Centuri Holdings, Inc 10-Q for FY2026 Q3
Centuri Holdings, Inc. (CTRI)
10-Q
2026-11-05
For: 2026-09-27
View Original
Added on
November 05, 2026
About this 10-Q
Centuri Holdings, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 27, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 27, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.19B
- up 40.2% from $850.04M a year earlier
- Net income
- $26.87M
- up 1180.1% from net income of $2.1M a year earlier
- Diluted EPS
- $0.27
- up 1250.0% from $0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
_________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 27, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___ to ___
Commission File Number 001-42022
_________________________
(Exact name of registrant as specified in its charter)
_________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
As of October 31, 2026, the number of outstanding shares of Common Stock of the Registrant was 100,967,595 .
| Page | |||||
Item 1. Financial Statements (Unaudited) | |||||
3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements included in this Quarterly Report on Form 10-Q are “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”). All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation and the economy, generally. Terminology such as “believe,” “anticipate,” “will,” “should,” “could,” “intend,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast,” “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.
Specific forward-looking statements in this Quarterly Report on Form 10-Q include:
•Our belief that our cash and cash equivalents are managed by high credit quality financial institutions;
•Our belief that our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future;
•Our belief that the trends listed in “Factors Affecting our Results of Operations” represent a significant challenge for utilities, but also an opportunity for outsourced utility infrastructure services companies to build and maintain more efficient, sustainable infrastructure that can meet the energy needs of future generations;
•Our belief that we have taken steps to secure delivery of a sufficient amount of equipment and do not anticipate any significant disruptions with respect to our fleet in the near-term;
•Our belief that we are well-positioned to serve the increased demand resulting from system integrity management programs to enhance safety pursuant to federal and state mandates;
•Our belief that we are well-positioned to support growing customer attention in achieving environmental objectives through infrastructure construction and maintenance;
•Our belief that customer investment in data center-related infrastructure intended to support the related increasing power demands represents a growing opportunity, and that our ability to capitalize on these opportunities will depend in part on the pace of permitting and regulatory approval of customer projects;
•Our belief, with respect to our agreements with Southwest Gas Holdings, Inc., that our ongoing obligations are not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows;
•Our expectation that future purchase accounting adjustments related to the Connect acquisition will not be material;
•Our belief that liabilities resulting from known legal proceedings will not have a material effect on our financial position, results of operations or cash flows, except as otherwise discussed in Note 15 — Commitments and Contingencies;
•Our expectation that we will continue to incur capital expenditures to meet anticipated needs for our services;
•Our belief that the responsibility under a guarantee could exceed the amount recoverable from the subsidiary alone and could materially and adversely affect our consolidated financial condition, results of operations and cash flows;
•Our belief that the timing of the recognition of remaining performance obligations of fixed-price contracts is largely within the control of the customer, including when the necessary equipment and materials required to complete the work will be provided by the customer;
•Our belief that fuel, labor and material costs could rise in the future resulting in a negative effect on our results of operations or that fluctuations in the price or availability of materials and equipment could impact costs to complete projects or result in the postponement of projects;
•Our belief that rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations; and
•Our belief that projects included in backlog can be subject to delays or cancellation as a result of regulatory requirements, adverse weather conditions, customer requirements and other factors that could cause actual revenue to differ significantly from the estimates, or cause revenue to be realized in periods other than originally expected.
4
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results may differ materially as a result of a number of factors, including, among other things:
•Customer project scheduling and duration;
•Weather, including the occurrence of major storms, and general economic conditions;
•Results of bid work, differences between actual and anticipated outcomes of bid or other fixed-price construction agreements;
•Outcomes from contract and change order negotiations;
•Our ability to successfully procure new work and impacts from work awarded or failing to be awarded work from significant customers, the mix of work awarded, and the amount of work awarded to us following work stoppages or reduction;
•The results of productivity inefficiencies from regulatory requirements, customer supply chain challenges, or otherwise, delays in commissioning individual projects, the ability of management to successfully finance, close on and assimilate any acquired businesses, and changes in our mix of customers, projects, contracts and business;
•Regional, national or general economic conditions and demand for our services;
•Price, volatility, and expectations of future prices of natural gas and electricity;
•Increases in the costs to perform services caused by changing conditions;
•The termination, or expiration of existing agreements or contracts;
•Decisions of our customers as to whether to pursue capital projects due to economic impacts resulting from a pandemic or otherwise;
•The budgetary spending patterns of customers;
•Inflation and other increases in construction costs that we may be unable to pass through to our customers;
•Cost or schedule overruns on fixed-price contracts;
•Availability of qualified labor for specific projects;
•The need and availability of letters of credit, payment and performance bonds, or other security;
•Costs we incur to support growth, whether organic or through acquisitions;
•The timing and volume of work under contract;
•Losses experienced in our operations;
•The results of the review of prior period accounting on certain projects and the impact of adjustments to accounting estimates;
•Developments in governmental investigations or inquiries;
•Intense competition in the industries in which we operate;
•Existing or future litigation or regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs;
•Failure of our partners, suppliers or subcontractors to perform their obligations;
•Cybersecurity breaches;
•Failure to maintain safe worksites;
•Risks or uncertainties associated with events outside of our control, including severe weather conditions, public health crises and pandemics, political crises or other catastrophic events, such as the conflicts in the Middle East, including the conflict between the United States and Iran, and the ongoing war in Ukraine;
•The impact of changes to federal policies, including those with respect to taxes, trade policies and tariffs, that affect U.S. relations with the rest of the world;
•Adverse developments affecting specific financial institutions or the broader financial services industry, including liquidity shortages or bank failures;
•Client delays or defaults in making payments;
•The cost and availability of credit and restrictions imposed by our debt agreements;
•The impact of credit rating actions and conditions in the capital markets on financing costs;
•Changes in construction expenditures and financing;
•Levels of or changes in operations and maintenance expenses;
•Our ability to continue to remain within the ratios and other limits in our debt covenants;
•Failure to implement strategic and operational initiatives;
•Risks or uncertainties associated with acquisitions, dispositions and investments;
•Possible information technology interruptions or inability to protect intellectual property;
•Our failure, or the failure of our agents or partners, to comply with laws;
•Our ability to secure appropriate insurance, licenses or permits;
•New or changing legal requirements, including those relating to environmental, health, licensing and safety matters;
•The loss of one or more clients that account for a significant portion of our revenue; and
•Asset impairments.
5
Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the risks and uncertainties detailed from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025. Except to the extent required by applicable law, Centuri does not assume any obligation to update or revise the forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise. You are cautioned not to place undue reliance on these forward-looking statements.
Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investor Relations section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this Quarterly Report on Form 10-Q.
6
Part I - Financial Information
Item 1. Financial Statements
Centuri Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share information)
(Unaudited)
| September 27, 2026 | December 28, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Contract assets | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill, net | |||||||||||
| Right-of-use assets under finance leases | |||||||||||
| Right-of-use assets under operating leases | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES, TEMPORARY EQUITY AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Current portion of finance lease liabilities | |||||||||||
| Current portion of operating lease liabilities | |||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Contract liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of current portion | |||||||||||
| Line of credit | |||||||||||
| Finance lease liabilities, net of current portion | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
| Deferred income taxes | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 15) | |||||||||||
| Temporary equity: | |||||||||||
| Redeemable noncontrolling interests | |||||||||||
| Equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total equity | |||||||||||
| Total liabilities, temporary equity and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Centuri Holdings, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share information)
(Unaudited)
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Revenue, related party - former parent | |||||||||||||||||||||||||||||
| Total revenue, net | |||||||||||||||||||||||||||||
| Cost of revenue (including depreciation) | |||||||||||||||||||||||||||||
| Cost of revenue, related party - former parent (including depreciation) | |||||||||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||
| Net income (loss) | ( | ||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | |||||||||||||||||||||||||||||
| Net income (loss) attributable to common stock | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| Earnings (loss) per share attributable to common stock: | |||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| Shares used in computing earnings (loss) per share: | |||||||||||||||||||||||||||||
| Weighted average basic shares outstanding | |||||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Centuri Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||||||||
| Total comprehensive income (loss) attributable to common stock | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
Centuri Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Fiscal Nine Months Ended | |||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income (loss) | $ | $ | ( | ||||||||||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||||||||||||||
| Depreciation | |||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||
| Amortization of debt issuance costs | |||||||||||||||||
| Non-cash loss on debt extinguishment | |||||||||||||||||
| Non-cash stock-based compensation expense | |||||||||||||||||
| Gain on sale of equipment | ( | ( | |||||||||||||||
| Amortization of right-of-use assets | |||||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||
| Changes in assets and liabilities, net of non-cash transactions | ( | ( | |||||||||||||||
| Net cash used in operating activities | ( | ( | |||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Capital expenditures | ( | ( | |||||||||||||||
| Proceeds from sale of property and equipment | |||||||||||||||||
| Acquisition of business, net of cash acquired | ( | ||||||||||||||||
| Purchase of equity method investment | ( | ||||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from line of credit borrowings | |||||||||||||||||
| Payment of line of credit borrowings | ( | ( | |||||||||||||||
| Proceeds from long-term debt borrowings, net | |||||||||||||||||
| Principal payments on long-term debt | ( | ( | |||||||||||||||
| Principal payments on finance lease liabilities | ( | ( | |||||||||||||||
| Payment of debt issuance costs | ( | ||||||||||||||||
| Other | ( | ( | |||||||||||||||
| Net cash provided by financing activities | |||||||||||||||||
| Effects of foreign exchange translation | ( | ||||||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
10
Centuri Holdings, Inc.
Condensed Consolidated Statements of Changes in Equity
(In thousands, except share information)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Equity | Temporary Equity: Redeemable Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances at December 29, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Separate return method tax adjustment | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
| Balances at March 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | ( | — | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Equity contribution - tax attributes | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Separate return method tax adjustment | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
| Balances at June 29, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
| Equity contribution - tax attributes | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | — | ( | — | ||||||||||||||||||||||||||||||||||
| Separate return method tax adjustment | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
| Noncontrolling interest revaluation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
| Balances at September 28, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
11
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Equity | Temporary Equity: Redeemable Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances at December 28, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | — | ( | — | ||||||||||||||||||||||||||||||||||
| Noncontrolling interest revaluation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
| Balances at March 29, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | — | ( | — | ||||||||||||||||||||||||||||||||||
| Noncontrolling interest revaluation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
| Balances at June 28, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Noncontrolling interest revaluation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
| Balances at September 27, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
12
Centuri Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
1.Description of Business
Organization Structure
Centuri Holdings, Inc. (“Holdings” and, together with its consolidated subsidiaries, the “Company” or “Centuri”) is a holding company incorporated in Delaware. Substantially all of the Company’s operations are conducted through Centuri Group, Inc. (the “Operating Company”), which is a wholly owned subsidiary of Holdings.
Holdings completed an initial public offering (“IPO”) in April 2024. Following the IPO, the Company’s former parent, Southwest Gas Holdings, Inc. (“Southwest Gas Holdings”), reduced its ownership interest through a series of secondary offerings and private placements which culminated in Southwest Gas Holdings no longer owning any equity interest in the Company effective September 5, 2025. Accordingly, the Company no longer qualifies as a “controlled company” under the New York Stock Exchange rules.
Description of Operations
The Company is a North American utility and energy infrastructure services company, and it partners with regulated utilities to maintain, upgrade, and expand the energy network that powers millions of homes and businesses. The Company’s service offerings primarily consist of the modernization of utility infrastructure through the replacement, maintenance, retrofitting and installation of electric and natural gas distribution and utility-scale transmission networks and building capacity to meet current and future demands. The Company operates through a family of complementary companies working together across different geographies to establish solid customer relationships and a strong reputation for a wide range of capabilities.
2.Basis of Presentation and Recent Accounting Pronouncements
Interim Condensed Consolidated Financial Information
The unaudited condensed consolidated financial statements and footnotes were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to those rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto as included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income (loss) and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations and comprehensive income (loss) for the interim periods are not necessarily indicative of the results for the entire fiscal year. The results of the Company have historically been subject to significant seasonal fluctuations.
The Company uses a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months, quarters and years in the Company’s condensed consolidated financial statements relate to fiscal months, quarters and years rather than calendar months, quarters and years. The first fiscal nine months of 2026 and 2025 ended on September 27, 2026 and September 28, 2025, respectively, and each period had 39 weeks. The third fiscal quarters of 2026 and 2025 each had 13 weeks.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The update enhances the level of detail available related to reporting about expenses. This update will be effective for the Company
13
beginning with the annual reporting for the fiscal year ending 2027. The Company is currently evaluating the impact the rules will have on its disclosures and expects to be prepared to adopt the standard upon its effective date.
