to properly maintain their systems or meet reliability requirements. We continue to see strong bidding activity in somemany of our electric distribution markets. We believe the increased storm activity and destruction caused by wildfires will cause a push to strengthen utility distribution systems against catastrophic damage. Distribution systems may also require upgrades to accommodate additional distributed energy resources and increased electrification. We expect to see an increase in the distribution market opportunities during in 2025.2026.

Our C&I bidding opportunities remain strong and we believe we will see continued opportunities in the primary markets we serve such as data centers, transportation, health care, manufacturing, clean energy and warehousing. In addition, the United States has experienced decades of underfunded economic expansion and aging infrastructure that have challenged the capacity of public watertransportation and transportationwater infrastructure forcing states and municipalities to seek creative means to fund needed expansion and repair. We believe the need for expanding public infrastructure in both the United States and Canada will offer opportunity in our C&I segment for several years. Legislation and regulation that promotes domestic manufacturing could also create opportunity for our C&I segment. We expect the long-term growth in our C&I segment to generally track the overall growth of the regions we serve.

We continued to implement strategies that further expand our capabilities and effectively allocate capital. We have maintained a strong balance sheet, while also supporting our organic growth with capital expenditures and working capital and repurchasing our shares. During 20242025 and 2023,2024, the Company repurchased 643,549639,207 and 25,042643,549 shares, respectively of its common stock under repurchase programs at a weighted-average price of $116.54$117.33 and $114.55$116.54 per share, respectively. We believe the borrowing availability under our $490 million revolving credit facilityfacility, our cash on hand and future cash flow from operations will enable us to support the organic growth of our business, pursue acquisitions and opportunistically repurchase shares.

We continue to manage our increasing operating costs, including increasing insurance, equipment, labor and material costs. We believe that our financial position, positive cash flows and other operational strengths will enable us to respond to challenges and uncertainties in the markets we serve and give us the flexibility to successfully execute our strategy. We continue to invest in developing key management and craft personnel in both our T&D and C&I segments and in procuring the specific specialty equipment and tooling needed to win and execute projects of all sizes and complexity. In 20242025 and 2023,2024, we invested in capital expenditures of approximately $75.9$94.4 million and $84.7$75.9 million, respectively. Most of our capital expenditures supported opportunities in our T&D business. We plan to continue to evaluate our needs for additional equipment and tooling.tooling to support future growth.

We define backlog as our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue we have recognized under such contracts. Backlog may not accurately represent the revenues that we expect to realize during any particular period. Several factors, such as the timing of contract awards, the type and duration of contracts, and the mix of subcontractor and material costs in our projects, can impact our backlog at any point in time. Some of our revenue does not appear in our periodic backlog reporting because the award of the project, as well as the execution of the work, can all take place within the period. For many of our unit-price, time-and-equipment, time-and-materials and cost-plus contracts, we only include projected revenue for a three-month period in the calculation of backlog, although these types of contracts are generally awarded as part of MSAs that typically have a one- to three-yearfour-year duration from execution. Additionally, the difference between our backlog and remaining performance obligations is due to the exclusion of a portion of our MSAs under certain contract types from our remaining performance obligations as these contracts can be canceled for convenience at any time by us or the customer without considerable cost incurred by the customer. Our backlog includes projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. Our estimated backlog also includes our proportionate share of our unconsolidated joint venture contracts.

Seasonal, Weather and Geographical. Seasonal and changing patterns, primarily related to weather conditions and the availability of system outages, can have a significant impact on gross margins in a given period. It is typical during the winter months that parts of the country may experience snow or rainfall, which can affect our crews’ ability to work efficiently. Recent abnormalAbnormal weather patterns including those related to excessive rainfall and increased thaw and freeze cycles also affect our crews’ ability to work efficiently. Additionally, our T&D customers often cannot remove their T&D lines from service during the summer months, when consumer demand for electricity is at its peak, delaying maintenance and repair services. In both cases, projects may be delayed or temporarily placed on hold. Conversely, in periods when weather remains dry and temperatures are moderate, more work can be done, sometimes with less cost, which would have a favorable impact on gross margins. The mix of business conducted in different parts of the country could also affect margins, as some parts of the country offer the opportunity for higher margins than others due to the geographic characteristics associated with the location where the work is being performed. Such characteristics include whether the project is performed in an urban versus a rural setting; in a mountainous area or in open terrain; or in normal soil conditions or rocky terrain. Site conditions, including unforeseen underground conditions, can also impact margins.

Gross margin for the year ended December 31, 20242025 decreasedincreased to 8.6%11.6% compared to 10.0%8.6% for the year ended December 31, 2023.2024. The decreaseincrease in gross margin was primarily impacteddue byto significant changes in our estimated gross profit on certain projects resulting in a net gross margin decrease of 1.4% for the year ended December 31, 2025, compared to a net gross margin decrease of 4.4% for the year ended December 31, 2024, compared to a net decrease of 1.7% for the year ended December 31, 2023.2024. During the year ended December 31, 2024,2025, significant estimate changes negatively impacted gross margin by 5.4%2.4%, and primarilylargely related to clean energy projects in T&D that have reached mechanical completion, the unfavorable impact of a C&I project that has reached substantial completion, labor and project inefficiencies, an increase in costs associated with schedulelabor compressionand project inefficiencies on certain projects,projects anand unfavorable change order and an unfavorable job closeout.orders. In addition, significant estimate changes in gross profit positively impacted gross margin by 1.0% and mainly related to better-than-anticipated productivity, favorable change orders and favorable job closeouts. Gross margin also benefited by approximately 0.2% from favorable joint venture results duringDuring the year ended December 31, 2024.2024, gross margin was primarily impacted by negative significant estimate changes in our estimated gross profit on certain T&D clean energy projects and a C&I project.

