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

A substantial portion of our revenue and profit is generated from construction projects, the awarding of which we do not directly control. The engineering and construction industry historically has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, material shortages, price increases by subcontractors, interest rate fluctuations and other economic factors beyond our control. When the general level of economic activity deteriorates, our customers have at times in the past and may in the future delay,delay or cancel upgrades, expansions, and/or maintenance and repairs to their systems. Many factors, including the financial condition of and potential disruptions related to artificial intelligence (“AI”) in the industries we serve, could adversely affect our customers and their willingness to fund capital expenditures in the future.

Economic, political, regulatory and market conditions affecting our specific end markets maycan adversely impact the demand for our services, resulting in the delay, reduction or cancellation of certain projects and these conditions may continue to adversely affect us in the future. For example, much of the work that we perform in the highway markets involves funding by federal, state and local governments. This funding is subject to fluctuation based on the budgets and operating priorities of the various government agencies.agencies and has in the past and may in the future be impacted by federal government shutdowns and federal budget cuts.

In addition, many customers operate in industries that are subject to rapid changes in technology, governmental regulation, changing consumer demands and consolidation. Technological advances in the markets we serve, including from climate-related initiatives,initiatives and developments in AI, could render existing projects or technologies uncompetitive or obsolete, and cause longer-term changes in consumer behavior or alter our customers’ existing operating models. Our failure to rapidly adopt and master new technologies as they are developed or adapt to changing customer requirements could reduce demand for our services.

Our business may be materially adversely impacted by regional, national and/or global requirements related to weather and climate changepatterns and the impact of greenhouse gas emissions in the future.

Greenhouse gases that result from human activities, including burning of fossil fuels, are the focus of increased scientific and political scrutiny and may be subject to changing legal requirements. International agreements, federal laws, state laws and various regulatory schemes to limit or otherwise regulate emissions of greenhouse gases, and additional restrictions are under consideration by different governmental entities. We derive a portion of our revenue and contract profit from engineering and construction services to clients that own and/or operate a wide range of process plants and own and/or operate electric power generating plants that generate electricity from burning natural gas or various types of solid fuels. These plants emit greenhouse gases as part of the process to generate electricity or other products. Compliance with existing greenhouse gas regulation may prove costly or difficult. It is possible that owners and operators of existing or future process plants and electric generating plants could be subject to new or changed environmental regulations that result in significantly limiting, or reducing the amounts of greenhouse gas emissions, increasing the cost of emitting such gases or requiring emissions allowances. The costs of controlling such emissions or obtaining required emissions allowances could be significant. It also is possible that necessary controls or allowances may not be available. Such regulations could negatively impact client investments in capital projects in our markets, which could negatively impact the market for our products and/or services.

While the potential impact of climate-related changes, including legislative and regulatory responses thereto, on our operations is uncertain, management considers climate-related risks and opportunities in connection with its long-term strategic planning and short-term deployment of resources. ClimateChanging changeclimate and weather patterns may result in, among other things, changes in rainfall patterns, storm patterns and intensities and temperature levels. Our operating results are significantly influenced by weather, and major changes in historical weather patterns could significantly impact our future operating results. For example, if changing climate changeand resultsweather patterns result in significantly more adverse weather conditions in a given period, we could experience reduced productivity, which could negatively impact our operating results.

Concerns about the impact of climate change have resulted, and are expected to continue to result, in technological advancements and market developments that impact our business. For example, utility customers are transitioning toward moreexpanding sustainable sources of power generation, such as renewables, which can provide additional opportunities for our Energy segment. Additionally, increased electrification of new technologies may lead to continued and additional demand for new and expanded electric power infrastructure and reengineering of existing electric power infrastructure. However, concerns about climate change could also result in potential new regulations, regulatory actions or requirements to fund energy efficiency activities, as well as decreased demand for refined products, which in turn could negatively impact our customers and demand for certain of our pipeline, underground utility and infrastructure services.

ClimateThe changeforegoing factors could also affect our customers and the types of projects that they award. Demand for power projects, underground pipelines or highway projects could be affected by significant changes in weather, or climate conditions, or by regulatory changes relating to climate change,thereto, which could in turn reduce demand for our services.

Natural disasters,disasters and public health crises have in the past, and could in the future, impact our business. Events such as hurricanes, tornadoes, floods, earthquakes, and other adverse weather and climate conditions; public health crises, such as pandemics and epidemics; political crises, such as terrorist attacks, war, labor unrest, and other political instability; or other catastrophic events could disrupt our operations, or the operations of one or more of our vendors or customers, and could adversely affect our financial results. In particular, these types of events could impact our product supply chain from or to the impacted region and could cause our customers to delay or cancel projects, which could impact our ability to operate. In addition, these types of events could lead to general inefficiencies from having to start and stop work, re-sequencing work or modifying our customary work practices.

A significant portion of our future business may beis focused on providing construction and/or installation services to owners and operators of solar power and other renewable energy facilities. Currently, the development of solar and other renewable energy facilities benefit from the existence of renewable portfolio standards and other state incentives and requirements. Renewable portfolio standards are state-specific statutory provisions requiring or encouraging that electric utilities generate a certain amount of electricity from renewable energy sources. These standards have initiated significant growth in the renewable energy industry and increased demand for renewable energy infrastructure construction services. Elimination of, or changes to, existing renewable portfolio standards, tax credits or similar environmental policies may negatively affect future demand for our services. Changes to federal support for renewable energy projects may also negatively affect future demand for our services.