3.Revenue and Related Balance Sheet Accounts
The following table presents the Company’s revenue from contracts with customers disaggregated by contract type (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Contract Type: | |||||||||||||||||||||||||||||
| Master service agreements | $ | $ | $ | $ | |||||||||||||||||||||||||
| Bid contracts | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Unit-price contracts | $ | $ | $ | $ | |||||||||||||||||||||||||
| Time and materials contracts | |||||||||||||||||||||||||||||
| Fixed-price contracts | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
Contract assets and liabilities consisted of the following (in thousands):
| September 27, 2026 | December 28, 2025 | ||||||||||||||||
| Current contract assets | $ | $ | |||||||||||||||
| Non-current contract assets | |||||||||||||||||
| Contract assets, total | |||||||||||||||||
| Contract liabilities | ( | ( | |||||||||||||||
| Net contract assets | $ | $ | |||||||||||||||
Contract assets primarily consist of revenue recognized on contracts in progress in excess of billings, which relates to the Company’s rights to consideration for work completed but not yet billed or approved at the reporting date, including retention amounts. Revenue earned on contracts in progress in excess of billings is transferred to accounts receivable when the rights become unconditional. Contract assets that are not expected to be billed and collected within one year of the financial statement date (“Non-current contract assets”) are classified as other assets on the condensed consolidated balance sheets. The Company applies the same approach to accounts receivable it does not expect to collect within one year.
Current contract assets included retention balances of approximately $74.2 million and $40.6 million as of September 27, 2026 and December 28, 2025, respectively, which are typically billed and collected upon project completion.
On occasion, the Company recognizes revenue related to contract claims and unapproved change orders. Contract claims and unapproved change orders occur when there is a dispute between the Company and a customer regarding a change in the scope of work and associated price for work already performed, or when the Company otherwise performs work above the scope of the initial contract without customer approval. As of September 27, 2026 and December 28, 2025, the Company had recorded approximately $68.8 million ($24.5 million non-current in other assets) and $47.8 million ($19.7 million non-current in other assets), respectively, in contract assets related to contract claims and unapproved change orders.
Total contract assets increased $46.1 million during the fiscal nine months ended September 27, 2026 due primarily to increased revenue and the timing of billings, which is based on the achievement of certain milestones. This increase was net of a reversal of revenue of $9.0 million ($7.4 million of which was a reduction in non-current contract assets) related to a revision of estimated variable consideration on a bid contract for work performed prior to 2020. See "Note 15 — Commitments and Contingencies — Legal Proceedings" for additional information.
Contract assets are recoverable from the Company’s customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of the Company’s time and materials (“T&M”) contract arrangements are billed in arrears pursuant to contract terms that are
14
standard within the industry, resulting in revenue earned on contracts in progress in excess of billings or unbilled receivables being recorded as revenue is recognized in advance of billings. The lag in billing due to the aforementioned contractual provisions may create circumstances in which material changes to a customer’s business, cash flows or financial condition, which may be impacted by negative economic or market conditions, could affect the Company’s ability to bill and subsequently collect amounts due. These changes may result in the need to record an estimate of the amount of loss from uncollectible receivables.
Contract liabilities primarily consist of amounts billed in excess of revenue earned related to the advance consideration received from customers for which work has not yet been completed. The increase in the contract liabilities balance of $40.5 million from December 28, 2025 to September 27, 2026 was primarily due to additional payments received in advance of work completed, net of approximately $39.3 million of revenue recognized that was included in the balance as of December 28, 2025.
The Company considers retention and unbilled amounts to customers to be conditional contract assets, as payment is contingent on the occurrence of a future event. Accounts receivable, net, includes only amounts that are unconditional in nature, which means only the passage of time remains and the Company has invoiced the customer. Contract liabilities include amounts billed in excess of revenue earned on contracts in progress related to fixed-price, unit-price and T&M contracts.
For contracts where payment is expected to be collected less than one year from when services are performed (as determined at contract inception), the Company uses the practical expedient and does not consider the time value of money. For contracts with an original duration of one year or less, the Company has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or the related timing of revenue recognition.
As of September 27, 2026, the Company had 97 fixed-price contracts with an original duration of more than one year. The aggregate amount of the transaction price allocated to the unsatisfied performance obligations of these contracts as of September 27, 2026 was $398.5 million. The Company expects to recognize revenue for substantially all of these remaining performance obligations of these contracts over approximately the next three years ; however, the timing of that recognition is largely within the control of the customer, including when the necessary equipment and materials required to complete the work will be provided by the customer.
Accounts receivable, net consisted of the following (in thousands):
| September 27, 2026 | December 28, 2025 | ||||||||||
| Billed on completed contracts and contracts in progress | $ | $ | |||||||||
| Other receivables | |||||||||||
| Accounts receivable, gross | |||||||||||
| Allowance for doubtful accounts | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
4.Segment Information
The Company’s reportable segments are: (i) U.S. Gas Utility Services (“U.S. Gas”); (ii) Canadian Utility Services (“Canadian Operations”); (iii) Union Electric Utility Services (“Union Electric”); and (iv) Non-Union Electric Utility Services (“Non-Union Electric”). Union Electric includes the results of JJ White, Inc. (“JJ White”), which was acquired in July 2026, and Canadian Operations includes the results of Connect Utility Services Corporation (“Connect”), which was acquired in November 2025.
The Company’s president and chief executive officer serves as the Company's chief operating decision maker (the "CODM"). The Company’s reportable segments are established in consideration of differences in services, geographic areas and workforce composition (union vs. non-union). The Company has not aggregated any operating segments into reportable segments. The CODM reviews short-term and long-term trends and budget-to-actual variances in gross profit to assess performance across the different segments in determining where to allocate resources.
U.S. Gas
U.S. Gas provides comprehensive services, including maintenance, replacement, repair, and installation for local natural gas distribution utilities (“LDCs”) focused on the modernization of customers’ infrastructure throughout the United
15
States. The work performed within this segment includes solutions for all stages of utility work and is performed primarily within the distribution, utility-scale transmission and end-user infrastructure, rather than large-scale, project-based, cross-country transmission. In addition, U.S. Gas performs other underground services, including water and fiber, and has an in-house fabrication shop providing pipe and component assembly. The Company is able to cater to the needs of its gas utility services and energy customers by serving union and non-union markets.
Canadian Operations
Canadian Operations provides comprehensive services, including maintenance, replacement, repair, and installation for local gas and electric utilities and energy providers. A majority of the work performed in this segment is focused on distribution, urban transmission and end-user interface under master service agreements (“MSAs”) for gas and electric utilities. This segment also provides storm response services and performs construction of electrical systems used in renewable energy projects.
Union Electric
Union Electric provides a comprehensive set of electric utility services encompassing maintenance, replacement, repair, storm response, upgrade and expansion services for urban transmission and local distribution infrastructure within union markets. The work performed within this segment is focused primarily on recurring local distribution and urban transmission services under MSAs, as opposed to large-scale, project-based, cross-country transmission, and services are primarily focused on infrastructure between the substation and end-user meter. In addition to core electric utility infrastructure, this segment provides heavy industrial work, including civil, mechanical, electrical, and fabrication (component assembly) services.
Non-Union Electric
Non-Union Electric provides a comprehensive set of electric utility services encompassing maintenance, replacement, repair, storm response, upgrade and expansion services for urban transmission and local distribution infrastructure within non-union markets. The work performed within this segment is focused almost exclusively on recurring local distribution and urban transmission services under MSAs as opposed to large-scale, project-based, cross-country transmission, and services are primarily focused on infrastructure between the substation and end-user meter.
Other/Eliminations
Other consists of any corporate and non-allocated transactions, and eliminations represents the elimination of intersegment activity.
Revenue and gross profit by segment are presented below (in thousands).
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| U.S. Gas | $ | $ | $ | $ | |||||||||||||||||||||||||
| Canadian Operations | |||||||||||||||||||||||||||||
| Union Electric | |||||||||||||||||||||||||||||
| Non-Union Electric | |||||||||||||||||||||||||||||
Eliminations (1) | ( | ( | |||||||||||||||||||||||||||
| Consolidated revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gross profit: | |||||||||||||||||||||||||||||
| U.S. Gas | $ | $ | $ | $ | |||||||||||||||||||||||||
| Canadian Operations | |||||||||||||||||||||||||||||
| Union Electric | |||||||||||||||||||||||||||||
| Non-Union Electric | |||||||||||||||||||||||||||||
| Consolidated gross profit | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)U.S. Gas and Union Electric segment revenues included $11.7 0.2
16
Gross profit represents the difference between revenue and cost of revenue. Cost of revenue is a significant expense that is regularly reported to the CODM by segment. Cost of revenue by segment was as follows (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| U.S. Gas | $ | $ | $ | $ | |||||||||||||||||||||||||
| Canadian Operations | |||||||||||||||||||||||||||||
| Union Electric | |||||||||||||||||||||||||||||
| Non-Union Electric | |||||||||||||||||||||||||||||
| Eliminations | ( | ( | |||||||||||||||||||||||||||
| Consolidated cost of revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
Depreciation expense, included in cost of revenue, by segment was as follows (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| U.S. Gas | $ | $ | $ | $ | |||||||||||||||||||||||||
| Canadian Operations | |||||||||||||||||||||||||||||
| Union Electric | |||||||||||||||||||||||||||||
| Non-Union Electric | |||||||||||||||||||||||||||||
Consolidated depreciation expense (1) | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)Depreciation expense within selling, general and administrative expense was excluded from the table above as it is not produced or utilized by management to evaluate segment performance.
Separate measures of the Company’s assets and cash flows, with the exception of capital expenditures, are not produced or utilized by the CODM to evaluate segment performance, as defined by Accounting Standards Codification Topic 280, “Segment Reporting.” The CODM does not use total assets by segment as a basis for decision making.
Capital expenditures by segment were as follows (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| U.S. Gas | $ | $ | $ | $ | |||||||||||||||||||||||||
| Canadian Operations | |||||||||||||||||||||||||||||
| Union Electric | |||||||||||||||||||||||||||||
| Non-Union Electric | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Consolidated capital expenditures | $ | $ | $ | $ | |||||||||||||||||||||||||
Foreign Operations
17
5.Per Share Information
The amounts used to compute basic and diluted earnings (loss) per share attributable to common stock consisted of the following (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Amounts attributable to common stock: | |||||||||||||||||||||||||||||
| Net income (loss) attributable to common stock | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| Weighted average shares: | |||||||||||||||||||||||||||||
| Weighted average shares outstanding for basic earnings per share attributable to common stock | |||||||||||||||||||||||||||||
| Weighted average dilutive securities | |||||||||||||||||||||||||||||
| Weighted average shares outstanding for diluted earnings per share attributable to common stock | |||||||||||||||||||||||||||||
Potentially dilutive securities that were antidilutive in the fiscal nine months ended September 28, 2025 due to the Company recording a net loss were not material.
6.Accounts Receivable Securitization Facility
In September 2024, the Company entered into a three-year , $125.0 million Receivables Purchase Agreement (as amended, the “Securitization Facility”), with PNC Bank, National Association (“PNC”), as administrative agent, to enhance the Company's financial flexibility by providing additional liquidity. On May 4, 2026, the Company entered into an amendment to the Securitization Facility which, among other things, increased the capacity from $125.0 million to $165.0 million.
Under the Securitization Facility, certain designated subsidiaries of the Company may sell or contribute their accounts receivable and contract assets generated in the ordinary course of their businesses and certain related assets to an indirect wholly owned bankruptcy-remote Special Purpose Entity (“SPE”) of the Company created specifically for this purpose. The SPE is a variable interest entity, and the Company is the primary beneficiary and therefore consolidates the SPE. The SPE transfers ownership and control of accounts receivable to PNC for payments as set forth in the agreement. The Company accounts for accounts receivable sold to the banking counterparty as a sale of financial assets and has derecognized the accounts receivable from the condensed consolidated balance sheet for the current period.
The total outstanding balance of accounts receivable that had been sold and derecognized was $165.0 million as of September 27, 2026. The increase in sold accounts receivable during the fiscal nine months ended September 27, 2026 resulted in an operating cash inflow of $40.0 million. The Company had no
As of September 27, 2026, the SPE owned $187.7 million in accounts receivable and $147.3 million in contract assets that were not sold to PNC. As of December 28, 2025, the corresponding amounts were $60.2 million and $115.6 million. These balances are primarily included in accounts receivable, net and contract assets in the Company’s condensed consolidated balance sheet, with certain non-current balances included in other assets.
7.Acquisitions
Connect
In November 2025, the Company completed the acquisition of all of the equity interests of Connect, a Canadian electric utility services provider. Connect’s revenue during the fiscal three and nine months ended September 27, 2026 was approximately $26.1 million and $71.6 million, respectively, and Connect’s earnings were not material. The Company
18
recorded a measurement period adjustment related to the Connect acquisition that increased goodwill by approximately $1.7 million with a corresponding increase in deferred income tax liabilities, reflecting a refinement of the acquired deferred tax positions based on information obtained subsequent to the acquisition date. Due to the estimates made for purposes of purchase accounting, primarily with respect to liabilities existing as of the closing date, the final purchase accounting has not yet been completed and further refinements may occur, though future adjustments are not expected to be material.
