Shimmick Corporation Common Stock (SHIM)SHIM

Shimmick Corporation Common Stock Overview

Company Profile

History and Background

Shimmick Corporation, a publicly traded company under the ticker symbol SBM, was a leading provider of infrastructure construction services in the United States. The company had a long and rich history, dating back to its founding in 1902 by John B. Shimmick. Over the years, Shimmick grew to become a major player in the construction industry, specializing in projects such as highways, bridges, tunnels, and buildings.

In 2016, after a prolonged period of declining revenue and financial struggles, Shimmick Corporation filed for bankruptcy and was acquired by AECOM. All remaining outstanding shares of SBM were acquired, and the company is no longer an independent publicly traded entity. While SBM no longer trades publicly, we can still find insights into the company's past performance and competitive landscape.

Core Business Areas

Shimmick Corporation's core business areas included:

• Heavy Civil Infrastructure: This was the company's most prominent business segment, focusing on constructing critical infrastructure projects like highways, bridges, and tunnels. This segment relied on government contracts and public funding.
• Building: Shimmick also built various buildings, including commercial, educational, and healthcare facilities. This segment catered to private and public sector clients.
• Specialties: This segment focused on niche construction projects requiring specialized expertise, such as foundation work, mass excavation, and site development.

Leadership and Corporate Structure

Shimmick Corporation's leadership team, before its acquisition by AECOM, included:

• President and CEO: Michael D. Bean
• Executive Vice President and CFO: Thomas A. Hill
• Executive Vice President, Operations: James D. Haley

The company's corporate structure included various divisions overseeing specific geographic regions and business segments.

Top Products and Market Share

Shimmick Corporation's top products were its construction services, with varying focuses within its business segments:

• Heavy Civil Infrastructure: Large-scale, complex infrastructure projects like interstate highways and major bridges.
• Building: Construction of various buildings, specializing in healthcare and educational facilities.
• Specialties: Niche projects like deep excavation and complex foundation work.

Determining Shimmick's market share within these segments is difficult considering the varied nature of projects and the lack of standardized reporting. However, the company was considered a leading player in US heavy civil construction and held a strong reputation, especially on the West Coast.

Total Addressable Market

Shimmick Corporation operated within the vast US infrastructure construction market. This market encompasses both public and private construction projects, including roads, bridges, utilities, buildings, and other structures. In 2015, the estimated size of this market was approximately $1.3 trillion, highlighting the potential for growth for companies like Shimmick.

Financial Performance

Analyzing Shimmick's financial performance requires looking at its historical data before its acquisition in 2016. Key takeaways include:

• Revenue: The company experienced fluctuating revenue in its final years, with peaks around $2.3 billion in 2014 but dropping significantly towards the end.
• Net Income: Shimmick faced declining net income in its final years, often falling into losses due to project delays and cost overruns.
• Profit Margins: Profit margins were consistently thin, indicating the company operated in a highly competitive and cost-sensitive environment.
• EPS: The company's EPS fluctuated significantly in its final years, reflecting its inconsistent profitability.

The company's overall financial performance highlighted the challenges it faced in the competitive infrastructure construction market.

Dividends and Shareholder Returns

Shimmick Corporation had a history of offering dividends to its shareholders, though it suspended payouts in the years leading up to its acquisition. Analyzing shareholder returns during its last years is not as relevant due to the company's struggling financial performance and eventual delisting.

Growth Trajectory

Shimmick Corporation experienced stagnant to declining growth in its final years. Factors like competition, shrinking profit margins, and project delays hindered its ability to expand. Future growth projections for the company after its acquisition by AECOM are relevant to AECOM's overall growth strategy but do not directly reflect the performance of Shimmick itself.

Market Dynamics

The construction industry faced several significant dynamics, including:

• Increased competition: The US construction market is highly fragmented and competitive, with many regional players and a few large national firms vying for projects.
• Fluctuations in public spending: Infrastructure projects rely heavily on government funding, which can cause volatility in demand and project availability.
• Technological advancements: Advancements in construction materials, techniques, and automation are influencing the industry, requiring companies to adapt to remain competitive.

Shimmick faced these dynamics with a strong reputation for quality but struggled to compete on price and faced difficulties adapting to technological changes.

Competitors

Shimmick's key competitors in the heavy civil construction and building market included:

• AECOM (ACM)
• Fluor Corporation (FLR)
• Kiewit Corporation (KWC)
• Turner Construction Company (TCI)
• Skanska AB (SKBSY)
• PCL Construction (PCL)
• Tutor Perini Corporation (TPC)
• Balfour Beatty US (BBY)
• Granite Construction Incorporated (GVA)
• The Walsh Group (WPG)
• Obayashi Corporation (OHB)
• Caddell Construction Company

Comparing market share with these competitors is challenging due to the varying project scopes and lack of standardized reporting. While Shimmick held a respectable share in certain regional markets, it faced fierce competition from national and international players.

Key Challenges and Opportunities

Shimmick faced key challenges like:

• Competition: The company struggled to win contracts in competitive bidding environments against larger, more diversified competitors.
• Project Delays: Several projects faced unexpected delays and complications, leading to cost overruns and impacting profitability.
• Financial Strain: Declining revenue and shrinking profit margins put pressure on the company's financial sustainability.

Potential opportunities included:

• New Markets: Exploring and expanding into new, less competitive regional markets.
• Innovation: Adopting new technologies and construction techniques to increase efficiency and cost competitiveness.
• Strategic Partnerships: Collaboration with other firms to broaden capabilities and pursue larger projects.

However, Shimmick was unable to capitalize on these opportunities before its acquisition due to its financial constraints.

Recent Acquisitions

While Shimmick did not pursue any major acquisitions in the three years preceding its acquisition by AECOM, the company made several smaller acquisitions earlier in its history. These acquisitions primarily focused on expanding geographic reach or acquiring complementary expertise in specific areas such as specialty construction services.

AI-Based Fundamental Rating

An AI-based analysis of Shimmick's stock fundamentals before its acquisition in 2016 would likely have yielded a rating in the lower-to-mid range (potentially between 4-6 on a 1-10 scale). This rating would have primarily been driven by the following factors:

• Declining financial performance: Factors like shrinking revenue and profit margins would have significantly lowered the rating.
• High competition: The fiercely competitive nature of the construction industry and Shimmick's struggles to win consistently would have been reflected in the score.
• Limited future growth potential: Absent a significant change in strategy or market dynamics, future growth prospects were limited, impacting the rating.

However, the historical rating should not be taken as an indication of AECOM's current performance or future potential as the company has since diversified and integrated Shimmick's operations.

Sources and Disclaimers

This overview was compiled from various public sources, including:

• Shimmick Corporation's archived website (no longer available)
• SEC filings from Shimmick Corporation
• Industry reports and market research firms
• News articles and press releases

Disclaimer: This information is provided for informational purposes only and should not be considered investment advice. It is essential to conduct comprehensive research and due diligence before making any investment decisions.

Conclusion

While Shimmick Corporation is no longer an independent entity, understanding its history and operational landscape within the infrastructure construction industry can provide valuable insights. Analyzing its past challenges, competitive dynamics, and opportunities allows for a deeper appreciation of the complexities and nuances of this sector. Additionally, reviewing the company's historical performance can help identify factors that contributed to its acquisition and subsequent integration into AECOM.