Shimmick Corporation

Company Overview

Business Model: Shimmick Corporation delivers turnkey infrastructure solutions designed to strengthen critical markets, including water, energy, climate resiliency, and sustainable transportation. The company integrates technical excellence with collaborative project delivery methods to provide innovative, technology-driven infrastructure solutions. Revenue is predominantly generated from construction and operations and management services to government and commercial clients, primarily through fixed-price contracts. Shimmick Corporation self-performs many projects to control critical construction aspects, reduce risks, and deliver value.

Market Position: With a history spanning over a century, Shimmick Corporation has successfully completed complex water and other critical infrastructure projects. In 2024, Engineering News Record nationally ranked Shimmick Corporation as a Top 400 contractor and a top ten builder of water supply (#8), dams and reservoirs (#6), and water treatment and desalination plants (#7). The company's core markets benefit from long-term trends such as climate change impact and aging infrastructure, with these sectors projected to grow at 4% to 11% annually through 2028, outpacing the overall non-residential construction industry average of 3.3%. Shimmick Corporation estimates its addressable market to be approximately $106 billion of the $1.1 trillion in non-residential construction projected for 2025.

Recent Strategic Developments:

• Independence and IPO: In January 2021, Shimmick Corporation was sold by AECOM and became an independent company under new private ownership. In November 2023, it completed its initial public offering, and its common stock is listed on the Nasdaq Capital Market under the symbol "SHIM".
• Strategic Shift: Post-AECOM Sale Transaction, Shimmick Corporation initiated a transformation to shift its strategy towards smaller to mid-sized projects with less risk and higher margins, replacing large-scale projects with higher risk and lower margins from prior ownership.
• Liquidity and Capital Efficiency Initiatives (Fiscal Year 2024):
  • Settled two major claims at the Chickamauga Lock and Golden Gate Bridge projects, receiving over $130 million in cash.
  • Divested foundation drilling assets and completed a sale-leaseback of its equipment yard, providing $17.5 million and $17 million in liquidity, respectively.
  • Decreased backlog originating from projects secured prior to the AECOM Sale Transaction which were in loss positions.
  • Reached an agreement with AECOM to resolve a previous lawsuit relating to the purchase and sale agreement for the divestiture of Shimmick Corporation from AECOM in exchange for shares of common stock.
• Leadership Change: On November 12, 2024, Ural Yal was appointed as the new CEO and a member of the Board of Directors, effective December 2, 2024, succeeding Steven Richards upon his retirement.

Geographic Footprint: Shimmick Corporation is headquartered in California and maintains a strong presence there, generating more than half of its 2024 revenue in California, which is the largest construction market in the United States. As of January 3, 2025, the company had ongoing projects in six other states: New Jersey, Tennessee, Texas, Wyoming, Idaho, and Washington.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: -11.6%
• Operating Margin: -24.8%
• Net Margin: -26.0%

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $10,477 thousand (FY2025), $7,042 thousand (FY2023)
• Strategic Investments:
  • ERP pre-implementation asset impairment and associated costs: $15,708 thousand (FY2025) due to a strategic decision to enhance the current ERP system rather than implementing a new platform.
  • Contributions to unconsolidated joint ventures: $6,460 thousand (FY2025), $23,170 thousand (FY2023).

Business Segment Analysis

Shimmick Corporation operates as one operating and reportable segment: infrastructure solutions. However, for internal performance assessment, the company disaggregates revenue and gross margin by project types.

Shimmick Projects

Financial Performance:

• Revenue: $355,683 thousand (-8% YoY)
• Gross Margin: $12,094 thousand (-68% YoY)
• Key Growth Drivers: Revenue decrease primarily from lower activity on existing projects and projects winding down, partially offset by $52 million of revenue from a new water infrastructure project and ramp-up of a transportation project. Gross margin decrease due to increased cost of revenue, schedule extensions, and decreased revenue from winding down projects, partially offset by $11 million of gross margin from a new water infrastructure project and ramp-up of a transportation project.

Product Portfolio:

• Focus on water infrastructure and other critical infrastructure projects initiated after the AECOM Sale Transaction.