We are engaged in highlya competitive businessesbusiness in which some customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors. We compete with other infrastructure services contractors, both regional and national, as well as small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in equipment and technology, which can put pressure on profit margins. We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our business. Additionally, an increase in competition may result in a decrease in new awards, a decrease in profit margins, or both.

A portion of our revenue is derived from project-based work that is awarded through a competitive bid process. The portion of revenue generated from the competitive bid process for 2024,2025, 20232024 and 20222023 was approximately 28.327.6%, %, 30.1%,28.3%, and 26.3%,30.1%, respectively. It is generally very difficult to predict the timing and geographic distribution of the projects that we will be awarded. The selection of, timing of or failure to obtain projects, delays in award of projects, the re-bidding or termination of projects due to budget overruns, cancellations of projects or delays in completion of contracts could result in the under-utilization of our assets and reduce our cash flows. Even if we are awarded contracts, we face additional risks that could affect whether or when work will begin. For example, some of our contracts are subject to financing, permitting and other contingencies that may delay or result in termination of projects. We may have difficulty in matching workforce size and equipment location with contract needs. In some cases, we may be required to bear the cost of a ready workforce and equipment that is larger than necessary, resulting in unpredictability in our cash flow, expenses and profitability. If any expected contract award, or the related work release is delayed or not received, we could incur substantial costs without receipt of any corresponding revenue. Finally, the winding down or completion of work on significant projects will reduce our revenue and earnings if these projects have not been replaced.

The FCPA and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We pursue opportunities in certain parts of the world that experience government corruption, and in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our internal policies mandate compliance with all applicable anti-bribery laws. We require our partners, subcontractors, agents and others who work for us or on our behalf to comply with the FCPA and other anti-bribery laws. There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries. If we are found to be liable for FCPA violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could suffer from severe criminal or civil penalties or other sanctions, which could have a material adverse effect on our reputation and business. In addition, detecting, investigating and resolving actual or alleged FCPA violations is expensive and could consume significant time and attention of our senior management.

Backlog is measured and defined differently by companies within our industry. We refer to “backlog” as our anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value, and the estimated revenue on MSA work. We present two measures of backlog; one that includes fixed backlog and estimated revenue on MSA work for the next four quarters, and total backlog that includes all fixed backlog and estimated revenue on MSA work to the end of the MSA agreement. In addition, many of our MSAs are subject to renewal, and these potential renewals can be considered in estimating MSA Backlog. We do not considerinclude renewalscertain whencontracts estimatingin totalthe backlog.calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

In addition, most contracts may be terminated by our customers on short notice. Reductions in backlog due to cancellation by a customer, or for other reasons, could significantly reduce the revenue that we actually receive from contracts in backlog. In the event of a project cancellation, we are typically reimbursed for all of our costs through a specific date, as well as all reasonable costs associated with demobilizing from the jobsite, but we typically have no contractual right to the total revenue reflected in our backlog. Projects may remain in backlog for extended periods of time. Additionally, some revenue may never be included in backlog if it is awarded and completed in the same quarter. While backlog includes estimated MSA revenue, customers are not contractually obligated to purchase a certain amount of services under the MSA.MSA, making it difficult to estimate our customers’ demand for our services.

While backlog may not be indicative of the revenue we expect to earn the following fiscal year, it is a potential, though not comprehensive, indicator of future revenue more generally; however, recognition of revenue from backlog does not necessarily ensure that the projects will be profitable. Poor project execution could impact profit from contracts included in backlog. For projects for which a loss is expected, future revenue will be recorded with no margin, which may reduce the overall margin percentage for work performed. If our backlog fails to materialize, or if amounts in our backlog are unprofitable, our results of operations, cash flows, liquidity and financial condition could be materially adversely affected.

We currently generate, and expect to continue to generate, a substantial portion of our revenue from fixed price and unit price contracts. The actual cost of labor and materials may vary from the costs we originally estimated, and we may not be successful in recouping additional costs from our customers. These variations may cause gross profit for a project to differ from those we originally estimated. Our profitability is therefore dependent upon our ability to accurately estimate the costs associated with our services and our ability to execute in accordance with our plans. Reduced profitability or losses on projects could occur due to changes in a variety of factors such as:

Our ability to perform work and meet customer schedules can be affected by weather conditions such as snow, ice, rain, and named storms. Weather may affect our ability to work efficiently and can cause project delays and additional costs. Our ability to negotiate change orders for the impact of weather on a project could impact our profitability. In addition, the impact of weather can cause significant variability in our quarterly revenue and profitability. The impact of weather conditions can result in variability in our quarterly revenues and profitability, particularly in the first and fourth quarters of the year.