JJ White
On July 20, 2026, the Company completed the acquisition of all of the equity interests in JJ White, a Pennsylvania-based provider of industrial and commercial construction and maintenance services, for an estimated $58.0 million in total cash consideration. Total consideration reflects net working capital adjustments and other post-closing adjustments from the $62.0 million base purchase price. The Company currently has a $0.2 million receivable recorded for consideration paid but expected to be refunded post-close. The Company acquired JJ White through Riggs Distler & Company, Inc., a consolidated subsidiary of the Company. The acquisition of JJ White expanded the Company’s core union electric capabilities across the Northeast and Midwest.
In connection with the acquisition, the Company recognized indemnification assets of $3.1 million related to certain pre-acquisition liabilities for which the sellers have agreed to indemnify the Company and which were funded in escrow. The indemnification assets were recognized on the same basis as the related indemnified liabilities, subject to the contractual terms and limitations of the indemnification arrangements. The ultimate amounts recoverable under the indemnification arrangements will depend on the resolution of the underlying indemnified matters.
Assets acquired and liabilities assumed in the transaction were recorded at their acquisition date fair values except as otherwise required by applicable guidance. Differences between the fair value of accounts receivable, net acquired and the gross contractual amount of receivables acquired were not material. Transaction costs associated with the acquisition were expensed as incurred. The Company’s allocation of the purchase price was based on an evaluation of the appropriate fair values and represented management’s best estimate based on available data (including market data, data regarding customers of the acquired businesses, terms of acquisition-related agreements, analysis of historical and projected results, and other types of data). The analysis included consideration of types of intangibles that were acquired, including customer relationships, trade name, and backlog. These intangibles were valued utilizing a discounted cash flow method. Determining the fair values of these intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including the attrition rate, revenue growth rate, gross profit percentage, and discount rate for customer relationships intangible assets, gross profit percentage and timing of recognition for the backlog asset, and the royalty rate and discount rate for the trade name intangible asset.
19
The estimated value of assets acquired and liabilities assumed as of July 20, 2026 were as follows (in thousands):
| July 20, 2026 | |||||
| Assets: | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable, net | |||||
| Contract assets | |||||
| Prepaid expenses and other current assets | |||||
| Property and equipment, net | |||||
| Intangible assets, net | |||||
| Right-of-use assets under operating leases | |||||
| Total assets acquired | |||||
| Liabilities: | |||||
| Accounts payable | |||||
| Contract liabilities | |||||
| Accrued expenses and other current liabilities | |||||
| Deferred income taxes | |||||
| Total liabilities assumed | |||||
| Total identifiable net assets | |||||
| Goodwill | |||||
| Fair value of net assets acquired | $ | ||||
The amounts allocated to major classes of intangible assets were as follows (gross carrying amount in thousands):
| Gross Carrying Amount | Weighted Average Amortization Period in Years | ||||||||||
| Customer relationships | $ | ||||||||||
| Trade name | |||||||||||
| Backlog | |||||||||||
| Total intangible assets | $ | ||||||||||
The Company recorded $27.8 million of goodwill as a result of the acquisition, which has been assigned to the Union Electric reporting unit. Goodwill consists of the value associated with the assembled workforce and the estimated economic value attributable to future opportunities related to the transaction. Goodwill acquired in the JJ White acquisition is not expected to be tax-deductible.
Due to the estimates made for purposes of purchase accounting, the final purchase accounting has not yet been completed and further refinements may occur. The primary areas of the preliminary estimates that are not yet finalized relate to accounts receivable, contract assets and liabilities, intangible assets, indemnification assets, tax assets and liabilities, and other liabilities existing as of the closing date. Purchase accounting will be completed no later than one year following the acquisition date.
Results attributable to JJ White subsequent to the acquisition and through September 27, 2026 included $86.4 million in revenue and $3.9 million in net income attributable to common stock, reflecting preliminary purchase accounting adjustments that remain subject to revision as described above. During the fiscal three and nine months ended September 27, 2026, the Company incurred acquisition costs of $3.4 million and $4.8 million, respectively, which were recorded within selling, general and administrative expenses within the consolidated statement of operations.
20
Unaudited pro forma information for JJ White acquisition
The table below reflects unaudited pro forma consolidated revenue and net income attributable to common stock assuming that JJ White had been acquired at the beginning of fiscal year 2025 (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||
| Total revenue, net | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income (loss) attributable to common stock | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
To calculate pro forma results, acquisition costs of $3.4 million and $4.8 million incurred during the fiscal three and nine months ended September 27, 2026, respectively, were excluded from those periods and the full $4.8 million was included in the fiscal nine months ended September 28, 2025, as if the acquisition had occurred at the beginning of fiscal year 2025.
This information is provided for informational purposes only and is not necessarily indicative of the results of operations that would have occurred had the acquisition been completed at that date, nor is it indicative of future results of operations.
8.Goodwill
Changes in the carrying amount of goodwill of each of the Company’s reportable segments were as follows (in thousands):
U.S. Gas | Canadian Operations(1) | Union Electric (2) | Non-Union Electric | Total | |||||||||||||||||||||||||
| Balances as of December 28, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Effect of exchange rate changes | — | ( | — | — | ( | ||||||||||||||||||||||||
| Additions from JJ White acquisition | — | — | — | ||||||||||||||||||||||||||
| Measurement period adjustment | — | — | — | ||||||||||||||||||||||||||
| Balances as of September 27, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)Net of accumulated impairment of $10.8
(2)Net of accumulated impairment of $391.1
9.Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
| September 27, 2026 | December 28, 2025 | ||||||||||
| Accrued compensation | $ | $ | |||||||||
| Other accrued expenses | |||||||||||
| Accrued insurance | |||||||||||
| Book overdrafts | |||||||||||
| Accrued expenses and other current liabilities | $ | $ | |||||||||
21
10.Long-Term Debt
Long-term debt, including outstanding amounts on the Company’s line of credit, consisted of the following (in thousands):
| September 27, 2026 | December 28, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value (1) | Carrying Amount | Fair Value (1) | ||||||||||||||||||||
| Borrowings under revolving line of credit | $ | $ | $ | $ | |||||||||||||||||||
| Term loans under loan facility | |||||||||||||||||||||||
| Total loan facility | |||||||||||||||||||||||
| Equipment loans: | |||||||||||||||||||||||
| Other equipment loans | |||||||||||||||||||||||
| Total long-term debt | $ | $ | $ | $ | |||||||||||||||||||
| Current portion of long-term debt | ( | ( | |||||||||||||||||||||
| Unamortized discount and debt issuance costs | ( | ( | |||||||||||||||||||||
| Long-term debt, net of current portion | $ | $ | |||||||||||||||||||||
(1)Fair values as of September 27, 2026 and December 28, 2025 were determined using discount rates commensurate with the Company’s credit rating.
On August 27, 2021, the Company entered into an amended and restated credit agreement. The agreement provided for a $1.145 billion secured term loan facility, at a discount of 1.00 %, and a $400 million secured revolving credit facility. On July 9, 2025, the Company signed the sixth amendment to its second amended and restated credit agreement to refinance and replace in full the existing term loan facility with an $800 million term loan facility, $93.6 million of which was comprised of new term loans used to refinance existing indebtedness and $706.4 million of which was used to refinance existing term loans. This amendment also increased the maximum principal amount of the senior secured revolving credit facility from $400 million to $450 million. On January 12, 2026, the Company entered into the seventh amendment to its amended and restated credit agreement, which (i) repriced the term loan, (ii) decreased the fixed margin for secured overnight financing rate (“SOFR”) loans from 2.25 % to 2.00 % and (iii) decreased the fixed margin for base rate loans from 1.25 % to 1.00 %. This multi-currency facility allows the Company to request loan advances in either Canadian dollars or U.S. dollars. Amounts borrowed and repaid under the revolving line of credit portion of the facility are available to be re-borrowed. The Company’s term loan facility is set to mature on July 9, 2032, and the revolving credit facility is set to mature on July 9, 2030.
The obligations under the amended and restated credit agreement are secured by present and future ownership interests in substantially all direct and indirect subsidiaries of the Company, substantially all of the tangible and intangible personal property of each borrower, and all products, profits, and proceeds of the foregoing. The Company’s assets securing the amended and restated credit agreement as of September 27, 2026 totaled $2.6 billion. The amended and restated credit agreement contains restrictive covenants, including a restriction on dividend payments with an available amount generally defined as $65.0 million plus 50 % of the Company’s consolidated net income since the beginning of the third fiscal quarter of 2025 adjusted for certain items, such as parent capital contributions, redeemable noncontrolling interest payments, and dividend payments, among other adjustments, as applicable.
The applicable margin for the revolving credit facility ranges from 1.25 2.25 0.25 % to 1.25 % for base rate loans, depending on the Company’s net leverage ratio. The term loan facility has a fixed margin of 1.00 % for base rate loans and 2.00 % for SOFR loans. The table
22
below summarizes the weighted average interest rates on the term loan facility and revolving credit facility as of September 27, 2026 and December 28, 2025:
| September 27, 2026 | December 28, 2025 | ||||||||||
| Term loan facility | % | % | |||||||||
| Revolving credit facility | % | % | |||||||||
The Company was required to maintain a leverage ratio of 4.50 to 1.00 for fiscal quarters ending prior to September 30, 2026, and is required to maintain a leverage ratio of 4.00 to 1.00 for quarters ending on or after September 30, 2026. The Company is also required to maintain an interest coverage ratio of greater than a minimum of 2.50 to 1.00.
As of September 27, 2026, the Company was in compliance with all of the financial covenants under the revolving credit facility. The Company is required to pay a commitment fee on the unused portion of the commitments which ranges from 0.15 % to 0.35 % per annum, depending on the Company’s net leverage ratio.
As of September 27, 2026 and December 28, 2025, the Company had borrowings outstanding of $0.8 billion and $0.7 billion, respectively, under its amended and restated credit agreement. The amount available under the revolving line of credit is further reduced by the amount of any outstanding letters of credit issued by the Company under the agreement. Accordingly, there was $220.7 million of unused capacity on the revolving line of credit as of September 27, 2026, net of outstanding letters of credit. The Company had $74.3 million of unused letters of credit available as of September 27, 2026 and $68.6 million as of December 28, 2025. Debt issuance costs associated with the Company’s line of credit are amortized over the term of the related line of credit. As of September 27, 2026 and December 28, 2025, there was $2.4 million and $2.9 million, respectively, in debt issuance costs recorded in other assets on the condensed consolidated balance sheets.
As of September 27, 2026, the Company had $55.4 million of surety-backed letters of credit issued outside of its amended and restated credit agreement.
Debt issuance costs associated with the Company’s term loan facility are amortized over the term of the related debt, which approximates the effective interest method. As of September 27, 2026 and December 28, 2025, debt issuance costs of $9.6 million and $10.8 million, respectively, were recorded as a reduction to long-term debt on the condensed consolidated balance sheets.
Amortization expense related to debt issuance costs is recorded as a component of interest expense in the condensed consolidated statements of operations. Amortization of debt issuance costs was $0.6 million and $0.7 million for the fiscal three-month periods ended September 27, 2026 and September 28, 2025, respectively. During the fiscal nine months ended September 27, 2026 and September 28, 2025, amortization of debt issuance costs was $1.7 million and $3.1 million, respectively.
As of September 27, 2026, the Company had six U.S. equipment term loans with initial amounts totaling approximately $150.0 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars.
The fair value of the Company’s debt as of September 27, 2026 and December 28, 2025 was $0.8 billion and $0.7 billion, respectively. The carrying value of the Company’s revolving credit facility approximates fair value given interest rates on the revolving credit facility approximate market rates, and draws on the revolving credit facility are typically paid back in a short period of time. The fair values of the Company’s term loan facility and equipment loans were determined utilizing a market-based valuation approach, where fair values are determined based on evaluated pricing data, and as such are categorized as Level 2 in the hierarchy.
11.Leases
The Company has operating and finance leases for corporate and field offices, equipment yards, construction equipment and transportation vehicles. The Company is currently not a lessor in any significant lease arrangements. The Company’s leases have remaining lease terms of up to 12 five years , and some leases include options to terminate within one year . The equipment leases may include variable payment terms in addition to the fixed lease payments if machinery is used in excess of the standard work periods. The occurrence of these variable payments is not probable under the Company’s current operating environment and has not been included in consideration of lease payments. Leases with an initial term of 12 months or less are classified as short-term leases and are not recognized on the condensed consolidated balance sheets unless the lease
23
contains a purchase option that is reasonably certain to be exercised, or unless it is reasonably certain that the equipment or property will be leased for greater than 12 months. Due to the seasonality of the Company’s operations, expense for short-term leases will fluctuate throughout the year with higher expense typically incurred during the periods when revenue is the greatest. As of September 27, 2026, the Company did not have any significant executed lease agreements that had not yet commenced.