Market Dynamics:

• These projects align with the company's strategic shift towards smaller to mid-sized projects with less risk and higher margins.

Legacy Projects

Financial Performance:

• Revenue: $93,226 thousand (-53% YoY)
• Gross Margin: $(49,321) thousand (642% YoY decrease in negative margin)
• Key Growth Drivers: Revenue decline due to projects winding down, sale of non-core business contracts in Q3 2023, and a non-cash adjustment to revenue on a Legacy Loss Project settlement in Q2 2024, partially offset by a settlement agreement in the Golden Gate Bridge Project in Q3 2024. Gross margin decline due to a Legacy Loss Project settlement, additional cost overruns on Legacy Loss Projects (due to COVID pandemic, design issues, legal costs), and increased legal fees, partially offset by the Golden Gate Bridge Project settlement.

Product Portfolio:

• Projects acquired as part of the AECOM Sale Transaction, including large-scale projects with higher risk and lower margins. A subset, "Legacy Loss Projects," experienced significant cost overruns.

Market Dynamics:

• These projects are being wound down, with a focus on completing them and addressing associated claims and cost overruns.

Foundations Projects

Financial Performance:

• Revenue: $31,327 thousand (-34% YoY)
• Gross Margin: $(18,422) thousand (104% YoY decrease in negative margin)
• Key Growth Drivers: Revenue decline due to timing of multiple projects winding down following the asset sale. Gross margin decline due to cost overruns and projects winding down.

Product Portfolio:

• Projects focused on foundation drilling, which were identified as non-core business.

Market Dynamics:

• The company entered an agreement to sell the assets of these non-core projects in Q2 2024 and continued to wind down work during FY2024.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: None disclosed.
• Dividend Payments: Shimmick Corporation does not anticipate paying any cash dividends in the foreseeable future, intending to retain all available funds and future earnings to fund business development and growth.
• Dividend Yield: Not applicable.
• Future Capital Return Commitments: No specific future capital return commitments disclosed.

Balance Sheet Position:

• Cash and Equivalents: $33,730 thousand
• Total Debt: $9,478 thousand
• Net Cash Position: $24,252 thousand
• Credit Rating: Not disclosed.
• Debt Maturity Profile:
  • Credit Agreement: Matures May 20, 2029.
  • Revolving Credit Facility: Terminated on March 13, 2025.
  • ACF Credit Agreement (subsequent to FY2025): Entered into on March 12, 2025, with a total commitment of $15 million, maturing on the earlier of March 12, 2028, or 90 days prior to the Credit Agreement maturity date.

Cash Flow Generation:

• Operating Cash Flow: $(21,259) thousand
• Free Cash Flow: $(31,736) thousand
• Cash Conversion Metrics: Operating assets and liabilities fluctuations are impacted by the mix of projects in backlog, seasonality, the timing of new awards and related payments for work performed, and contract billings. Cash proceeds of approximately $42 million from Legacy Loss Projects in FY2025, partly due to claim settlements, compared to cash used of $65 million in FY2023.

Operational Excellence

Production & Service Model: Shimmick Corporation delivers turnkey infrastructure solutions, self-performing many projects to better control critical aspects of construction, reduce cost and schedule risks, and deliver greater value to clients. The company focuses on water infrastructure, climate resilience, transportation, and energy transition projects. It utilizes collaborative contracting models, where clients select contractors based on qualifications, and parties develop projects together under a consultancy contract before negotiating a construction contract based on open-book pricing.

Supply Chain Architecture: Key Suppliers & Partners:

• Subcontractors: Used to perform portions of services on projects.
• Material Suppliers: Provide essential materials such as aggregates, cement, asphalt, concrete, steel, pipe, oil, and fuel.
• Equipment Manufacturers & Lessors: Provide necessary equipment for operations.
• Joint Venture Partners: Selected based on construction and financial capabilities, expertise, and past relationships to share expertise, risk, and resources for complex projects.