Although significant materials are often supplied by the customer, we use suppliers to provide some materials and equipment used for projects. If a supplier fails to provide supplies and equipment at the estimated price, fails to provide adequate amounts of supplies and equipment, fails to provide supplies or equipment that meet the project requirements, or fails to provide supplies when scheduled, we may be required to source the supplies or equipment at a higher price or may be required to delay performance of the project. The additional cost or project delays can negatively impact project profitability.profitability and may impact our reputation.

We periodically enter into various joint ventures and teaming arrangements where control may be shared with unaffiliated third parties. At times, we also participate in joint ventures where we are not a controlling party. In such instances, we may have limited control over joint venture decisions and actions, including internal controls and financial reporting which may have an impact on our business. If our joint venture partners fail to satisfactorily perform their joint venture obligations, the joint venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, and where we and our partners are jointly and severally liable for liabilities and obligations of the entity or joint venture, we may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of the contracted services. These additional obligations could result in reduced profit and may impact our reputation in the industry.

In our fixed-price and unit-price contracts we may provide a project completion date, and in some of our projects we may commit that the project will achieve specific performance standards.standards, including completion by a certain date. Failure to complete the project as scheduled or at the contracted performance standards could result in additional costs or penalties, including liquidated damages, and such amounts could reduce or exceed expected project profit.profit and may have a material adverse impact on our business, results of operations and financial condition.

Current or future market conditions, as well as changes in our surety providers’ assessments of our operating and financial risk, could cause our surety providers to decline to issue or renew, or to substantially reduce, the availability of bonds for our work and could increase our bonding costs. These actions could be taken on short notice. If our surety providers were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other sureties, finding more business that does not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding capacity, we may be unable to compete for, or work onon, certain projects.

We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business. These actions may seek, among other things, compensation for alleged personal injury, workers’worker’s compensation, employment discrimination, breach of contract, cyber-security and related incidents, property damage, punitive damages, and civil penalties, or other losses or injunctive or declaratory relief. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts with them, and, in some instances, we may be allocated risk through our contract terms for actions by our customers, or other third parties. Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we may become subject to lawsuits or claims for any failure of the systems on which we work, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure. The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of management’s attention from the business. Payments of significant amounts, even if reserved, could adversely affect our reputation, our cash flows, and our business.

Although we maintain insurance policies with respect to employer’s liability, general liability, auto liability and workersworker’s compensation claims,liability, those policies are subject to deductibles or self-insured retention amounts up to certain limits applied on an occurrence or claims-made basis. In addition, for our employees not part of a collective bargaining agreement, we provide employee health care benefit plans. Our primary health insurance plan is subject to a deductible per individual claimant per year.

In many instances, these key employees have significant experience and expertise in our industry. These key employees often possess and maintain key relationships with our customers and subcontractors that would be difficult to replace. We do not carry “key-person” life or disability insurance on any of our employees. The loss or long-term incapacitation of any one of our executive officers or other key employees could negatively affect our customer relationships or the ability to execute our business strategy, which could adversely affect our business.

The amount of the withdrawal liability legislated by ERISA and MEPA varies for every pension plan to which we contribute. For each plan, our potential liability is the total unfunded vested benefits of the plan multiplied by a fraction: the numerator of the fraction is the sum of our contributions to the plan for the past ten years and the denominator is the sum of all contributions made by all employers to the plan for the past ten years. For some pension plans to which we contribute, the total unfunded vested benefits for the entire plan could be in the billions of dollars. If we cannot reduce the alleged fractional exposure through exemptions or negotiations, the withdrawal from a plan could have a material adverse impact on our business.

Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace, including OSHA and other state and local laws and regulations. While we have invested, and will continue to invest, substantial resources in our environmental, health and safety programs, our industry involves a high degree of operational risk and there can be no assurance that we will avoid significant liability exposure. Although we have taken what we believe are appropriate precautions, we have suffered fatalities in the past and may suffer additional fatalities in the future. Serious accidents, including fatalities, may subject us to substantial penalties, civil litigation or criminal prosecution. Claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows. In addition, if our safety record were to substantially deteriorate over time or we were to suffer substantial penalties or criminal prosecution for violating health and safety regulations, our reputation could suffer and our customers could cancel our contracts and not award us future business.

Any cyber security attack (including denial of service attacks, ransomware, phishing attacks, payment fraud or others)threat that affects our facilities, our systems, our partners, our customers or any of our financial data could have a material adverse effect on our business. We rely on information technology systems, some of which are managed by third parties, to process, transmit and store electronic information and to manage or support a variety of our business processes, activities and services. Additionally, we collect and store sensitive data, including intellectual property and proprietary business information, as well as personally identifiable information of our customers and employees, in data centers and on information technology networks (including networks that may be controlled or maintained by third parties). The secure operation of these systems and products, and the processing and maintenance of the information processed by these systems and products, is critical to our business operations and strategy. Further, customers usingsupplying ourus systemstheir data rely on the security of our infrastructure,infrastructure and systems, including hardware, software and other elements provided by third parties, to ensure the reliability of our products and the protection of their data. We also face the risk of operational disruption, failure, termination or capacity constraints of any of the third parties that facilitate our business activities, including vendors, service providers, suppliers, customers, counterparties or other financial intermediaries. Such third parties who provide us services or with whom we communicate could also be the source of a cyberattack on, or breach of, our operational systems, network, data or infrastructure. Despite our security measures and business continuity plans, our information technology systems and networked and connected products may be vulnerable to damage, disruptions or shutdowns caused by attacks by hackers, computer viruses, or breaches due to errors or malfeasance by employees, contractors or others who have access to these systems and products. Any of these events could result in, among other things, the loss of proprietary data, interruptions or delays in our business operations and damage to our reputation.