The components of lease expense were as follows (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | |||||||||||||||||||||||||||||||
| Lease cost | Classification | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | |||||||||||||||||||||||||||
| Operating lease cost | Cost of revenue and selling, general and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||||||||||||||
| Amortization of ROU assets | Depreciation (1) | |||||||||||||||||||||||||||||||
| Interest on lease liabilities | Interest expense, net | |||||||||||||||||||||||||||||||
| Total finance lease cost | ||||||||||||||||||||||||||||||||
Short-term lease cost (2) | Cost of revenue and selling, general and administrative expenses | |||||||||||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||||||||||||||||||
(1)Depreciation is included within cost of revenue in the accompanying condensed consolidated statements of operations.
(2)Short-term lease cost includes both leases and rentals with initial terms of 12 months or less.
Supplemental cash flow information related to leases was as follows (in thousands):
| Fiscal Nine Months Ended | |||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||||||||
| Operating cash flows from finance leases | $ | $ | |||||||||||||||
| Financing cash flows from finance leases | $ | $ | |||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | $ | $ | |||||||||||||||
Finance leases | $ | $ | |||||||||||||||
Supplemental information related to leases was as follows:
| September 27, 2026 | December 28, 2025 | ||||||||||
| Weighted average remaining lease term (in years): | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
24
The following is a schedule of maturities of lease liabilities as of September 27, 2026 (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| Fiscal year ended: | |||||||||||
| Remainder of 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total lease payments | |||||||||||
| Less: Amount of lease payments representing interest | ( | ( | |||||||||
| Total | $ | $ | |||||||||
Certain leases require the Company to pay variable property taxes, insurance and maintenance costs that have been excluded from the minimum lease payments presented in the above tables because they are variable in nature.
12.Income Taxes
The Company’s current quarter provision for income taxes was prepared using the annual effective tax rate adjusted to remove discrete items, as those items will impact the quarter in which those items were reflected. The Company’s effective tax rate for the fiscal three months ended September 27, 2026 and September 28, 2025 was 44.7 % and 78.9 %, respectively, and for the fiscal nine months ended September 27, 2026 and September 28, 2025 was 46.1 % and (14.4 %), respectively.
For the fiscal three months ended September 27, 2026, discrete tax items impacting the effective tax rate were primarily due to acquisition and severance costs (the majority of both were not deductible). For the fiscal nine months ended September 27, 2026, discrete tax items impacting the effective tax rate were primarily due to the City of Chicago reversal and strategy implementation costs, as well as acquisition costs and severance costs (the majority of both were not deductible). For the fiscal three and nine months ended September 28, 2025, discrete tax items impacting the effective tax rate were primarily due to fees incurred in refinancing our debt and fees incurred in separating from Southwest Gas Holdings. Effective tax rates for all periods were impacted by U.S. tax on certain earnings of our foreign operations under the global intangible low-taxed income (“GILTI”) provisions of the Internal Revenue Code and the disproportionate amount of non-deductible expenses in relation to income (loss) before income taxes.
The Company regularly evaluates valuation allowances established for deferred tax assets for which future realization is uncertain, including in connection with changes in tax laws. The Company maintains a valuation allowance on certain state net operating loss carryforwards and for Canadian capital losses. Such valuation allowances are released as the related tax benefits are realized or when sufficient evidence exists to conclude that it is more likely than not the deferred tax assets will be realized.
There were no
25
13.Supplemental Cash Flow Disclosures
The following table represents the Company’s supplemental cash flow information related to interest and cash taxes paid (in thousands):
| Fiscal Nine Months Ended | |||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||
| Interest paid | $ | $ | |||||||||||||||
| Income taxes paid, net of refunds | $ | $ | |||||||||||||||
Non-cash lease activity is disclosed in “Note 11 — Leases.” The following table represents the Company’s non-cash investing activity (in thousands):
| Fiscal Nine Months Ended | |||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||
| Non-cash investing activities: | |||||||||||||||||
| Accrued capital expenditures | $ | $ | |||||||||||||||
Accrued Connect acquisition consideration (1) | $ | $ | |||||||||||||||
(1)Represents approximately $0.7 million that is expected to be paid within the next fiscal quarter pursuant to working capital and other adjustments, as well as $1.4 million in non-current liabilities which is offset by restricted cash.
Following is a reconciliation of the cash-related captions in the consolidated balance sheets to the consolidated statements of cash flows (in thousands):
| Fiscal Nine Months Ended | |||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||
Condensed consolidated balance sheets: | |||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||
Restricted cash included in other assets | |||||||||||||||||
Cash, cash equivalents, and restricted cash in the condensed consolidated statements of cash flows | $ | $ | |||||||||||||||
14.Related Parties
Southwest Gas Holdings
Overview
Southwest Gas Holdings was formerly the Company’s parent and held a controlling interest in the Company until August 11, 2025, when its ownership decreased to 31 %. On September 5, 2025, Southwest Gas Holdings sold all of its remaining ownership interest in the Company. The Company still considers Southwest Gas Holdings to be a related party as Southwest Gas Holdings’ former chief executive officer and director, who is continuing to serve as an advisor to Southwest Gas Holdings through the end of 2026, is a member of the Company’s Board of Directors.
Related Party Transactions
The Company performs various construction services for Southwest Gas Corporation, a wholly owned subsidiary of Southwest Gas Holdings. The following table represents the Company’s revenue in dollars and as a percentage of total revenue as well as gross profit in dollars and as a percentage of total gross profit relating to contracts with Southwest Gas Corporation (in thousands):
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
26
As of September 27, 2026 and December 28, 2025, approximately $22.6 million (4 %) and $11.9 million (4 %) of the Company’s accounts receivable, respectively, and $1.6 million and $0.7 million of contract assets, respectively, were related to contracts with Southwest Gas Corporation. There were $3.8 million of contract liabilities as of September 27, 2026 and no significant contract liabilities as of December 28, 2025 that related to contracts with Southwest Gas Corporation.
Agreements Related to the Separation from Southwest Gas Holdings
In connection with the Company’s IPO and separation from Southwest Gas Holdings, the Company previously entered into a Separation Agreement, Tax Matters Agreement, and Registration Rights Agreement with Southwest Gas Holdings. Following Southwest Gas Holdings’ disposition of its remaining ownership interest in the Company on September 5, 2025, many provisions of these agreements, including Southwest Gas Holdings’ governance rights and registration rights, have terminated or are no longer applicable.
The remaining provisions primarily relate to customary indemnification and cooperation obligations. As of the date of this report, there are no known claims, proceedings, or contingencies that would require indemnification by or to the Company under these agreements, and the ongoing obligations are not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows.
On February 24, 2025, the Company entered into an Unutilized Tax Assets Settlement Agreement (the “Tax Assets Agreement”) with Southwest Gas Holdings, which governs the treatment of certain unutilized tax assets (the “Tax Assets”) retained by the Company following its deconsolidation from Southwest Gas Holdings for purposes of U.S. federal and relevant state income tax laws. Under the terms of the Tax Assets Agreement, such Tax Assets were initially treated as deemed capital contributions and recorded within additional paid‑in capital. After Southwest Gas Holdings’ ownership of the Company decreased below 50%, subsequent adjustments to Tax Assets were reflected as an adjustment to income tax benefit in the Company’s condensed consolidated statements of operations.
Tax Assets allocated to the Company remain subject to true‑up until after Southwest Gas Holdings files its U.S. federal and applicable state income tax returns for tax year 2025. Any future changes resulting from the true‑up process will be reflected in the Company’s condensed consolidated statements of operations. There were no changes during the fiscal nine months ended September 27, 2026.
Riggs Distler Noncontrolling Interest
15.Commitments and Contingencies
Legal Proceedings
The Company is a named party in various legal proceedings arising from the normal course of business. Although the ultimate outcomes of active matters are currently unknown, the Company does not believe any liabilities resulting from these known matters will have a material effect on its financial position, results of operations or cash flows, unless otherwise stated below.
NPL Construction Co. (“NPL”), a subsidiary of the Operating Company included in the U.S. Gas segment, is currently pursuing a contract claim for damages against the City of Chicago and related parties (collectively, the “City”), arising out of work that NPL performed for the City. NPL initiated this dispute through the City’s required administrative process on August 26, 2019. In response to NPL’s claim, the City has taken the position that it is entitled to withhold payments on amounts NPL believes it is owed for work already completed, claiming that further corrective work by NPL on the project is necessary and that withholding payment is appropriate until remediation is complete. On July 18, 2024, the administrative agency issued a decision denying NPL’s claim for damages. The Company disagrees with the decision of the administrative agency, and NPL filed a petition seeking a review of the administrative agency’s decision by the Circuit Court of Cook County Illinois on November 8, 2024.
On April 20, 2026, the Circuit Court entered an interlocutory memorandum opinion and order (the “Order”) addressing some, but not all, of NPL’s claims, with the remaining claims requiring later briefing and argument. Following further legal
27
analysis of the Order, the Company disagrees with the Order and intends to continue to vigorously pursue this matter; however, based on the information available at this time, the Company reassessed its estimate of variable consideration under the contract in accordance with ASC 606 and reversed revenue of $9.0 million in the second fiscal quarter of 2026.
The Company may be entitled to additional revenue if future developments indicate a likelihood of collecting outstanding balances, or if NPL succeeds in its claims for damages. The Company can provide no assurance as to whether or when there will be material developments in this matter. The Company no longer has any amounts recorded as receivable or contract assets related to this matter, although NPL continues to assert its right to payment of the outstanding balances. The Company has no contingent liabilities accrued with respect to this matter.
The Company is the plaintiff in legal proceedings initiated during the fiscal three months ended September 27, 2026 against certain competitors and former operating company employees of the Company. In these lawsuits, the Company is seeking damages and injunctive relief for alleged breaches of restrictive covenants, breach of fiduciary duties, tortious interference, misappropriation of trade secrets, and related claims. The Company alleges that the competitors and former operating company employees diverted work crews, other personnel and future business to competing ventures, among other misconduct. In connection with these matters, the Company is incurring professional fees for litigation and investigation activities and employee retention expenses. These matters are at an early stage. Because litigation is inherently uncertain, the Company cannot predict the duration, total costs, or potential outcome related to the proceedings.
The Company maintains liability insurance for various risks associated with its operations. In connection with its liability insurance policies, the Company is responsible for an initial deductible or self-insured retention amount per occurrence, after which the insurance carriers would be responsible for amounts up to the policy limits.
Employment Agreements
The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. Certain employment agreements also contain severance clauses that become effective upon a change in control of the Company. Upon the occurrence of certain defined events in the various employment agreements, the Company would be obligated to pay varying amounts to the related employees, which vary with the level of the employees’ respective responsibilities.
Concentration of Credit Risk
The Company provides full-service utility infrastructure services to various customers, primarily utility companies that are located throughout the U.S. and Canada. The Company is subject to concentrations of credit risk related primarily to its revenue and accounts receivable and contract asset positions with customers, which is defined as greater than or equal to 10% of the Company’s consolidated balances. No customers accounted for more than 10% of revenue during the fiscal three or nine months ended September 27, 2026 or the fiscal three or nine months ended September 28, 2025. As of September 27, 2026 and December 28, 2025, one Non-Union Electric segment customer had a combined accounts receivable and contract assets balance above 10% of the consolidated accounts receivable and contract assets balance, which was $151.5 million and $131.9 million, respectively, or approximately 15 % and 19 %, respectively, of the consolidated balance of these accounts.
The Company primarily uses two financial banking institutions. The Company’s cash on deposit with these financial institutions exceeded the federal insurability limits as of September 27, 2026. The Company believes its cash and cash equivalents are managed by high credit quality financial institutions.
Bonds and Parent Guarantees
Many customers, particularly in connection with new construction, require the Company to post performance and payment bonds. These bonds provide a guarantee that the Company will perform under the terms of a contract and pay its subcontractors and vendors. In certain circumstances, the customer may demand that the surety make payments under the bond, and the Company must reimburse the surety for any expenses or outlays it incurs. The Company may also be required to post letters of credit as collateral in favor of the sureties, which would reduce the borrowing availability under
28
its revolving credit facility. As of September 27, 2026, the Company was not aware of any outstanding material obligations for payments related to these bond obligations.
Performance bonds expire at various times ranging from mechanical completion of a project to a period extending beyond contract completion in certain circumstances, and therefore a determination of maximum potential amounts outstanding requires certain estimates and assumptions. Such amounts can also fluctuate from period to period based upon the mix and level of the Company’s bonded operating activity. As of September 27, 2026, the estimated total amount of outstanding performance and payment bonds was approximately $907.0 million. The Company’s estimated maximum exposure related to the value of the performance bonds outstanding is lowered on each bonded project as the cost to complete is reduced, and each commitment under a performance bond generally extinguishes concurrently with the expiration of its related contractual obligation. The estimated cost to complete these bonded projects was approximately $366.6 million as of September 27, 2026.