Gross profit decreasedincreased $74.1$133.5 million, or 20.3%,46.0%, to $290.3$423.8 million for year ended December 31, 20242025 from $364.4$290.3 million for the year ended December 31, 2023,2024, due to lowerhigher margins and lower revenues.

SG&A was $256.4 million for the year ended December 31, 2025, an increase of $18.2 million from $238.2 million for the year ended December 31, 2024, an increase of $3.6 million from $234.6 million for the year ended December 31, 2023.2024. The year-over-year increase was primarily due to an increase in employee incentive compensation costs and an increase in employee-related expenses to support future growthgrowth. inThese ourincreases operationswere andpartially anoffset increaseby of $1.1$10.3 million related toof contingent compensation expense related to a prior acquisition,acquisition partiallyand offsetrecognized byduring athe decreaseyear inended employeeDecember incentive31, compensation2024, costs.which did not recur.

Interest expense was $5.6 million for the year ended December 31, 2025 compared to $6.5 million for the year ended December 31, 2024 compared to $4.9 million for the year ended December 31, 2023.2024. This increasedecrease was primarily attributable to higher average debt balances partially offset by lower interest rates during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024.

Other expense was $0.7 million for the year ended December 31, 2025 compared to $1.5 million for the year ended December 31, 2024 compared to an insignificant amount of other expense for the year ended December 31, 2023.2024. The change was largely due to higher foreign currency losses from changes in exchange rates on intercompany receivables.receivables recognized during the year ended December 31, 2024.

Income tax expense was $42.9 million for the year ended December 31, 2025, with an effective tax rate of 26.6%, compared to $16.2 million for the year ended December 31, 2024, with an effective tax rate of 34.9%, compared to $34.0 million for the year ended December 31, 2023, with an effective tax rate of 27.2%.34.9%. The increasedecrease in the tax rate for the year ended December 31, 20242025 was primarily due to higherchanges otherin state tax rates used to measure our state deferred income taxes and lower permanent difference itemsitems, and the unrecognized benefit of deferred tax assets,partially offset by lower stock compensation excess tax benefits. The increase in permanent difference items primarily related to deductibility limits of contingent compensation, associated with a prior acquisition.

Net income decreasedincreased to $118.4 million for the year ended December 31, 2025 from $30.3 million for the year ended December 31, 2024 from $91.0 million for the year ended December 31, 2023.2024. The decreaseincrease was primarily for the reasons stated above.

Revenues for our T&D segment for the year ended December 31, 20242025 were $1.88$2.00 billion compared to $2.09$1.88 billion for the year ended December 31, 2023,2024, aan decreaseincrease of $208.7$121.9 million, or 10.0%.6.5%. The decreaseincrease in revenue was related to aan decreaseincrease of $241.1$63.2 million in revenue on distribution projects, and an increase of $58.7 million in revenue on transmission projects, primarily related to the mechanical completion of certain clean energy projects, partially offset by an increase of $32.4 million in revenue on distribution projects. Revenues from transmission projects represented 60.6% and 66.1%, of T&D segment revenue for the year ended December 31, 2024 and 2023, respectively.

Operating income for our T&D segment for the year ended December 31, 20242025 was $69.4$157.6 million compared to $149.7$69.4 million for the year ended December 31, 2023,2024, aan decreaseincrease of $80.3$88.2 million, or 53.7%.127.2%. AsOperating income as a percentage of revenues operating income for our T&D segment wasincreased to 7.9% for the year ended December 31, 2025 from 3.7% for the year ended December 31, 2024 compared to 7.2% for the year ended December 31, 2023.2024. Operating income margin was impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 0.5% for the year ended December 31, 2025, compared to a net decrease of 5.5% for the year ended December 31, 2024, compared to a net decrease of 1.5% for the year ended December 31, 2023.2024. During the year ended December 31, 2024,2025, significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 5.7% with 5.5% of the impact related to losses on certain clean energy projects that have reached mechanical completion. Losses on these projects were1.1% primarily related to contractual disputes, labor and project inefficiencies,inefficiencies higheron laborcertain and contract related costs and unfavorable weather conditions. Significant estimated gross profit changes were also negatively impacted by an unfavorable job closeout and labor and project inefficiencies.projects. These decreases were partially offset by positive significant estimated gross profit changes totaling 0.2%0.6% of revenues mostly related to better-than-anticipated productivity. During the year ended December 31, 2024, T&D operating income margin was negatively impacted by significant estimated gross profit changes related to clean energy projects.