We have experienced cyber security threats, such as viruses and attacks targeting our systems, and expect the frequency and sophistication of such incidents will continue to increase. Such prior events have not had a material impact on our financial condition, results of operations or liquidity. However, future threats or existing threats of which we are not yet aware could cause harm to our business and our reputation, disrupt our operations, expose us to potential liability, regulatory actions and loss of business, and materially impact our results of operations materially.operations. We also currently maintain a cyber insurance policy; however, such insurance coverage may not be adequate to cover all the costs related to cyber security attacks or disruptions resulting from such events.

While we have taken steps to mitigate persistent and continuously evolving cyber security threats by implementing network security and internal control measures, implementing policies and procedures for managing risk to our information systems, periodically testing our information technology systems, and conducting employee training on cyber security, a system or network failure or data security breach could have negative consequences fordisrupt our company,business or the delivery of services to our customers, orresult partnersin andpotential adverselyliabilities, affectthe termination of contracts, divert the attention of management from effectively operating our business.business, cause significant reputational damage, or otherwise have an adverse effect on our financial results. We may also need to expend significant additional resources to protect against cybersecurity threats or to address actual breaches or to redress problems caused by cybersecurity breaches. Furthermore, the continuing and evolving threat of cyber-attacks has resulted in increased regulatory focus on prevention. To the extent we face increased regulatory requirements, we may be required to expend significant additional resources to meet such requirements.

Our ability to generate cash is essential for the funding of our operations and the servicing of our debt. If existing cash balances together with the borrowing capacity under our credit facilities were not sufficient to make future investments, make acquisitions or provide needed working capital, we may require financing from other sources. Our ability to obtain such additional financing in the future will depend on a number of factors including prevailing capital market conditions, conditions in our industry, and our operating results. These factors may affect our ability to arrange additional financing on terms that are acceptable to us. If additional funds were not available on acceptable terms, we may not be able to make future investments, take advantage of acquisitions or pursue other opportunities. In addition, the terms of any financing agreement we enter into may require us to agree to covenants that limit or restrict our operational and financial flexibility.

Borrowings under our revolving credit facility and term loan bear interest at variable rates and expose us to interest rate risk. From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2024,2025, $300.0 millionnone of our variable rate debt outstanding was economically hedged. The interest rate swap matured on January 31, 2025. The remaining $376.9 million of variable rate debt was unhedged. If interest rates increase, our debt service obligations on the unhedged portion of our variable rate debt will increase even if the amount borrowed remains the same, and our net income and cash flows,flows will decrease correspondingly. Based on our variable rate debt outstanding as of December 31, 2024,2025, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8$4.4 million.

As part of our acquisition strategy, we have issued and used shares of common stock as a part of contingent earn-out consideration, which havehas resulted in dilution to our stockholders. Additionally, we could issue shares in connection with an acquisition which could result in dilution to our stockholders. Our Certificate of Incorporation permits us to issue up to 90.0 million shares of common stock of which approximately 53.754.0 million were outstanding at December 31, 2024.2025. While New York Stock Exchange rules require that we obtain stockholder approval to issue more than 20% additional shares, stockholder approval is not required below that level. In addition, we can issue shares of preferred stock which could cause further dilution to the stockholder, resulting in reduced net income and cash flow available to common stockholders.

We are onea leading provider of the leading providers ofcritical infrastructure services operating mainly in the United States and Canada. We provide a wide range of construction, maintenance, replacement, fabrication, and engineering services to a diversified base of customers through our two segments: Utilities and Energy. The structure of our reportable segments is generally focused on broad end-user markets for our services.

We have longstanding customer relationships with solar facility developersdevelopers, power producers, gas and utility,electric utilities, refining, petrochemical, communications, midstream, downstream, and engineering companies, as well as power producers and transportation agencies across our core markets. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the United States and major electrical and gas projects for a number of large utility companies in the United States. We enter into a large number of contracts each year, and the projects can vary in length from daily work orders to as long as 36 months, and occasionally longer, for completion on larger projects. Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenue in any given year.

We are exposed to certain market risks related to changes in interest rates. To monitor and manage these market risks, we have established risk management policies and procedures. Our Revolving Credit FacilityFacility, Term Loan, and TermAmended LoanAccounts Receivable Securitization Facility bear interest at a variable rate which exposes us to interest rate risk. From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2024,2025, $300.0 millionnone of our variable rate debt outstanding was economically hedged. The interest rate swap matured on January 31, 2025. Based on our variable rate debt outstanding as of December 31, 2024,2025, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8$4.4 million.