Facility Network:

• Manufacturing: Manufactures asphaltic concrete for sale to third parties and use in asphalt paving construction projects.
• Research & Development: Not explicitly detailed as separate facilities.
• Distribution: Equipment maintenance and repair facility in Tracy, California (10,000 sq. ft., 43 acres).
• Offices: Administrative offices in Irvine, California (6,000 sq. ft.); Denver, Colorado (7,211 sq. ft.); Suisun, California (10,221 sq. ft.); Boise, Idaho (1,704 sq. ft.).

Operational Metrics:

• Safety Recordable Incident Rate: 1.06 per 100 employees in calendar year 2024, representing a 34% reduction compared to 2023. This is significantly better than the construction industry average of 2.3 per 100 employees in 2023, as reported by the Bureau of Labor Statistics.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Serves as prime contractor on approximately 93% of its current backlog.
• Channel Partners: Participates in joint ventures to bid on and execute specific projects.

Customer Portfolio: Enterprise Customers:

• Public Sector: Predominantly federal agencies (military and civilian), municipal water and wastewater districts, irrigation districts, flood control districts, local and regional transit authorities, and statewide, county, and city public works departments.
• Private Clients: Developers, utilities, and owners of industrial, commercial, and residential sites.
• Customer Concentration:
  • As of January 3, 2025: Customer one (40.6% of Accounts Receivable, Net), Customer two (20.2% of Accounts Receivable, Net).
  • For Fiscal Year Ended January 3, 2025: Customer one (17.1% of total revenue), Customer two (15.4% of total revenue), Customer three (10.2% of total revenue), Customer four (10.1% of total revenue).

Geographic Revenue Distribution:

• California: More than half of 2024 revenue.
• Other States: Ongoing projects in New Jersey, Tennessee, Texas, Wyoming, Idaho, and Washington.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The water and critical infrastructure markets are competitive and benefit from long-term trends such as climate change impact and aging infrastructure. These sectors are projected to grow at 4% to 11% annually through 2028, outpacing the overall non-residential construction industry average of 3.3%. Demand for water infrastructure is driven by urbanization, industrialization, and aging networks. Critical infrastructure demand is fueled by increasing international trade, urbanization, modernization needs, and population growth. Project awards are typically based on price, technical approach, past performance, quality plans, equipment resources, financial strength, bonding capacity, and relevant project experience.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Barnard Construction Company, Inc.
• Ames Construction Inc.
• Flatiron Construction Corp.
• Fluor Corporation
• Granite Construction Incorporated
• Kiewit Corporation
• Skanska USA Inc.
• Traylor Bros., Inc.
• Walsh Construction Group, LLC
• Smaller regional contractors, particularly in California.

Emerging Competitive Threats: Not explicitly detailed beyond general industry competition.

Competitive Response Strategy: Shimmick Corporation focuses on projects where its self-perform capabilities, technical expertise, and local market knowledge provide competitive advantages. The company is investing in bidding, sales, and marketing efforts to increase collaborative contracts in its backlog. It also plans to expand in electrical work, leveraging over 15 years of experience to provide turn-key solutions. Operational improvements and SG&A optimization are ongoing, alongside project controls improvements through digitization of cost, schedule, and progress tracking systems.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Economic Downturns: Reduced capital expenditures in served industries, decreased demand for services, difficulty for customers to fund projects or obtain financing.
• Government Funding: Highly dependent on the amount and timing of infrastructure work funded by governmental entities; subject to political considerations and governmental actions.
• Geographic Concentration: Susceptible to adverse economic or other conditions in California, where over half of 2024 revenue was generated.
• Competition: Operates in a highly competitive marketplace with larger national firms and smaller regional contractors, leading to pricing pressures.
• Contract Cancellation: Government contracts are generally cancelable at any time with payment only for work completed, potentially idling equipment and crews.
• Commodity Price Fluctuations: Exposure to price risks for cement, steel, liquid asphalt, lumber, diesel fuel, natural gas, and propane, which can affect project costs and customer investment decisions.
• Inflation & Interest Rates: Continuing inflation and elevated interest rates could increase costs (labor, materials, overhead) and impact profitability if not offset by price increases.
• Geopolitical Exposure: Geopolitical risks, including those related to the war between Russia and Ukraine, the conflict in the Gaza strip, and the conflict in the Red Sea region, can cause volatility in commodity and energy markets, affecting customers' businesses.