Additionally, from time to time, the Company guarantees certain obligations and liabilities of its subsidiaries that may arise in connection with, among other things, contracts with customers, and equipment and real estate lease obligations. These guarantees may cover all of the subsidiary’s unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. The Company is not aware of any claims under any guarantees that are material. The responsibility under a guarantee could exceed the amount recoverable from the subsidiary alone and could materially and adversely affect the Company’s consolidated financial condition, results of operations and cash flows.
16.Stock-Based Compensation
The Company maintains a stock-based compensation plan, which authorizes the granting of various equity-based incentives, including restricted stock units (“RSUs”) and performance stock units (“PSUs”). Stock-based compensation expense is amortized on a straight-line basis over the service period, which is generally the vesting period. The fair value of the Company’s RSU and PSU awards is measured at the market price of the Company’s common stock on the grant date. PSUs are earned based on the achievement of certain performance metrics in relation to a set target, and stock compensation expense may fluctuate based on the forecasted achievement prior to vesting or actual achievement of these target metrics upon vesting.
RSU grants to employees generally vest ratably on an annual basis over a three-year period following the grant date, although some awards may vest ratably on an annual basis over two years or cliff vest at the end of a shorter time period. RSU grants to non-employee directors typically vest at the end of a one-year period. PSU grants generally cliff vest at the end of a three-year period following the grant date. Forfeitures are recorded as they occur.
Non-cash stock-based compensation expense totaled approximately $2.2 million and $2.1 million for the fiscal three-month periods ended September 27, 2026 and September 28, 2025, respectively, and totaled approximately $8.5 million and $5.9 million for the fiscal nine-month periods ended September 27, 2026 and September 28, 2025, respectively.
29
The table below summarizes activity related to the Company’s stock-based compensation plans during the fiscal nine-month periods ended September 27, 2026 and September 28, 2025.
| RSUs | PSUs | ||||||||||||||||||||||||||||||||||
| Shares | Weighted Average Grant Date Fair Value (Per Unit) | Shares | Weighted Average Grant Date Fair Value (Per Unit) | ||||||||||||||||||||||||||||||||
| As of December 29, 2024 | $ | N/A | |||||||||||||||||||||||||||||||||
| Granted | $ | $ | |||||||||||||||||||||||||||||||||
| Vested | ( | $ | — | N/A | |||||||||||||||||||||||||||||||
| Forfeited | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| As of September 28, 2025 | $ | $ | |||||||||||||||||||||||||||||||||
| As of December 28, 2025 | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | $ | $ | |||||||||||||||||||||||||||||||||
| Vested | ( | $ | — | N/A | |||||||||||||||||||||||||||||||
PSUs converted to RSUs (1) | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Forfeited | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| As of September 27, 2026 | $ | $ | |||||||||||||||||||||||||||||||||
30
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and corresponding notes in Item 1 — Financial Statements within Part I of this Quarterly Report on Form 10-Q, and our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 filed with the SEC on February 26, 2026 (our “2025 Annual Report”).
Unless the context otherwise requires, references to “we,” “us,” “our,” “the Company,” and “our Company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A. Risk Factors in our 2025 Annual Report. See “Cautionary Note Regarding Forward-Looking Statements.”
We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months and quarters throughout relate to fiscal months and quarters rather than calendar months and quarters. The first fiscal nine months of 2026 and 2025 ended on September 27, 2026 and September 28, 2025, respectively, and each period had 39 weeks. The third fiscal quarters of 2026 and 2025 each had 13 weeks.
Overview
Company Overview
We are a leading North American utility and energy infrastructure services company, and we partner with regulated utilities to maintain, upgrade and expand the energy network that powers millions of homes and businesses. We serve as a long-term strategic partner to, and an extension of, North America’s electric, gas and combination utility providers, delivering a wide range of infrastructure solutions to ensure safe, reliable and environmentally sustainable energy operations. Our service offerings primarily consist of the modernization of utility infrastructure through the replacement, maintenance, retrofitting and installation of electric and natural gas distribution and utility-scale transmission networks and building capacity to meet current and future demands. We also serve complementary, attractive and growing end markets such as distributed power projects and data centers. Our essential services enable our customers to enhance the safety, reliability and environmental sustainability of the electric and natural gas networks that consumers rely upon to meet their essential and evolving energy needs. Our strategy is focused primarily on maintaining and growing services to our existing customers through master service agreements (“MSAs”) and bid work, securing new customer relationships, providing services to select adjacent end-markets, expanding our geographic footprint further into the Southeastern and Midwestern United States and Canada, and diversifying our portfolio of work. Guided by our values and our unwavering commitment to serve as a long-term partner to customers and communities, our employees enable our customers to safely and reliably deliver electricity and natural gas and achieve their goals for environmental sustainability.
Separation from Southwest Gas Holdings
We completed an initial public offering (“IPO”) in April 2024. Following the IPO, our former parent, Southwest Gas Holdings, Inc. (“Southwest Gas Holdings”), reduced its ownership interest through a series of secondary offerings and private placements which culminated in Southwest Gas Holdings no longer owning any equity interest in our Company effective September 5, 2025. Accordingly, we no longer qualify as a “controlled company” under the New York Stock Exchange rules.
Segment Information
We report under the following four reportable segments: (i) U.S. Gas Utility Services (“U.S. Gas”); (ii) Canadian Utility Services (“Canadian Operations”); (iii) Union Electric Utility Services (“Union Electric”); and (iv) Non-Union Electric Utility Services (“Non-Union Electric”).
Acquisitions
In November 2025, we completed the acquisition of all of the equity interests in Connect Utility Services Corporation (“Connect”), a Canadian electric utility services provider. Connect’s results are included in our Canadian Operations segment.
On July 20, 2026, we completed the acquisition of all of the equity interests in JJ White, Inc. (“JJ White”), a
31
Pennsylvania-based provider of industrial and commercial construction and maintenance services, for an estimated $58.0 million in total cash consideration. Total consideration reflects net working capital adjustments and other post-closing adjustments from the $62.0 million base purchase price. The acquisition of JJ White expanded our core union electric capabilities across the Northeast and Midwest. JJ White’s results are included in our Union Electric segment.
Factors Affecting Our Results of Operations
Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, seasonality and severe weather events, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Additionally, our results are impacted by fluctuations in the capital expenditure and maintenance budgets of our customers, which are subject to overall economic conditions; regulatory changes, such as the adoption of new laws or changes to permitting requirements; the introduction of new technologies; and our customers’ capital resources, financial performance, and strategic plans. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.
During the second fiscal quarter of 2026, we reversed $9.0 million in revenue related to a legacy contract with the City of Chicago (the “City of Chicago reversal”) within our U.S. Gas segment upon completing our initial analysis of a court order entered on April 20, 2026, which required us to reassess our estimates of variable consideration under the legacy contract in accordance with ASC 606. This reversal decreased gross profit by the same amount, resulted in a $2.3 million tax benefit and reduced net income by $6.7 million. Refer to “Note 15 — Commitments and Contingencies — Legal Proceedings” to the financial statements for further details.
Market Outlook and Trends
North America relies on electric and natural gas delivery infrastructure to maintain its dynamic economy, but existing infrastructure is subject to degradation and is often decades old. Governments have increased regulatory stringency and enacted legislation to support the necessary infrastructure investments in the sector, aimed at preventing disruption, enhancing safety and readying to meet current and future demands. Additionally, labor market constraints and a changing utility workforce have led utilities to become increasingly reliant on external outsourced utility infrastructure service providers, creating an overall growing market well-positioned for consolidation. We believe these trends represent a significant challenge for utilities, but also an opportunity for outsourced utility infrastructure services companies to build and maintain more efficient, sustainable infrastructure that can meet the energy needs of future generations.
We regularly evaluate the impact of macroeconomic conditions on our business. During the fiscal nine months ended September 27, 2026, rising fuel, labor and material costs negatively impacted our results of operations where the timing and extent of cost recovery did not fully offset these increases. While we attempt to mitigate the impact of commodity price increases through our bid processes and price escalation provisions with our customers, our operating expenses and margins may continue to be negatively impacted if commodity prices remain at or exceed current levels.
During the first and second fiscal quarters of 2026, we incurred increased costs to scale up our field workforce in response to increased demand. While these costs moderated during the third fiscal quarter of 2026, we expect our labor-related costs will continue to be impacted by our investments in attracting and retaining skilled labor in this highly competitive environment for utility infrastructure services.
Generally, our contracts provide that the customer is responsible for supplying the materials for their projects. Fluctuations in the price or availability of materials and equipment that we or our customers utilize could impact (positively or negatively, as applicable) costs to complete projects or result in the postponement of projects. Although certain of our customers have experienced previous disruptions in their supply chain for certain project materials, most of our customers have generally been able to procure the necessary materials in a timely manner.
Our operations also depend on the availability of certain equipment to perform services. We believe we have taken steps to secure delivery of a sufficient amount of equipment and do not anticipate any significant disruptions with respect to our fleet in the near-term.
Demand for Services
Seasonality and severe weather events. The seasonal nature of the industry we serve affects demand for our services. Generally, our revenue is lowest during the first fiscal quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather
32
conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.
Energy prices. Fluctuations in market prices for oil, gas and other energy sources can impact demand for our services. Such fluctuations can affect the level of activity in energy generation projects as well as pipeline construction projects. The availability of transportation and transmission capacity can also impact demand for our services, including energy generation, electric grid and pipeline construction projects.
Competition. The highly competitive nature of our industry can result in changes in the levels of activity, project mix and moreover the profitability of the services we provide. We compete with a number of regional and national utility infrastructure services companies for contracts and labor, and competitors may be awarded work that we seek, which could reduce our revenue and utilization levels.
Regulatory environment. Our results are affected by changes in the regulatory environment, including changes in energy and environmental laws, utility rate-making and capital recovery decisions, and permitting and approval timelines. These changes may create opportunities that increase demand for our services or, alternatively, may delay, reduce or increase the cost of customer projects, and we cannot predict their timing or effect on our results of operations. For example, utilities continue to implement or modify system integrity management programs to enhance safety pursuant to federal and state mandates. These programs have resulted in multi-year utility system replacement programs throughout the U.S., and we believe that we are well-positioned to serve the increased demand resulting from these programs. Additionally, customer investment in data center-related infrastructure intended to support the related increasing power demands represents a growing opportunity for us. Our ability to capitalize on these opportunities will depend in part on the pace of permitting and regulatory approval of these projects by our customers, which may be affected by, among other factors, developments at the federal, state and local levels in legislative, regulatory and community initiatives with respect to data centers or a slowdown, reprioritization or technological shift in artificial intelligence-related capital spending, which spending is currently driving demand for data centers. Postponement or a reduction in the scope of customer projects could affect the timing of our revenue and our results of operations. Our backlog includes data center-related projects only when we believe the applicable customer budgets have been approved and required permitting has been obtained.
Sustainability initiatives. Our services support customers’ environmental goals, such as reducing methane emissions from pipeline leaks through pipe repair and replacement, hardening electric infrastructure to prevent damage from storms or otherwise, and assisting gas and electric customers with their renewable and sustainable energy infrastructure initiatives. We believe that we are well-positioned to support growing customer attention in achieving environmental objectives through infrastructure construction and maintenance.
Project Variability
Margins for our projects may vary from period to period due to changes in the volume or type of work performed and the pricing structure of our projects. Additionally, factors such as site conditions, project location, competition for skilled craft labor, labor shortages, weather events, environmental restrictions, regulatory delays, protests, political activity, legal challenges, or the performance of third parties may adversely impact our project performance.
In certain circumstances, such as with large bid contracts (especially those of a longer duration), or unit-price contracts with revenue caps, results may be impacted by differences between costs incurred and those anticipated when the work was originally bid. Work awarded, or failing to be awarded, by individual large customers can impact our results of operations.
Inflation
Under the terms of a majority of our MSAs and other customer agreements, materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended
33
period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Excluding fuel, our results for the third fiscal quarter of 2026 were not significantly impacted by increases in prices, including due to tariffs implemented by the Trump Administration.
Backlog
Backlog as of September 27, 2026 was approximately $6.2 billion, with approximately 81% of backlog related to MSAs. Backlog represents contracted revenue on existing bid agreements as well as estimates of revenue to be realized over the contractual life of existing long-term MSAs. The contractual life of an MSA is defined as the stated length of the contract including any renewal options stated in the contract that we believe our customers are reasonably certain to execute.
Backlog differs from remaining performance obligations disclosed in “Note 3 — Revenue and Related Balance Sheet Accounts” to the condensed consolidated financial statements, as remaining performance obligations are limited to contractually obligated revenue on our contracts that exceed one year, which is typically only bid projects, whereas backlog is inclusive of all contracts regardless of length and includes estimated future work over the contractual life of MSAs. Generally, customers are not contractually committed to specific volumes of work under MSAs, and MSAs may be terminated by either party upon notice. Revenue estimates for MSAs are based on historical customer trends. As backlog only includes revenue estimates over the contractual life of MSAs, backlog tends to fluctuate based on the timing of MSA renewals.