Identifiable Tangible Assets. Significant identifiable tangible assets acquired would include accounts receivable, contract assets, leases and fixed assets (generally consisting of facilities and construction equipment). We determine the fair value of these assets as of the acquisition date. For current assets and current liabilities of an acquisition, we will evaluate whether the book value is equivalent to fair value due to their short termshort-term nature. We estimate the fair value of fixed assets using a market approach, based on comparable market values for similar equipment of similar condition and age.

Litigation and contingencies—Litigation and contingencies are included in our consolidated financial statements based on our assessment of the expected outcome of litigation proceedings or the expected resolution of the contingency. We record costs related to contingencies when a loss from such claims is probable and the amount is reasonably estimable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, we review and evaluate litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defenses to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a material adverse effect on our consolidated results of operations, financial condition or cash flows. See Note 11 — “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for further information.

For the year ended December 31, 2024,2025, gross profit increased by $115.8$109.9 million, or 19.7%,15.6%, compared to 2023.2024. The increase was primarily due to an increase in revenue.revenue in both segments, partially offset by lower margins. Gross profit as a percentage of revenue increaseddecreased to 11.0%10.7% compared to 10.3%11.0% for the same period in 2023,2024, primarily driven by improvedlower margins in our Energy segment, partially offset by higher margins in our Utilities segment.

For the year ended December 31, 2023,2024, gross profit increased by $130.6$115.8 million, or 28.6%,19.7%, compared to 2022.2023. The increase was primarily due to an increase in revenue.revenue in both segments and improved margins. Gross profit as a percentage of revenue remainedincreased consistentto at 10.3%11.0% compared to 10.3% for the same period in 2022.2023, primarily driven by improved margins in our Utilities segment.

Transaction and related costs for the year ended December 31, 20242025 werewas $2.4 million, a decrease of $3.2$0.1 million or 57.0%4.0% compared to 2023 primarily related to a decrease in integration costs for the PLH acquisition.2024.

Transaction and related costs for the year ended December 31, 20232024, were $5.7$2.5 million, a decrease of $14.4$3.2 million or 71.7%56.1% compared to 2022.2023 Theprimarily related to a decrease wasin dueintegration to professional fees paid to advisorscosts for the acquisitions of B Comm and PLH inGroup, 2022.Inc. (“PLH”) acquisition.

Interest expense, net for the year ended December 31, 20242025, was $65.3$28.7 million compared to $78.2$65.3 million for the year ended December 31, 2023.2024. The decrease of $12.9$36.6 million was due primarily to lower average debt balances and lower average interest rates.

Interest expense, net for the year ended December 31, 20232024 was $78.2$65.3 million compared to $39.2$78.2 million for the year ended December 31, 2022.2023. The increasedecrease of $39.0$12.9 million was due primarily to higherlower average debt balances from the borrowings related to the PLH acquisition and a higherlower average interest rate.rates.

Our provision for income taxes increased $22.5$35.1 million to $74.0$109.1 million for 20242025 compared to 2023.2024. The increase was primarily driven by an increase in pre-tax profits subject to tax. The 2024 effective tax rate was 29.0%.

Our provision for income taxes increased $25.3$22.5 million to $51.5$74.0 million for 20232024 compared to 2022.2023. The increase was primarily driven by thean tax benefit recognizedincrease in 2022 for capital losses, the 2023 expiration of a temporary law which allowed full deductibility of per diem expenses in 2021 and 2022 and increased pre-tax profits subject to tax. The 2023 effective tax rate was 29.0%.

In June 2023, we entered into an Accounts Receivable Securitization Facility (the “AR Facility”) with PNC Bank, National Association (“PNC”) to reduce interest costs and improve cash flows from trade accounts receivable. In July 2024 we renewed the AR Facility for a two-year term, added Regions Bank to the AR Facility, and increased the maximum purchase commitment to $150.0 million, at any one time. In March 2025 we entered into an amended and restated Accounts Receivable Securitization Facility (the “Amended AR Facility), modifying certain terms of the AR Facility and extending the maturity date of the AR Facility to March 24, 2027. In August 2025, we increased the maximum commitment amount under the Amended AR Facility to $250.0 million. Under the Amended AR Facility, certain of our designated subsidiaries may sell or pledge their trade accounts receivable as they are originated to a wholly owned bankruptcy remote Special Purpose Entity created specifically for this purpose. The total outstanding balance of trade accounts receivable that have been sold and derecognized is $75.0$125.0 million as of December 31, 2024.2025. In addition, the total amount of trade accounts receivable that have been pledged is $62.5 million as of December 31, 2025. As of December 31, 2024,2025, we had $75.0$62.5 million in available capacity under the Amended AR Facility.

The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services. In 2024,2025, we spent approximately $126.6$129.9 million for capital expenditures, which included $81.9$75.8 million for construction equipment and $35.3 million on our facilities and $36.6 million for construction equipment.facilities. Capital expenditures are expected to total between $90.0$120.0 million and $110.0$140.0 million for 2025,2026, which includes $60.0$90.0 million to $80.0$110.0 million for construction equipment.

Net cash provided by operating activities for 20242025 was $508.3$470.4 million, ana increasedecrease of $309.7$37.9 million compared to 2023.2024. The change year-over-year was primarily due to improvement in the impact from the changes in assets and liabilities andoffset by an increase in net income.