Revenues for our C&I segment for the year ended December 31, 20242025 were $1.48$1.66 billion compared to $1.55$1.48 billion for the year ended December 31, 2023,2024, aan decreaseincrease of $72.9$173.6 million, or 4.7%, primarily due to the delayed start of certain projects in 2024.11.7%. The decreaseincrease in revenue includedwas arelated decreaseto an increase of $72.1$195.6 million in revenue on fixed priced contracts, partially offset by a decrease of $15.6 million on T&E contracts and a decrease of $12.1$6.3 million in revenues on unit price work, partially offset by an increase of $11.2 million on T&E contracts.work.

Operating income for our C&I segment for the year ended December 31, 20242025 was $48.0$97.2 million compared to $45.9$48.0 million for the year ended December 31, 2023,2024, an increase of $2.1$49.2 million, or 4.7%.102.3%. Operating income, as a percentage of revenues, for our C&I segment increased to 5.9% for the year ended December 31, 2025 from 3.2% for the year ended December 31, 2024 from 3.0% for the year ended December 31, 2023.2024. Operating income margin was positively impacted during the year ended December 31, 2024,2025, by thea continuedlarger benefitportion of higherour margins on certain completedC&I projects andprogressing certainat projectshigher contractual margins, some of which are nearing completion,completion. theseAdditionally, benefitsC&I largelyoperating income for the year ended December 31, 2024 was negatively impacted by contingent compensation expense related to better-than-anticipateda productivityprior andacquisition, favorablethat changedid orders.not Therecur year-over-yearduring increasethe inyear ended December 31, 2025. C&I operating income margin wasduring positivelythe impactedyear byended approximatelyDecember 0.4%31, due to favorable joint venture results. Operating income margin2025 was also impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin decrease of 2.6% for the year ended December 31, 2025, compared to a net decrease of 2.9% for the year ended December 31, 2024, compared to a net decrease of 2.0% for the year ended December 31, 2023.2024. Significant estimated gross profit changes negatively impacted operating income as a percentage of revenues by 5.0% with 2.3% of the impact from a single project that is substantially complete. The loss from this project was4.1%, primarily due to scope additions, increased labor costs related to schedule compression and lower productivity due to access and workflow issues. Significant estimated gross profit changes were also negatively impacted by an increase in costs associated with labor and project inefficiencies, schedule compressioninefficiencies on certain projects and an unfavorable change order.orders. These decreases were partially offset by positive significant estimated gross profit changes totaling 2.1%1.5% of revenuesand largely related to better-than-anticipated productivity, some of which related to clean energy projects, favorable change orders and a favorable job closeouts.closeout.

The decreaseincrease in corporate expenses for the year ended December 31, 20242025 was primarily attributable to aan decreaseincrease in employee incentive compensation costs,costs partially offset byand an increase in employee-related expenses to support future growth in our operations.

EBITDA is a non-GAAP measure used by management that we define as net income plus net income from noncontrolling interests, interest expense net of interest income, income tax expense and depreciation and amortization, as shown in the following table. EBITDA does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. We believe that EBITDA is useful to investors and other external users of our Consolidated Financial Statements in evaluating our operating performance and cash flow because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods, book value of assets, useful lives placed on assets, capital structure and the method by which assets were acquired. Because not all companies define EBITDA as we do, this presentation of EBITDA may not be comparable to other similarly-titled measures of other companies. We use, and we believe investors benefit from, the presentation of EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations.

As of December 31, 20242025 and 2023,2024, we had working capital of $265.8$265.5 million and $279.0$265.8 million, respectively. During the year ended December 31, 2024,2025, our operating activities provided cash of $87.1$326.6 million, compared to $71.0$87.1 million for the year ended December 31, 2023.2024. Cash flow from operations is primarily influenced by operating margins, timing of contract performance and the type of services we provide to our customers. The $16.1$239.5 million year-over-year increase in cash provided by operating activities was primarily due to favorable net changes in operating assets and liabilities of $74.4$151.5 million, offsetand byan a $60.7 million decreaseincrease in net income.income of $88.2 million. The favorable change in operating assets and liabilities was primarily due to the net favorable year-over-year changes in various working capital accounts that relate primarily to construction activities (accounts receivable, contract assets, accounts payable and contract liabilities) of $119.3$109.6 million,million and the favorable change of $59.3 million in other liabilities, partially offset by the net unfavorable changechanges of $50.9$23.6 million in prepaid expenses and other liabilities.assets. The net favorable changes of $119.3$109.6 million in cash provided by working capital accounts, mainly related to construction activities, was due to the timing of billings and payments under our contracts. The unfavorablefavorable change of $50.9$59.3 million in other liabilities was primarily due to thechanges timingin ofour contingentemployee incentive compensation paymentsaccruals associated with a prior acquisition,and the timing of employee related wage and tax paymentspayments. The unfavorable change of $23.6 million in prepaid expenses and lowerother employeeassets incentivewas compensationprimarily accruals.due to prepayment of materials required for certain projects.

