Press release·12/16/2025 00:51:31

Understanding Gross Margins

Our gross margin is gross profit expressed as a percentage of revenues. Factors affecting gross margin include:

Seasonal: Seasonal patterns can have a significant impact on gross margins. Business is usually slower in the winter months versus the warmer months.

Weather: Adverse or favorable weather conditions can impact gross margin. Wet weather, snow, or severe temperatures can negatively impact production and revenues, while dry weather with moderate temperatures can positively impact them.

Revenue Mix: The mix of revenues between customer types and types of work can impact gross margins. Some projects have greater margins while others have narrower margins due to competitive bidding.

Service and Maintenance versus Installation: Installation work generally has a higher gross margin than maintenance work because it is usually of a fixed price nature and has higher risks involved.

Subcontract Work: Work that is subcontracted to other service providers generally has lower gross margins. Increases in subcontract work as a percentage of total revenues may contribute to a decrease in gross margin.

Materials versus Labor: Typically, materials supplied on projects have lower margins than labor. Projects with a higher material cost in relation to the entire job will have a lower overall margin.

Depreciation: Depreciation is included in our cost of revenue, which can make comparability to other companies difficult.

Margin Risk: Failure to properly execute a job, including failure to manage and supervise it, could decrease the profit margin.

Selling and Administrative Expenses

Selling and administrative expenses consist primarily of compensation and related benefits to management, administrative salaries and benefits, marketing, communications, office and utility costs, professional fees, bad debt expense, letter of credit fees, general liability insurance, and miscellaneous other expenses.

Results of Operations for the Fiscal Year Ended September 30, 2025, Compared to the Fiscal Year Ended September 30, 2024

Revenue

Revenue increased by $59.1 million, or 16.8%, to $411.0 million for the fiscal year ended September 30, 2025, from $351.9 million for the fiscal year ended September 30, 2024. The increase was the result of increased work in the Electrical, Mechanical, and General and Gas & Water Distribution business lines, partially offset by a decrease in Gas & Petroleum Transmission work.

Segment	Twelve Months Ended September 30, 2025	% of total	Twelve Months Ended September 30, 2024	% of total	Change	% Change
Gas & Water Distribution	$149,574,917	36.4%	$82,426,199	23.3%	$67,148,718	81.5%
Gas & Petroleum Transmission	$64,586,137	15.7%	$81,055,175	23.5%	$(16,469,038)	(20.3)%
Electrical, Mechanical, & General	$196,840,319	47.9%	$188,395,487	53.2%	$8,444,832	4.5%
Total	$411,001,373	100.0%	$351,876,861	100.0%	$59,124,512	16.8%

Cost of Revenues

Total cost of revenues increased by $70.3 million, or 23.3%, to $372.2 million for the fiscal year ended September 30, 2025, from $301.9 million for the fiscal year ended September 30, 2024. The increase was the result of increased work in the Electrical, Mechanical, and General and Gas & Water Distribution business lines, partially offset by a decrease in Gas & Petroleum Transmission work.

Segment	Twelve Months Ended September 30, 2025	% of total	Twelve Months Ended September 30, 2024	% of total	Change	% Change
Gas & Water Distribution	$131,260,431	35.3%	$63,255,027	21.0%	$68,005,404	107.5%
Gas & Petroleum Transmission	$60,106,509	16.1%	$69,451,038	23.0%	$(9,344,529)	(13.5)%
Electrical, Mechanical, & General	$176,304,885	47.4%	$167,617,676	55.5%	$8,687,209	5.2%
Unallocated Shop Expense	$4,553,835	1.2%	$1,598,804	0.5%	$2,955,031	184.8%
Total	$372,225,660	100.0%	$301,922,545	100.0%	$70,303,115	23.3%

Gross Profit

Total gross profit decreased by $11.2 million or 22.4% to $38.8 million for the fiscal year ended September 30, 2025, from $50.0 million for the fiscal year ended September 30, 2024.

Segment	Twelve Months Ended September 30, 2025	% of revenue	Twelve Months Ended September 30, 2024	% of revenue	Change	% Change
Gas & Water Distribution	$18,314,486	12.24%	$19,171,172	23.26%	$(856,686)	(4.5)%
Gas & Petroleum Transmission	$4,479,628	6.94%	$11,604,137	14.32%	$(7,124,509)	(61.4)%
Electrical, Mechanical, & General	$20,535,434	10.43%	$20,777,811	11.03%	$(242,377)	(1.2)%
Unallocated Shop Expense	$(4,553,835)	—%	$(1,598,804)	—%	$(2,955,031)	184.8%
Total	$38,775,713	9.4%	$49,954,316	14.2%	$(11,178,603)	(22.4)%

Selling and Administrative Expenses

Total selling and administrative expenses increased by $4.4 million to $34.6 million for the fiscal year ended September 30, 2025, from $30.1 million for the fiscal year ended September 30, 2024. The increase was primarily related to increased business opportunities and management hirings needed to secure and manage projects, as well as $1.9 million related to the acquisition of Tribute.

Income from Operations

Income from operations was $4.2 million for the fiscal year ended September 30, 2025, a $15.6 million decrease from $30.1 million for the fiscal year ended September 30, 2024. The decrease was due to the factors described above.

Segment Results

The table below sets forth segment revenues, segment income (loss) from operations, and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period:

Segment	Year Ended September 30, 2025	Year Ended September 30, 2024	Change
Revenues:
Underground Infrastructure Construction	$222,966,841	$189,104,106	$33,862,735
Industrial Construction	$138,935,139	$104,054,034	$34,881,105
Building Construction	$49,099,393	$58,718,721	$(9,619,328)
Consolidated revenues	$411,001,373	$351,876,861	$59,124,512
Income (loss) from operations:
Underground Infrastructure Construction	$(1,934,020)	$11,558,065	$(13,492,085)
Industrial Construction	$9,199,801	$7,908,577	$1,291,224
Building Construction	$3,266,300	$4,889,181	$(1,622,881)
Corporate and Non-Allocated Costs	$(6,316,608)	$(4,520,577)	$(1,796,031)
Consolidated income from operations	$4,215,473	$19,835,246	$(15,619,773)

Comparison of Financial Condition at September 30, 2025 Compared to September 30, 2024

The Company’s total assets increased by $57.0 million to $215.2 million, primarily due to increases in accounts receivable, property, plant and equipment, contract assets, and goodwill and acquired intangible assets.

Liabilities increased by $56.4 million to $156.0 million, primarily due to increases in debt, contract liabilities, and accounts payable.

Shareholders’ equity increased by $542,000 to $59.2 million, primarily due to net income and common shares issued for acquisitions, partially offset by dividends and stock repurchases.

Liquidity and Capital Resources

The Company has a $30.0 million line of credit with a maturity date of June 28, 2027. As of September 30, 2025, the Company had $24.8 million borrowed on the line of credit.

The Company also has various long-term debt agreements, including loans for acquisitions and equipment financing. Future expected payments on this debt total $72.2 million.

The Company leases certain facilities and equipment under operating lease agreements. Future minimum lease payments total $2.5 million.

Critical Accounting Estimates

The Company’s critical accounting estimates include revenue recognition, allowance for doubtful accounts, impairment of goodwill and intangible assets, depreciation and amortization, and income taxes. These estimates require significant judgment and can have a material impact on the financial statements.

Overall, the Company’s financial performance in fiscal year 2025 was mixed, with increased revenues but lower gross margins and profitability compared to the prior year. The Company continues to focus on growing its core business lines while managing costs and integrating recent acquisitions.