We purchased property and equipment for $126.6$129.9 million, $103.0$126.5 million and $94.7$103.0 million in the years ended December 31, 2024,2025, 20232024 and 20222023 respectively, principally for our construction activities and facilitiesinvestments investment.in facilities. We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs.

We periodically sell assets and facilities, typically to update our fleet. We received proceeds from the sale of assets of $32.5 million, $99.3 million,million and $63.7 million and $41.3 million for 2024,the 2023years ended December 31, 2025, 2024 and 2022,2023, respectively.

On August 1, 2022, we entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) with CIBC Bank USA, as administrative agent (the “Administrative Agent”) and co-lead arranger, and the financial parties thereto (collectively, the “Lenders”), thatwhich increased the existingour term loan by $439.5 million to an aggregate principal amount of $945.0 million (as amended, the “Term Loan”). and increased our revolving credit facility to $325.0 million (the “Revolving Credit Facility”), under which the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to the $325.0 million committed amount. The maturity date of the Credit Agreement is scheduled to mature on August 1, 2027. As of December 31, 2025, commercial letters of credit outstanding were $9.9 million. There were no outstanding borrowings under the Revolving Credit Facility, and available borrowing capacity was $315.1 million as of December 31, 2025.

Under the Credit Agreement, we must make quarterly principal payments on the Term Loan in an amount equal to approximately $11.8 million, with the balance due on August 1, 2027. The proceeds from the Term Loan and additional borrowings under the Revolving Credit Facility were used to finance the acquisition of PLH.

The Credit Agreement contains various restrictive and financial covenants including, among others, a net senior debt/EBITDA ratio and minimum EBITDA to cash interest ratio. In addition, the Credit Agreement includes restrictions on investments, change of control provisions and provisions in the event we dispose of more than 20% of our total assets. We were in compliance with the covenants for the Credit Agreement at December 31, 2025.

For infrastructure services contractors, backlog can be an indicator of future revenue streams. Different companies define and calculate backlog in different manners. We define backlog as anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value (“Fixed Backlog”), and the estimated revenue on MSA work (“MSA Backlog”). We present two measures of backlog; one that includes Fixed Backlog and MSA Backlog for the next twelve months, and total backlog that includes all Fixed Backlog and MSA Backlog to the end of the MSA agreement. WeIn doaddition, notmany considerof our MSAs are subject to renewal, and these potential renewals whencan be considered in estimating MSA Backlog. We do not include certain contracts in the calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

This Quarterly Report on Form 10-Q for the quarterly period ended MarchJune 31,30, 2026 (“FirstSecond Quarter 2026 Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

We discuss many of these risks in detail in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the Securities and Exchange Commission (“SEC”). You should read this FirstSecond Quarter 2026 Report, our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this FirstSecond Quarter 2026 Report. We assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

The following discussion and analysis should be read in conjunction with the unaudited financial statements and the accompanying notes included in Part 1, Item 1 of this FirstSecond Quarter 2026 Report and our Annual Report on Form 10-K for the year ended December 31, 2025.

The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, data center services and petroleum and petrochemical industries, as well as state departments of transportation.

We are exposed to certain market risks related to changes in interest rates. To monitor and manage these market risks, we have established risk management policies and procedures. Our Revolving Credit Facility, New Term Loan, and Accounts Receivable Securitization Facility bear interest at a variable rate which exposes us to interest rate risk. From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of MarchJune 31,30, 2026, none of our variable rate debt outstanding was economically hedged. Based on our variable rate debt outstanding as of MarchJune 31,30, 2026, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $4.3$7.8 million.

On May 1, 2026, we closedcompleted on ourthe acquisition of PayneCrest Electric, Inc. (“PayneCrest”) in an all-cash transaction valued at approximately $399.5$404.7 million, net of cash acquired. PayneCrest is a leading electrical construction and services provider supporting industrial, manufacturing, and advanced facilities. The acquisition increases our exposure to the high-growth data center services market and expands opportunities for integrating our industrial and renewables businesses with complementary electrical construction capabilities. The total purchase price was funded through a combination of borrowings under our term loan facility (as amended) and cash on hand. We will incorporateincorporated PayneCrest operations into our Energy segment. For more information, see Note 144 – “Subsequent EventsAcquisitions” in Item 1, Financial Statements of this FirstSecond Quarter 2026 Report.

Our results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain, ice, snow, and named storms, which can impact our ability to perform infrastructure services. These seasonal impacts can affect revenue and profitability in all of our businesses. Any quarter can be affected either negatively,negatively or positivelypositively, by atypical weather patterns in any part of the country. In addition, demand for new projects in our Utilities segment tends to be lower during the early part of the calendar year due to clients’ internal budget cycles. As a result, we usually experience higher revenue and earnings in the second, third and fourth quarters of the year as compared to the first quarter.

The following discussion compares the results of the three and six months ended MarchJune 31,30, 2026, to the three and six months ended MarchJune 31,30, 2025.

Revenue was $1.6$1.7 billion for the three months ended MarchJune 31,30, 2026, a decrease of $0.1$0.2 billion, or 5.4%,10.7%, compared to the same period in 2025. The decrease was primarily due to lower revenue in our Energy segment partially offset by growth in the Utilities segment.