Technology Disruption:

• ERP System Impairment: A strategic decision to enhance the current ERP system rather than implement a new platform resulted in a $15,708 thousand charge due to prior capitalized costs and remaining contractual obligations.

Customer Concentration:

• Dependency on a limited number of customers, with top customers representing significant portions of accounts receivable and revenue, posing risk if business is lost or payments are delayed.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Subcontractor/Supplier Dependency: Reliance on third-party subcontractors and suppliers for materials; failure to perform or deliver on time can cause delays, higher costs, and reduced profit.
• Aggregates Availability: Challenging and costly to obtain sufficient aggregates due to strict governmental regulations and limited properties.
• Equipment Costs: Higher costs to lease, acquire, and maintain equipment; potential decline in market value of owned equipment.
• Force Majeure Events: Natural disasters, epidemics, pandemics, and terrorist actions could negatively impact operations, financial condition, results, or cash flows.

Capacity Constraints:

• Skilled Labor Shortages: Difficulty attracting and retaining qualified managers and skilled employees in a competitive environment, potentially increasing labor and training expenses.
• Bonding Capacity: Inability to obtain adequate surety bonds or increased cost of bonding could limit the ability to bid on new contracts and competitiveness.
• Joint Venture Liabilities: Joint and several liability for joint venture obligations; risk if partners fail to perform or are financially unable to meet obligations.

Financial & Regulatory Risks

Market & Financial Risks:

• Working Capital Management: Need for careful liquidity management due to fluctuations in receivables, contract retentions, contract assets/liabilities, and payment timing.
• Debt Covenants: Existing debt agreements contain restrictive covenants (e.g., maximum leverage ratio starting Q1 2026) that could limit business operations; failure to comply could lead to default.
• Access to Capital: Future success dependent on the ability to access outside capital for working capital, capital expenditures, and acquisitions; no assurance of availability on favorable terms.
• Multiemployer Pension Plans: Potential future significant contributions to underfunded multiemployer pension plans.

Regulatory & Compliance Risks:

• Environmental Laws: Subject to stringent federal, state, and local environmental laws (e.g., California Air Resources Board regulations for diesel emissions, crystalline silica exposure, Solid Waste Disposal Act, Resource Conservation and Recovery Act, CERCLA); non-compliance can result in penalties, remediation costs, operational restrictions.
• Government Contract Regulations: Majority of revenue from government contracts subject to specific procurement regulations (e.g., Federal Acquisition Regulations, Cost Accounting Standards), Davis-Bacon Act (wages/benefits), Walsh-Healy Act (minimum wage/working conditions), Executive Order 11246 (EEO/affirmative action), Drug-Free Workplace Act; violations could lead to termination, suspension, debarment, or material cost disallowances.
• Immigration Laws: Heavy reliance on immigrant labor; vulnerability to changes in immigration laws, enforcement actions, and penalties.
• OSHA Compliance: Failure to comply with Occupational Safety and Health Administration and other safety regulations could result in liabilities, penalties, litigation, and reputational damage.
• False Claims Act: Subsidiary SCC is subject to a Civil Investigative Demand from the Department of Justice pursuant to the False Claims Act regarding the L 536 Levee Restoration Project.
• Climate Change Regulations: New or additional legislation/regulations to reduce greenhouse gas emissions could increase costs for compliance, energy, production, transportation, and raw materials.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Treatment Technologies: Implements ozonation, biological activated carbon, membrane filtration, reverse osmosis, chemical treatment, and oxidation in water and wastewater treatment projects.
• Intelligent Transportation Technologies: Implements intelligent transportation technologies in transportation and mobility projects.
• Digitalization: Investing in digitization of cost, schedule, and progress tracking systems through digital labor and equipment tracking systems, PowerBI-based reporting structures, and accounting system improvements.