Projects included in backlog can be subject to delays or cancellation as a result of regulatory requirements, adverse weather conditions, customer requirements and other factors that could cause actual revenue to differ significantly from the estimates, or cause revenue to be realized in periods other than originally expected.
Results of Operations
Our results of operations, on a consolidated basis and by segment, for the fiscal three- and nine-month periods ended September 27, 2026 and September 28, 2025 are set forth and compared below.
Fiscal three months ended September 27, 2026 compared to the fiscal three months ended September 28, 2025
The following table summarizes our consolidated results of operations for the fiscal three months ended September 27, 2026, and September 28, 2025, including as a percentage of revenue, as well as the dollar and percentage change period-over-period.
| Fiscal Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | $ | % | |||||||||||||||||||||||||||||||
| Revenue, net | $ | 1,192,048 | 100.0 | % | $ | 850,044 | 100.0 | % | $ | 342,004 | 40.2 | % | |||||||||||||||||||||||
| Cost of revenue (including depreciation) | 1,078,657 | 90.5 | % | 772,084 | 90.8 | % | 306,573 | 39.7 | % | ||||||||||||||||||||||||||
| Gross profit | 113,391 | 9.5 | % | 77,960 | 9.2 | % | 35,431 | 45.4 | % | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 44,294 | 3.7 | % | 34,960 | 4.1 | % | 9,334 | 26.7 | % | ||||||||||||||||||||||||||
| Amortization of intangible assets | 8,066 | 0.7 | % | 6,685 | 0.8 | % | 1,381 | 20.7 | % | ||||||||||||||||||||||||||
| Operating income | 61,031 | 5.1 | % | 36,315 | 4.3 | % | 24,716 | 68.1 | % | ||||||||||||||||||||||||||
| Interest expense, net | 13,227 | 1.1 | % | 26,205 | 3.1 | % | (12,978) | (49.5 | %) | ||||||||||||||||||||||||||
| Other (income) expense, net | (935) | (0.1 | %) | 78 | 0.0 | % | (1,013) | NM | |||||||||||||||||||||||||||
| Income before income taxes | 48,739 | 4.1 | % | 10,032 | 1.2 | % | 38,707 | 385.8 | % | ||||||||||||||||||||||||||
| Income tax expense | 21,810 | 1.8 | % | 7,918 | 1.0 | % | 13,892 | 175.4 | % | ||||||||||||||||||||||||||
| Net income | 26,929 | 2.3 | % | 2,114 | 0.2 | % | 24,815 | 1,173.8 | % | ||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 59 | 0.0 | % | 15 | 0.0 | % | 44 | 293.3 | % | ||||||||||||||||||||||||||
| Net income attributable to common stock | $ | 26,870 | 2.3 | % | $ | 2,099 | 0.2 | % | $ | 24,771 | 1,180.1 | % | |||||||||||||||||||||||
34
Revenue and Gross Profit
The following table summarizes our revenue and gross profit for the periods indicated by segment as well as the dollar and percentage change from the prior year period. Gross profit margins are calculated by dividing gross profit by revenue. The discussion that follows highlights key revenue changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue.
| Fiscal Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | $ | % | |||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| U.S. Gas | $ | 576,046 | 48.3 | % | $ | 412,407 | 48.5 | % | $ | 163,639 | 39.7 | % | |||||||||||||||||||||||
| Canadian Operations | 98,498 | 8.3 | % | 74,153 | 8.8 | % | 24,345 | 32.8 | % | ||||||||||||||||||||||||||
| Union Electric | 354,001 | 29.7 | % | 214,499 | 25.2 | % | 139,502 | 65.0 | % | ||||||||||||||||||||||||||
| Non-Union Electric | 175,372 | 14.7 | % | 148,985 | 17.5 | % | 26,387 | 17.7 | % | ||||||||||||||||||||||||||
| Eliminations | (11,869) | (1.0 | %) | — | — | % | (11,869) | NM | |||||||||||||||||||||||||||
| Consolidated revenue | $ | 1,192,048 | 100.0 | % | $ | 850,044 | 100.0 | % | $ | 342,004 | 40.2 | % | |||||||||||||||||||||||
| Gross profit: | |||||||||||||||||||||||||||||||||||
| U.S. Gas | $ | 47,480 | 8.2 | % | $ | 31,650 | 7.7 | % | $ | 15,830 | 50.0 | % | |||||||||||||||||||||||
| Canadian Operations | 19,275 | 19.6 | % | 16,218 | 21.9 | % | 3,057 | 18.8 | % | ||||||||||||||||||||||||||
| Union Electric | 31,423 | 8.9 | % | 19,490 | 9.1 | % | 11,933 | 61.2 | % | ||||||||||||||||||||||||||
| Non-Union Electric | 15,213 | 8.7 | % | 10,602 | 7.1 | % | 4,611 | 43.5 | % | ||||||||||||||||||||||||||
| Consolidated gross profit | $ | 113,391 | 9.5 | % | $ | 77,960 | 9.2 | % | $ | 35,431 | 45.4 | % | |||||||||||||||||||||||
NM — Percentage is not meaningful
•Revenue from our U.S. Gas segment totaled $576.0 million for the fiscal three months ended September 27, 2026, reflecting an increase of $163.6 million, or 39.7%, compared to the prior year period, primarily driven by new bid and MSA contracts. We also experienced additional volumes on existing MSAs during the current three-month period. As a percentage of revenue, gross profit increased to 8.2% in the current three-month period from 7.7% in the prior year three-month period, benefiting from increased productivity of crews and more efficient utilization of fixed overhead due to increased volumes.
•Revenue from our Canadian Operations segment totaled $98.5 million for the fiscal three months ended September 27, 2026, reflecting an increase of $24.3 million, or 32.8%, compared to the prior year three-month period. This increase was driven by the acquisition of Connect, which contributed approximately $26.1 million in revenue and $3.8 million in gross profit in the current year three-month period. As a percentage of revenue, gross profit decreased to 19.6% in the current three-month period as compared to 21.9% in the prior year three-month period, primarily due to the acquisition of Connect, which realizes slightly lower margins than the segment's legacy gas operations.
•Revenue from our Union Electric segment totaled $354.0 million for the fiscal three months ended September 27, 2026, reflecting an increase of $139.5 million, or 65.0%, compared to the prior year period. This increase was driven primarily by the acquisition of JJ White and an increase in industrial and electric bid revenue. JJ White contributed approximately $86.4 million in revenue and $7.6 million in gross profit during the current year period. As a percentage of revenue, gross profit decreased to 8.9% in the current period compared to 9.1% in the prior year period.
•Revenue from our Non-Union Electric segment totaled $175.4 million for the fiscal three months ended September 27, 2026, reflecting an increase of $26.4 million, or 17.7%, compared to the prior year period. Storm restoration services revenue increased by $18.5 million and the related gross profit increased $5.1 million between periods. As a percentage of revenue, Non-Union Electric gross profit increased to 8.7% in the current period compared to 7.1% in the prior year period driven by the profitability of storm restoration work.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $9.3 million, or 26.7%, in the fiscal three months ended September 27, 2026 compared to the prior year three-month period, while decreasing as a percentage of revenue. Within selling, general and administrative expenses in the current three-month period, we incurred $3.4 million in acquisition costs, $3.2 million in severance, and $1.7 million in strategy implementation and other non-recurring professional fees. In
35
the prior year three-month period, we incurred $2.3 million in non-recurring separation costs. Newly acquired companies also contributed $1.4 million in incremental selling, general and administrative expenses in the current year period. The remainder of the increase between periods was attributable to increased compensation, insurance costs, professional fees, and other general overhead costs.
Interest Expense, Net
The decrease of $13.0 million in interest expense, net in the fiscal three months ended September 27, 2026 compared to the prior year three-month period was primarily due to the $8.3 million in costs related to the refinance of our credit facility included in the prior year three-month period. Additionally, we maintained a lower average debt balance in the current year three-month period, and incurred lower interest rates on outstanding variable-rate borrowings as compared to the prior year three-month period.
Income Tax
Our effective tax rate for the fiscal three months ended September 27, 2026 and September 28, 2025 was 44.7% and 78.9%, respectively. For the current year period, discrete tax items impacting the current year period effective tax rate were primarily due to acquisition costs and severance costs (the majority of both were not deductible). Discrete tax items impacting the prior year period effective tax rate were primarily due to fees incurred in refinancing our debt and fees incurred in separating from Southwest Gas Holdings. Effective tax rates for both periods were impacted by the effect of U.S. tax on certain earnings of our foreign operations under the global intangible low-taxed income (“GILTI”) provisions of the Internal Revenue Code and the disproportionate amount of non-deductible expenses in relation to income before income taxes.
Fiscal nine months ended September 27, 2026 compared to fiscal nine months ended September 28, 2025
The following table summarizes our consolidated results of operations for the fiscal nine-month periods ended September 27, 2026 and September 28, 2025, including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.
| Fiscal Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | $ | % | |||||||||||||||||||||||||||||||
| Revenue, net | $ | 2,877,208 | 100.0 | % | $ | 2,124,177 | 100.0 | % | $ | 753,031 | 35.5 | % | |||||||||||||||||||||||
| Cost of revenue (including depreciation) | 2,658,917 | 92.4 | % | 1,958,088 | 92.2 | % | 700,829 | 35.8 | % | ||||||||||||||||||||||||||
| Gross profit | 218,291 | 7.6 | % | 166,089 | 7.8 | % | 52,202 | 31.4 | % | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 114,228 | 4.0 | % | 90,294 | 4.3 | % | 23,934 | 26.5 | % | ||||||||||||||||||||||||||
| Amortization of intangible assets | 23,625 | 0.8 | % | 20,034 | 0.9 | % | 3,591 | 17.9 | % | ||||||||||||||||||||||||||
| Operating income | 80,438 | 2.8 | % | 55,761 | 2.6 | % | 24,677 | 44.3 | % | ||||||||||||||||||||||||||
| Interest expense, net | 37,769 | 1.3 | % | 62,314 | 2.9 | % | (24,545) | (39.4 | %) | ||||||||||||||||||||||||||
| Other (income) expense, net | (1,116) | 0.0 | % | 205 | 0.0 | % | (1,321) | NM | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 43,785 | 1.5 | % | (6,758) | (0.3 | %) | 50,543 | NM | |||||||||||||||||||||||||||
| Income tax expense | 20,193 | 0.7 | % | 973 | 0.1 | % | 19,220 | 1,975.3 | % | ||||||||||||||||||||||||||
| Net income (loss) | 23,592 | 0.8 | % | (7,731) | (0.4 | %) | 31,323 | NM | |||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 150 | 0.0 | % | 54 | 0.0 | % | 96 | 177.8 | % | ||||||||||||||||||||||||||
| Net income (loss) attributable to common stock | $ | 23,442 | 0.8 | % | $ | (7,785) | (0.4 | %) | $ | 31,227 | NM | ||||||||||||||||||||||||
NM — Percentage is not meaningful
36
Revenue and Gross Profit
The following table summarizes our revenue and gross profit for the periods indicated by segment, as well as the dollar and percentage change from the prior year period. Gross profit margins are calculated by dividing gross profit by revenue. The discussion that follows highlights key revenue changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue.
| Fiscal Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | $ | % | |||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| U.S. Gas | $ | 1,350,065 | 46.9 | % | $ | 946,935 | 44.6 | % | $ | 403,130 | 42.6 | % | |||||||||||||||||||||||
| Canadian Operations | 239,964 | 8.3 | % | 169,048 | 8.0 | % | 70,916 | 42.0 | % | ||||||||||||||||||||||||||
| Union Electric | 782,237 | 27.2 | % | 572,206 | 26.9 | % | 210,031 | 36.7 | % | ||||||||||||||||||||||||||
| Non-Union Electric | 516,811 | 18.0 | % | 435,988 | 20.5 | % | 80,823 | 18.5 | % | ||||||||||||||||||||||||||
| Eliminations | (11,869) | (0.4 | %) | — | — | % | (11,869) | NM | |||||||||||||||||||||||||||
| Consolidated revenue | $ | 2,877,208 | 100.0 | % | $ | 2,124,177 | 100.0 | % | $ | 753,031 | 35.5 | % | |||||||||||||||||||||||
| Gross profit: | |||||||||||||||||||||||||||||||||||
| U.S. Gas | $ | 61,792 | 4.6 | % | $ | 43,218 | 4.6 | % | $ | 18,574 | 43.0 | % | |||||||||||||||||||||||
| Canadian Operations | 41,417 | 17.3 | % | 32,782 | 19.4 | % | 8,635 | 26.3 | % | ||||||||||||||||||||||||||
| Union Electric | 69,852 | 8.9 | % | 46,658 | 8.2 | % | 23,194 | 49.7 | % | ||||||||||||||||||||||||||
| Non-Union Electric | 45,230 | 8.8 | % | 43,431 | 10.0 | % | 1,799 | 4.1 | % | ||||||||||||||||||||||||||
| Consolidated gross profit | $ | 218,291 | 7.6 | % | $ | 166,089 | 7.8 | % | $ | 52,202 | 31.4 | % | |||||||||||||||||||||||
NM — Percentage is not meaningful
•Revenue from our U.S. Gas segment totaled $1,350.1 million in the fiscal nine months ended September 27, 2026, reflecting an increase of $403.1 million, or 42.6%, compared to the prior year period. This increase was driven by new bid and MSA contracts as well as increased MSA volumes on existing contracts. There was no change in gross profit as a percentage of revenue in the fiscal nine months ended September 27, 2026 from the prior year period. Profitability in the current year nine-month period was negatively impacted by the $9.0 million City of Chicago reversal. Excluding this reversal, profitability improved from the prior year nine-month period, primarily reflecting more efficient performance, partially offset by costs associated with scaling up new work and increased fuel costs.