During the years ended December 31, 20242025 and 2023,2024, we used cash of $40.0$94.1 million, and $18.4$40.0 million, respectively in financing activities. The $94.1 million of cash used in financing activities in the year ended December 31, 2025 consisted primarily of $75.0 million of share repurchases under our prior share repurchase program, $11.0 million of net payments under our revolving line of credit, $4.4 million of payments for equipment notes, $2.6 million of shares repurchased to satisfy tax obligations under our stock compensation programs and $1.1 million of payments for finance lease obligations. The $40.0 million of cash used in financing activities in the year ended December 31, 2024 consisted primarily of $75.0 million of share repurchases under our prior share repurchase program, $7.1 million of payments under our master equipment notes,loan agreements, $5.9 million of shares repurchased to satisfy tax obligations under our stock compensation programs and $1.2 million of repaymentspayments offor finance lease obligations, partially offset by $45.2 million of net borrowings under our revolving line of credit. The $18.4 million of cash used in financing activities in the year ended December 31, 2023 consisted primarily of $7.9 million of shares repurchased to satisfy tax obligations under our stock compensation programs, $4.6 million of net repayments under our master equipment loan agreements, $2.9 million of shares repurchases under our share repurchase program and $1.1 million of repayments of finance lease obligations.

We believe our $354.8$408.3 million borrowing availability under our revolving line of credit as of December 31, 2024,2025, cash on hand, future cash flow from operations and our ability to utilize short-term and long-term leases will provide sufficient liquidity for our short-term and long-term needs. Our primary short-term liquidity needs include cash for operations, debt service requirements, capital expenditures, and acquisition and joint venture opportunities. We believe we have adequate sourcesfinancial of liquidityresources to meet our long-term liquidity needs and foreseeable material cash requirements, including those associated with funding future acquisition opportunities. We continue to invest in developing key management and craft personnel in both our T&D and C&I segments and in procuring the specific specialty equipment and tooling needed to win and execute projects of all sizes and complexity.

We had $47.4 million and $58.4 million and $13.2 million ofin borrowings outstanding under the Facility as of December 31, 20242025 and December 31, 2023,2024, respectively.

Some of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our insurance programs. In addition, from time to time, certain customers or our sureties require us to post letters of credit to ensure payment to our subcontractors and vendors and guarantee performance under our contracts. Such letters of credit are generally issued by a bank typically pursuant to our senior credit facility. Each letter of credit commits the issuer to pay specified amounts to the holder of the letter of credit if the holder claims that we have failed to perform specified actions. If this were to occur, we would be required to reimburse the issuer of the letter of credit. Depending on the circumstances of such a reimbursement, we may also have to record a charge to earnings for the reimbursement.

As of December 31, 2025, we had $34.3 million in letters of credit outstanding under our Credit Agreement, including $34.2 million related to the Company's payment obligations under its insurance programs and $0.1 million related to contract performance obligations. As of December 31, 2024, we had $37.3 million in letters of credit outstanding under our Credit Agreement,Agreement including $32.6 million related to the Company's payment obligations under its insurance programs and $4.7 million related to contract performance obligations. As of December 31, 2023, we had $34.4 million in letters of credit outstanding under our Credit Agreement including $27.1 million related to the Company's payment obligations under its insurance programs and $7.3 million related to contract performance obligations. We are not aware of any claims currently asserted or threatened under any of these letters of credit that are material, individually, or in the aggregate. However, to the extent payment is required for any such claims, the amount paid could be material and could adversely affect cash flows.

As of December 31, 2025 and 2024, we had one outstanding Equipment Note collateralized by equipment and vehicles owned by us. As of December 31, 2023, we had two outstanding Equipment Notes collateralized by equipment2025 and vehicles owned by us. As of December 31, 2024 and 2023,2024, we also had one other equipment note outstanding collateralized by a vehicle owned by us. The outstanding balance of all equipment notes was $11.6 million as of December 31, 2025, of which $4.6 million was due in the next twelve months. The outstanding balance of these equipment notes was $16.0 million as of December 31, 2024, of which $4.4 million was due in the next twelve months. The outstanding balance of these equipment notes was $23.0 million as of December 31, 2023, of which $7.1 million was due in the next twelve months.

From time to time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from less than one to ninetwelve years, some of which may include options to extend the leases for up to ten years, and some of which may include options to terminate the leases within one year. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is ongoing and the purchase option price is attractive.

The outstanding balance of operating lease obligations was $42.4 million as of December 31, 2025. As of December 31, 2025, we had outstanding short-term and long-term operating lease obligations of approximately $13.0 million and $29.4 million, respectively. The outstanding balance of operating lease obligations was $42.6 million as of December 31, 2024. As of December 31, 2024, we had $3.0 million outstanding finance lease obligations, consisting of short-term and long-term financeoperating lease obligations of approximately $1.1$12.1 million and $1.9$30.5 million, respectively. As of December 31, 2023, we had $2.3 million outstanding finance lease obligations, consisting of short-term and long-term finance lease obligations of approximately $2.0 million and $0.3 million, respectively.

Many customers, particularly in connection with new construction, require us to post performance and payment bonds typically issued by a surety or insurancefinancial company.institution. These bonds provide a guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If we fail to perform under a contract or to pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the respective issuers of the bonds for any claim expenses or outlays they incur. Under our continuing indemnity and security agreements with the issuers of the bonds, we may be required to grant them a security interest relating to a particular project. We believe that it is unlikely that we will have to fund significant claims under our surety arrangements. As of December 31, 2024,2025, an aggregate of approximately $2.27$2.35 billion in original face amount of bonds issued by our sureties were outstanding. Our estimated remaining cost to complete these bonded projects was approximately $662.6$817.8 million as of December 31, 2024.2025.