Gross profit was $134.7$82.4 million for the three months ended MarchJune 31,30, 2026, a decrease of $36.0$149.3 million, or 21.1%,64.4% compared to the same period in 2025. The decrease was primarily due to a decrease in revenue and margin in the Energy segment,segment partiallyand offseta by an increasedecrease in revenue and margin in the Utilities segment. Gross profit as a percentage of revenue decreased to 8.6%4.9% for the three months ended MarchJune 31,30, 2026, compared to 10.4%12.3% for the same period in 2025 primarily driven by lower margins in ourthe Energy segment.and Utilities segments.

SG&A expenses were $105.8$106.3 million during the three months ended MarchJune 31,30, 2026, an increase of $6.3$1.7 million, or 6.3%,1.6%, compared to 2025.2025, due to the acquisition of PayneCrest, partially offset by lower incentive compensation costs. SG&A expenses as a percentage of revenue increased to 6.8%6.3% compared to 6.0%5.5% for the corresponding period in 2025 primarily due to lower revenue.

Transaction and related costs were $4.5$2.9 million during the three months ended MarchJune 31,30, 2026, compared to $0.8$0.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to professional fees paid to advisors associated with the PayneCrest acquisition.

Non-operating income and expense items for the three and six months ended MarchJune 31,30, 2026, and 2025 were as follows (in millions):

Interest expense, net for the three months ended MarchJune 31,30, 2026, decreasedincreased $3.2$3.1 million compared to the same period in 20252025, due to lowerhigher average debt balances.balances, offset by a lower average interest rate.

The effective tax rate for the three-monthsix month period ended MarchJune 31,30, 2026, of 12.6%,59.5%, differs from the U.S. federal statutory rate of 21.0%, primarily due to a discrete tax benefitbenefits for equity compensation paid in the quarter,first six months, partially offset by state income tax expense and nondeductible components of per diem expenses. The effective tax rate for the three-monthsix month period ended MarchJune 31,30, 2025, of 29.0% differs from the U.S. federal statutory rate of 21.0% primarily due to state income tax expense and nondeductible components of per diem expenses.

We recorded an income tax benefit for the six months ended June 30, 2026, of $9.9 million compared to an income tax expense for the three months ended March 31, 2026, of $2.5 million compared to $18.1$52.5 million for the threesix months ended MarchJune 31,30, 2025. The $15.6$62.4 million decreasechange is primarily driven by a $42.4$197.7 million decrease in pretax income and aan decreaseincrease in the effective tax rate.

Operating performance by segment for the three months ended MarchJune 31,30, 2026 and 2025 was as follows (in millions):

Revenue increased by $69.5$19.6 million, or 12.3%,2.8%, for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to increased activity in our gas operations and power delivery andbusinesses, gaspartially operationsoffset markets.by decreased activity in our communications business.

Operating income for the three months ended MarchJune 31,30, 2026, increaseddecreased $12.4$11.0 million, or 68.5%16.8% compared to the same period in 2025 due to lower gross margins, partially offset by revenue growth. Gross profit as a percentage of revenue during the three months ended MarchJune 31,30, 2026, increaseddecreased to 9.8%11.9% compared to 9.2%14.1% in the same period in 2025.2025 primarily due to the impact of favorable project closeouts in our gas operations business in 2025, and a decrease in higher margin storm restoration work in 2026.

Revenue decreased by $152.9$236.9 million, or 13.8%,19.2%, for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily attributable to decreased renewable energy activity, due to slower than anticipated startsstart of new projects, release of new work, and slower than expected financial close associated with certain projects. The decrease was partially offset by the incremental impact from the acquisition of PayneCrest.

Operating income for the three months ended MarchJune 31,30, 2026, decreased by $49.1$149.0 million, or 62.2%,million compared to the same period in 2025, due to decreased revenue and lower gross margins. Gross loss as a percentage of revenue was (0.3%) during the three months ended June 30, 2026, compared to gross profit as a percentage of revenue decreasedof to 7.6% during the three months ended March 31, 2026, compared to 10.7%10.8% in the same period in 2025 primarily due to increasedcost costsoverruns in 2026 onassociated certainwith six renewable energy projects. These higher costs were driven in part by project redesign efforts, changes in project sequencing, labor productivity challenges, sub-surface issues, and unfavorable weather conditions. Two of the six projects were substantially complete in the second quarter of 2026, three are expected to be substantially complete in the third quarter of 2026, and the remaining project is expected to be substantially complete in the fourth quarter of 2026. In addition, we have had lower than anticipated volumes in 2026, which led to higher relative carrying costs for equipment and personnel.

The majority of our revenue is derived from customers in the United States with approximately 2.8%3.0% generated from sources outside of the United States during the threesix months ended MarchJune 31,30, 2026, principally in Canada.