Innovation Pipeline: Not explicitly detailed as a formal pipeline, but the company's strategy includes providing innovative, technology-driven infrastructure solutions.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed.
• Licensing Programs: Not explicitly detailed.
• IP Litigation: Not explicitly detailed.
• Intangible Assets: As of January 3, 2025, net intangible assets include Trademarks ($4,543 thousand, weighted average remaining useful life 3 years) and Customer contracts ($2,124 thousand, weighted average remaining useful life 2 years).

Technology Partnerships: Not explicitly detailed.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Ural Yal succeeded Steven Richards upon his retirement as CEO. The company has a dedicated team of employees overseeing its data security plan and initiatives, led by its Director of IT, who has over fifteen years of experience in cybersecurity.

Board Composition: The board of directors has ultimate oversight for risks relating to the data security plan and has delegated primary responsibility to the Audit Committee for assessing and managing data privacy and cybersecurity risks. The controlling stockholder beneficially owns over 60% of outstanding common stock.

Human Capital Strategy

Workforce Composition:

• Total Employees: 1,200 as of January 3, 2025.
• Geographic Distribution: 399 staff and 801 craft workers.
• Skill Mix: Many employees possess specialized technical skills necessary for the highly specialized work performed by the company.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Strong relationships with various trade unions in areas utilizing union labor force to attract top talent.
• Retention Metrics: Employee engagement is evaluated via formal surveys; strategic initiatives focused on culture and career development have been implemented.
• Employee Value Proposition: Provides attractive benefits that promote the health and welfare of employees and their families, offers compelling job opportunities, fair remuneration policies, and performance-based compensation (some employees receive equity). A volunteer time off program provides eight hours of paid time off to volunteer.

Diversity & Development:

• Development Programs: Runs periodic education series with internal and external speakers on relevant topics, and provides multiple learning solutions covering leadership skills, safety training, financial knowledge, technology training, and presentation skills.
• Culture & Engagement: Committed to an inclusive and equitable workplace, with a culture where employees are treated with respect and free of unlawful discrimination, harassment, and retaliation. An ethics hotline is maintained for confidential reporting. Managers hold periodic performance conversations and promote continuous dialogue.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Not explicitly detailed.
• Carbon Neutrality: Not explicitly detailed.
• Renewable Energy: Implements renewable energy components in projects.
• Water Infrastructure: Projects incorporate systems for treating and repurposing wastewater, which helps reduce strain on freshwater resources.
• Flood Control: Constructs projects designed to protect regions from flooding, including levees, flood walls, pump stations, and drainage systems.

Supply Chain Sustainability:

• Supplier Engagement: Regularly partners with disadvantaged business enterprises to provide subcontracting opportunities, supported by a team of small business and diversity program managers and an outreach program including a mentor-protégé program.
• Responsible Sourcing: Projects are often constructed in environmentally sensitive areas and urban locations, with the Safety, Health, and Environmental ("SH&E") program including specific guidelines to protect people and the environment and minimize construction impacts.

Social Impact Initiatives:

• Community Investment: Projects aim to accelerate economic growth and empower communities nationwide, and contribute to protecting communities from flood damage.
• Product Impact: Water projects ensure access to clean and safe drinking water, protect public health, reduce waterborne diseases, and protect ecosystems by removing pollutants.
• Workplace Safety: Safety is a core value, with training programs, weekly on-site safety meetings, site safety inspections, and OSHA-approved safety courses for superintendents and project managers. The incident rate is below the industry average (1.06 per 100 employees in 2024 vs. industry average 2.3 in 2023).
• Ethical Conduct: The governance framework is designed to promote transparency, ethical conduct, and accountability, supported by an ethics hotline for confidential reporting.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Revenue is typically lowest in the first quarter of the year due to cold, snowy, or wet conditions. Second-quarter revenue is generally higher, but productivity can still be impacted by weather. Third-quarter revenue is typically the highest due to a greater number of projects underway and more accommodating operating conditions. The fourth quarter can experience delays due to the holiday season and inclement weather.
• Economic Sensitivity: The demand for Shimmick Corporation's services is cyclical and vulnerable to general downturns in the U.S. economy, which can reduce capital expenditures for infrastructure.
• Industry Cycles: Core markets benefit from long-term trends (climate change, aging infrastructure) projected to grow 4-11% annually through 2028.