We grant trade credit under contractual payment terms, generally without collateral, to our customers, which include high credit quality electric utilities, governmental entities, general contractors and builders, owners and managers of commercial and industrial properties located in the United States and Canada. Consequently, we are subject to potential credit risk related to changes in business and economic factors throughout the United States and Canada. However, we generally have certain statutory lien rights with respect to services provided. Under certain circumstances such as foreclosures or negotiated settlements, we may take title to the underlying assets in lieu of cash in settlement of receivables. As of December 31, 2025, none of the Company's customers individually exceeded 10.0% of our accounts receivable. As of December 31, 2024, one customer individually exceeded 10.0% of our accounts receivable with approximately of 11.3% of the total accounts receivable amount (excluding the impact of allowance for doubtful accounts). As of December 31, 2023, none of our customers individually exceeded 10.0% of our accounts receivable.

Revenue Recognition. We recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that we expect to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as our performance creates or enhances customer-controlled assets or creates or enhances an asset with no alternative use, for which we have an enforceable right to receive compensation as defined under the contract. To determine the amount of revenue to recognize over time, we estimate profit by determining the difference between total estimated revenue and total estimated cost of a contract. In addition, we estimate a cost accrual every quarter that represents unbilled invoicing activity for services performed by subcontractors and suppliers during the quarter, and estimate revenue from the contract cost portion of this accrual based on current gross margin rates to be consistent with our cost method of revenue recognition. The estimated value of unbilled amounts areis determined using a regression analysisand thatother estimatestypes of analysis, as well as management judgment to produce an estimated value based on ourthe Company’s historical experience, and is adjusted for large individual projects. The profit and corresponding revenue is recognized over the contract term based on costs incurred under the cost-to-cost method. We utilized the cost-to-cost method as we believe cost incurred best represents the amount of work completed and remaining on our projects, and is the most common basis for computing percentage of completion in our industry. For purposes of recognizing revenue, we follow the five-step approach outlined in Accounting Standards Codification (“ASC”) 606.

As the cost-to-cost method is driven by incurred cost, we calculate the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by estimated revenues to determine inception-to-date revenue. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Because our billings are based on contract terms and do not coincide with our progress in a project, revenue recognition also includes an amount related to our contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded. Additionally, the contract asset includes retainage billed to the customer that cannot be collected until the contract work has been completed and approved. Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded. Therefore, retainage amounts are reflected in contract assets or contract liabilities depending on the net contract position of the particular contract. Additionally, the contract liability includes a liability for the excess of costs over revenues for all contracts that are in a loss position.

We provide warranties to customers on a basis customary to the industry; however, the warranty period does not typically exceed onetwo year.years. Historically, warranty claims have not been material.

We grant trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases) to our customers, and we are subject to potential credit risk related to changes in business and overall economic activity. We analyze specific accounts receivable balances, historical bad debts, customer credit-worthiness,creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible the account balance is written-off against the allowance for doubtful accounts.

We had consolidated revenues for the threesix months ended MarchJune 31,30, 2026 of $1.00$2.08 billion, of which 54.1%51.1% was attributable to our T&D customers and 45.9%48.9% was attributable to our C&I customers. Our consolidated revenues for the threesix months ended MarchJune 31,30, 2025 were $833.6$1.73 million.billion. For the threesix months ended MarchJune 31,30, 2026, our net income and EBITDA(1) were $46.8$96.7 million and $81.5$166.5 million, respectively, compared to $23.3$49.8 million and $50.2$105.8 million, respectively, for the threesix months ended MarchJune 31,30, 2025.

We continue to implement strategies that are designed to further expand our capabilities and effectively allocate capital. We have maintained a strong balance sheet, while also supporting our organic growthand withacquisitive growth, as well as opportunistically repurchasing shares. On July 1, 2026, we acquired all issued and outstanding shares of capital expenditures,stock of Valley Holdings I, Inc. and its subsidiaries (collectively, “Valley"), for initial cash consideration of approximately $328.0 million, subject to working capital and sharenet repurchases.asset adjustments, and additional contingent consideration summarized in Note 12–Subsequent Event in the accompanying notes to our Consolidated Financial Statements. The Valley acquisition expanded our electrical contractor operations in the western U.S. We believefunded the borrowingapproximately availability$328.0 million cash payment at closing through a combination of approximately $93.0 million of cash on hand and $235.0 million of borrowings under our $490 million revolving credit facility,facility (the “Facility”). After giving effect to the Valley acquisition, we continue to believe the remaining $225.5 million of borrowing availability under the Facility as of July 1, 2026, cash on hand and future cash flow from operations will enable us to support the organic growth of our business, pursue acquisitions and opportunistically repurchase shares.shares of our common stock.

