Property Plant and Equipment and Intangible Assets

12 Months Ended

Jan. 03, 2025

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment and Intangible Assets

Note 5. Property, Plant and Equipment and Intangible Assets

The following tables summarize the components of property, plant and equipment as of January 3, 2025 and December 29, 2023:

	January 3, 2025			December 29, 2023
(In thousands)
Building and land	$	171		$	4,002
Machinery, equipment, and vehicles		51,227			70,250
Office furniture and equipment		6,876			9,324
Property, plant and equipment, gross		58,274			83,576
Accumulated depreciation		(39,142	)		(37,203	)
Property, plant and equipment, net	$	19,132		$	46,373

	Fiscal Year Ended
	January 3,		December 29,
	2025		2023
(In thousands)
Depreciation expense	$	12,276	$	14,338

Depreciation is recorded within cost of revenue and selling, general and administrative expenses and is calculated using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements and capitalized leases, the lesser of the remaining term of the lease or its estimated useful life.

During the fiscal year ended January 3, 2025, Shimmick completed the sale-leaseback of the Company's equipment yard in Tracy, California. The agreement consummated the sale of the equipment yard for $20.5 million and allows us to continue using the property pursuant to a separately executed seven-year lease. The Company received net proceeds of $17 million, after adjustments for prepaid rent through February 2026 and related closing costs, which were used to repay borrowings under the Revolving Credit Facility. As a result of the sale, the Company recorded a gain of $17 million in gain on sale of assets within the consolidated statements of operations.

During the fiscal year ended January 3, 2025, Shimmick made the strategic decision to enhance the Company’s current ERP system rather than implementing a new platform which, due to prior capitalized pre-implementation

costs and remaining contractual obligations of $5 million included in accrued expenses in the accompanying consolidated balance sheets, resulted in a charge of $16 million recorded in the fiscal year ended January 3, 2025.

The following tables present the Company’s finite-lived intangible assets, including the weighted- average useful lives for each major intangible asset category and in total:

	January 3, 2025
	Weighted Average Remaining Useful Life		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net
(In thousands)
Trademark		3	$	10,600	$	(6,057	)	$	4,543
Customer contracts		2		6,373		(4,249	)		2,124
Total			$	16,973	$	(10,306	)	$	6,667

	December 29, 2023
	Weighted Average Remaining Useful Life		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net
(In thousands)
Trademark		4	$	10,600	$	(4,543	)	$	6,057
Customer contracts		3		6,527		(3,340	)		3,187
Total			$	17,127	$	(7,883	)	$	9,244

Amortization of intangibles was $3 million for each of the fiscal years ended January 3, 2025 and December 29, 2023 and is recorded in selling, general and administrative expenses within the consolidated statements of operations. The Company’s estimated aggregate remaining amortization is as follows:

	Amortization
	Expense
(In thousands)
2025	$	2,577
2026		2,577
2027		1,513
Total	$	6,667