Planning & Forecasting: The uncertainty of contract award timing presents difficulties in matching the size of the equipment fleet and work crews with contract needs. The company may incur costs by maintaining more equipment and crews than currently required in anticipation of future needs.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Environmental: Subject to stringent federal, state, and local laws regarding air, water, and land discharges, the handling and disposal of solid and hazardous waste, underground storage tanks, and cleanup of properties affected by hazardous substances (e.g., California Air Resources Board regulations for diesel emissions, crystalline silica exposure, Solid Waste Disposal Act, Resource Conservation and Recovery Act, CERCLA). Compliance costs are typically passed to customers.
• Workplace Safety: Subject to Occupational Safety and Health Administration and comparable state laws, including standards for notices of hazards and safety in excavation and demolition work.
• Government Contracts: Majority of revenue from government contracts is subject to specific procurement regulations (e.g., Federal Acquisition Regulations, Cost Accounting Standards), Davis-Bacon Act (wages/benefits), Walsh-Healy Act (minimum wage/working conditions), Executive Order 11246 (EEO/affirmative action), Drug-Free Workplace Act.

Trade & Export Controls:

• U.S. Trade Policy: Financial results could be impacted by uncertainty in U.S. trade policy, including changes in tariffs, trade agreements, or other restrictions.

Legal Proceedings:

• Department of Justice Investigation: Subsidiary SCC received a Civil Investigative Demand from the Department of Justice pursuant to the False Claims Act regarding an investigation into the L 536 Levee Restoration Project. Shimmick Corporation believes all work was performed and requirements satisfied, and that no violations occurred.
• General Litigation: Subject to various legal proceedings, liability claims, and contract disputes in the ordinary course of business.
• Liquidated Damages: Contracts may contain provisions requiring payment of liquidated damages if the company is responsible for failure to meet specified contractual milestone dates.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 0.8% (FY2025), 0% (FY2023).
• Geographic Tax Planning: Files income tax returns in numerous U.S. federal and state jurisdictions.
• Tax Reform Impact: Assessing the impact of various U.S. federal, state, and international legislative proposals that could result in a material increase to its tax burden.
• AECOM Tax Matters Agreement: AECOM is generally responsible for all taxes associated with consolidated federal and state filings for taxable periods ended on or prior to January 1, 2021. Shimmick Corporation is liable for tax periods filed on a standalone basis following the acquisition date. Shimmick Corporation is obligated to share actual tax benefits realized from AECOM's election under Treasury Regulations Section 1.1502-36(d)(6).
• Deferred Tax Assets/Liabilities: Gross deferred tax assets of $177,556 thousand (FY2025) and $140,928 thousand (FY2023). A full valuation allowance of $170,276 thousand (FY2025) and $123,676 thousand (FY2023) is recorded on all increases in deferred tax assets.
• Net Operating Loss Carryforwards: U.S. federal NOL carryforwards of $189 million (indefinite carryforward, offsets up to 80% of taxable income). State NOL carryforwards of $188 million (indefinite and limited carryforward periods, expiring 2036-2043). A full valuation allowance is related to these NOLs.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Maintains general liability, workers’ compensation, excess liability, and auto insurance in amounts consistent with its risk of loss and industry practice. All buildings and equipment are also covered by insurance.
• Surety Bonds: Generally required to provide various types of surety and payment bonds for public contracts (typically a bid bond for 5% to 10% of the bid amount, and a performance and payment bond for 100% of the contract amount upon winning the bid). The ability to obtain surety bonds depends on capitalization, working capital, past performance, management expertise, and the overall capacity of the surety market. Historically, Liberty Mutual Group and Berkshire Hathaway have provided surety bonding.
• Risk Transfer Mechanisms: Indemnifies third-party bonding companies for any losses incurred in connection with issued bonds. Typically indemnifies contract owners for claims arising during the construction process and carries insurance coverage for such claims.
• Letters of Credit: No letters of credit outstanding as of January 3, 2025, or December 29, 2023.