•Revenue from our Canadian Operations segment totaled $240.0 million in the fiscal nine months ended September 27, 2026, reflecting an increase of $70.9 million, or 42.0%, compared to the prior year period. The increase was driven by the acquisition of Connect, which contributed approximately $71.6 million in revenue and $9.6 million in gross profit in the current year period. As a percentage of revenue, gross profit decreased to 17.3% in the fiscal nine months ended September 27, 2026 compared to 19.4% in the prior year period. This decrease was primarily driven by Connect, which realizes slightly lower margins than the segment's legacy gas operations.
•Revenue from our Union Electric segment totaled $782.2 million in the fiscal nine months ended September 27, 2026, reflecting an increase of $210.0 million, or 36.7%, compared to the prior year period. This increase was driven by the acquisition of JJ White and an increase in industrial and electric bid revenue. JJ White contributed approximately $86.4 million in revenue and $7.6 million in gross profit during the current year period. As a percentage of revenue, gross profit increased to 8.9% in the fiscal nine months ended September 27, 2026 compared to 8.2% in the prior year period. Gross profit margin for the current year period was positively impacted by a favorable change in estimated costs to complete on an offshore wind project that is nearing completion.
•Revenue from our Non-Union Electric segment totaled $516.8 million in the fiscal nine months ended September 27, 2026, reflecting an increase of $80.8 million, or 18.5%, compared to the prior year period. Storm restoration services revenue increased $21.7 million, and the related gross profit increased $2.3 million. As a percentage of revenue, gross profit decreased to 8.8% in the fiscal nine months ended September 27, 2026 compared to 10.0% in the prior year period, largely due to the elevated fuel costs and, to a lesser extent, ramp-up inefficiencies experienced on a new MSA in the first fiscal quarter.
37
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $23.9 million, or 26.5% in the fiscal nine months ended September 27, 2026, while decreasing slightly as a percentage of revenue. Within selling, general and administrative expenses in the current period, we incurred $4.8 million in acquisition costs, $3.3 million in strategy implementation and other non-recurring professional fees, and $3.2 million in severance for administrative positions. In the prior year period, we incurred $5.5 million in non-recurring separation-related costs and $1.4 million in non-recurring one-time professional fees.
Year-over-year, bonus and stock-based compensation increased approximately $5.9 million and salaries increased approximately $3.4 million in the fiscal nine months ended September 27, 2026 as compared to the prior year period. Additionally, newly acquired companies contributed approximately $2.8 million in incremental selling, general and administrative expenses in the current year period. We also experienced increased insurance costs, professional fees, and other general overhead costs.
Interest Expense, Net
Interest expense, net decreased by $24.5 million in the fiscal nine months ended September 27, 2026 compared to the prior year period due to a reduced average debt balance and lower interest rates on outstanding variable-rate borrowings. Additionally, the prior year period included $8.3 million in costs related to the refinance of our credit facility.
Income Tax
Our effective tax rate for the fiscal nine-month periods ended September 27, 2026 and September 28, 2025 was 46.1% and (14.4%), respectively. For the current year nine-month period, discrete tax items impacting the effective tax rate were primarily due to the City of Chicago reversal and strategy implementation costs, as well as acquisition costs and severance costs (the majority of both were not deductible). Discrete tax items impacting the prior year nine-month period effective tax rate were primarily due to fees incurred in refinancing our debt and fees incurred in separating from Southwest Gas Holdings. Effective tax rates for both periods were impacted by U.S. tax on certain earnings of our foreign operations under the global intangible low-taxed income (“GILTI”) provisions of the Internal Revenue Code and the disproportionate amount of non-deductible expenses in relation to income (loss) before income taxes.
Non-GAAP Financial Measures
We prepare and present our financial statements in accordance with GAAP. However, management believes that EBIT, Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT Margin, Adjusted EBITDA Margin, and Adjusted Net Income, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters. Because these non-GAAP measures, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP measures may not be comparable to similarly titled measures of other companies. Management believes that, due to the non-recurring nature of the previously reported City of Chicago reversal, its exclusion from certain non-GAAP financial measures provides investors with a better understanding of the current performance of the business.
EBIT is defined as earnings before interest and taxes. Adjusted EBIT is defined as EBIT, adjusted for (i) non-cash stock-based compensation, (ii) acquisition costs, (iii) separation-related costs, (iv) strategy implementation costs, (v) severance costs, (vi) other professional fees and (vii) the City of Chicago reversal. Adjusted EBITDA is defined as Adjusted EBIT, adjusted to remove depreciation and amortization. Adjusted EBIT Margin is defined as the percentage derived from dividing Adjusted EBIT by revenue. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue.
Management believes that EBIT, Adjusted EBIT, and Adjusted EBITDA help investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBIT and Adjusted EBITDA provide additional insight by removing certain expenses that are non-recurring or non-operational in nature. Management believes that Adjusted EBIT Margin and Adjusted EBITDA Margin are useful for
38
the same reasons as Adjusted EBIT and Adjusted EBITDA, respectively, and also provide an additional understanding of how Adjusted EBIT and Adjusted EBITDA, respectively, are impacted by factors other than changes in revenue.
Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategy implementation costs, (iii) severance costs, (iv) amortization of intangible assets, (v) other professional fees, (vi) City of Chicago reversal, (vii) loss on debt modification and extinguishment, (viii) non-cash stock-based compensation, (ix) acquisition costs and (x) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature.
Using EBIT, Adjusted EBIT, and Adjusted EBITDA as performance measures has material limitations as compared to net income (loss), or other financial measures as defined under GAAP, as they exclude certain recurring items, which may be meaningful to investors. These metrics all exclude interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, these metrics exclude income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. Adjusted EBITDA also excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. As a result of these exclusions, the metrics from which they are excluded have material limitations compared to net income (loss). When using these metrics as a performance measure, management compensates for these limitations by comparing them to net income (loss) in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the Company on a full-cost, after-tax basis.
As to certain of the items related to these non-GAAP measures: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) acquisition costs vary from period to period depending on the level of our acquisition activity; (iii) separation-related costs represent expenses incurred post-IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings’ sale of its holdings of our common stock, which are not reflective of our ongoing operations and will not recur given that Centuri is fully separated from Southwest Gas Holdings; (iv) strategy implementation costs represent non-recurring consulting fees incurred in connection with implementing the Company’s new long-term strategy announced on May 6, 2026; (v) severance costs related to non-recurring leadership restructuring; (vi) other professional fees are non-recurring costs associated with certain one-time events; (vii) the City of Chicago reversal relates to a non-recurring reversal of revenue on a legacy contract; and (viii) loss on debt modification and extinguishment represents non-recurring professional fees expensed as part of our credit facility refinance as well as the non-cash write-off of unamortized debt issuance costs associated with debt extinguishments. The most comparable GAAP financial measures and information reconciling the GAAP and non-GAAP financial measures are set forth below.
39
EBIT, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA and Adjusted EBITDA Margin
The following table presents reconciliations of net income (loss) to EBIT, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA and Adjusted EBITDA Margin for the specified periods:
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | |||||||||||||||||||||||||
| Net income (loss) | $ | 26,929 | $ | 2,114 | $ | 23,592 | $ | (7,731) | |||||||||||||||||||||
| Interest expense, net | 13,227 | 26,205 | 37,769 | 62,314 | |||||||||||||||||||||||||
| Income tax expense | 21,810 | 7,918 | 20,193 | 973 | |||||||||||||||||||||||||
| EBIT | 61,966 | 36,237 | 81,554 | 55,556 | |||||||||||||||||||||||||
| Non-cash stock-based compensation | 2,232 | 2,143 | 8,543 | 5,893 | |||||||||||||||||||||||||
| Acquisition costs | 3,430 | — | 4,826 | — | |||||||||||||||||||||||||
| Separation-related costs | — | 2,343 | — | 5,518 | |||||||||||||||||||||||||
| Strategy implementation costs | 1,036 | — | 2,712 | — | |||||||||||||||||||||||||
| Severance costs | 3,745 | — | 3,745 | — | |||||||||||||||||||||||||
| Other professional fees | 629 | — | 629 | 1,379 | |||||||||||||||||||||||||
| City of Chicago reversal | — | — | 8,953 | — | |||||||||||||||||||||||||
| Adjusted EBIT | 73,038 | 40,723 | 110,962 | 68,346 | |||||||||||||||||||||||||
Depreciation expense | 26,939 | 27,805 | 81,686 | 82,901 | |||||||||||||||||||||||||
Amortization of intangible assets | 8,066 | 6,685 | 23,625 | 20,034 | |||||||||||||||||||||||||
| Adjusted EBITDA | $ | 108,043 | $ | 75,213 | $ | 216,273 | $ | 171,281 | |||||||||||||||||||||
| Adjusted EBIT Margin (% of revenue) | 6.1 | % | 4.8 | % | 3.9 | % | 3.2 | % | |||||||||||||||||||||
| Adjusted EBITDA Margin (% of revenue) | 9.1 | % | 8.8 | % | 7.5 | % | 8.1 | % | |||||||||||||||||||||
Adjusted Net Income:
The following table presents reconciliations of net income (loss) to Adjusted Net Income for the specified periods:
| Fiscal Three Months Ended | Fiscal Nine Months Ended | ||||||||||||||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | |||||||||||||||||||||||||
| Net income (loss) | $ | 26,929 | $ | 2,114 | $ | 23,592 | $ | (7,731) | |||||||||||||||||||||
| Separation-related costs | — | 2,343 | — | 5,518 | |||||||||||||||||||||||||
| Strategy implementation costs | 1,036 | — | 2,712 | — | |||||||||||||||||||||||||
| Severance costs | 3,745 | — | 3,745 | — | |||||||||||||||||||||||||
| Amortization of intangible assets | 8,066 | 6,685 | 23,625 | 20,034 | |||||||||||||||||||||||||
| Other professional fees | 629 | — | 629 | 1,379 | |||||||||||||||||||||||||
| City of Chicago reversal | — | — | 8,953 | — | |||||||||||||||||||||||||
| Loss on debt modification and extinguishment | — | 8,240 | — | 8,240 | |||||||||||||||||||||||||
| Non-cash stock-based compensation | 2,232 | 2,143 | 8,543 | 5,893 | |||||||||||||||||||||||||
| Acquisition costs | 3,430 | — | 4,826 | — | |||||||||||||||||||||||||
Income tax impact of adjustments(1) | (3,576) | (4,853) | (11,702) | (10,267) | |||||||||||||||||||||||||
| Adjusted Net Income | $ | 42,491 | $ | 16,672 | $ | 64,923 | $ | 23,066 | |||||||||||||||||||||
(1)Calculated based on a blended statutory tax rate of 25%, except for certain nondeductible severance costs and acquisition costs.
40
Liquidity and Capital Resources
Sources and Uses of Liquidity
Our primary liquidity needs have historically related to supporting working capital requirements, funding capital expenditures and servicing our debt. As of September 27, 2026 and December 28, 2025, cash and cash equivalents were $42.0 million and $126.6 million, respectively. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future.
We evaluate our working capital requirements on a regular basis and regularly monitor financial markets and assess general economic conditions for possible impacts to our financial position. Our capital requirements may change to the extent we identify acquisition opportunities, if we experience difficulties collecting amounts due from customers, increase our working capital in connection with new or existing customer programs or repay certain credit facilities.