Our backlog was $2.84$3.16 billion at MarchJune 31,30, 2026 compared to $2.64 billion at MarchJune 31,30, 2025. Our backlog at MarchJune 31,30, 2026 increased $19.2$316.4 million from DecemberMarch 31, 2025.2026. Backlog in the T&D segment decreasedincreased $37.5$284.9 million and C&I backlog increased $56.7$31.5 million compared to DecemberMarch 31, 2025.2026. Our backlog as of MarchJune 31,30, 2026 included our proportionate share of joint venture backlog totaling $167.5$158.8 million, compared to $176.1$167.5 million at DecemberMarch 31, 2025.2026.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Revenues increased $166.8$181.4 million, or 20.0%,20.1%, to $1.00$1.08 billion for the three months ended MarchJune 31,30, 2026 from $833.6$900.3 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to an increase of $87.6$163.6 million in C&I revenue and an increase of $79.2$17.7 million in T&D revenue. See Segment Results below for additional information and discussion related to segment revenues.

Gross margin for the three months ended MarchJune 31,30, 2026 increased to 13.4%13.2% compared to 11.6%11.5% for the three months ended MarchJune 31,30, 2025. The increase in gross margin was primarily due to a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion, during the three months ended March 31, 2026. Gross margin was also impacted by significant changes in our estimated gross profit on certain projects resulting in a net gross margin increase of 0.8%0.9% for the three months ended MarchJune 31,30, 2026, compared to a net gross margin decrease of 1.1%1.0% for the three months ended MarchJune 31,30, 2025. During the three months ended MarchJune 31,30, 2026, significant estimate changes positively impacted gross margin by 3.2%,2.1%, primarily related to better-than-anticipated productivity, favorable changejob ordersclose outs and aan favorableincrease jobin closeout.scope on certain projects. In addition, significant estimate changes in gross profit negatively impacted gross margin by 2.4%1.2% and largely related to an increase in costs associated with project inefficiencies on certain projects.

Gross profit was $134.4$142.7 million for the three months ended MarchJune 31,30, 2026 compared to $96.9$103.7 million for the three months ended MarchJune 31,30, 2025. The increase of $37.5$39.0 million, or 38.7%,37.6%, was due to higher margin and revenues.

Selling, general and administrative expenses (“SG&A”) were $69.4$74.4 million for the three months ended MarchJune 31,30, 2026 compared to $62.5$63.3 million for the three months ended MarchJune 31,30, 2025. The period-over-period increase of $6.9$11.1 million was primarily due to an increase in employee incentive compensation costs and an increase in employee-related expenses to support future growth.

Interest income was $0.9 million for the three months ended MarchJune 31,30, 20262026. comparedInterest toincome $0.2was millionnot significant for the three months ended MarchJune 31,30, 2025. The increase was attributable to higher average balances held in money market accounts during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025.

Interest expense was $0.7 million for the three months ended MarchJune 31,30, 2026 compared to $1.4$1.9 million for the three months ended MarchJune 31,30, 2025. The decrease was attributable to lower average outstanding debt balances and lower interest rates during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025.

Income tax expense was $17.2$17.3 million for the three months ended MarchJune 31,30, 2026, with an effective tax rate of 26.9%,25.7%, compared to the income tax expense of $9.5$10.9 million for the three months ended MarchJune 31,30, 2025, with an effective tax rate of 28.9%.29.2%. The decrease in the tax rate for the three months ended MarchJune 31,30, 2026 was primarily due to a favorable impact from stock compensation excess tax benefits, partially offset by the impact of the net CFC tested income (“NCTI”) and other permanent difference items.

Net income was $46.8$49.9 million for the three months ended MarchJune 31,30, 2026 compared to net income of $23.3$26.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to the reasons stated earlier.

Revenues for our T&D segment for the three months ended MarchJune 31,30, 2026 were $541.0$524.0 million compared to $461.8$506.3 million for the three months ended MarchJune 31,30, 2025, an increase of $79.2$17.7 million, or 17.2%.3.5%. The increase in revenue was related to an increase of $66.1$19.8 million in revenue ofon unit priceT&E contracts and an increase of $36.4$17.4 million in revenue inon T&Eunit price contracts, partially offset by a decrease of $23.3$19.5 million in revenue on fixed price contracts.

Operating income for our T&D segment for the three months ended MarchJune 31,30, 2026 was $52.2$49.5 million, an increase of $16.0$9.0 million, from the three months ended MarchJune 31,30, 2025. Operating income as a percentage of revenues for our T&D segment increased to 9.7%9.4% for the three months ended MarchJune 31,30, 2026 from 7.8%8.0% for the three months ended MarchJune 31,30, 2025. The increase in operating income margin was driven by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin increase of 1.5%0.7% for the three months ended MarchJune 31,30, 2026, compared to a net operating income margin decrease of 0.9% for the three months ended MarchJune 31,30, 2025. During the three months ended MarchJune 31,30, 2026, significant estimated gross profit changes positively impacted operating income as a percentage of revenues by 1.7%,1.5%, primarily related to better-than-anticipated productivity and aproductivity, favorable job close out.outs and an increase in scope on a project. These increases were partially offset by negative significant estimated gross profit changes totaling 0.2%0.8% and largely related to project inefficiencies on acertain project.projects.

