Revenue Receivables and Contract Assets and Liabilities

12 Months Ended

Jan. 03, 2025

Revenue from Contract with Customer [Abstract]

Revenue Receivables and Contract Assets and Liabilities

Note 3. Revenue, Receivables and Contract Assets and Liabilities

The following table presents the Company’s revenue disaggregated by contract types:

	Fiscal Year Ended
	January 3,		December 29,
(In thousands)	2025		2023
Fixed-price	$	442,243	$	567,224
Cost reimbursable		36,070		57,063
Equipment and labor		1,923		8,519
Total revenue	$	480,236	$	632,806

Projects started after prior ownership ("Shimmick Projects") have focused on water infrastructure and other critical infrastructure. Projects that started under prior ownership are referred to as "Legacy Projects". Projects that focus on foundation drilling are referred to as "Foundations Projects".

The following table presents the Company’s revenue disaggregated by Shimmick Projects, Foundations Projects and Legacy Projects:

	Fiscal Year Ended
	January 3,		December 29,
(In thousands)	2025		2023
Shimmick Projects	$	355,683	$	386,491
Legacy Projects		93,226		198,509
Foundations Projects		31,327		47,806
Total revenue	$	480,236	$	632,806

Remaining performance obligations

The Company had $767 million of remaining performance obligations yet to be satisfied as of January 3, 2025. Our remaining performance obligations have a weighted average life of 1.9 years as of January 3, 2025.

Contract Balances

The following table provides information about contract assets (also referred to as costs and estimated earnings in excess of billings on uncompleted contracts and retainage receivable) and contract liabilities (also referred to as billings on uncompleted contracts in excess of costs and estimated earnings and forward loss reserve), which include assets and liabilities that are dependent upon future activity:

	January 3,			December 29,
	2025			2023			Change
(In thousands)
Contract assets, current and non-current:
Costs and estimated earnings in excess of billings on uncompleted contracts	$	46,603		$	125,943		$	(79,340	)
Retainage receivable		23,517			48,316			(24,799	)
Total contract assets		70,120			174,259			(104,139	)
Contract liabilities, current and non-current:
Billings on uncompleted contracts in excess of costs and estimated earnings		(50,490	)		(48,841	)		(1,649	)
Forward loss reserve		(52,147	)		(70,159	)		18,012
Total contract liabilities		(102,637	)		(119,000	)		16,363
Net	$	(32,517	)	$	55,259		$	(87,776	)

Contract terms with customers include the timing of billing and payment, which usually differs from the timing of revenue recognition. As a result, the Company carries contract assets and liabilities within the consolidated balance sheets. These contract assets and liabilities are calculated on a contract-by-contract basis and reported on a net basis at the end of each period and are classified as current or non-current. Many of the contracts under which the Company performs work also contain retainage provisions. Retainage refers to that portion of our billings held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained by customers under such provisions are fully collectible. These assets and liabilities are reported in the consolidated balance sheets within “Contract assets, current,” “Contract assets, non-current,” “Contract liabilities, current" and “Contract liabilities, non-current." A certain portion of our retainage receivable contract asset balance is non-current, and therefore is not presented on a net basis against the associated contract liabilities that are current. Costs and estimated earnings in excess of billings on uncompleted contracts consists of revenue recognized in excess of billings.

Billings on uncompleted contracts in excess of costs and estimated earnings consists of billings in excess of revenue recognized. The Company recognized revenue of $45 million during the fiscal year ended January 3, 2025 that was included in contract liabilities as of December 29, 2023.

The Company’s timing of revenue recognition may not be consistent with its rights to bill and collect cash from its clients. Those rights are generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of work or when services are performed. The Company’s accounts receivable represents amounts billed to clients that have yet to be collected and represent an unconditional right to cash from its clients as presented below.

	January 3,			December 29,
	2025			2023
(In thousands)
Total accounts receivable, gross	$	43,942		$	55,202
Allowance for doubtful accounts		(954	)		(1,024	)
Accounts receivable, net	$	42,988		$	54,178

Substantially all contract assets as of January 3, 2025 and December 29, 2023 are expected to be collected within the Company’s estimated operating cycle, except for retainage and claims pertaining to certain contracts. The Company’s operating cycle may extend beyond one year.

The Company is in the process of negotiating or awaiting approval of unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work. The Company may take legal action if it and the customer cannot reach a mutually acceptable resolution.

Information about significant customers

Significant Customers as a Percentage of Accounts Receivable, Net
As of January 3, 2025
Customer one	40.6%
Customer two	20.2%
As of December 29, 2023
Customer one	32.5%
Customer two	21.7%

Significant Customers as a Percentage of Revenue
Fiscal Year Ended January 3, 2025
Customer one	17.1%
Customer two	15.4%
Customer three	10.2%
Customer four	10.1%
Fiscal Year Ended December 29, 2023
Customer one	16.7%
Customer two	14.5%
Customer three	12.9%

Revisions in Estimates

Changes in contract estimates resulted in net decreases in gross margin of $63 million for the fiscal year ended January 3, 2025, primarily due to settlements of claims on two large projects and increased forecasted costs to complete on loss projects.

Changes in contract estimates resulted in net decreases in gross margin of $10 million for the fiscal year ended December 29, 2023, primarily due to increased forecasted costs to complete and an agreed upon contract settlement lower than previously estimated, partially offset by increases in gross margin on an outstanding claim.