For infrastructure services contractors, backlog can be an indicator of future revenue streams. Different companies define and calculate backlog in different manners. We define backlog as anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value (“Fixed Backlog”), and the estimated revenue on MSA work (“MSA Backlog”). We present two measures of backlog;: one that includes Fixed Backlog and MSA Backlog for the next twelve months, and total backlog that includes all Fixed Backlog and MSA Backlog to the end of the MSA agreement. In addition, many of our MSAs are subject to renewal, and these potential renewals can be considered in estimating MSA Backlog. We do not include certain contracts in the calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

Fixed and MSA Backlog by reporting segment for the periods ending MarchJune 31,30, 2026, and December 31, 2025, were as follows (in millions):

Liquidity represents our ability to pay our liabilities when they become due, fund business operations, and meet our contractual obligations and execute our business plan. Our primary sources of liquidity are our cash balances at the beginning of each period and our cash flows from operating activities. If needed, we have availability under our lines of credit to augment liquidity needs, and we have a current shelf registration statement filed with the SEC that allows for the issuance of an indeterminate amount of debt and equity securities. Our short-term and long-term cash requirements consist primarily of working capital, investments to support revenue growth and maintain our equipment and facilities, general corporate needs, and to service our debt obligations. As of March 31, 2026, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $9.8 million, and available borrowing capacity was $315.2 million. In addition, there were no outstanding borrowings under our Canadian credit facilities as of September 30, 2025, commercial letters of credit outstanding were $0.3 million in Canadian dollars and available borrowing capacity was $13.7 million in Canadian dollars.

On May 1, 2026, we entered into the Fourth Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with CIBC Bank USA, as administrative agent (the “Administrative Agent”) and co-lead arranger, and the financial parties thereto (collectively, the “Lenders”), amending and restating the credit agreement (the “Credit Agreement”) to increase the term loan (the “Term Loan”) by $411.8 million to an aggregate principal amount of $779.6 million (the “New Term Loan”) and to extend the maturity date of the Credit Agreement from August 1, 2027 to May 1, 2031.

In addition to the New Term Loan, the Amended Credit Agreement increased the existingrevolving credit facility to $750.0 million (the “Revolving Credit Facility to $750.0 million,), whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue up to $400.0 million of letters of credit. At May 1, 2026, there was $50.0 million of outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $9.8 million, and available borrowing capacity was $690.2 million. The proceeds from the New Term Loan were used to finance the acquisition of PayneCrest.

We have an Accounts Receivable Securitization Facility (the “AR Facility”) to reduce interest costs and improve cash flows from trade accounts receivable. Under the AR Facility we may sell or pledge trade accounts receivable as they are originated to a wholly owned bankruptcy remote special purpose entity. The maximum commitment amount under the AR Facility is $250.0 million. The total outstanding balance of trade accounts receivable that have been sold and derecognized is $125.0$213.5 million as of MarchJune 31,30, 2026. In addition, the total amount ofno trade accounts receivable that have been pledged is $62.5 million as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had $62.5$36.5 million of available capacity under the AR Facility.

Our cash and cash equivalents totaled $361.5$218.2 million as of MarchJune 31,30, 2026, compared to $535.5 million as of December 31, 2025. We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, access to and capacity under a shelf registration statement, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future.

The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services. During the threesix months ended MarchJune 31,30, 2026, we spent approximately $27.8$50.3 million for capital expenditures, which included $16.0$28.4 million for construction equipment and $6.5$13.1 million on our facilities. Capital expenditures for the remaining ninesix months of 2026 are expected to total between $90.0$70.0 million and $110.0$90.0 million, which includes $70.0$60.0 million to $90.0$80.0 million for equipment.

Cash flows during the threesix months ended MarchJune 31,30, 2026 and 2025 are summarized as follows (in millions):

The cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 and 2025, were as follows (in millions):

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $122.6$131.3 million compared to $66.2$144.6 million cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025. The change year-over-year was primarily due to the unfavorable impact from the changes in assets and liabilities and a decrease in net income.

The significant components of the $167.1$181.9 million change in assets and liabilities for the threesix months ended MarchJune 31,30, 2026 are summarized as follows:

The significant components of the $0.9$29.5 million change in assets and liabilities for the threesix months ended MarchJune 31,30, 2025 are summarized as follows:

For the threesix months ended MarchJune 31,30, 2026, cash used in investing activities was $12.7$431.2 million compared to $33.2$59.1 million for the threesix months ended MarchJune 31,30, 2025.

During the threesix months ended MarchJune 31,30, 2026, we purchased property and equipment for $27.8$50.3 million compared to $40.6$73.7 million during the same period in the prior year. We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs.

We periodically sell assets, typically to update our fleet. We received proceeds from the sale of assets of $7.1$12.5 million during the threesix months ended MarchJune 31,30, 2026, compared to $7.4$14.6 million during the same period in the prior year.

Financing activities usedprovided cash of $38.6$244.6 million for the threesix months ended MarchJune 31,30, 2026, which was primarily due to the following:

Financing activities used cash of $137.2$151.7 million for the threesix months ended MarchJune 31,30, 2025, which was primarily due to the following:

For a description of our credit agreements, see Note 78 — “Credit Arrangements” in Item 1, Financial Statements of this FirstSecond Quarter 2026 Report.

For a discussion of items affecting our common stock, please see Note 1011 — “Stockholders’ Equity” in Item 1, Financial Statements of this FirstSecond Quarter 2026 Report.