Revenues for our C&I segment for the three months ended MarchJune 31,30, 2026 were $459.4$557.7 million compared to $371.9$394.1 million for the three months ended MarchJune 31,30, 2025, an increase of $87.6$163.6 million, or 23.5%.41.5%. The increase in revenue was primarily related to an increase of $100.9$159.3 million in revenue on fixed priced contracts.

Operating income for our C&I segment for the three months ended MarchJune 31,30, 2026 was $37.2$47.3 million, an increase of $19.8$25.3 million, over the three months ended MarchJune 31,30, 2025. Operating income as a percentage of revenues for our C&I segment increased to 8.1%8.5% for the three months ended MarchJune 31,30, 2026 from 4.7%5.6% for the three months ended MarchJune 31,30, 2025. The increase in operating income margin was driven by a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion. Operating income margin was also impacted by significant changes in our estimated gross profit on certain projects resulting in a net operating income margin increase of 0.1%1.1% for the three months ended MarchJune 31,30, 2026, compared to a net operating income margin decrease of 1.2% for the three months ended MarchJune 31,30, 2025. Significant estimated gross profit changes positively impacted operating income as a percentage of revenues by 5.2%,2.7%, primarily related to better-than-anticipated productivity on certain projects, most of which are nearing completion, and favorablean changeincrease orders.in scope on a project. These increases were partially offset by negative significant estimated gross profit changes totaling 5.1%1.6% and largely related to an increase in costs associated with project inefficiencies on certain projects. Operating income margin was also positively impacted during the three months ended June 30, 2026 by a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion.

We also use EBITDA as a liquidity measure. Certain material covenants contained within our credit agreement (the “Credit Agreement”) are based on EBITDA with certain additional adjustments. Non-compliance with these financial covenants under the Credit Agreement —- our interest coverage ratio which is defined in the Credit Agreement as Consolidated EBITDA (as defined in the Credit Agreement) divided by interest expense (as defined in the Credit Agreement) and our net leverage ratio, which is defined in the Credit Agreement as Total Net Indebtedness (as defined in the Credit Agreement), divided by Consolidated EBITDA (as defined in the Credit Agreement) —- could result in our lenders requiring us to immediately repay all amounts borrowed on ourthe revolving credit facility.Facility. If we anticipated a potential covenant violation, we would seek relief from our lenders, likely causing us to incur additional cost, and such relief might not be available, or if available, might not be on terms as favorable as those in the Credit Agreement. In addition, if we cannot satisfy these financial covenants, we would be prohibited under the Credit Agreement from engaging in certain activities, such as incurring additional indebtedness, making certain payments, and acquiring or disposing of assets. Based on the information above, management believes that the presentation of EBITDA as a liquidity measure is useful to investors and relevant to their assessment of our capacity to service or incur debt, fund capital expenditures, finance acquisitions and expand our operations.

As of MarchJune 31,30, 2026, we had working capital of $257.6$306.9 million. We define working capital as current assets less current liabilities. During the threesix months ended MarchJune 31,30, 2026, operating activities of our business provided net cash of $84.7$88.1 million, compared to $83.3$116.1 million of cash provided for the threesix months ended MarchJune 31,30, 2025. Cash flow from operations is primarily influenced by operating margins, timing of contract performance and the type of services we provide to our customers. The $1.4$28.1 million year-over-year increasedecrease in cash provided by operating activities was primarily due to an increase of $23.5 million in net income offset by unfavorable net changes in operating assets and liabilities of $25.1$84.0 million.million offset by an increase of $46.9 million in net income. The unfavorable change in operating assets and liabilities was primarily due to the net unfavorable year-over-year changes in various working capital accounts that relate primarily to construction activities (accounts receivable, contract assets, accounts payable and contract liabilities) of $26.0$51.8 million. The decline in net cash provided by working capital accounts, mainly related to construction activities, was due to the timing of billings and payments under our contracts. The unfavorable change of $35.0 million in other liabilities was primarily due to the timing of tax payments.

In the threesix months ended MarchJune 31,30, 2026, we used net cash of $15.2$42.7 million in investing activities consisting of $16.1$45.0 million for capital expenditures, partially offset by $1.0$2.4 million of proceeds from the sale of equipment.

In the threesix months ended MarchJune 31,30, 2026, financing activities used net cash of $56.3$57.4 million, consisting primarily of $47.4 million of net repayments under our revolving line of credit, $6.5$7.3 million of shares repurchased to satisfy tax obligations under our stock compensation programs and $2.2$2.3 million of payments under our equipment notes.

WeAfter giving effect to the Valley acquisition, we continue to believe ourthe $460.5remaining $225.5 million of borrowing availability under ourthe revolving line of credit as of March 31, 2026,Facility, cash on hand, future cash flow from operations and our ability to utilize short-term and long-term leases will provide sufficient liquidity for our short-term and long-term needs. Our primary short-term liquidity needs include cash for operations, debt service requirements, capital expenditures, and acquisition and joint venture opportunities. We believe we have adequate financial resources to meet our long-term liquidity needs and foreseeable material cash requirements, including those associated with funding future acquisition opportunities. We continue to invest in developing key management and craft personnel in both our T&D and C&I segments and in procuring the specific specialty equipment and tooling needed to win and execute projects of all sizes and complexity.