Cash Flows
The following table presents a summary of our cash flows:
| Fiscal Nine Months Ended | |||||||||||||||||
| (dollars in thousands) | September 27, 2026 | September 28, 2025 | |||||||||||||||
| Net cash used in operating activities | $ | (42,630) | $ | (5,769) | |||||||||||||
| Net cash used in investing activities | $ | (103,262) | $ | (64,161) | |||||||||||||
| Net cash provided by financing activities | $ | 61,801 | $ | 36,953 | |||||||||||||
Operating Activities
Cash flows provided by operating activities are impacted by changes in the timing of demand for our services and related operating margins but can also be affected by working capital needs. Working capital is primarily affected by changes in accounts receivable, contract assets, prepaid expenses and other current assets, accounts payable, accrued expenses, contract liabilities, and income tax accounts, which are primarily related to changes in revenue and related costs of revenue. These working capital balances are affected by changes in revenue resulting from the timing and volume of work performed, variability in the timing of customer billings and collections of receivables, as well as settlement of payables and other liabilities.
Net cash used in operating activities for the fiscal nine months ended September 27, 2026 was $42.6 million, compared to $5.8 million for the fiscal nine months ended September 28, 2025, representing a decrease in operating cash flows of $36.8 million. The year-over-year decrease primarily reflected increased working capital associated with revenue growth and the timing of customer billings and collections, partially offset by improved net income and increased advance billings from customers. The most significant factors were:
•Net income: Our net income improved $31.3 million from the prior year period.
•Accounts receivable and contract assets: Cash flow decreased $94.2 million, primarily reflecting higher accounts receivable and contract asset balances associated with revenue growth and the timing of billings and collections. This increase included certain bid projects for which billings are subject to completion of milestones and certain MSAs for which customer approval is contractually required before invoices can be issued. These requirements can result in a timing difference between revenue recognition and billing and collection, particularly during periods of higher work volumes. Partially offsetting this impact was the sale of an additional $40.0 million in accounts receivable under the Securitization Facility in the current year period.
•Contract liabilities: Cash flow increased $25.8 million, as certain new projects led to advance billings to customers.
Investing Activities
Net cash used in investing activities was $103.3 million in the fiscal nine months ended September 27, 2026 compared to $64.2 million for the fiscal nine months ended September 28, 2025, an increase of $39.1 million.
41
The construction industry is capital intensive, and we expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal nine months ended September 27, 2026 and September 28, 2025, we had capital expenditures of $70.8 million and $68.7 million, respectively.
These items were partially offset by proceeds from the sale of property and equipment of $22.5 million and $4.6 million for the fiscal nine-month periods ended September 27, 2026 and September 28, 2025, respectively. Proceeds from the sale of property and equipment for the fiscal nine months ended September 27, 2026 included approximately $18.7 million in proceeds from sale-leaseback transactions.
For the fiscal nine months ended September 27, 2026, cash outflows for acquisitions, net of cash acquired, was $53.0 million, $51.6 million of which related to the JJ White acquisition, with the remainder relating to post-closing adjustments on the Connect acquisition.
Financing Activities
Net cash provided by financing activities was $61.8 million for the fiscal nine months ended September 27, 2026, compared to $37.0 million for the fiscal nine months ended September 28, 2025, an increase of $24.8 million. The increase was primarily attributable to higher net borrowings on our credit facility, including borrowings used to fund the acquisition of JJ White.
Foreign Operations
While we primarily operate in the United States, we also have operations in Canada. Therefore, changes in the value of Canadian dollars affect our financial statements when translated into U.S. dollars. Revenue from our Canadian operations was approximately 8% of total revenue for both the fiscal nine-month periods ended September 27, 2026 and September 28, 2025. At times, we also enter into transactions in foreign currencies, primarily in Canadian dollars, that subject us to currency risks. We regularly monitor our foreign currency exposure to determine the most effective foreign currency risk mitigation strategies. Currently, we are not party to any foreign currency exchange contracts.
Credit and Securitization Facilities
Term Loan and Revolving Credit Facility
On July 9, 2025, we signed the sixth amendment to our second amended and restated credit agreement to refinance and replace in full our existing term loan facility with an $800 million term loan facility, $93.6 million of which is comprised of new term loans used to refinance existing indebtedness and $706.4 million of which was used to refinance existing term loans. This amendment also increased the maximum principal amount of our senior secured revolving credit facility from $400 million to $450 million. On January 12, 2026, we entered into the seventh amendment to our amended and restated credit agreement, which (i) repriced the term loan, (ii) decreased the fixed margin for SOFR loans from 2.25% to 2.00% and (iii) decreased the fixed margin for base rate loans from 1.25% to 1.00%. This multi-currency facility allows us to request loan advances in either Canadian dollars or U.S. dollars. Amounts borrowed and repaid under the revolving line of credit portion of the facility are available to be re-borrowed. Our term loan facility is set to mature on July 9, 2032, and our revolving credit facility is set to mature on July 9, 2030.
The obligations under our amended and restated credit agreement are secured by present and future ownership interests in substantially all of our direct and indirect subsidiaries, substantially all of our tangible and intangible personal property, and all products, profits and proceeds of the foregoing. Assets securing the facility totaled $2.6 billion as of September 27, 2026.
During the fiscal nine months ended September 27, 2026, the maximum amount outstanding on the combined facility was $796.4 million, at which point $616.0 million was outstanding on the term loan portion of the facility. As of September 27, 2026 and December 28, 2025, $178.6 million and $91.2 million, respectively, was outstanding on the revolving credit facility, in addition to $616.0 million that was outstanding on the term loan portion of the facility as of both September 27, 2026 and December 28, 2025. Also, as of September 27, 2026 and December 28, 2025, there was approximately $220.7 million and $302.4 million, respectively, net of outstanding letters of credit, of unused capacity under the line of credit. We had $74.3 million of unused letters of credit available as of September 27, 2026 and $68.6 million as of December 28, 2025.
42
We were required to maintain a leverage ratio of 4.50 to 1.00 for quarters ending prior to September 30, 2026, and are required to maintain a leverage ratio of 4.00 to 1.00 for quarters ending on or after September 30, 2026. We are also required to maintain an interest coverage ratio of greater than a minimum of 2.50 to 1.00. We are currently in compliance with all of our financial covenants under the revolving credit facility.
The applicable margin for our revolving credit facility ranges from 1.25% to 2.25% for SOFR and Canadian Overnight Repo Rate Average (“CORRA”) loans and from 0.25% to 1.25% for base rate loans, depending on our net leverage ratio. The term loan facility has a fixed margin of 1.00% for base rate loans and 2.00% for SOFR loans.
Accounts Receivable Securitization
On September 20, 2024, we entered into a three-year, $125.0 million Receivables Purchase Agreement (as amended, the “Securitization Facility”) with PNC Bank, National Association (“PNC”), as administrative agent, to improve cash flows from trade accounts receivable and to pay down our existing debt. In May 2026, we amended the Securitization Facility to, among other things, increase the capacity to $165.0 million. Under the Securitization Facility, certain of our designated subsidiaries have sold or contributed, and will continue to sell or contribute, their accounts receivable and contract assets generated in the ordinary course of their business and certain related assets to the indirect, wholly owned bankruptcy-remote Special Purpose Entity (“SPE”) we created specifically for this purpose. The SPE transfers ownership and control of accounts receivable to PNC for payments as set forth in the agreement. We account for accounts receivable sold to the banking counterparty as a sale of financial assets and have derecognized the accounts receivable from our condensed consolidated balance sheet for the current period.
The total outstanding balance of accounts receivable that had been sold and derecognized was $165.0 million as of September 27, 2026. We had no unused capacity on the Securitization Facility as of September 27, 2026.
Equipment Term Loans
As of September 27, 2026, we had six U.S. equipment term loans with initial amounts totaling approximately $150.0 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars.
Recently Issued Accounting Pronouncements
Refer to “Note 2 — Basis of Presentation and Recent Accounting Pronouncements” to our condensed consolidated financial statements for a discussion of recent accounting standards and pronouncements.
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the use of estimates and assumptions. A summary of our critical accounting policies and estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2025 Annual Report. We are required to make estimates and judgments in the preparation of our condensed consolidated financial statements that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the fiscal nine months ended September 27, 2026, there were no material changes in our critical accounting estimates or policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to our quantitative and qualitative disclosures about market risk during the fiscal nine months ended September 27, 2026. Refer to “Quantitative and Qualitative Disclosures about Market Risk” within our 2025 Annual Report for information on financial market risk related to changes in interest rates and currency exchange rates. Our primary exposure to market risk relates to unfavorable changes in interest rates and currency exchange rates.
For a discussion of our concentration of credit risk, refer to “Note 15 — Commitments and Contingencies” to our condensed consolidated financial statements.
43
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of September 27, 2026, we evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer, concluded that, as of September 27, 2026, the end of the period covered by this report, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
As discussed in “Note 7 — Acquisitions” to the accompanying condensed consolidated financial statements, the Company completed the acquisition of JJ White on July 20, 2026. Management plans to exclude JJ White from its assessment of internal control over financial reporting as of January 3, 2027 because it was acquired by the Company in a purchase business combination during fiscal year 2026. JJ White is a wholly-owned subsidiary whose total assets and total revenues represent approximately 3.7% and 3.0%, respectively, of the related consolidated financial statements amount as of and for the fiscal nine months ended September 27, 2026.
Except as described above, there have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the third fiscal quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
44
Part II - Other Information
Item 1. Legal Proceedings
For a discussion regarding legal proceedings, please refer to “Note 15 — Commitments and Contingencies — Legal Proceedings” in the accompanying notes to our condensed consolidated financial statements, which is incorporated by reference in this Item 1, for additional information regarding litigation, claims and other legal proceedings.
Item 1A. Risk Factors
Our business is subject to a variety of risks and uncertainties that are difficult to predict and many of which are outside of our control. For a detailed discussion of the risks that affect our business, refer to the section entitled “Risk Factors” included in our 2025 Annual Report. As of the date of this filing, there have been no material changes to the risk factors previously described in our 2025 Annual Report. The matters specifically identified are not the only risks and uncertainties facing our Company, and risks and uncertainties not known to us or not specifically identified also may impair our business operations. If any of these risks and uncertainties occur, our business, financial condition, results of operations and cash flows could be negatively affected, which could negatively impact the value of an investment in our Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the fiscal three months ended September 27, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted terminated
The Company’s definitive proxy statement for its 2026 Annual Meeting of Stockholders held on May 19, 2026, which was filed with the SEC on April 6, 2026, incorrectly stated the window during which a stockholder who wishes to submit a proposal or nominate a candidate to serve as a director for consideration at the 2027 Annual Meeting outside the processes of Rule 14a-8 under the Exchange Act must timely deliver a written notice to the Company. Referencing “Stockholder Proposals for the Next Annual Meeting—Other Stockholder Proposals for Presentation at Next Year’s Annual Meeting” in the definitive proxy statement, the corrected dates are set forth below:
In order for a stockholder proposal to be properly submitted for presentation at the Annual Meeting of Stockholders to be held in 2027, notice must be given to the Company no earlier than the close of business on January 19, 2027, and no later than the close of business on February 18, 2027
45
Item 6. Exhibits
| Exhibit Number | Exhibit Description | Incorporated by Reference | ||||||||||||||||||
| Form | File Number | Exhibit | Filing Date | Filed or Furnished Herewith | ||||||||||||||||
| 3.1 | S-8 | 333-278834 | 4.1 | April 19, 2024 | ||||||||||||||||
| 3.2 | S-8 | 333-278834 | 4.2 | April 19, 2024 | ||||||||||||||||
| 10.1†* | 8-K | 001-42022 | 10.1 | August 12, 2026 | ||||||||||||||||
| 31.1 | X | |||||||||||||||||||
| 31.2 | X | |||||||||||||||||||
| 32.1 | X | |||||||||||||||||||
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) | X | ||||||||||||||||||
†Indicates management contract or compensatory plan.
* Certain personally identifiable information contained in this Exhibit has been redacted pursuant to Item 601(a)(6) of Regulation S-K.
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CENTURI HOLDINGS, INC. | ||||||||
Date: November 5, 2026 | By: | /s/ Kendra L. Chilton | ||||||
| Kendra L. Chilton | ||||||||
| Chief Accounting Officer | ||||||||
| (Principal Accounting Officer and duly authorized officer) | ||||||||
47
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Christian I. Brown, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Centuri Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026 | /s/ Christian I. Brown | ||||
| Christian I. Brown | |||||
| President, Chief Executive Officer and Director | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Kelly D. Youngblood, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Centuri Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026 | /s/ Kelly D. Youngblood | ||||
Kelly D. Youngblood | |||||
Chief Financial Officer (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Each of the undersigned officers of Centuri Holdings, Inc. (the “Company”) hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to such officer’s knowledge that:
1.the accompanying quarterly report on Form 10-Q for the period ended September 27, 2026 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 5, 2026 | /s/ Christian I. Brown | ||||
| Christian I. Brown | |||||
| President, Chief Executive Officer and Director | |||||
Dated: November 5, 2026 | /s/ Kelly D. Youngblood | ||||
Kelly D. Youngblood | |||||
Chief Financial Officer | |||||
This certification is being furnished to the Securities and Exchange Commission with the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.