We have not historically paid dividends and currently do not expect to pay dividends.dividends on our common stock.

On May 31, 2023, the Company entered into a five-year third amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A. that provides for a $490 million revolving credit facility (the “Facility”),facility, subject to certain financial covenants as defined in the Credit Agreement. The Facility allows for revolving loans in Canadian dollars and other non-US currencies, up to the U.S. dollar equivalent of $150 million. Up to $75 million of the Facility may be used for letters of credit, with an additional $75 million available for letters of credit, subject to the sole discretion of each issuing bank. The Facility also allows for $15 million to be used for swingline loans. The Company has an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries, and by a pledge of substantially all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the direct foreign subsidiaries of the Company. Additionally, subject to certain exceptions, the Company’s domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. The Credit Agreement provides for customary events of default. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Credit Agreement are used to refinance existing indebtedness, and to provide for future working capital, capital expenditures, acquisitions and other general corporate purposes.

Under the Credit Agreement, the Company is subject to certain financial covenants including a maximum Net Leverage Ratio of 3.0 and a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of 3.0. The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens. The Company was in compliance with all of its financial covenants under the Credit Agreement as of MarchJune 31,30, 2026.

We had no borrowings outstanding under the Facility as of MarchJune 31,30, 2026. We had $47.4 million in borrowings outstanding under the Facility as of December 31, 2025. On July 1, 2026, subsequent to the end of the quarter, the Company borrowed $235.0 million under the Facility to fund a portion of the consideration for the Valley acquisition.

As of MarchJune 31,30, 2026, we had $29.5 million in letters of credit outstanding under our Credit Agreement related to the Company's payment obligation under its insurance programs. As of December 31, 2025, we had $34.3 million in letters of credit outstanding under our Credit Agreement, including $34.2 million related to the Company's payment obligations under its insurance programs and $0.1 million related to contract performance obligations.

As of MarchJune 31,30, 2026 and December 31, 2025, we had one outstanding Equipment Note collateralized by equipment and vehicles owned by us. As of MarchJune 31,30, 2026 and December 31, 2025, we also had one other equipment note outstanding collateralized by a vehicle owned by us. The outstanding balance of all equipment notes was $9.4 million as of MarchJune 31,30, 2026 and $11.6 million as of December 31, 2025. As of MarchJune 31,30, 2026, we had outstanding short-term equipment notes of approximately $4.7 million and outstanding long-term equipment notes of approximately $4.7 million. As of December 31, 2025, we had outstanding short-term and long-term equipment notes of approximately $4.6 million and $7.0 million, respectively.

The outstanding balance of operating lease obligations was $50.4$56.2 million as of MarchJune 31,30, 2026, consisting of short-term and long-term operating lease obligations of approximately $12.8$13.1 million and $37.6$43.1 million, respectively. The outstanding balance of operating lease obligations was $42.4 million as of December 31, 2025, consisting of short-term and long-term operating lease obligations of approximately $13.0 million and $29.4 million, respectively.

The outstanding balance of finance lease obligations was $1.8$1.6 million as of MarchJune 31,30, 2026, consisting of short-term and long-term finance lease obligations of approximately $0.8 million and $1.0$0.8 million, respectively. As of December 31, 2025, we had $2.0 million outstanding finance lease obligations, consisting of short-term and long-term finance lease obligations of approximately $0.8 million and $1.2 million, respectively.

As of MarchJune 31,30, 2026, we had approximately $59.6$48.6 million in outstanding purchase obligations for certain construction equipment to be paid with cash outlays scheduled to occur in 2026 and 2027.

Many customers, particularly in connection with new construction, require us to post performance and payment bonds typically issued by a surety or financial institution. These bonds provide a guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If we fail to perform under a contract or to pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We must reimburse our sureties for any expenses or outlays they incur. Under our continuing indemnity and security agreements with the issuers of the bonds, we may be required to grant them a security interest relating to a particular project. We believe that it is unlikely that we will have to fund significant claims under our surety arrangements. As of MarchJune 31,30, 2026, an aggregate of approximately $2.70$2.89 billion in original face amount of bonds issued by our sureties were outstanding. Our estimated remaining cost to complete these bonded projects was approximately $899.0$926.2 million as of MarchJune 31,30, 2026.

We grant trade credit under normal payment terms, generally without collateral, to our customers, which include high credit quality electric utilities, governmental entities, general contractors and builders, owners and managers of commercial and industrial properties located in the United States and Canada. Consequently, we are subject to potential credit risk related to changes in business and economic factors throughout the United States and Canada. However, we generally have certain statutory lien rights with respect to services provided. Under certain circumstances such as foreclosures or negotiated settlements, we may take title to the underlying assets in lieu of cash in settlement of receivables. As of MarchJune 31,30, 2026 andaccounts Marchreceivable 31,for one of our customers individually accounted for approximately 15% of our consolidated accounts receivable. As of June 30, 2025, none of our customers individually exceeded 10% of our consolidated accounts receivable. Management believes the terms and conditions in its contracts, billing and collection policies are adequate to minimize the potential credit risk.